10-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)
x	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended March 31, 2006
or
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to            

Commission File Number: 001-32869

DYNCORP INTERNATIONAL INC.
(Exact name of registrant as specified in its charter)

Delaware	01-0824791
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

8445 Freeport Parkway, Suite 400, Irving, Texas 75063
(817) 302-1460
(Address, including zip code, and telephone number, including area code,
 of registrant’s principal executive offices)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Name of Exchange on Which Registered
Class A common stock, par value $0.01 per share	New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Act.       Yes o     No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.      Yes o     No x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.       Yes o     No x

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check One):

Large accelerated filer  o Accelerated filer  o Non-accelerated filer x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).     Yes  o     No x

The aggregate market value of the registrant’s voting and non-voting common stock held by non-affiliates of the registrant at June 5, 2006, based on the $12.49 per share closing price for the registrant’s common stock on the New York Stock Exchange on June 5, 2006, was approximately $312.3 million.

As of June 5, 2006, the registrant had 57,000,000 shares of its Class A common stock outstanding.

Documents Incorporated by Reference

None.

DYNCORP INTERNATIONAL INC.
TABLE OF CONTENTS

		Page
PART I.
Item 1.	Business		1
Item 1A.	Risk Factors		12
Item 1B.	Unresolved Staff Comments		25
Item 2.	Properties		25
Item 3.	Legal Proceedings		25
Item 4.	Submission of Matters to a Vote of Security Holders		26
PART II.
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		27
Item 6.	Selected Financial Data		28
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		30
Item 7A.	Quantitative and Qualitative Disclosure About Market Risk		53
Item 8.	Financial Statements and Supplementary Data		55
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure		95
Item 9A.	Controls and Procedures		95
Item 9B.	Other Information		95
PART III.
Item 10.	Directors and Executive Officers of the Registrant		96
Item 11.	Executive Compensation		102
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		105
Item 13.	Certain Relationships and Related Transactions		107
Item 14.	Principal Accounting Fees and Services		110
PART IV.
Item 15.	Exhibits and Financial Statement Schedules		111

PART I

ITEM 1. BUSINESS.

Our Company

In this Annual Report, unless the context requires otherwise, references to “we,” “our,” “the Company,” “us” or “DynCorp International” refer to DynCorp International Inc. and its consolidated subsidiaries. We refer to our subsidiary, DynCorp International LLC and its subsidiaries, as our “operating company.” All references in this Annual Report to fiscal years made in connection with our financial statements or operating results refer to the fiscal year ended on the Friday closest to March 31st of such year. For example, “fiscal 2004” refers to our fiscal year ended April 2, 2004.

We provide specialized mission-critical outsourced technical services to civilian and military government agencies. Our specific global expertise is in law enforcement training and support, security services, base operations, and aviation services and operations. We also provide logistics support for all our services. Our predecessors have provided services to numerous U.S. government departments and agencies since 1951. Our operating company was a separate subsidiary of Computer Sciences Corporation from March 2003 until February 2005. On February 11, 2005, Computer Sciences Corporation and DynCorp (a wholly owned subsidiary of Computer Sciences Corporation) sold DynCorp International LLC (a wholly owned subsidiary of DynCorp) to DynCorp International Inc., a newly formed entity controlled by The Veritas Capital Fund II, L.P. and its affiliates. We refer to The Veritas Capital Fund II, L.P. and its affiliates in this Annual Report as “Veritas Capital.” The Company has no operations independent of DynCorp International LLC.

On May 9, 2006, we consummated an Equity Offering of 25,000,000 shares of our Class A common stock, par value $0.01 per share, at a price of $15.00 per share (the “Equity Offering”). The gross proceeds from the Equity Offering of $375.0 million, together with cash on hand, were used: (i) to redeem all of our outstanding preferred stock, of which $222.8 million in stated amount, including accrued and unpaid dividends thereon, was outstanding as of May 9, 2006; (ii) to pay a special Class B distribution in the amount of $100.0 million to the holder of the Company’s common stock, DIV Holding LLC; (iii) to redeem $28.0 million of our senior subordinated notes on June 8, 2006; (iv) to pay prepayment penalties of $8.4 million as of May 9, 2006, $5.7 million of which represented prepayment penalties on our preferred stock and $2.7 million of which represented prepayment penalties on our senior subordinated notes; and (v) to pay transaction expenses of approximately $35.0 million, including an underwriters’ commission of $22.5 million, a fee of $5.0 million to Veritas Capital Management II, L.L.C. and $7.5 million of miscellaneous fees and expenses related to the Equity Offering.

Our Services

We provide government technical services and outsourced solutions to our customers. Our primary services are provided through our two core operating segments, International Technical Services and Field Technical Services.

Our International Technical Services operating segment offers the following services:

·Law Enforcement Training. Our services in this area include international policing and police training, judicial support, immigration support and base operations.

·International Narcotics Eradication. Our services include drug eradication and interdiction, host nation pilot and crew training.

·Contingency Services. We provide peace-keeping support, humanitarian relief, de-mining, worldwide contingency planning, warehousing and heavy equipment inspections. We believe we have the ability to provide these services on a rapid response basis.

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·Logistics Support Services. We offer procurement, parts tracking, inventory and equipment maintenance, property control, data entry and mobile repair services. We believe that we are able to support the deployment of personnel and equipment on short notice.

·Security Services. Our services include security for diplomats, personal protection, security system design, installation and operations and cultural training. Using a database of approximately 3,000 qualified individuals, as of March 31, 2006, we have the ability to recruit and assemble large security contingents on short notice.

·Military Facility Operations. We provide facility and equipment maintenance and control, civil, electrical, environmental and mechanical engineering, custodial and administrative services.

·Infrastructure Development. Our services include infrastructure engineering and construction management.

·Marine Services. Our services include ship logistics, range ship maintenance, communications services and oil spill response fleet operations. We provide these services for both government agencies and commercial customers.

·Security Technology. Our services include installation, maintenance and upgrades of physical and software access control points and servers and development of security software, smart cards and biometrics for use by government agencies and commercial customers.

Our Field Technical Services operating segment offers the following services:

·Aviation Services and Operations. Our aviation services and operations include aircraft fleet maintenance, depot augmentation, aftermarket logistics support, aircrew services and training, ground equipment maintenance and modifications, quality control, Federal Aviation Administration certification, facilities and operations support, aircraft scheduling and flight planning and the provisioning of pilots, test pilots and flight crews. Services are provided from both main base locations and forward operating locations.

·Aviation Engineering. Our technicians design, manufacture and install aircraft modification programs for a broad range of weapons systems and, as of March 31, 2006, more than 70 engine types, updating entire fleets to mission-readiness status. We provide services such as engineering design, kit manufacturing and installation, field installations, configuration management, avionics upgrades, cockpit and fuselage redesign and technical data, drawings and manual revisions.

·Aviation Ground Equipment Support. Our services in this area include ground equipment support, maintenance and overhaul, modifications and upgrades, corrosion control, engine rebuilding, hydraulic and load testing and serviceability inspections. We provide these services worldwide and offer both short- and long-duration field teams. As of March 31, 2006, we employed over 850 mechanics, technicians and support personnel who perform depot level overhaul of ground support equipment for U.S. Navy and U.S. Coast Guard programs and provide depot level ground support equipment support at 20 worldwide locations.

·Ground Vehicle Maintenance. Our ground vehicle maintenance services include vehicle maintenance, overhaul and corrosion control and scheduling and work flow management. We perform maintenance and overhaul on wheeled and tracked vehicles for the U.S. Army and U.S. Marine Corps, in support of their pre-positioning programs. We also provide overall program management, logistics support, tear down and inspection of equipment cycled off of prepositioned ships.

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The 2005 Acquisition

On December 12, 2004, together with The Veritas Capital Fund II, L.P., we entered into a purchase agreement with Computer Sciences Corporation and DynCorp whereby we agreed to acquire DynCorp International LLC, then a wholly owned subsidiary of DynCorp and Computer Sciences Corporation (the “2005 Acquisition”). We assigned our rights to acquire DynCorp International LLC to a subsidiary we formed, DI Finance LLC. Immediately after the consummation of the 2005 Acquisition on February 11, 2005, DI Finance LLC was merged with and into DynCorp International LLC. DynCorp International LLC survived the merger and is now our wholly owned subsidiary. We changed our name from DI Acquisition Corp. to DynCorp International Inc. on February 11, 2005, the day we acquired DynCorp International LLC. In this section, Computer Sciences Corporation and DynCorp are referred to as the “sellers.”

Closing Price and Purchase Price Adjustments

The purchase price for the 2005 Acquisition was $937.0 million after giving effect to a net working capital adjustment in favor of Computer Sciences Corporation in the amount of $65.55 million and $6.1 million of accumulated dividends in connection with the preferred stock issued for satisfaction of the working capital adjustment. Of the $937.0 million purchase price, $775.0 million was paid in cash, $140.6 million was paid to Computer Sciences Corporation in the form of our preferred equity, $6.1 million represented accumulated dividends on the preferred stock issued in connection with the working capital adjustment and the remaining amounts were attributable to transaction expenses.

In addition to the issuance of preferred stock to Computer Sciences Corporation and the additional preferred stock equity investment discussed above, the 2005 Acquisition was funded by:

·borrowings under our senior secured credit facility, consisting of a $345.0 million term loan, and a $90.0 million revolving credit facility, as amended, which was drawn down $20.0 million at closing;

·the senior subordinated notes of $320.0 million offered by our operating company; and

·a common equity investment in our Company of $86.0 million by Veritas Capital and $14.0 million by The Northwestern Mutual Life Insurance Company.

See notes to the consolidated financial statements elsewhere in this Annual Report for a discussion of the senior secured credit facility and the senior subordinated notes.

Purchase Agreement

General.The purchase agreement contained customary representations, warranties, covenants and indemnities by, and for the benefit of, The Veritas Capital Fund II, L.P. and the sellers.

Indemnification.Sellers’ obligation, which is joint and several, to indemnify the Company and The Veritas Capital Fund II, L.P. for breaches of representations and warranties generally survived until 180 days after the closing of the 2005 Acquisition, except for representations and warranties relating to certain corporate representations and broker representations, which will survive until the applicable statute of limitations, and tax representations that did not survive closing except for the representation relating to our Company’s status as a disregarded entity, which will survive for three years following the closing of the 2005 Acquisition. The sellers’ obligations to indemnify DynCorp International and its affiliates (including after the closing of the 2005 Acquisition) and our obligation, subject to certain exceptions, to indemnify the sellers are subject to a $5.0 million deductible, and each individual claim must be at least $50,000 per individual claim. The aggregate indemnification obligations are generally threshold capped at $50.0 million in the aggregate, subject to certain exceptions.

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The purchase agreement also provides that the sellers will indemnify us without regard to any time limitation, but subject to the above cap, for any losses incurred in connection with the Arias litigation, a class action lawsuit seeking $100.0 million filed on September 11, 2001. Upon closing of the 2005 Acquisition, the sellers and our Company entered into a joint defense agreement pursuant to which both parties will assume joint defense of the litigation. See “Legal Proceedings—Pending Litigation and Claims” for additional information regarding the Arias litigation.

Under the purchase agreement, the sellers agreed to remit to the Company any amounts actually received by sellers (less related fees) with respect to potential Texas sales tax refunds relating to any contracts that have been assigned by the sellers to our Company or any subsidiaries thereof.

Additional Covenants.The purchase agreement includes customary covenants by the sellers to maintain certain proprietary information about the buyer and its affiliates confidential, by the sellers and certain of their affiliates not to compete with our Company and our affiliates with respect to any of our existing contracts for a period of two years, and both parties not to solicit for employment or hire certain of our employees for a period of three years after the closing of the 2005 Acquisition.

Under the purchase agreement, the sellers granted to our Company an exclusive, perpetual, irrevocable, worldwide, royalty-free and fully paid-up license to use the “Dyn International” and “DynCorp International” names in connection with aviation services, security services, technical services and marine services.

Contract Types

Our contracts typically have a term of three to ten years consisting of a base period of one year with multiple one-year options. Our contracts typically are awarded for an estimated dollar value based on the forecast of the work to be performed under the contract over its maximum life. In addition, we have historically received additional revenues through increases in program scope beyond that of the original contract. These contract modifications typically consist of “over and above” requests derived from changing customer requirements. The government is not obligated to exercise options under a contract after the base period. At the time of completion of the contract term of a government contract, the contract is recompeted to the extent that the service is still required.

Contracts between our operating company and the U.S. government or the government’s prime contractor (to the extent that we are a subcontractor) generally contain standard provisions for termination at the convenience of the government or the prime contractor or for default. Government contracts generally also contain provisions that allow the U.S. government to unilaterally suspend us from receiving new contracts pending resolution of alleged violations of procurement laws or regulations, reduce the value of existing contracts, issue modifications to a contract and control and potentially prohibit the export of our services and associated materials.

Many government contracts are indefinite delivery, indefinite quantity contracts, which are often awarded to multiple contractors. An indefinite delivery, indefinite quantity contract does not represent a firm order for services. Our Civilian Police and Contract Field Teams programs are examples of indefinite delivery, indefinite quantity contracts. In fiscal 2005 and 2006, 56.3% and 58.9% of our revenues, respectively, were attributable to indefinite delivery, indefinite quantity contracts. When a customer wishes to order services under an indefinite delivery, indefinite quantity contract, the customer issues a task order. Requests for proposal are often submitted to all of the contract awardees, and task orders are typically awarded under a best-value approach. However, many indefinite delivery, indefinite quantity contracts permit the customer to direct work to a particular contractor. In some instances, the contractor may identify specific projects and propose to perform the service for a customer covered by the indefinite delivery, indefinite quantity contract, although the customer is not obligated to order the services. See

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“Management’s Discussion and Analysis of Financial Condition and Results of Operations—Explanation of Reporting Periods and Basis of Presentation.”

Our business generally is performed under fixed-price, time-and-materials or cost-reimbursement contracts. Each of these is described generally below.

·Fixed-Price Contracts. In a fixed-price contract, the price is not subject to adjustment based on costs incurred, which can favorably or adversely impact our profitability depending upon our execution in performing the contracted service. Fixed-price contracts can include a firm fixed price covering multiple service elements and/or a fixed-price covering individual service elements.

·Time-and-Materials Contracts. In a time-and-materials contract, we operate under fixed per-hour or per-day labor rates and receive reimbursement for allowable direct and indirect costs. Time-and-materials contracts generally have shorter billing and collection terms than other contract types.

·Cost-Reimbursement Contracts. We are reimbursed for allowable incurred costs, plus a fixed fee or an award fee. In addition, under some cost-reimbursement contracts, we may receive additional award fees or incentive fees based upon various objective and subjective criteria, such as aircraft mission capability rates and meeting cost targets.

We believe that our profitability will continue to improve as we anticipate that our customers will continue to shift away from cost-reimbursement to time-and-materials contracts and fixed-price contracts. We base our belief on recent trends in our revenues, the nature of the contracts on which we are bidding and the pricing structure in fixed-price and time-and-materials contracts.

Our historical contract mix by type for the last three fiscal years, as a percentage of revenue, is indicated in the table below.

	Fiscal Year
Contract Type	2004		2005		2006
Fixed-Price	24	%	27	%	34	%
Time-and-Materials	32		39		38
Cost-Reimbursement	44		34		28
	100	%	100	%	100	%

Many of our contracts involve subcontracts with other companies, which we rely upon to perform all or a portion of the services we are required to provide to our customers. Often we enter into subcontract arrangements in order to meet government requirements that certain categories of services be awarded to small businesses. We use subcontractors primarily for non-core functions such as construction and catering. For fiscal 2004, 2005 and 2006, we paid our subcontractors approximately $95.4 million, $174.9 million and $229.0 million, respectively.

Principal Customers and Contracts

Our principal customers are U.S. government agencies, including the Department of Defense and Department of State. Over the last decade, we have expanded our customer base to include foreign governments and commercial customers, such as EarthTech, Fluor, the Kuwaiti Air Force, Lucent, Parsons, the Royal Saudi Air Force and Washington Group International. During fiscal 2004, 2005 and 2006, we derived substantially all of our revenues from contracts and subcontracts with the U.S. government and its agencies, Department of Defense and Department of State and their respective agencies. Contracts with agencies of the Department of Defense represented approximately 63%, 49% and 44% of our revenues for fiscal 2004, 2005 and 2006, respectively, and contracts with agencies of the Department of State represented approximately 29%, 49% and 53%, respectively, of our revenues over the same period. For fiscal 2006, we derived 3% of our revenue from contracts directly with foreign

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governments or with commercial customers. For fiscal 2005 and 2006, Contract Field Teams, Civilian Police and International Narcotics and Law Enforcement contracts accounted for 18.0%, 27.4% and 8.1% and 17.2%, 32.1% and 11.9% of our revenues, respectively. For a discussion of the risk of government contracts, see “Risk Factors—We rely on sales to U.S. government entities. A loss of contracts with the U.S. government, a failure to obtain new contracts or a reduction of sales under existing contracts could adversely affect our operating performance and our ability to generate cash flow to fund our operations.”

For fiscal 2005 and 2006, approximately 5.9% and 1.9% of our revenues, respectively, were derived from services that we provided as a subcontractor.

Key International Technical Services Contracts

Civilian Police.The most significant contract of our International Technical Services operating segment is our Civilian Police contract, awarded to us by the Department of State in February 2004. Our Civilian Police contract has an estimated value of $1.75 billion over the five-year term of this program, through February 2009. Through the Civilian Police program, we have deployed civilian police officers from the United States to 12 countries to train and offer logistics support to the local police and assist them with infrastructure reconstruction. Our first significant deployment of civilian police personnel began in the Balkans in 1996, where our predecessors helped train local police and provided support during the height of the conflict. We remained in the region through 2004. In addition, we have been awarded multiple task orders under the Civilian Police program, including assignments in Iraq, Afghanistan and Haiti.

International Narcotics Eradication and Law Enforcement.In May of 2005, the Department of State awarded us a new contract in support of the International Narcotics and Law Enforcement Air-Wing program to aid in the eradication of illegal drug operations. We are the sole awardee of this contract, which has an estimated value of $643 million for the first three years of this ten-year contract through May 2015. This program has been ongoing since 1991 in cooperation with multiple Latin American countries, and we recently commenced a similar program in Afghanistan.

War Reserve Material.Through our War Reserve Material program, we provide management of the U.S. Air Force Southwest Asia War Reserve Material Prepositioning program, which includes operations in Oman, Bahrain, Qatar, Kuwait and two locations in the United States, Albany, Georgia and Shaw Air Force base, South Carolina. We store, maintain and deploy assets such as tents, generators, vehicles, kitchens and medical supplies to deployed forces in the Global War on Terror. During Operation Enduring Freedom and Operation Iraqi Freedom, we sent teams into the field to assist in the setup of tent cities prior to the arrival of the deployed forces. The War Reserve Material program continues to partner with the United States Central Command Air Force in the development of new and innovative approaches to asset management.

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The following table sets forth certain information for our principal International Technical Services contracts, including the respective estimated values of the current contracts as of March 31, 2006:

Contract	Principal Customer	Initial/Current Award Date		Recompete Date	Estimated Contract Value(1)
Civilian Police Program	Department of State		Feb. 1994/Feb. 2004	February 2009		$	1.75 billion	(2)
International Narcotics and Law Enforcement	Department of State		Jan. 1991/May 2005	October 2015		$	643 million	(3)
War Reserve Material	U.S. Air Force		May 2000	December 2006		$	493 million
Forward Operating Locations	U.S. Air Force		March 2002	December 2006		$	141 million
Qatar Security	U.S. Army		Aug. 1997/Feb. 2003	September 2007		$	92 million
Sudan	Department of State		May 2001	Not Applicable		$	27 million	(2)
Worldwide Personal Protective Services	Department of State		April 1998/June 2005	June 2010		$	2 million	(4)(2)

(1)For more information on estimated contract value, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Estimated Contract Value.”

(2)These contracts are indefinite delivery, indefinite quantity contracts. For more information about indefinite delivery, indefinite quantity contracts, see “—Contract Types.” Also, for a discussion of how we define estimated remaining contract value for indefinite delivery, indefinite quantity contracts, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Estimated Remaining Contract Value.”

(3)Estimated contract value is for the first three years of this ten-year contract through May 2015.

(4)Estimated contract value is for the priced, program management portion of the contract only. Potential task orders are not included in this estimated contract value.

Key Field Technical Services Contracts

Contract Field Teams.   Contract Field Teams is the most significant program in our Field Technical Services operating segment. Our Company and its predecessors have provided this service for over 54 consecutive years. This program deploys highly mobile, quick-response field teams to customer locations to supplement a customer’s workforce. Services under a Contract Field Teams contract generally include providing mission support to aircraft and weapons systems in addition to depot-level repair. The principal customer for our Contract Field Teams program is the Department of Defense. Our Contract Field Teams contract is up for recompetition in September 2007. This contract has a $2.09 billion estimated value over a ten-year term through September 2007.

Life Cycle Contractor Support.This Field Technical Services program consists of contracts with both the U.S. Army and the U.S. Navy. Under the Life Cycle Contractor Support-Army contracts, our Company provides aircraft maintenance and logistics for 165 C-12/RC-12 and 27 UC-35 aircraft, as well as services for a major avionics suite upgrade of 39 aircraft for Global Air Traffic Management compliance. Under our Life Cycle Contractor Support-Navy contracts, our Company and its predecessors provide aircraft maintenance and logistics for the U.S. Navy’s 6 UC-35 aircraft. We entered into the Life Cycle Contractor Support-Army and Life Cycle Contractor Support-Navy contracts in August 2000 and the Global Air Traffic Management portion of our Army contract in March 2003. The Life Cycle Contractor Support-Army and Life Cycle Contractor Support-Navy contracts are up for recompetition in January 2010. These contracts have estimated values of $911 million and $33 million for Life Cycle Contractor Support-Army and Life Cycle Contractor Support-Navy, respectively.

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Attack Helicopter-1/Utility Helicopter-1 (“AH-1/UH-1”).The AH-1/UH-1 program provides worldwide helicopter support to foreign governments that have acquired AH-1 and UH-1 helicopters. Services include program management, sustaining engineering, training, maintenance and refurbishment, logistics and material management. The U.S. Army is our principal customer for this program. We entered into our AH-1/UH-1 contract in March 2004 and the contract is up for recompetition in March 2014. This contract has a $406 million estimated value.

Andrews Air Force Base.Under the Andrews Air Force Base contract, our Company performs aircraft maintenance and base supply functions, including full backshop support, organizational level maintenance, fleet fuel services and supply, launch and recovery and FAA repair services. Our principal customer under this contract is the U.S. Air Force. We entered into this contract in January 2001 and it is up for recompetition in December 2011. This contract has a $324 million estimated value.

The following table sets forth certain information for our principal Field Technical Services contracts, including the respective estimated values of the current contracts as of March 31, 2006:

Contract	Principal Customer	Initial/Current Award Date	Recompete Date	Estimated Contract Value(1)
Contract Field Teams	Department of Defense	Oct. 1951/Oct. 1997	September 2007		$	2.09 billion	(2)
Life Cycle Contractor Support	U.S. Army and U.S. Navy	August 2000	January 2010		$	944 million
AH-1/UH-1	U.S. Army/FMS	March 2004	March 2014		$	406 million	(2)
Andrews Air Force Base	U.S. Air Force	January 2001	December 2011		$	324 million
Columbus Air Force Base	U.S. Air Force	Oct. 1998/July 2005	September 2012		$	245 million
Army Prepositioned Stocks Afloat	U.S. Army	February 1999	February 2009		$	217 million
Holloman Air Force Base	U.S. Air Force	September 1999	September 2006		$	101 million
Eglin Air Force Base	U.S. Air Force	November 2002	November 2010		$	77 million
F/A-18	Kuwaiti Air Force(3)	Sept. 1997/Dec. 2005	December 2010		$	70 million
California Department of Forestry	State of California	January 2002	June 2007		$	65 million

(1)For more information on estimated contract value, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Estimated Contract Value.”

(2)These contracts are indefinite delivery, indefinite quantity contracts. For more information about indefinite delivery, indefinite quantity contracts, see “—Contract Types.”  Also, for a discussion of how we define estimated remaining contract value for indefinite delivery, indefinite quantity contracts, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Estimated Remaining Contract Value.”

(3)Reflects end users under the contract rather than the contract party.

Backlog

Backlog consists of orders and options under our contracts. We define backlog as the estimated value of contract modifications received from customers that have not been recognized as revenue. Our backlog consists of funded and unfunded backlog. Funded backlog is based upon amounts actually appropriated by a customer for payment of goods and services less actual revenue recorded as of the measurement date under that appropriation. Unfunded backlog is the actual dollar value of unexercised contract options. Anticipated revenues from indefinite delivery, indefinite quantity contracts are not included in unfunded backlog. Backlog is only a measure of funded contract values and unfunded contract options, less any revenue recognized to that point. Backlog does not take into account any expenses associated with contractual performance and converting backlog into revenue would not reflect net income associated with the contracts. Most of our U.S. government contracts allow the customer, in its sole discretion, the option to extend the period of performance of a contract for a period of one or more years. Historically, it has been our experience that the customer has exercised contract options. See “Risk Factors—Our U.S. government contracts may be terminated by the U.S. government at any time prior to their completion and

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contain other unfavorable provisions, which could lead to unexpected loss of revenues and reduction in backlog.”

Our backlog is spread over a diverse mix of activities, services and platforms. In addition, contracts and task orders awarded thereunder are with different agencies within the U.S. government.

The following table sets forth our approximate contracted backlog (dollars in millions) as of the dates indicated:

	April 2, 2004		April 1, 2005		March 31, 2006
Funded Backlog	$	991	$	1,140		$	1,024
Unfunded Backlog	1,173		900			1,617
Total Backlog	$	2,164	$	2,040		$	2,641

Regulatory Matters

Contracts with the U.S. government are subject to certain regulatory requirements. Under U.S. government regulations, certain costs, including certain financing costs, portions of research and development costs, lobbying expenses, certain types of legal expenses and certain marketing expenses related to the preparation of bids and proposals, are not allowed for pricing purposes and calculation of contract reimbursement rates under cost-reimbursement contracts. The U.S. government also regulates the methods by which allowable costs may be allocated under U.S. government contracts.

Our government contracts are subject to audits at various points in the contracting process. Pre-award audits are performed at the time a proposal is submitted to the U.S. government for cost-reimbursement contracts. The purpose of a pre-award audit is to determine the basis of the bid and provide the information required for the U.S. government to negotiate the contract effectively. In addition, the U.S. government may perform a pre-award audit to determine our capability to perform under a contract. During the performance of a contract, the U.S. government may have the right to examine our costs incurred in the contract, including any labor charges, material purchases and overhead charges. Upon a contract’s completion, the U.S. government performs an incurred cost audit of all aspects of contract performance for cost-reimbursement contracts to ensure that we have performed the contract in a manner consistent with our proposal. The government also may perform a post-award audit for proposals that are subject to the Truth in Negotiations Act, which are proposals in excess of $550,000, to determine if the cost proposed and negotiated was accurate, current and complete as of the time of negotiations.

The Defense Contract Audit Agency performs these audits on behalf of the U.S. government. The Defense Contract Audit Agency also reviews the adequacy of, and our compliance with, our internal control systems and policies, including our purchasing, property, estimating, compensation and management information systems. The Defense Contract Audit Agency has the right to perform audits on our incurred costs on all contracts on a yearly basis. We have Defense Contract Audit Agency auditors on site to monitor our billing and back office operations. An adverse finding under a Defense Contract Audit Agency audit could result in the disallowance of our costs under a U.S. government contract, termination of U.S. government contracts, forfeiture of profits, suspension of payments, fines and suspension and prohibition from doing business with the U.S. government. In the event that an audit by the Defense Contract Audit Agency results in disallowance of our costs under a contract, we have the right to appeal the findings of the audit under applicable dispute resolution provisions. Approval of submitted yearly contract incurred costs can take from one to three years from the date of submission of the contract costs. All of our contract incurred costs for U.S. government contracts completed through March 28, 2003 have been audited and approved by the Defense Contract Audit Agency, and audits are continuing on such costs for subsequent periods. See “Risk Factors—A negative audit or other actions by the U.S. government could adversely affect our operating performance.”

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At any given time, many of our contracts are under review by the Defense Contract Audit Agency and other government agencies. We cannot predict the outcome of such ongoing audits and what, if any, impact such audits may have on our future operating performance. An audit report we received in August 2005 issued by the Defense Contract Audit Agency on our Air-Wing Contract to the Department of State in June 2005 reached the conclusion that we had incorrectly included certain cost elements in base pay for purposes of calculating hazard and post-differential pay, resulting in overbilling of $1.8 million. To the extent this matter is decided against us, we will need to refund the disputed amount, and our revenues will be adversely affected.

Sales and Marketing

As of March 31, 2006, we had marketing offices in the following 8 countries: the United Kingdom, Germany, Australia, Afghanistan, Iraq, the United Arab Emirates, Kenya and Italy. We also market through relationships with military and government officials, joint ventures and international trade shows. Personnel profiles range from employees with marketing degrees to retired senior officers from the various U.S. and foreign military branches. Most senior personnel engaged in sales and marketing have long-term operations experience.

Our approach is to establish marketing activities in the area or region that we believe presents the greatest opportunity to grow and develop our business. As of March 31, 2006, we had an organization and presence in Dubai, UAE which we believe, together with our Company and its predecessors’ long-standing presence in the Middle East well-positions us to pursue additional opportunities in that region. We also have an office in Canberra, Australia from which we pursue opportunities in Australia and the Asia-Pacific region, and we have offices in both the United Kingdom and Germany to develop business with the U.K. Ministry of Defense, United States, national and NATO military commands as well as to promote commercial business opportunities. In addition, we have frontline sales and marketing personnel in the United States, Europe-Africa and Asia-Pacific. In each office, to assist us in the regions we serve, we employ personnel who are fluent in both English and the local language, and who are familiar with local culture. We also utilize focus groups to target our services to geographic markets and provide local training to our sales force. In addition, we  market through international trade shows and relationships with senior military and government officials.

Competition

We compete with various entities across geographic and business lines based on a number of factors, including services offered, experience, price, geographic reach and mobility. Some of our competitors have greater financial and other resources than we do or are better positioned than we are to compete for certain contract opportunities. For example, original equipment manufacturers who also provide aftermarket support services have an advantage in obtaining service contracts for aircraft that they have manufactured, as they frequently have better access to replacement and service parts as well as an existing technical understanding of the platform they have manufactured. In addition, we are at a disadvantage when bidding for contracts put up for recompetition for which we are not the incumbent provider, because incumbent providers frequently are able to capitalize on customer relationships, technical knowledge and pricing experience gained from their prior service.

Competitors of our International Technical Services operating segment include solutions providers who typically compete in one of our International Technical Services business segments. Our three largest competitors for international law enforcement services are Civilian Police International, PAE Government Services, Inc. and Science Applications International Corporation. Our three largest competitors for international logistics and base operations services are ITT Industries, Halliburton and IAP Worldwide Services, Inc. Our two largest competitors in the personnel and physical security business are Blackwater and Triple Canopy.

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Competitors of our Field Technical Services operating segment typically are large defense services contractors, who offer services associated with maintenance, training and other activities. The three largest domestic competitors of Field Technical Services are Lockheed Martin Corporation, Sikorsky United Technologies and L-3. The three largest international competitors of Field Technical Services are Aerospace Industrial Development Corporation, Al Salam Aircraft Company Ltd. and Serco Group Plc.

Intellectual Property

We hold an exclusive, perpetual, irrevocable, worldwide, royalty-free and fully paid up license to use the “Dyn International” and “DynCorp International” names in connection with aviation services, security services, technical services and marine services. We do not own any trademarks or patents and do not believe our business is dependent on trademarks or patents.

Environmental Matters

Our operations include the use, generation and disposal of petroleum products and other hazardous materials. We are subject to various U.S. federal, state, local and foreign laws and regulations relating to the protection of the environment, including those governing the management and disposal of hazardous substances and wastes, the cleanup of contaminated sites and the maintenance of a safe workplace. We believe that we have been and are in substantial compliance with environmental laws and regulations and that we have no liabilities under environmental requirements that would have a material adverse effect on our business, results of operations or financial condition. We have not incurred, nor do we expect to incur, material costs relating to environmental compliance.

Employees

As of March 31, 2006, we had over 14,400 employees in 33 countries, of which approximately 1,490 were represented by labor unions.

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FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K contains various forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements, written, oral or otherwise made, represent the Company’s expectation or belief concerning future events. Forward-looking statements involve risks and uncertainties. Without limiting the foregoing, the words “believes,” “thinks,” “anticipates,” “plans,” “expects” and similar expressions are intended to identify forward-looking statements. The Company cautions that these statements are further qualified by important economic, competitive, governmental and technological factors that could cause our business, strategy or actual results or events to differ materially, or otherwise, from those in the forward-looking statements, including, without limitation, changes in the demand for services that the Company provides; additional work awarded under the Civilian Police and International Narcotics and Law Enforcement contracts; pursuit of new commercial business in the United States and abroad;  activities of competitors; changes in significant operating expenses; changes in availability of capital; general economic and business conditions in the United States; acts of war or terrorist activities; variations in performance of financial markets; estimates of contract values; anticipated revenues from indefinite delivery, indefinite quantity contracts; expected percentages of future revenues represented by fixed-price and time-and-materials contracts; and statements covering our business strategy, those described in “Risk Factors” and other risks detailed from time to time in the Company’s reports filed with the Securities and Exchange Commission. Accordingly, such forward-looking statements do not purport to be predictions of future events or circumstances and therefore there can be no assurance that any forward-looking statement contained herein will prove to be accurate. The Company assumes no obligation to update the forward-looking statements.

ITEM 1A. RISK FACTORS.

You should carefully consider the risks described below, together with all of the other information contained in this Form 10-K. The risks described below are not the only ones we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially and adversely affect our financial condition, results of operations or cash flow. Any of the following risks could materially and adversely affect our financial condition or results of operations.

We rely on sales to U.S. government entities. A loss of contracts with the U.S. government, a failure to obtain new contracts or a reduction of sales under existing contracts could adversely affect our operating performance and our ability to generate cash flow to fund our operations.

For fiscal 2005 and 2006, the Contract Field Teams, Civilian Police and International Narcotics and Law Enforcement contracts accounted for 18.0%, 27.4% and 8.1%, and 17.2%, 32.1% and 11.9% of our revenues, respectively. The loss of any one of these contracts would significantly and adversely affect our future revenues and earnings. We derived substantially all of our revenues from contracts and subcontracts with the U.S. government and its agencies, primarily the Department of Defense and the Department of State. Contracts with agencies of the Department of Defense represented 63%, 49% and 44% of our revenues for fiscal 2004, 2005 and 2006, respectively, and contracts with agencies of the Department of State represented 29%, 49% and 53% of our revenues over the same respective periods. The remainder of our revenues represent commercial contracts and direct contracts with foreign governments. We expect that U.S. government contracts, particularly with the Department of Defense and the Department of State, will continue to be our primary source of revenue for the foreseeable future. Continuation and renewal of our existing government contracts and new government contracts are, among other things, contingent upon the availability of adequate funding for various U.S. government agencies, including the Department of Defense and the Department of State. Changes in U.S. government spending could directly affect our

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operating performance and lead to an unexpected loss of revenue. Among the factors that could impact U.S. government spending and that would reduce our federal government contracting business are:

·a significant decline in, or reapportioning of, spending by the U.S. government, in general, or by the Department of Defense or the Department of State, in particular;

·changes, delays or cancellations of U.S. government programs or requirements;

·the adoption of new laws or regulations that affect companies that provide services to the U.S. government;

·U.S. government shutdowns or other delays in the government appropriations process;

·curtailment of the U.S. government’s outsourcing of services to private contractors;

·changes in the political climate, including with regard to the funding or operation of the services we provide; and

·general economic conditions.

These or other factors could cause U.S. government agencies to reduce their purchases under our contracts, to exercise their right to terminate our contracts in whole or in part, to issue temporary stop-work orders under, or decline to exercise options to renew, our contracts. The loss or significant curtailment of our material government contracts, or our failure to renew or enter into new contracts could adversely affect our operating performance and lead to an unexpected loss of revenue.

Our U.S. government contracts may be terminated by the U.S. government at any time prior to their completion and contain other unfavorable provisions, which could lead to unexpected loss of revenues and reduction in backlog.

Under the terms of our contracts, the U.S. government may unilaterally:

·terminate or modify existing contracts;

·reduce the value of existing contracts through partial termination;

·delay the payment of our invoices by government payment offices;

·audit our contract-related costs and fees; and

·suspend us from receiving new contracts pending resolution of alleged violations of procurement laws or regulations.

The U.S. government can terminate or modify any of its contracts with us either for its convenience or if we default by failing to perform under the terms of the applicable contract. A termination arising out of our default could expose us to liability and adversely affect our operating performance and lead to an unexpected loss of revenue.

Our government contracts typically have an initial term of one year with multiple option periods, exercisable at the discretion of the government at previously negotiated prices. The government is not obligated to exercise any option under a contract. Furthermore, the government is required to compete all programs and, therefore, may not automatically renew a contract. In addition, at the time of completion of any of our government contracts, the contract is required to be recompeted if the government still requires the services covered by the contract.

If the U.S. government terminates and/or materially modifies any of our contracts or if option periods are not exercised, our failure to replace revenue generated from such contracts would result in lower

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revenues and would likely adversely affect our earnings, which would have a material adverse effect on our financial condition and results of operations.

Our U.S. government contracts are subject to competitive bidding, both upon initial issuance and recompetition. If we are unable to successfully compete in the bidding process or if we fail to receive renewal, it could adversely affect our operating performance and lead to an unexpected loss of revenue.

Substantially all of our U.S. government contracts are awarded through a competitive bidding process, including upon renewal, and we expect that this will continue to be the case. There often is significant competition and pricing pressure as a result of this process. The competitive bidding process presents a number of risks, including the following:

·we must expend substantial funds and time to prepare bids and proposals for contracts;

·we may be unable to estimate accurately the resources and costs that will be required to fund any contract we win, which could result in substantial cost overruns; and

·we may encounter expense and delay if our competitors protest or challenge awards of contracts to us, and any such protest or challenge could result in a requirement to resubmit bids on modified specifications or in termination, reduction or modification of the awarded contract.

The government contracts for which we compete typically have multiple option periods, and if we fail to win a contract or a task order, we generally will be unable to compete again for that contract for several years. For example, we recently lost four task orders for which we competed under our Worldwide Personal Protective Services program in Israel, Haiti, Afghanistan and Baghdad. If we fail to win new contracts or to receive renewal contracts upon recompetition, it may result in additional costs and expenses and possible loss of revenue, and we will not have an opportunity to compete for these opportunities again until the current task orders expire.

Political destabilization or insurgency in the regions in which we operate may have a material adverse effect on our operating performance.

Certain regions in which we operate are highly unstable. Insurgency activities in the areas in which we operate may cause further destabilization in these regions. There can be no assurance that the regions in which we operate will continue to be stable enough to allow us to operate profitably or at all. For fiscal 2005 and 2006, respectively, revenues generated on a combined basis from our operations in Iraq and Afghanistan contributed 36.9% and 38.5% of our revenues. Insurgents in Iraq and Afghanistan have targeted installations where we have personnel and have contributed to instability in these countries. This could impair our ability to attract and deploy personnel to perform services in either or both locations. In addition, we have been required to increase compensation to our personnel as an incentive to deploy them to these regions. To date, we have been able to recover this added cost under the contracts, but there is no guarantee that future increases, if required, will be able to be passed onto our customers through our contracts. To the extent that we are unable to pass through such increased compensation costs to our customers, our operating margins would be adversely impacted, which could adversely affect our operating performance. We also may have difficulty obtaining insurance to cover our liabilities in these regions and for third-party general liability. We have been able to obtain insurance to cover our liabilities; however, this could change or premiums may become prohibitively expensive. In addition, increased insurgency activities or destabilization, including civil unrest or a civil war in Iraq or Afghanistan, may lead to a determination by the U.S. government to halt our operations in a particular location, country or region and to perform the services using military personnel. Furthermore, in extreme circumstances, the U.S. government may decide to terminate all U.S. government activities including our operations under U.S. government contracts in a particular location, country or region and to withdraw all military personnel.

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This could adversely affect our operating performance and may result in additional costs and expenses and loss of revenue.

Our indefinite delivery, indefinite quantity contracts are not firm orders for services, and we may never receive revenues from these contracts, which could adversely affect our operating performance.

Many of our government contracts are indefinite delivery, indefinite quantity contracts, which are often awarded to multiple contractors. Award of an indefinite delivery, indefinite quantity contract does not represent firm orders for services. Generally, under an indefinite delivery, indefinite quantity contract, the government is not obligated to order a minimum of services or supplies from its contractor, irrespective of the total estimated contract value. Furthermore, under an indefinite delivery, indefinite quantity contract, the customer develops requirements for task orders that are competitively bid against all of the contract awardees, usually under a best-value approach. However, many contracts also permit the government customer to direct work to a specific contractor. Our Civilian Police and Contract Field Team programs are performed under indefinite delivery, indefinite quantity contracts. We may not win new task orders under these contracts for various reasons such as failing to rapidly deploy personnel or high prices, which would have an adverse effect on our operating performance and may result in additional expenses and loss of revenue. In fiscal 2005 and 2006, 56.3% and 58.9% of our revenues, respectively, were attributable to indefinite delivery, indefinite quantity contracts.

Our cost of performing under time-and-materials and fixed-price contracts may exceed our revenues which would result in a recorded loss on the contracts.

Our government contract services have three distinct pricing structures: cost-reimbursement, time-and-materials and fixed-price levels of effort, representing approximately 34%, 39% and 27% of our revenues, respectively, for fiscal 2005, and approximately 28%, 38% and 34% of our revenues, respectively, for fiscal 2006. With cost-reimbursement contracts, so long as actual costs incurred are within the contract ceiling and allowable under the terms of the contract, we are entitled to reimbursement of the costs plus a stipulated fixed fee and, in some cases, an incentive-based award fee. We assume financial risk on time-and-materials and fixed-price contracts, because we assume the risk of performing those contracts at the stipulated prices or negotiated hourly/daily rates. If we do not accurately estimate ultimate costs and control costs during performance of the work, we could lose money on a particular contract or have lower than anticipated margins. Also, we assume the risk of damage or loss to government property and we are responsible for third-party claims under fixed-price contracts. We believe that our profitability will continue to improve as we anticipate that our customers will continue to shift away from cost- reimbursement to time-and-materials contracts and fixed-price contracts. We base our belief on recent trends in our revenues, the nature of the contracts on which we are bidding and the pricing structure in fixed-price and time-and-materials contracts. As of March 31, 2006, seven of our 44 active contracts contained incentive-based pricing terms. These contracts comprised 19.7% and 15.3% of our revenues, respectively, for fiscal 2005 and 2006. The failure to meet contractually defined performance standards may result in a loss of a particular contract or lower-than-anticipated margins. This could adversely affect our operating performance and may result in additional costs and expenses and possible loss of revenue.

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A negative audit or other actions by the U.S. government could adversely affect our operating performance.

At any given time, many of our contracts are under review by the Defense Contract Audit Agency and other government agencies. These agencies review our contract performance, cost structure and compliance with applicable laws, regulations and standards. The Defense Contract Audit Agency also reviews the adequacy of, and our compliance with, its internal control systems and policies, including our purchasing, property, estimating, compensation and management information systems. Any costs found to be improperly allocated to a specific contract will not be reimbursed. In addition, government contract payments received by us for allowable direct and indirect costs are subject to adjustment after audit by government auditors and repayment to the government if the payments exceed allowable costs as defined in the government contracts. For example, an audit report issued by the Defense Contract Audit Agency on our Air-Wing Contract to the Department of State in June 2005 that we received in August 2005 reached the conclusion that we had incorrectly included certain cost elements in base pay for purposes of calculating hazard and post-differential pay, resulting in overbilling of $1.8 million. To the extent this matter is decided against us, we will need to refund the disputed amount and our revenues will be adversely affected.

Audits have been completed on our incurred contract costs through March 28, 2003 and are continuing for subsequent periods. We cannot predict the outcome of such audits and what, if any, impact such audits may have on our future operating performance.

We are subject to investigation by the U.S. government, which could result in our inability to receive government contracts and could adversely affect our future operating performance.

As a U.S. government contractor, we must comply with laws and regulations relating to U.S. government contracts that do not apply to a commercial company. From time to time, we are investigated by government agencies with respect to our compliance with these laws and regulations. If we are found to be in violation of the law, we may be subject to civil or criminal penalties or administrative sanctions, including contract termination, the assessment of penalties and suspension or debarment from doing business with U.S. government agencies. For example, many of the contracts we perform in the United States are subject to the Service Contract Act, which requires hourly employees to be paid certain specified wages and benefits. If the Department of Labor determines that we violated the Service Contract Act or its implementing regulations, we could be suspended from winning new government contracts or renewals of existing contracts for a period of time, which could adversely affect our future operating performance.

We are subject to an increased risk of investigations, criminal prosecution, civil fraud, whistleblower lawsuits and other legal actions and liabilities to which companies with solely commercial customers are not subject. In addition, if an audit uncovers improper or illegal activities, we may be subject to civil and criminal penalties and administrative sanctions, including termination of contracts, forfeiture of profits, suspension of payments, fines and suspension or prohibition from doing business with the U.S. government. Furthermore, our reputation could suffer serious harm if allegations of impropriety were made against us. If we were suspended or prohibited from contracting with the U.S. government, or any significant U.S. government agency, if our reputation or relationship with U.S. government agencies was impaired or if the U.S. government otherwise ceased doing business with us or significantly decreased the amount of business it does with us, it could adversely affect our operating performance and may result in additional expenses and possible loss of revenue.

An accident or incident involving our employees or third parties could harm our reputation and adversely affect our ability to compete for business and, as a result, adversely affect our operating performance.

We are exposed to liabilities arising out of the services we provide. Such liabilities may relate to an accident or incident involving our employees or third parties, particularly where we are deployed on-site at

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active military installations or in locations experiencing political or civil unrest, or they may relate to an accident or incident involving aircraft or other equipment we have serviced or used in the course of our business. Any of these types of accidents or incidents could involve significant potential claims of injured employees and other third parties, and claims relating to loss of or damage to government or third-party property. The amount of our insurance coverage may not be adequate to cover those claims or liabilities and we may be forced to bear substantial costs from an accident or incident. Substantial claims in excess of our related insurance coverage could adversely affect our operating performance and may result in additional expenses and possible loss of revenue. Moreover, any accident or incident for which we are liable, even if fully insured, may result in negative publicity which could adversely affect our reputation among our customers, including our government customers, and the public, which could result in us losing existing and future contracts or make it more difficult for us to compete effectively, which could adversely affect our operating performance and may result in additional expenses and possible loss of revenue.

The expiration of our collective bargaining agreements could result in increased operating costs or work disruptions, which could potentially affect our operating performance.

As of March 31, 2006, we had over 14,400 employees located in 33 countries around the world, approximately 7,400 of whom are located inside the United States. Of these employees, approximately 1,490 are represented by labor unions. As of March 31, 2006, we had approximately 62 collective bargaining agreements. These agreements either expired or will expire between March 2006 and December 2008. Although we believe that our relationships with these unions and our employees are satisfactory, there can be no assurance that we will not experience labor disruptions associated with the expiration or renegotiation of collective bargaining agreements or otherwise. We could experience a significant disruption of operations and increased operating costs as a result of higher wages or benefits paid to union members, which could adversely affect our operating performance and may result in additional expenses and possible loss of revenue.

Our employees in Bahrain working on the War Reserve Material contract are also represented by a labor union. We have been notified by our work force that they are dissatisfied with their compensation and benefits and that they have voted to strike. We have a strike contingency plan in place that should avoid disruption to our performance of the contract; however, if our plan does not work to our expectations, we would experience a disruption of operations which could adversely affect our operating performance and may result in additional expenses and possible loss of revenue.

Proceedings against us in domestic and foreign courts could result in legal costs and adversely affect our operating performance.

At any given time, we are involved in various claims and lawsuits arising in the ordinary course of business. Actions involving third-party liability claims generally are covered by insurance; however, in the event our insurance coverage is inadequate to cover such claims, we will be forced to bear the costs arising from a judgment. We do not have insurance coverage for adverse employment and breach of contract actions, and we bear all costs associated with such litigation and claims.

As required by generally accepted accounting principles, we estimate material loss contingencies and establish reserves when we assess that liability is deemed probable and reasonably estimable based on the facts and circumstances known to us at a particular point in time, as adjusted by subsequent developments in a particular matter. For a description of our current material legal proceedings, see “Legal Proceedings.”

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Competition in our industry could limit our ability to attract and retain customers or employees, which could result in a loss of revenue and/or a reduction in margins, which could adversely affect our operating performance.

We compete with various entities across geographic and business lines. Competitors of our Field Technical Services operating segment are typically large defense services contractors, who offer services associated with maintenance, training and other activities. Competitors of our International Technical Services operating segment are various solution providers who typically compete in any one of our key business segments. We compete on a number of factors, including our broad range of services, geographic reach, mobility and response time.

Some of our competitors have greater financial and other resources than we do or are better positioned than we are to compete for contract opportunities. For example, original equipment manufacturers who also provide aftermarket support services have a distinct advantage in obtaining service contracts for aircraft that they have manufactured, as they frequently have better access to replacement and service parts as well as an existing technical understanding of the platform they have manufactured. In addition, we are at a disadvantage when bidding for contracts put up for recompetition for which we are not the incumbent provider, because incumbent providers are frequently able to capitalize on customer relationships, technical knowledge and pricing experience gained from their prior service.

In addition to the competition we face in bidding for contracts and task orders, we must also compete to attract the skilled and experienced personnel integral to our continued operation. We hire from a limited pool of potential employees, with military and law enforcement experience, specialized technical skill sets and security clearances as prerequisites for many positions. Our failure to compete effectively for employees or excessive attrition among our skilled personnel could reduce our ability to satisfy our customers’ needs, and increase the costs and time required to perform our contractual obligations. This could adversely affect our operating performance and may result in additional expenses and possible loss of revenue. For example, we recently lost four task orders for which we competed under our Worldwide Personal Protective Services program in Israel, Haiti, Afghanistan and Baghdad.

Loss of our skilled personnel, including members of senior management, may have an adverse effect on our operations and/or our operating performance until we find suitable replacements.

Our continued success depends in large part on our ability to recruit and retain the skilled personnel necessary to serve our customers effectively, including personnel with extensive military and law enforcement training and backgrounds. The proper execution of our contract objectives depends upon the availability of quality resources, especially qualified personnel. Given the nature of our business, we have substantial need for personnel who are willing to work overseas, frequently in locations experiencing political or civil unrest, for extended periods of time and often on short notice. We may not be able to meet the need for qualified personnel as such need arises.

In addition, we must comply with provisions in U.S. government contracts that require employment of persons with specified work experience and security clearances. An inability to maintain employees with the required security clearances could have a material adverse effect on our ability to win new business and satisfy our existing contractual obligations, and could adversely affect our operating performance and may result in additional expenses and possible loss of revenue.

The loss of services of any of the members of our senior management could adversely affect our business until a suitable replacement can be found. There may be a limited number of personnel with the requisite skills to serve in these positions, and we may be unable to locate or employ such qualified personnel on acceptable terms.

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If our subcontractors fail to perform their contractual obligations, our prime contract performance and our ability to obtain future business could be materially and adversely impacted.

Many of our contracts involve subcontracts with other companies upon which we rely to perform a portion of the services we must provide to our customers. In fiscal 2005 and 2006, we paid our subcontractors $174.9 million and $229.0 million, respectively. These subcontractors generally perform niche or specialty services for which they have more direct experience, such as construction or catering services, or they have local knowledge of the region in which we will be performing and the ability to communicate with local nationals and assist in making arrangements for commencement of performance. Often, we enter into subcontract arrangements in order to meet government requirements to award certain categories of services to small businesses. A failure by one or more of our subcontractors to satisfactorily provide on a timely basis the agreed-upon supplies or perform the agreed-upon services may materially and adversely impact our ability to perform our obligations as the prime contractor. Such subcontractor performance deficiencies could result in a customer terminating our contract for default. A default termination could expose us to liability and adversely affect our operating performance and may result in additional expenses and possible loss of revenue.

Environmental laws and regulations may subject us to significant costs and liabilities that could adversely affect our operating performance.

We are subject to numerous environmental, legal and regulatory requirements related to our operations worldwide. In the United States, these laws and regulations include those governing the management and disposal of hazardous substances and wastes and the maintenance of a safe workplace, primarily associated with our aviation services activities, including painting aircraft and handling substances that may qualify as hazardous waste, such as used batteries and petroleum products. In addition to U.S. federal laws and regulations, states and other countries where we do business have numerous environmental, legal and regulatory requirements by which we must abide. We could incur substantial costs, including clean-up costs, as a result of violations of, or liabilities under, environmental laws. This could adversely affect our operating performance and may result in additional expenses and possible loss of revenue.

The requirements of complying with the Securities Exchange Act of 1934 and the Sarbanes-Oxley Act of 2002 may strain our resources and distract management.

We are subject to the Sarbanes-Oxley Act of 2002. These requirements may place a strain on our systems and resources. Section 404 of the Sarbanes-Oxley Act will require that we maintain, and certify that we have, effective disclosure controls and procedures and internal control over financial reporting. Pursuant to Section 404 of the Sarbanes-Oxley Act, our management will be required to deliver a report that assesses the effectiveness of our internal control over financial reporting and an attestation report of our auditors on our management’s assessment of such internal control. In order to maintain and improve the effectiveness of our disclosure controls and procedures and internal control over financial reporting, significant resources and management oversight will be required to devote additional time and personnel to legal, financial and accounting activities to ensure our ongoing compliance with these reporting requirements. We might not be able to complete the documentation and management assessment required by Section 404 of the Sarbanes-Oxley Act before it becomes applicable to us. In addition, the effort to prepare for these obligations may divert management’s attention from other business concerns, which could adversely affect our operating performance. In addition, we may need to hire additional accounting and financial staff, which we may not be able to do in a timely fashion and which would result in additional expense and distraction of our management’s time and resources.

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Our substantial level of indebtedness may make it difficult for us to satisfy our debt obligations and may adversely affect our ability to obtain financing for working capital, capitalize on business opportunities or respond to adverse changes in our industry.

As of March 31, 2006, we had $661.6 million of total indebtedness and $82.5 million of additional borrowing capacity under our senior secured credit facility (which gives effect to the $7.5 million of outstanding letters of credit). Based on our indebtedness and other obligations as of March 31, 2006, we estimate that, for fiscal 2007, our remaining contractual commitments including interest associated with our indebtedness and other obligations (assuming that our revolving credit facility will be undrawn at the close of fiscal 2007) will be $216.0 million in the aggregate for the remaining period between April 1, 2006 through the end of fiscal 2010. This estimate gives effect to the use of a portion of the proceeds of the Equity Offering to redeem approximately $28.0 million of the senior subordinated notes on June 8, 2006, which does not include accrued and unpaid interest on such notes as of that date of $0.8 million. Even after the application of a portion of the proceeds of the Equity Offering to repay certain indebtedness, we still have substantial indebtedness. Such indebtedness could have important consequences for you, including the following:

·it may be more difficult for us to satisfy our debt obligations;

·our ability to obtain additional financing for working capital, debt service requirements, general corporate or other purposes may be impaired;

·we must use a substantial portion of our cash flow to pay interest and principal on our indebtedness which will reduce the funds available for other purposes;

·we are more vulnerable to economic downturns and adverse industry conditions;

·our ability to capitalize on business opportunities and to react to competitive pressures and adverse changes in our industry as compared to our competitors may be compromised due to the high level of indebtedness; and

·our ability to refinance indebtedness may be limited.

Our senior secured credit facility and the indenture governing our senior subordinated notes contain various covenants limiting the discretion of our management in operating our business.

Our indenture and senior secured credit facility contain various restrictive covenants that limit our management’s discretion in operating our business. These instruments limit our ability to engage in, among other things, the following activities:

·the incurrence of additional indebtedness or guarantee obligations;

·the repayment of indebtedness prior to stated maturities;

·the payment of dividends or make certain other restricted payments;

·making investments or acquisitions;

·the creation of liens or other encumbrances; and

·the ability to transfer or sell certain assets or merge or consolidate with another entity.

In addition, our senior secured credit facility also requires us to maintain certain financial ratios and limits our ability to make capital expenditures. Capital expenditures, as defined in the senior secured credit facility, are the purchases of property and equipment. These financial ratios include a minimum interest coverage ratio and a leverage ratio. The interest coverage ratio is the ratio of earnings before interest, taxes, depreciation and amortization (“EBITDA’’) (as defined in our senior secured credit facility) to cash

20

interest expense for the preceding four quarters. The leverage ratio is a ratio of our debt to our EBITDA for the preceding four quarters. The minimum interest coverage ratio increases from 2:1 to 3.2:1 during the term of the senior secured credit facility. The maximum leverage ratio decreases from 6:1 to 3:1 during the term of the senior secured credit facility. The senior secured credit facility also restricts the maximum amount of our capital expenditures during each year of the term of the senior secured credit facility. Our annual capital expenditures may not exceed $4.0 million during the term of our senior secured credit facility. Capital expenditures are expenditures that are required by generally accepted accounting principles to be included in the purchase of property and equipment.

If we fail to comply with the restrictions in the indenture or our senior secured credit facility or any other subsequent financing agreements, a default may allow the creditors under the relevant instruments, in certain circumstances, to accelerate the related debt and to exercise their remedies thereunder, which will typically include the right to declare the principal amount of such debt, together with accrued and unpaid interest and other related amounts immediately due and payable, to exercise any remedies such creditors may have to foreclose on any of our assets that are subject to liens securing such debt and to terminate any commitments they had made to supply us with further funds. Moreover, any of our other debt that has a cross-default or cross-acceleration provision that would be triggered by such default or acceleration would also be subject to acceleration upon the occurrence of such default or acceleration.

Our ability to comply with these covenants may be affected by events beyond our control, and an adverse development affecting our business could require us to seek waivers or amendments of covenants, alternative or additional sources of financing or reductions in expenditures. We cannot assure you that such waivers, amendments or alternative or additional financings could be obtained, or if obtained, would be on terms acceptable to us.

Servicing our indebtedness requires a significant amount of cash. Our ability to generate sufficient cash depends on numerous factors beyond our control, and we may be unable to generate sufficient cash flow to service our debt obligations, which could adversely affect our financial condition.

As of March 31, 2006, we had $661.6 million of total indebtedness and $82.5 million of additional borrowing capacity under our senior secured credit facility (which gives effect to the $7.5 million of outstanding letters of credit). Based on our indebtedness and other obligations as of March 31, 2006, we estimate that, for fiscal 2007, our remaining contractual commitments including interest associated with our indebtedness and other obligations (assuming that our revolving credit facility will be undrawn at the close of fiscal 2007) will be $216.0 million in the aggregate for the remaining period between April 1, 2006 through the end of fiscal 2010. This estimate gives effect to the use of a portion of the proceeds of the Equity Offering to redeem approximately $28.0 million of the senior subordinated notes on June 8, 2006, which includes accrued and unpaid interest on such notes as of that date of $0.8 million. Our ability to make payments on and to refinance our indebtedness depends on our ability to generate cash. This, to a certain extent, is subject to general economic, political, financial, competitive, legislative, regulatory and other factors that are beyond our control.

We cannot assure you, however, that our business will generate sufficient cash flow from operations, or that future borrowings will be available to us under our senior secured facility in an amount sufficient to enable us to pay our indebtedness or to fund our other liquidity needs. We may need to refinance all or a portion of our indebtedness. We cannot assure you that we will be able to refinance any of our indebtedness, including our senior secured credit facility, on commercially reasonable terms or at all. In addition, the terms of existing or future debt agreements, including our senior secured credit facility and the indenture governing our senior subordinated notes, may restrict us from carrying out any of these alternatives. If we are unable to generate sufficient cash flow or refinance our debt on favorable terms, it could significantly adversely affect our financial condition.

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Despite our current indebtedness level, we and our subsidiaries may still be able to incur substantially more debt, which could exacerbate the risks associated with our substantial leverage.

As of March 31, 2006, we had up to $82.5 million of additional availability under our senior secured credit facility (which gives effect to $7.5 million of outstanding letters of credit). The terms of the senior secured credit facility and our senior subordinated notes do not fully prohibit us or our subsidiaries from incurring additional indebtedness. It is not possible to quantify the specific dollar amount of indebtedness we may incur because our senior secured credit facility does not provide for a specific dollar amount of indebtedness we may incur. Our senior secured credit facility and our senior subordinated notes allow us to incur only certain indebtedness that is expressly enumerated in our senior secured credit facility and the indenture governing our senior subordinated notes. The indebtedness permitted under our senior secured credit facility includes indebtedness that is customary for similar credit facilities. Specific examples of indebtedness permitted under our senior secured credit facility are described further under notes to the consolidated financial statements and include certain intercompany indebtedness, indebtedness under the senior secured credit facility, the senior subordinated notes, certain refinancing indebtedness and certain indebtedness with respect to capital leases in an amount that may not exceed $10.0 million. We believe that the comparable restrictions in the indenture governing our senior subordinated notes have restrictions that are generally no more restrictive in any material respect than the senior secured credit facility. If either we or our subsidiaries were to incur additional indebtedness, the related risks that we now face could intensify.

If our Class A common stock price fluctuates, you could lose a significant part of your investment.

The market price of our Class A common stock may be influenced by many factors, some of which are beyond our control, including:

·the failure of securities analysts to cover our Class A common stock, or changes in financial estimates by analysts;

·the activities of competitors;

·future sales of our Class A common stock either by us or by our controlling stockholder;

·future issuances by us of our Class A common stock to finance future acquisitions;

·investor perceptions of us and the industry;

·our quarterly or annual earnings or those of other companies in our industry;

·the public’s reaction to our press releases, our other public announcements and our filings with the Securities and Exchange Commission;

·general economic conditions; and

·the other factors described elsewhere in these “Risk Factors.”

The stock market often experiences extreme price and volume fluctuations that are unrelated or disproportionate to the operating performance of a particular company. These broad market fluctuations and industry factors may materially reduce the market price of our Class A common stock, regardless of our operating performance.

We are controlled by Veritas Capital, whose interests may not be aligned with yours.

Veritas Capital Management II, L.L.C. and its affiliates, The Veritas Capital Fund II, L.P. and Veritas Capital II A, LLC, own 86% of the outstanding membership interest in our controlling stockholder, DIV Holding LLC. Veritas Capital indirectly controls approximately 56.1% of our Class A common stock. So long as Veritas Capital continues to own a significant amount of the outstanding shares of our Class A common stock, it will continue to be able to strongly influence or effectively control our decisions,

22

including potential mergers or acquisitions, asset sales and other significant corporate transactions. As a result, Veritas Capital is able to control the election of our directors, determine our corporate and management policies and determine without the consent of our other stockholders, the outcome of any corporate transaction or other matter submitted to our stockholders for approval, including potential mergers or acquisitions, asset sales and other significant corporate transactions. Three of our thirteen directors are either employees of, or advisors to, Veritas Capital, as described under “Directors and Executive Officers of the Registrant—Management.”  Veritas Capital has sufficient voting power to amend our organizational documents. The interests of Veritas Capital may not coincide with the interests of other holders of our Class A common stock. Additionally, Veritas Capital is in the business of making investments in companies and may, from time to time, acquire and hold interests in businesses that compete directly or indirectly with us. Veritas Capital may also pursue, for its own account, acquisition opportunities that may be complementary to our business, and as a result, those acquisition opportunities may not be available to us. In addition, our Bylaws provide that so long as Veritas Capital beneficially owns a majority of our outstanding Class A common stock, the foregoing advance notice procedures for stockholder proposals will not apply to it. Amendment of the provisions described above in our Amended and Restated Certificate of Incorporation generally will require an affirmative vote of our directors, as well as the affirmative vote of at least a majority of our then outstanding voting stock if Veritas Capital beneficially owns a majority of our outstanding Class A common stock, or the affirmative vote of at least 80% of our then outstanding voting stock if Veritas Capital beneficially owns less than a majority of our then outstanding Class A common stock. Amendments to any other provisions of our Amended and Restated Certificate of Incorporation generally will require the affirmative vote of a majority of our outstanding voting stock. In addition, because we are a controlled company within the meaning of the New York Stock Exchange rules, we will be exempt from the New York Stock Exchange requirements that our board be composed of a majority of independent directors, and that our compensation and corporate governance committees be composed entirely of independent directors.

DIV Holding LLC is a party to a registration rights agreement, which grants it rights to require us to effect the registration of its shares of common stock. In addition, if we propose to register any of our common stock under the Securities Act of 1933, as amended, whether for our own account or otherwise, DIV Holding LLC is entitled to include its shares of common stock in that registration.

Prior to our Equity Offering, we and our existing holder of Class A common stock agreed with the underwriters to a “lock-up” period, meaning that our current stockholder may not, subject to certain other exceptions, sell any of its shares of our Class A common stock without the prior written consent of Credit Suisse Securities (USA) LLC and Goldman, Sachs & Co. until approximately 180 days after the effective date of the offering. Credit Suisse Securities (USA) LLC and Goldman, Sachs & Co., on behalf of the underwriters, may, in their sole discretion, at any time or from time to time and without notice, waive the terms and conditions of the lock-up agreement. In addition, our current stockholder will be subject to the Rule 144 holding period requirement. When the lock-up agreements expire, 32.0 million shares of our Class A common stock will become eligible for sale, in some cases subject to the requirements of Rule 144. The market price for shares of our Class A common stock may drop significantly when the restrictions on resale by our existing stockholder lapses. A decline in the price of shares of our Class A common stock might impede our ability to raise capital through the issuance of additional shares of our Class A common stock or other equity securities.

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Even if Veritas Capital no longer controls us in the future, certain provisions of our charter documents and agreements, as well as Delaware law, could discourage, delay or prevent a merger or acquisition at a premium price.

Our Amended and Restated Certificate of Incorporation and Bylaws contain provisions that:

·permit us to issue, without any further vote or action by our stockholders, 50,000,000 shares of preferred stock in one or more series and, with respect to each series, to fix the number of shares constituting the series and the designation of the series, the voting powers (if any) of the shares of such series, and the preferences and other special rights, if any, and any qualifications, limitations or restrictions, of the shares of the series;

·provide for a classified board of directors serving staggered three-year terms; and

·limit our stockholder’s ability to call special meetings.

In addition, we have a rights plan that grants stockholders the right to purchase from us additional shares at preferential prices in the event of a hostile attempt to acquire control of us.

All of the foregoing provisions may impose various impediments to the ability of a third party to acquire control of us, even if a change in control would be beneficial to our existing stockholders.

We do not intend to pay dividends on our Class A common stock for the foreseeable future, and the instruments governing our current indebtedness contain various covenants that may limit our ability to pay dividends.

We do not intend to pay dividends on our Class A common stock for the foreseeable future. Our board of directors may, in its discretion, modify or repeal our dividend policy. Future dividends, if any, with respect to shares of our Class A common stock will depend on, among other things, our results of operations, cash requirements, financial condition, contractual restrictions, provisions of applicable law and other factors that our board of directors may deem relevant. Accordingly, we cannot assure you that we will pay dividends in the future or at all.

The instruments governing our current indebtedness contain covenants that place limitations on the amount of dividends we may pay. See the notes to the consolidated financial statements elsewhere in this Form 10-K. In addition, under Delaware law, our board of directors may declare dividends only to the extent of our “surplus” (which is defined as total assets at fair market value minus total liabilities, minus statutory capital), or if there is no surplus, out of net profits for the then current and/or immediately preceding fiscal year. For a discussion of our restrictions, see “Risk Factors.”

We are dependent upon cash flows from our operating activities and availability under our senior secured credit facility as our principal source of liquidity.

We are dependent upon the cash generated from operating activities and availability under our senior secured credit facility to be our principal sources of liquidity. Based on our current level of operations, we believe our cash flow from operations and available borrowings under our senior secured credit facility will be adequate to meet our liquidity needs for at least the next twelve months. We cannot assure you, however, that our business will generate sufficient cash flow from operations, or that future borrowings will be available to us under our senior secured credit facility in an amount sufficient to enable us to repay our indebtedness, including the notes, or to fund our other liquidity needs.

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ITEM 1B. UNRESOLVED STAFF COMMENTS.

None.

ITEM 2. PROPERTIES.

Our principal executive office is located in, and a portion of our operations are conducted from, leased premises located at 8445 Freeport Parkway, Suite 400, Irving, Texas, 75254-8815. In addition, as of March 31, 2006, we leased 197 commercial facilities in 18 countries used in connection with the various services rendered to our customers. Upon expiration of our leases, we do not anticipate any difficulty in obtaining renewals or alternative space. We do not own any real property. Lease expirations range from month-to-month to ten years. Many of the current leases are non-cancelable.

We believe that substantially all of our property and equipment is in good condition, subject to normal wear and tear and that our facilities have sufficient capacity to meet the current and projected needs of our business.

The following table lists our U.S. leased properties, including the inside square footage of those properties as of May 31, 2006.

City, State	Size
	(square feet)
Albany, Georgia		280,000
Fort Worth, Texas		119,001
Irving, Texas		52,421
Falls Church, Virginia		46,664
McClellan, California		18,837
Herndon, Virginia		10,063
Hampton, Virginia		3,437
Fredericksburg, Virginia		2,600
Huntsville, Alabama		1,200
Killeen, Texas		1,000

ITEM 3. LEGAL PROCEEDINGS.

Pending Litigation and Claims

On September 11, 2001, a class action lawsuit seeking $100.0 million on behalf of approximately 10,000 citizens of Ecuador was filed against DynCorp International and several of its former affiliates in the U.S. District Court for the District of Columbia. The action alleges personal injury, property damage and wrongful death as a consequence of the spraying of narcotic plant crops along the Colombian border adjacent to Ecuador. The spraying operations are conducted under a Department of State contract in cooperation with the Colombian government. The terms of the Department of State contract provide that the Department of State will indemnify DynCorp International against third-party liabilities arising out of the contract, subject to available funding. We are also entitled to indemnification by Computer Sciences Corporation in connection with this lawsuit, subject to certain limitations. Additionally, any damage award would have to be apportioned between the other defendants and our Company.

On May 29, 2003, Gloria Longest, a former accounting manager for the Company, filed suit against the Company under the False Claims Act and the Florida Whistleblower Statute, alleging that it submitted false claims to the government under the International Narcotics & Law Enforcement Affairs contract with the Department of State. The action, titled U.S. ex rel. Longest v. DynCorp and DynCorp International LLC, was filed in the U.S. District Court for the Middle District of Florida under seal. The case was unsealed in 2005, and we learned of its existence on August 15, 2005 when we were served with the complaint. After

25

conducting an investigation of the allegations made by the plaintiff, the U.S. government did not join the action. The complaint does not demand any specific monetary damages; however, in the event that a court decides against us in this lawsuit, it could have a material adverse effect on our operating performance.

General Legal Matters

The Company and its subsidiaries and affiliates are involved in various lawsuits and claims that have arisen in the normal course of business. In most cases, we have denied, or believe we have a basis to deny, liability. We have recorded, in the consolidated financial statements found elsewhere in this Form 10-K, our best estimate of the aggregate liability that will result from these matters and believe that these matters are adequately reserved. While it is not possible to predict with certainty the outcome of litigation and other matters discussed above, it is the opinion of the Company’s management, based in part upon opinions of counsel, insurance in force and the facts currently known, that liabilities in excess of those recorded, if any, arising from such matters would not have a material adverse effect on the results of operations, consolidated financial condition or liquidity of the Company over the long term.

In addition, the Company is occasionally the subject of investigations by various agencies of the U.S. government. Such investigations, whether related to our U.S. government contracts or conducted for other reasons, could result in administrative, civil or criminal liabilities, including repayments, fines or penalties being imposed upon us, or could lead to suspension or debarment from future U.S. government contracting. In management’s opinion, there are no outstanding issues of this nature at March 31, 2006 that will have a material adverse effect on the Company’s consolidated financial condition, results of operations or liquidity.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

None.

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PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

(a)Market Information. Our equity securities consist of one class of common stock, Class A common stock. DIV Holding LLC held Class B common stock, which automatically converted on a one-for-one basis into Class A common stock once the underwriters’ over-allotment option expired on June 2, 2006. Our Class A common stock began trading on the New York Stock Exchange on May 4, 2006, subsequent to our fiscal year ended March 31, 2006, under the symbol “DCP.”  Therefore, we do not have any quarterly high and low sales prices of our Class A common stock for fiscal 2005 and 2006.

(b)Holders of Record. As of June 1 2006, there were approximately 154 holders of record of our Class A common stock.

(c)Dividends. Immediately prior to the consummation of our Equity Offering, we declared an initial special Class B distribution of $100.0 million, payable upon the consummation of the offering, and an additional special Class B distribution payable upon the exercise of the underwriters’ over-allotment option, representing 50% of the aggregate net proceeds that we would have received from the sale of up to 3,750,000 additional shares of our Class A common stock. The initial special Class B distribution was made on May 9, 2006 and since the underwriters failed to exercise their over-allotment option, the additional special Class B distribution is no longer payable.

We do not intend to pay cash dividends on our Class A common stock in the foreseeable future. We are a holding company that does not conduct any business operations of our own. As a result, we are dependent upon cash dividends and distributions and other transfers from our subsidiaries to make dividend payments on our Class A common stock. The amounts available to us to pay cash dividends are restricted by our subsidiaries’ debt agreements. The declaration and payment of dividends also are subject to the discretion of our board of directors and depend on various factors, including our net income, financial conditions, cash requirements, future prospects and other factors deemed relevant by our board of directors.

(d)Securities Authorized for Issuance Under Equity Compensation Plans. None.

(e)Recent Sales of Unregistered Securities; Use of Proceeds from Registered Securities. The following is a list of all securities sold or issued by us during the period covered by this Annual Report:

In October 2005, as payment for the working capital adjustment in the amount of $65.5 million, we issued 65,550 shares of our preferred stock to Computer Sciences Corporation. We redeemed all of our preferred stock using proceeds from the Equity Offering.

On May 9, 2006, we consummated an Equity Offering of 25,000,000 shares of our Class A common stock, par value $.01 per share, at a price of $15.00 per share. The gross proceeds from the Equity Offering of $375.0 million, together with cash on hand, were used: (i) to redeem all of our outstanding preferred stock, of which $222.8 million in stated amount, including accrued and unpaid dividends thereon, was outstanding as of May 9, 2006 (including preferred stock issued and accrued and unpaid dividends related to the working capital adjustment); (ii) to pay a special Class B distribution in the amount of $100.0 million to the holder of the Company’s common stock, DIV Holding LLC; (iii) to redeem $28.0 million of our senior subordinated notes on June 8, 2006; (iv) to pay prepayment penalties of $8.4 million as of May 9, 2006, $5.7 million of which represented prepayment penalties on our preferred stock and $2.7 million of which represented prepayment penalties on our senior subordinated notes; and (v) to pay transaction expenses of approximately $35.0 million, including an underwriters’ commission of $22.5 million, a fee of

27

$5.0 million to Veritas Capital and $7.5 million of miscellaneous fees and expenses related to the Equity Offering.

ITEM 6. SELECTED FINANCIAL DATA.

Set forth below are the five-year selected historical consolidated financial data. This information should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and related notes thereto included elsewhere in this Form 10-K. The selected consolidated financial information for fiscal 2002 has been derived from our unaudited consolidated financial statements. In our opinion, these unaudited consolidated financial statements have been prepared on the same basis as the audited financial statements and include all adjustments, consisting only of normal and recurring adjustments, necessary for a fair presentation of the information included therein. The selected consolidated financial information for the period from March 30, 2002 through March 7, 2003 has been derived from our consolidated financial statements, referred to as the “original predecessor period.”  The selected historical consolidated financial data for the period from March 8, 2003 through March 28, 2003, as of and for the fiscal year ended April 2, 2004 and for the period from April 3, 2004 through February 11, 2005 are derived from our consolidated financial statements, referred to as the “immediate predecessor period.”  The selected historical consolidated financial data as of April 1, 2005 and for the period from February 12, 2005 through April 1, 2005 and for the fiscal year ended March 31, 2006 are derived from our consolidated financial statements, referred to as the “successor period.”

We use a 52/53-week fiscal year ending on the closest Friday to March 31. The period from April 3, 2004 to February 11, 2005 was a 45-week period. The fiscal year ended April 2, 2004 was a 53-week year. The period from March 30, 2002 to March 7, 2003 included 49 weeks. During the original predecessor period, DynCorp used a calendar year. Accordingly, the financial statements covered by that period were restated to 52/53-week fiscal year ends.

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Original Predecessor Period Immediate Predecessor Period Successor Period

	Fiscal Year Ended March 29, 2002				March 30, 2002 – March 7, 2003				21 Days Ended March 28, 2003			Fiscal Year Ended April 2, 2004			April 3, 2004 – Feb. 11, 2005			49 Days Ended April 1, 2005			Fiscal Year Ended March 31, 2006
									(dollars in thousands)
STATEMENT OF OPERATIONS DATA:
Revenues		$	755,326			$	859,112		$	59,240		$	1,214,289		$	1,654,305		$	266,604		$	1,966,993
Costs of Services (excluding depreciation and amortization disclosed below)		687,088				787,649			53,482			1,106,571			1,496,109			245,406			1,722,089
Selling, General and Administrative		34,544				40,316			3,414			48,350			57,755			8,408			97,520
Depreciation and Amortization		1,462				351			265			8,148			5,922			5,605			46,147
Operating Income		32,232				30,796			2,079			51,220			94,519			7,185			101,237
Interest Expense		43				—			—			—			—			8,054			56,686
Interest on Mandatory Redeemable Shares		—				—			—			—			—			2,182			21,142
Interest Income		(50		)		(43		)	(2		)	(64		)	(170		)	(7		)	(461		)
Net Income (Loss) Before Income Taxes		32,239				30,839			2,081			51,284			94,689			(3,044		)	23,870
Provision for Income Taxes		11,525				11,973			852			19,924			34,956			60			16,627
Net Income (Loss)		$	20,714			$	18,866		$	1,229		$	31,360		$	59,733		$	(3,104	)	$	7,243
CASH FLOW DATA:
Net Cash (Used in) Provided by Operating Activities						$	(10,331	)	$	12,542		$	(6,756	)	$	(2,092	)	$	(31,240	)	$	55,111
Net Cash Used in Investing Activities						(920		)	(360,961		)	(2,292		)	(10,707		)	(869,394		)	(6,231		)
Net Cash Provided by (Used in) Financing Activities						13,191			348,854			11,017			14,325			906,072			(41,781		)
OTHER FINANCIAL DATA:
EBITDA (1) (2)		$	33,744			$	31,781		$	2,382		$	60,072		$	101,326		$	12,896		$	148,718
Capital Expenditures		1,181				1,011			11			2,047			8,473			244			3,465
SELECTED OPERATING INFORMATION:
Backlog (3)		$	2,091			NA			$	2,028		$	2,164		NA			$	2,040		$	2,641
BALANCE SHEET DATA:(4)
Cash and Cash Equivalents		$	2,166			NA			$	4,541		$	6,510		NA			$	13,474		$	20,573
Working Capital (5)		38,861				NA			58,295			104,335			NA			200,367			251,329
Total Assets		148,032				NA			481,097			579,829			NA			1,148,193			1,239,089
Total Debt		—				NA			—			—			NA			826,990			881,372
Shareholder’s Equity		—				NA			354,198			396,573			NA			96,918			106,338

(1)EBITDA is a primary component of certain covenants under our senior secured credit facility and is defined as net income (loss) before interest expense, income taxes, depreciation and amortization. EBITDA does not represent net income or cash flows from operations, as these terms are defined under generally accepted accounting principles, or “GAAP,” and should not be considered as an alternative to net income, operating income or any other performance measures derived in accordance with GAAP. EBITDA as presented in this Form 10-K is not necessarily comparable to similarly titled measures reported by other companies.

(2)The following table presents a reconciliation of income to EBITDA for the periods included below.

	Original Predecessor Period		Immediate Predecessor Period			Successor Period
	Fiscal Year Ended March 29, 2002	March 30, 2002 – March 7, 2003	21 Days Ended March 28, 2003	Fiscal Year Ended April 2, 2004	April 3, 2004 – Feb. 11, 2005	49 Days Ended April 1, 2005	Fiscal Year Ended March 31, 2006
			(dollars in thousands)
RECONCILIATION OF NET INCOME TO EBITDA:

Net Income (loss)	$	20,714	$	18,866	$	1,229	$	31,360	$	59,733	$	(3,104	)	$	7,243
Income Taxes	11,525		11,973		852		19,924		34,956		60			16,627
Interest Expense	43		—		—		—		—		10,236			77,828
Depreciation and Amortization	1,462		942		301		8,788		6,637		5,704			47,020
EBITDA	$	33,744	$	31,781	$	2,382	$	60,072	$	101,326	$	12,896		$	148,718

(3)Backlog data is as of the end of the applicable period.

(4)Balance sheet data is as of the end of the applicable period.

(5)Working capital is defined as current assets, net of current liabilities.

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ITEM 7.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Overview

Company Background

We provide specialized mission-critical outsourced technical services to civilian and military government agencies. Our specific global expertise is in law enforcement training and support, security services, base operations and aviation services and operations. We also provide logistics support for all of our services. Our predecessors have provided services to numerous U.S. government departments and agencies since 1951. We operated as a separate subsidiary of Computer Sciences Corporation from March 2003 until February 2005. On February 11, 2005, Computer Sciences Corporation and DynCorp sold DynCorp International LLC to DynCorp International Inc., a newly formed entity controlled by Veritas Capital. The Company has no operations independent of DynCorp International LLC.

Equity Offering

On May 9, 2006, we consummated an Equity Offering of 25,000,000 shares of our Class A common stock, par value $0.01 per share, at a price of $15.00 per share (the “Equity Offering”). The gross proceeds from the Equity Offering of $375.0 million, together with cash on hand, were used: (i) to redeem all of our outstanding preferred stock, of which $222.8 million in stated amount, including accrued and unpaid dividends thereon, was outstanding as of May 9, 2006; (ii) to pay a special Class B distribution in the amount of $100.0 million to the holder of the Company’s common stock, DIV Holding LLC; (iii) to redeem $28.0 million of our senior subordinated notes on June 8, 2006; (iv) to pay prepayment penalties of $8.4 million as of May 9, 2006, $5.7 million of which represented prepayment penalties on our preferred stock and $2.7 million of which represented prepayment penalties on our senior subordinated notes; and (v) to pay transaction expenses of approximately $35.0 million, including an underwriters’ commission of $22.5 million, a fee of $5.0 million to Veritas Capital Management II, L.L.C. and $7.5 million of miscellaneous fees and expenses related to the Equity Offering.

Presentation of Financial Results

On December 12, 2004, The Veritas Capital Fund II, L.P. and its subsidiary, DI Acquisition Corp. (later renamed DynCorp International Inc.), entered into a purchase agreement with Computer Sciences Corporation and DynCorp whereby DynCorp International agreed to acquire our operating company, a wholly owned subsidiary of DynCorp. DynCorp International assigned its rights to acquire our operating company to DI Finance LLC, its wholly owned subsidiary. Immediately after the consummation of the 2005 Acquisition on February 11, 2005, DI Finance LLC was merged with and into our operating company. Our operating company survived the merger and is now a wholly owned subsidiary of DynCorp International. Accordingly, the discussion and analysis of historical operations during the period prior to the 2005 Acquisition do not reflect the significant impact that this transaction had on us. You should read the following discussion together with the sections entitled “Selected Financial Data,” “Risk Factors” and the consolidated financial statements included elsewhere in this Form 10-K. With respect to certain forward-looking statements contained in this Management’s Discussion and Analysis of Financial Condition and Results of Operations, see “Business—Forward-Looking Statements.”

We are providing the following supplemental comparative financial information on a pro forma and combined basis for the immediate predecessor and successor for the full year of fiscal 2005. This pro forma and combined financial information is presented on a consolidated basis as if the acquisition was effective at the beginning of fiscal 2005. The usefulness of this information may be limited due to the aforementioned risk factors. Unless otherwise indicated, references in this Item 7 to results for the full year of fiscal 2005 reflect pro forma and combined results of the immediate predecessor and successor.

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The following pro forma consolidated statement of operations for the fiscal year ended April 1, 2005, is derived from the application of pro forma adjustments to the historical statement of operations of the immediate predecessor for the period from April 3, 2004 to February 11, 2005 as if the 2005 Acquisition occurred on April 3, 2004. The statement of operations for the 49 days ended April 1, 2005 represents the historical results of the successor company. These pro forma results should be read in conjunction with the consolidated financial statements, related notes and other consolidated financial information included elsewhere in this Form 10-K.

The pro forma adjustments are described in the notes to the pro forma statement of operations and are based on available information and assumptions that management believes are reasonable. The pro forma statement of operations is not necessarily indicative of the future results of operations of the successor company or results of operations of the successor company that would have actually occurred had the 2005 Acquisition been consummated as of April 3, 2004.

Pro Forma Financial Information

	Immediate Predecessor Period				Successor
	Period from April 3, 2004 to Feb. 11, 2005				49 Days Ended April 1, 2005				Adjustments				Pro Forma Combined Fiscal Year Ended April 1, 2005
	(dollars in thousands)
Revenues		$	1,654,305			$	266,604			$	—			$	1,920,909
Costs of Services		1,496,109				245,406				—				1,741,515
Selling, General and Administrative		57,755				8,408				(775		)(1)		65,388
Depreciation and Amortization		5,922				5,605				34,009		(2)		45,536
Total Costs and Expenses		1,559,786				259,419				33,234				1,852,439
Operating Income		94,519				7,185				(33,234		)		68,470
Interest Income		(170		)		(7		)		—				(177		)
Interest Expense		—				8,054				47,414		(3)		55,468
Interest on Mandatory Redeemable Shares		—				2,182				18,960		(4)		21,142
Income (loss) before Income Taxes		94,689				(3,044		)		(99,608		)		(7,963		)
Provision for Income Taxes		34,956				60				(30,153		)(5)		4,863
Net Income (loss)		$	59,733			$	(3,104	)		$	(69,455	)		$	(12,826	)
Segment information:
Revenues:
International Technical Services		$	1,059,713			$	173,007			$	—			$	1,232,720
Field Technical Services		594,480				93,674				—				688,154
Other		112				(77		)		—				35
Consolidated		$	1,654,305			$	266,604			$	—			$	1,920,909
Earnings before Interest and Taxes:
International Technical Services		$	68,198			$	3,447			$	(24,821	)		$	46,824
Field Technical Services		27,755				3,662				(8,106		)		23,311
Other		(1,434		)		76				(307		)		(1,665		)
Consolidated		$	94,519			$	7,185			$	(33,234	)		$	68,470
Cash flow data:
Net cash used in operating activities		$	(2,092	)		$	(31,240	)		$	—			$	(33,332	)
Net cash used in investing activities		(10,707		)		(869,394		)		—				(880,101		)
Net cash provided by financing activities		14,325				906,072				—				920,397

(1)The annual management fee is $300,000, $25,000 of which is reflected under selling, general and administrative for the successor period and which is offset by management retention bonuses expensed during the successor period of $1,050,000. See “Certain Relationships and Related Transactions.”

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(2)Reflects the change in intangible amortization related to the adjustment to estimated fair value of intangible assets and the change in estimated lives.

(3)Represents the increase in interest expense to reflect the new capital structure and the amortization of financing costs over the terms of the corresponding debt. A summary follows (dollars in thousands):

	Year Ended April 1, 2005
Interest on Term Loan		$	21,735
Interest on Senior Subordinated Notes		30,400
Senior Administrative Agent Fee		100
Undrawn Facility Fee		375
Amortization of Deferred Financing Fees		2,858
Total Expense		$	55,468

(4)Represents a full year of accreted value on our preferred stock.

(5)Based on an effective tax rate of 36.9%, which is the historical rate for the period April 3, 2004 to February 11, 2005 and is the expected approximate effective tax rate for successor operations.

Operating Environment and Impact of Our Business

We are primarily a U.S. government contractor providing a broad range of critical technical services to civilian and military government agencies and to a lesser extent, commercial customers. As a result, our operating performance for any time period is impacted primarily by trends in U.S. government outsourcing, spending and the awarding of contracts and related payment terms and therefore trends they currently have in this market can have a significant effect on our business. The trends we monitor and the impact we believe they have on our business are discussed below.

Increased Outsourcing by U.S. and Foreign Governments.   We have seen and benefited from a continued trend toward outsourcing of services by the U.S. government, particularly within the Department of Defense and the Department of State. These outsourcing trends are seen both domestically and internationally and support the increased deployment of U.S. resources overseas. The increase in overseas deployment has been in both frequency and magnitude, and across multiple U.S. government agencies. For example, our International Technical Services segment has witnessed strong growth as a result of the U.S. government’s trend toward outsourcing critical functions. Outside of the U.S. government, we are seeing other countries, particularly the United Kingdom and Australia, follow the U.S. government trend to outsource services. We believe that this provides additional markets for our existing services. Our International Technical Services operating segment primarily provides outsourced law enforcement training, drug eradication, global logistics, base operations and personal physical security services to government and commercial customers in foreign jurisdictions. Since fiscal 2001, International Technical Services has grown revenues from $264.7 million to $1,264.6 million for fiscal 2006, or 64.3% of our total revenues. Although we expect to continue to see increases in government outsourcing for the foreseeable future, particularly in government technical support services and other non-combat related functions, the adoption of new laws or regulations that affect companies that provide services to the federal government or curtailment of the federal government’s outsourcing of services to private contractors would significantly alter this positive trend.

Increased Spending by Our Customers.   The Department of Defense budget for fiscal 2007, excluding supplemental funding relating to operations in Iraq and Afghanistan, has been proposed to Congress at $439.3 billion, representing a 48% increase over fiscal 2001. Fiscal 2005 Department of Defense actual spending, excluding supplemental funding relating to operations in Iraq and Afghanistan, was $400.1 billion. The U.S. government budget for international development and humanitarian and international security assistance coordinated by the Department of State has grown from approximately $15 billion in fiscal 2000 to a projected $25 billion in fiscal 2009 (a compound annual growth rate of 5.2%)

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from fiscal 2000 to fiscal 2009. As a result of the U.S. military’s presence in the Middle East and abroad, we believe that this trend will continue for the foreseeable future and that we are well-positioned to benefit from this trend. Among the factors that could impact U.S. government spending and that would reduce our U.S. government contracting business are: a significant decline in, or reapportioning of, spending by the U.S. government, in general, or by the Department of Defense or the Department of State.

Shift to More Multiple Awards in Indefinite Delivery, Indefinite Quantity Contracts.The trend in the service segment of the U.S. government has been to award more multiple award indefinite delivery, indefinite quantity contracts. We expect these trends to continue. Strong customer relationships combined with strong past performance will increase the probability of earning a customer’s business under multiple award indefinite delivery, indefinite quantity contracts, as well as winning new procurements. In fiscal 2005 and 2006, 56.3% and 58.9% of our revenues were attributable to indefinite delivery, indefinite quantity contracts, respectively. Traditional government contracts typically have a base year award plus four to nine option years, limiting the competition to the 5-10 year contract cycle. Under multiple award indefinite delivery, indefinite quantity contracts, the customer has the ability to compete for the work more frequently among the contract holders, or even move the work on a sole source basis to one of the other providers. This trend toward multiple award indefinite delivery, indefinite quantity contracts could increase the volatility in our revenue.

Shift from Cost Type Contracts to Time-and-Materials or Fixed-Price Contracts.Our government contract services have three distinct pricing structures: cost-reimbursement, time-and-materials and fixed-price, representing approximately 34%, 39% and 27% of our revenues, respectively, for fiscal 2005, and approximately 28%, 38% and 34% of our revenues, respectively, for fiscal 2006. We believe that our profitability will continue to improve as we anticipate that our customers will continue to shift away from cost-reimbursement to time-and-materials contracts and fixed-price contracts. We base our belief on recent trends in our revenues, the nature of the contracts on which we are bidding and the pricing structure in fixed-price and time-and-materials contracts. We assume financial risk on time-and-materials and fixed-price contracts, because we assume the risk of performing those contracts at the stipulated prices or negotiated hourly rates. If we do not accurately estimate ultimate costs and control costs during performance of the work, we could lose money on a particular contract or have lower than anticipated margins. The movement from cost type contracts to time-and-materials or fixed-price contracts, while increasing our risks, allows us the opportunity to earn higher margins.

Increased Maintenance, Overhaul and Upgrades Needed to Support Aging Military Platforms.Another trend we monitor to determine our future strategies is the age and use of weapon systems. The high visibility/high cost new weapons systems tend to be the target of budget reductions, while the O&M budget continues to grow as a percentage of the total budget. The O&M portion of the Department of Defense budget, which includes the majority of the services we provide, is the largest and fastest growing segment of Department of Defense military spending. Also, as the purchase of new weapons systems are delayed or cancelled, the current weapons systems continue to age and require increased maintenance. This aging, combined with the increased use of the equipment, often in harsh environments, provides opportunities for the services we offer.

Competition.We believe that the favorable industry trends that we anticipate may also attract additional competition by certain existing and potential competitors. We compete with various entities across geographic and business lines. Some of our competitors have greater financial and other resources than we do or are better positioned than we are to compete for contract opportunities. In addition, we are at a disadvantage when bidding for contracts put up for recompetition for which we are not the incumbent provider, because incumbent providers are frequently able to capitalize on customer relationships, technical knowledge and pricing experience gained from their prior service.

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Factors Affecting Our Results of Operations

Our future results of operations will be affected by the following factors, which may cause our results of operations to differ from those discussed under “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Debt Service.During the predecessor periods, working capital was provided by our parent at the time, and therefore there was no debt and minimal interest expense on our financial statements. As of March 31, 2006, we had $661.6 million of outstanding debt, which generates significant interest expense. Approximately $216.0 million per year of our cash flow will be required for interest and principal payments annually for fiscal 2007 through 2010, giving effect to the application of the use of proceeds from our Equity Offering. This will limit the amount of cash that is available for working capital requirements, or other uses.

Stand-Alone Operating Costs.During fiscal 2004, we paid Computer Sciences Corporation $12.7 million, and during the period from April 3, 2004 through February 11, 2005, we paid Computer Sciences Corporation $11.9 million for executive oversight and other services such as treasury, tax, insurance, legal, consolidation accounting, public affairs and information technology. In addition, under the transition services agreement, we incurred approximately $1.6 million of expenses during the fiscal year ended March 31, 2006. We have put in place people and/or other resources to provide the services previously provided by corporate resources from Computer Sciences Corporation (March 29, 2003 through February 11, 2005). On May 15, 2006, we terminated the transition services agreement with Computer Sciences Corporation. All services previously provided by Computer Sciences Corporation are now performed by our own employees.

Purchase Accounting Adjustments.The 2005 Acquisition was accounted for under the purchase method and, accordingly, the purchase price of the 2005 Acquisition was allocated to the net assets acquired based on the fair values at the date of the 2005 Acquisition. We engaged a third party to provide an independent appraisal of the fair values of certain intangible assets.

2005 Working Capital Adjustment.The purchase price for the 2005 Acquisition was $937.0 million after giving effect to a $65.55 million net working capital adjustment in favor of Computer Sciences Corporation and $6.1 million of accumulated dividends in connection with the preferred stock issued for satisfaction of the working capital adjustment. Of the $937.0 million purchase price, $775.0 million was paid in cash, $140.6 million was paid to Computer Sciences Corporation in the form of our preferred equity, $6.1 million in accumulated dividends on the preferred stock was issued in connection with the working capital adjustment and the remaining amounts were transaction expenses.

On May 9, 2006, we redeemed all of our outstanding preferred stock, of which $222.8 million in stated amount included accrued and unpaid dividends thereon as of May 9, 2006, with a portion of the proceeds from the Equity Offering.

Explanation of Reporting Periods and Basis of Presentation

On February 11, 2005, our Company was sold by Computer Sciences Corporation to an entity controlled by Veritas Capital. The financial statements from March 29, 2003 to February 11, 2005, the period of Computer Sciences Corporation ownership, are referred to as the “immediate predecessor period” statements. We refer to financial statements from and after February 12, 2005 as the “successor period” statements.

The historical financial statements and information included herein include the consolidated accounts of DynCorp International and its subsidiaries. This presentation is on the historical cost basis of accounting with the application of purchase accounting related to the 2005 Acquisition in the applicable period presented.

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The Company’s financial statements for fiscal 2004 are based on the historical assets, liabilities, sales and expenses of our Company, including the allocation to our Company of a portion of our corporate expenses and income taxes. During fiscal 2004 and the period from April 3, 2004 to February 11, 2005, our Company’s predecessor parents allocated $12.7 million and $11.9 million, respectively, of expenses it incurred for providing executive oversight and corporate headquarter functions, consolidation accounting, treasury, tax, legal, public affairs, human resources, information technology and other services. Of the $12.7 million, $9.4 million and $3.3 million were allocated to selling, general and administrative and costs of services, respectively. Of the $11.9 million, $9.8 million and $2.1 million were allocated to selling, general and administrative and costs of services, respectively. These allocations are considered to be reasonable reflections of the utilization of services provided to, or the benefit received by, our Company. For a discussion of our transition services agreement, see “Certain Relationships and Related Transactions—Transition Services Agreement.”  On May 15, 2006, we terminated the transition services agreement with Computer Sciences Corporation. All services previously provided by Computer Sciences Corporation are now performed by our own employees.

The 2005 Acquisition

On December 12, 2004, The Veritas Capital Fund II, L.P. and its subsidiary, DynCorp International (formerly known as DI Acquisition Corp.), entered into a purchase agreement with Computer Sciences Corporation and DynCorp whereby DynCorp International agreed to acquire our operating company, a wholly owned subsidiary of DynCorp. DynCorp International assigned its rights to acquire our operating company to DI Finance LLC, its wholly owned subsidiary. Immediately after the consummation of the 2005 Acquisition on February 11, 2005, DI Finance LLC was merged with and into our operating company. Our operating company survived the merger and is now a wholly owned subsidiary of DynCorp International.

As a result of the 2005 Acquisition, our assets and liabilities have been adjusted to their estimated fair value as of the closing. The excess of the total purchase price over the value of our assets at the closing of the 2005 Acquisition has been allocated to goodwill and other intangible assets, some of which will be amortized, and will be subject to annual impairment review.

Backlog

We track contracted backlog in order to assess our current business development effectiveness and to assist us in forecasting our future business needs and financial performance. Backlog consists of orders and options under our contracts. We define contracted backlog as the estimated value of contract modifications received from customers that have not been recognized as revenue. Our backlog consists of funded and unfunded backlog. Funded backlog is based upon amounts actually appropriated by a customer for payment of goods and services less actual revenue recorded as of the measurement date under that appropriation. Unfunded backlog is the actual dollar value of unexercised contract options. Most of our U.S. government contracts allow the customer the option to extend the period of performance of a contract for a period of one or more years. These options may be exercised at the sole discretion of the customer. Historically, it has been our experience that the customer has exercised contract options.

Because of appropriation limitations in the federal budget process, firm funding for our contracts is usually made for only one year at a time, with the remainder of the years under the contract expressed as a series of one-year options. As is the case with the base period of our U.S. government contracts, option periods are subject to the availability of funding for contract performance. The U.S. government is legally prohibited from ordering work under a contract in the absence of funding. Our historical experience has been that the government generally has funded the option periods of our contracts.

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The following table sets forth our contracted backlog (dollars in millions) as of the dates indicated:

	April 2, 2004		April 1, 2005		March 31, 2006
Funded Backlog	$	991	$	1,140		$	1,024
Unfunded Backlog	1,173		900			1,617
Total Backlog	$	2,164	$	2,040		$	2,641

For additional information on backlog, see “Business—Backlog.”

Estimated Contract Value

Estimated contract value is calculated as the greater of the bid price we submitted or expect to submit for the applicable contract or the sum of our actual revenues under the contract plus our estimated revenues from future performance under priced options in the contract. For indefinite delivery, indefinite quantity contracts, the estimated contract value of such contracts is the greater of the sum of our actual revenues under the contract plus our estimated revenue from future performance under funded task orders or the bid price we submitted that was accepted by the customer.

Estimated Remaining Contract Value

The following table sets forth our estimated remaining contract value (dollars in millions) as of the dates indicated:

	April 2, 2004		April 1, 2005		March 31, 2006
Estimated remaining contract value	$	2,812	$	4,413		$	5,727

Our estimated remaining contract value represents the backlog plus management’s estimate of future revenues under indefinite delivery, indefinite quantity contracts that have not been funded, or award term periods that have not yet been earned. These future revenues would be our estimate of revenue that would occur from the end of currently funded task orders until the end of the indefinite delivery, indefinite quantity contracts. Our estimated remaining contract value is based on our experience under contracts and we believe our estimates are reasonable. However, there can be no assurance that our existing contracts will result in actual revenues in any particular period or at all. These amounts could vary depending upon government budgets and appropriations.

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Results of Operations

The following tables set forth, for the periods indicated, our historical and pro forma combined results of operations, both in dollars and as a percentage of revenues:

	Immediate Predecessor Period											Successor Period
	For the Fiscal Year Ended April 2, 2004						Pro Forma Combined Fiscal Year Ended April 1, 2005(1)					For the Fiscal Year Ended March 31, 2006
	(dollars in thousands)
Revenues		$	1,214,289		100.0	%	$	1,920,909		100.0	%	$	1,966,993		100.0	%
Costs of Services (excluding depreciation and amortization disclosed below)		1,106,571			91.1		1,741,515			90.7		1,722,089			87.5
Selling, General and Administrative Expenses		48,350			4.0		65,388			3.4		97,520			5.0
Depreciation and Amortization		8,148			0.7		45,536			2.4		46,147			2.4
Total Costs and Expenses		1,163,069			95.8	%	1,852,439			96.5	%	1,865,756			94.9	%
Interest Income		(64		)	0.0		(177		)	0.0		(461		)	0.0
Interest Expense		—			—		55,468			2.9		56,686			2.9
Interest on Mandatory Redeemable Shares		—			—		21,142			1.1		21,142			1.1
Income (loss) Before Taxes		51,284			4.2		(7,963		)	(0.5	)	23,870			1.1
Provision for Income Taxes		19,924			1.6		4,863			0.3		16,627			0.8
Net Income (loss)		$	31,360		2.6	%	$	(12,826	)	(0.8	)%	$	7,243		0.3	%

(1)This information was derived from, and should be read in conjunction with, the “Pro Forma Financial Information” and footnotes thereto included in Item 7 of this Form 10-K.

Fiscal Year Ended March 31, 2006 Compared to Fiscal Year Ended April 1, 2005 Pro Forma

The following discussion provides a comparison of the results of operations for the successor company for the fiscal year ended March 31, 2006 with the pro forma combined results of operations for the Company for the fiscal year ended April 1, 2005. The discussion is provided for comparative purposes only, but the value of such a comparison may be limited. The information in this section should be read in conjunction with the consolidated financial statements and the related notes contained elsewhere in this Form 10-K.

Consolidated

Revenues.   Total revenues increased from $1,920.9 million for the fiscal year ended April 1, 2005 pro forma to $1,967.0 million for the fiscal year ended March 31, 2006, an increase of $46.1 million or 2.4%.

Revenue from our International Technical Services segment increased from $1,232.7 million for the fiscal year ended April 1, 2005 pro forma to $1,264.6 million for the fiscal year ended March 31, 2006, an increase of $31.9 million or 2.6%. Increases in this segment include $79.0 million of revenue under the International Narcotics and Law Enforcement Air-Wing program as a result of a new contract that went into effect on November 1, 2005 for operations, and added work to provide helicopter support for ground eradication efforts in Afghanistan, $27.1 million of new work providing hurricane relief efforts along the Gulf Coast, $26.0 million due to added work under our Africa Peacekeeping contract with the Department of State and $12.8 million of additional construction work under the Worldwide Personal Protective Services program. These increases were partially offset by a reduction of $16.6 million under the Civilian Police program due to the timing of various construction efforts in the Middle East, and $67.5 million from

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a series of contracts to provide security and logistics support to various U.S. government construction efforts in the Middle East as a subcontractor. This type of subcontract effort was typically short term with delayed payments, and therefore we decided to exit this line of business until it can be performed in a more stable environment with improved financial terms. Further offsetting the increases described above was a reduction in our Dyn Marine Services of Virginia LLC business of $32.0 million due to the discontinuance of our work under the Oceangraphics Ships contract.

Revenues from our Field Technical Service segment increased from $688.2 million for the fiscal year ended April 1, 2005 pro forma to $702.4 million for the fiscal year ended March 31, 2006, an increase of $14.2 million or 2.1%. The Field Technical Services increase of $14.7 million was primarily driven by the Life Cycle Contractor Support program increase of $8.5 million due to the addition of the Global Air Traffic Management avionics modification to the contract, an increase in the Army Pre-Positioned Stocks program of $7.8 million and the ramp-up of the AH-1/UH-1 program, which increased $16.9 million since the initial contract award during the first quarter of fiscal 2005. Partially offsetting this increase was the Contract Field Teams program, which decreased by $10.2 million mainly as a result of reduced workload for maintenance, repair and refurbishment of weapons systems, and the end of the Al Salam program, which reduced revenue by $12.4 million. We withdrew from the Al Salam program due to unfavorable contract terms offered by the customer. Consequently, the customer decided to self perform the maintenance we had been providing. In addition, the Holloman contract decreased by $5.1 million due to the removal of the German F-4s from the contract.

Costs of services.Costs of services are comprised of direct labor, direct material, subcontractor costs, other direct costs and overhead. Other direct costs include travel, supplies and other miscellaneous costs. Costs of services decreased from $1,741.5 million for the fiscal year ended April 1, 2005 pro forma to $1,722.1 million for the fiscal year ended March 31, 2006, or a decrease of $19.4 million or 1.1%. As a percentage of revenue, costs of services dropped from 90.7% in the fiscal year ended April 1, 2005 pro forma to 87.5% for the fiscal year ended March 31, 2006. This reduction as a percentage of revenue was due to the following: (i) strong performance on fixed-price construction projects and on fixed-price task orders under the Civilian Police program; and (ii) improved contract mix resulting from a larger proportion of higher-margin fixed-price and time-and-materials contracts as opposed to lower-margin.

Selling, general and administrative expenses.Selling, general and administrative expenses primarily relate to functions such as management, legal, financial accounting, contracts and administration, human resources, management information systems, purchasing and business development. Selling, general and administrative expenses for the fiscal year ended April 1, 2005 pro forma were $65.4 million and increased to $97.5 million for the fiscal year ended March 31, 2006, an increase of 49.1%. In addition, as a percentage of revenue, selling, general and administrative expenses increased from 3.4% for the fiscal year ended April 1, 2005 pro forma to 5.0% for the fiscal year ended March 31, 2006. This increase was primarily the result of developing our administrative functions as an independent company, which contributed approximately $15.0 million to the fiscal 2006 increase. Prior to the 2005 Acquisition, these services were provided by our predecessor parent, Computer Sciences Corporation. In addition to the development of administrative functions, we incurred a higher business development cost of approximately $10.0 million during fiscal 2006. Business development expenses represented $32.0 million or 33% of total selling, general and administrative expense. We expect business development expenses to level out and increase at a much lower rate, approximately 10%, in fiscal 2007. Other factors contributing to higher selling, general and administrative expenses in fiscal 2006 include:

·Non-cash equity-based compensation expense was $2.4 million. During fiscal 2007, we expect to incur $2.6 million related to this equity compensation program.

·Legal expense of approximately $1.6 million related to our current expected outcome of legal contingencies.

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·Certain incentive compensation payments related to retention bonuses associated with the 2005 Acquisition and incentive payments related to our Equity Offering were $2.7 million and $2.3 million, respectively. Pro forma fiscal 2005 included approximately $1.1 million of retention bonus expense.

Depreciation and amortization.Depreciation and amortization increased from $45.5 million for the fiscal year ended April 1, 2005 pro forma to $46.1 million for the fiscal year ended March 31, 2006, or an increase of $0.6 million. This increase was primarily due to higher depreciation expense. Amortization in the fiscal year ended April 1, 2005 pro forma was based on an estimate of current year amortization. The amortization for the fiscal year ended March 31, 2006 was based on the 2005 Acquisition, which included a step-up in basis of our customer-related intangibles resulting in increased amortization. An independent valuation study was done to allocate the purchase price between goodwill and intangibles.

Interest Expense.Interest expense increased from $55.5 million for the fiscal year ended April 1, 2005 pro forma to $56.7 million for the fiscal year ended March 31, 2006. The interest expense incurred related to our senior secured credit facility, the revolving credit facility and our senior subordinated notes. This interest expense includes interest costs applicable to the fiscal year as well as amortization of deferred financing fees. The increase was primarily due to the increasing interest rates during fiscal 2006.

Interest on mandatory redeemable shares.Interest on the mandatory redeemable shares, or preferred stock, was $21.1 million for the fiscal year ended March 31, 2006 as compared to $21.1 million for the fiscal year ended April 1, 2005 pro forma, which gives effect to the net working capital settlement. The interest is accrued, but unpaid.

Income tax expense.We had income tax expense for the fiscal year ended March 31, 2006 of $16.6 million, which is an increase of $11.7 million or 238.8% from income tax expense of $4.9 million for the fiscal year ended April 1, 2005 pro forma. The interest expense related to the preferred shares is nondeductible for tax purposes resulting in the taxable position for the fiscal year ended March 31, 2006.

Results by Segment

The following table sets forth the revenues and earnings before interest and taxes for our International Technical Services and Field Technical Services operating segments, both in dollars and as a percentage of our consolidated revenues for segment revenue and as a percentage of segment specific revenue for earnings before interest and taxes, for the fiscal year ended March 31, 2006 as compared to the fiscal year ended April 1, 2005 pro forma.

							Successor Period
	Pro Forma for the Year Ended April 1, 2005						For the Fiscal Year Ended March 31, 2006
		(dollars in thousands)
Revenues
International Technical Services		$	1,232,720		64.2	%		$	1,264,586		64.3	%
Field Technical Services		688,154			35.8			702,407			35.7
Other		35			0.0			—			—
Consolidated		$	1,920,909		100.0	%		$	1,966,993		100.0	%
Earnings before Interest and Taxes
International Technical Services		$	46,824		3.8	%		$	93,637		7.4	%
Field Technical Services		23,311			3.4	%		10,017			1.4	%
Other(1)		(1,665		)	NA			(2,417		)	NA
Consolidated		$	68,470		3.6	%		$	101,237		5.1	%

(1)Amount represents amortization of Class B equity interests for fiscal year 2006.

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International Technical Services

Revenues.Revenues for the fiscal year ended March 31, 2006 were $1,264.6 million, an increase of $31.9 million, or 2.6%, from $1,232.7 million for the fiscal year ended April 1, 2005 pro forma. The revenue increase was due to additional revenue under the International Narcotics and Law Enforcement Air-Wing program as a result of a new contract that went into effect on November 1, 2005 for operation, added work to provide helicopter support for ground eradication efforts in Afghanistan, new work providing hurricane relief efforts along the Gulf Coast, added work under our Africa Peacekeeping contract with the Department of State and additional construction work under the Worldwide Personal Protective Services program. These increases were partially offset by a reduction of revenue under the Civilian Police program due to the timing of various construction efforts in the Middle East, and from a series of contracts to provide security and logistics support to various U.S. government construction efforts in the Middle East as a subcontractor. This type of subcontract effort was typically short term with delayed payments, and therefore we decided to exit this line of business until it can be performed in a more stable environment with improved financial terms. Further offsetting the increases described above was a reduction in our Dyn Marine Services of Virginia LLC business due to the discontinuance of our work under the Oceangraphics Ships contract.

Earnings before interest and taxes.   Earnings before interest and taxes for the fiscal year ended March 31, 2006 were $93.6 million, an increase of $46.8 million, or 100.0%, from $46.8 million for the fiscal year ended April 1, 2005. Earnings before interest and taxes as a percentage of revenue for the fiscal year ended March 31, 2006 and April 1, 2005 pro forma was 7.4% and 3.8%, respectively. The increase is due to the following: (i) strong performance on fixed-price construction projects and on fixed-price task orders under the Civilian Police program; and (ii) improved contract mix resulting from a larger proportion of higher-margin fixed-price and time-and-materials contracts as opposed to lower-margin. The Civilian Police contract changed from cost-reimbursement to a combination of fixed-price and time-and-materials in February 2004, and the International Narcotics and Law Enforcement Air-Wing contract had a similar change effective November 2005. The current year also includes the recognition of an equitable adjustment related to our Civilian Police program. The equitable adjustment has resulted in earnings of $5.5 million during the current year and has improved the margin on earnings before interest and taxes by 0.4% for the fiscal year ended March 31, 2006.

Field Technical Services

Revenues.Revenues for the fiscal year ended March 31, 2006 were $702.4 million, an increase of $14.2 million, or 2.0%, from $688.2 million for the fiscal year ended April 1, 2005 pro forma. This revenue increase was primarily from the Global Air Traffic Management avionics modification under the Life Cycle Contractor Support program, increases on Army Prepositioned Stocks Afloat program workload and ramp-up of the AH-1/UH-1 program. These increases were partially offset by reduced workload under Contract Field Teams, and the withdrawal from the Al Salam contract due to unfavorable contract terms offered by the customer. Consequently, the customer decided to self perform the F-15 maintenance we had been providing.

Earnings before interest and taxes.Earnings before interest and taxes for the fiscal year ended March 31, 2006 were $10.0 million, a decrease of $13.3 million, or 57.1%, from $23.3 million for the fiscal year ended April 1, 2005 pro forma. Earnings before interest and taxes as a percentage of revenue for the fiscal year ended March 31, 2006 was 1.4% compared to 3.4% for the fiscal year ended April 1, 2005 pro forma. The primary factors contributing to the decrease are as follows: (i) higher indirect allocations not recoverable under our fixed-price and time-and-materials contracts of $9.5 million; (ii) incurred operating losses of $3.2 million in delivering services to the U.S. Army under our Life Cycle Contractor Support program. We have experienced operational issues in executing to the cost structure outlined in the original proposal. As a result, we are in the process of seeking an equitable adjustment from our customer for this

40

program; and (iii) higher depreciation of $1.2 million due to our decision to exit a facility where we provided a portion of our AH-1/UH-1 services in Puerto Rico. As a result of this decision, we accelerated the amortization of leasehold improvements related to the facility.

Fiscal Year Ended April 1, 2005 Pro Forma Compared to the Fiscal Year Ended April 2, 2004

The following discussion provides a comparison of the pro forma results of operations for the successor company for the fiscal year ended April 1, 2005 with the historical results of the immediate predecessor company for the fiscal year ended April 2, 2004. The discussion is provided for comparative purposes only, but the value of such a comparison may be limited. The information in this section should be read in conjunction with the consolidated financial statements, summary consolidated historical and pro forma financial data, and the related notes contained elsewhere in this Form 10-K.

Consolidated

Revenues.   Revenues for the fiscal year ended April 1, 2005 pro forma were $1,920.9 million, an increase of $706.6 million, or 58.2%, from $1,214.3 million for the fiscal year ended April 2, 2004. The largest amount of this increase was $494.6 million under the Civilian Police program, which includes both the current Civilian Police contract that was awarded in February 2004 as well as predecessors’ contracts for similar police training activity in support of the Department of State. This increase was primarily due to additional and expanded task orders in the Middle East to provide police and other law enforcement training. Other revenue increases occurred on the Worldwide Personal Protective Services contract of $72.9 million as a result of additional work in the Middle East, and $72.8 million on the Contract Field Teams program due to higher manning requirements. These higher manning requirements were primarily due to increased equipment maintenance due to higher usage. These revenue increases were offset by decreases on Dyn Marine programs of $15.7 million and the Al Salam contract of $13.5 million. The decrease in Dyn Marine revenue was a result of the loss of the Oceangraphics Ship contract, and the decrease on the Al Salam contract was a result of the customer not extending the contract and performing the work itself.

Costs of services.   Costs of services for the fiscal year ended April 1, 2005 pro forma were $1,741.5 million, an increase of approximately $634.9 million, or 57.4%, from approximately $1,106.6 million for fiscal year ended April 2, 2004. For the fiscal year ended April 1, 2005, pro forma costs of services as a percentage of revenue decreased to 90.7% from 91.1% for the fiscal year ended April 2, 2004. This decrease was due to increased overhead absorption resulting from higher revenues and a change in the contract mix. The contract mix in the fiscal year ended April 2, 2004 was 44% cost-reimbursement, with the balance being either time-and-materials or fixed-price. The percentage of cost-reimbursement dropped to 34% for the entire fiscal year ended April 1, 2005 pro forma, with a resulting increase in the time-and-materials or fixed-price portion.

Selling, general and administrative.   Selling, general and administrative for the fiscal year ended April 1, 2005 pro forma were $65.4 million, an increase of $17.0 million, or 35.1%, from $48.4 million for the fiscal year ended April 2, 2004. For the fiscal year ended April 1, 2005, pro forma selling, general and administrative expense as a percentage of revenue decreased to 3.4% from 4.0% for the fiscal year ended April 2, 2004. This decrease was due to lower increases as a percentage of sales for business development spending as revenue growth accelerated.

Depreciation and amortization.   Depreciation and amortization expense for the fiscal year ended April 1, 2005 pro forma was $45.5 million, an increase of $37.4 million, or 461.7%, from $8.1 million for fiscal year ended April 2, 2004. This increase was primarily due to the amortization of intangible assets. Intangible assets valued in connection with the 2005 Acquisition were significantly higher than previous

41

values assigned in connection with the Computer Sciences Corporation acquisition. A third party assisted us in determining the amount for amortization of intangible assets.

Interest Expense.Interest expense was $55.5 million for the fiscal year ended April 1, 2005 pro forma. The pro forma interest expense is related to our senior secured credit facility, the revolving credit facility and our senior subordinated notes. For fiscal 2004, we did not incur any interest expense because it was recorded at the Computer Sciences Corporation corporate level and not allocated to the operating entities.

Interest on mandatory redeemable shares.Interest on the mandatory redeemable shares, or preferred stock, was $21.1 million for the fiscal year ended April 1, 2005 pro forma. These shares were not outstanding during fiscal 2004, so there was no interest during the comparable period. The interest is accrued, but unpaid.

Income tax expense.Income tax expense for the fiscal year ended April 1, 2005 pro forma was $4.9 million, a decrease of $15.0 million from $19.9 million for the fiscal year ended April 2, 2004. This decrease is primarily the result of reduced income before tax as a result of the addition of interest expense, which was not pushed down to the operating units during the immediate predecessor period, and the increase in amortization discussed above, as the effective tax rates for the fiscal years ended April 1, 2005 and April 2, 2004 were 36.7% and 38.9%, respectively. The reduction in the overall effective tax rate is a result of a greater percentage of the income before tax being from outside the United States, so the overall state tax is reduced as a percentage of income before tax.

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Results by Segment

The following table sets forth the revenues and earnings before interest and taxes for our International Technical Services and Field Technical Services operating segments, both in dollars and as a percentage of our consolidated revenues for segment revenue and as a percentage of segment specific revenue for earnings before interest and taxes, on a pro forma basis for the fiscal year ended April 1, 2005 as compared with the fiscal year ended April 2, 2004:

	Immediate Predecessor Period
	For the Fiscal Year Ended April 2, 2004						Pro Forma for the Year Ended April 1, 2005
	(dollars in thousands)
Revenues
International Technical Services		$	631,672		52.0	%	$	1,232,720		64.2	%
Field Technical Services		582,476			48.0		688,154			35.8
Other		141			0.0		35			0.0
Consolidated		$	1,214,289		100.0	%	$	1,920,909		100.0	%
Earnings before Interest and Taxes
International Technical Services		$	26,189		4.1	%	$	46,824		3.8	%
Field Technical Services		25,144			4.3	%	23,311			3.4	%
Other		(113		)	NA		(1,665		)	NA
Consolidated		$	51,220		4.2	%	$	68,470		3.6	%

International Technical Services

Revenues.   Revenues for the fiscal year ended April 1, 2005 pro forma were $1,232.7 million, an increase of $601.0 million, or 95.1%, from $631.7 million for the fiscal year ended April 2, 2004. This increase was primarily due to an increase in revenues from our Civilian Police and Worldwide Personal Protective Services programs. The revenue increase under our Civilian Police program was due to our entering into a new Civilian Police contract in February 2004, reflecting initial stages of law enforcement training in the Middle East. The revenue increase under our Worldwide Personal Protective Services program was due to increased security contracts in Iraq. These increases were partially offset by a decrease in our War Reserve Materials program revenues as activity under this program has returned to historical levels after a short-term increase due to recent wartime activity.

Earnings before interest and taxes.   Earnings before interest and taxes for the fiscal year ended April 1, 2005 pro forma were $46.8 million, an increase of $20.6 million, or 78.6%, from $26.2 million for the fiscal year ended April 2, 2004. Earnings before interest and taxes as a percentage of revenue for the fiscal year ended April 1, 2005 pro forma and for the year ended April 2, 2004 was 3.8% and 4.1%, respectively. The earnings before interest and taxes as a percentage of revenue did not change; however, the increased amortization resulting from the transaction was offset by an improvement in contract margin due to the change in the mix of contracts types with a greater percentage of our programs performed under time-and-material or fixed-price contracts versus lower margin cost-reimbursement contracts.

Field Technical Services

Revenues.   Revenues for the fiscal year ended April 1, 2005 pro forma were $688.2 million, an increase of $105.7 million, or 18.1%, from $582.5 million for the fiscal year ended April 2, 2004. This increase was primarily due to increased revenues under our Contract Field Teams program and, to a lesser extent, our Army Prepositioned Stocks Afloat, or Army Pre-Positioned Stocks Afloat, program. This was offset by a reduction in revenue under the Al Salam contract, which was not extended.

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Earnings before interest and taxes.   Earnings before interest and taxes for the fiscal year ended April 1, 2005 pro forma were $23.3 million, a decrease of $1.8 million, or 7.2%, from $25.1 million for the fiscal year ended April 2, 2004. Earnings before interest and taxes as a percentage of revenue for the fiscal year ended April 1, 2005 pro forma was 3.4% compared to 4.3% for the fiscal year ended April 2, 2004. This reduction was due to the increased amortization resulting from the 2005 Acquisition and offset by an improvement in contract performance on the Contract Field Teams contract due to increased absorption of fixed costs.

The Period April 3, 2004 to February 11, 2005 and the Period February 12, 2005 to April 1, 2005

Other items impacting the immediate predecessor period April 3, 2004 to February 11, 2005 or the successor period February 12, 2005 to April 1, 2005 are presented below:

Depreciation and Amortization.During the immediate predecessor period, the amortization of intangibles was based on appraised values of the customer contracts and related customer relationships that were determined on a by-contract basis done at the time of the Computer Sciences Corporation purchase of DynCorp with the assistance of a third party.

Interest Expense.During the immediate predecessor period, interest expense was recorded at the parent level and was not allocated down to the operating units. As a result of the 2005 Acquisition, significant long-term debt has been incurred.

Liquidity and Capital Resources

The following table sets forth cash flow data for the periods indicated therein (dollars in thousands):

	Fiscal Year Ended April 2, 2004				Pro Forma Combined Fiscal Year Ended April 1, 2005				Fiscal Year  Ended March 31, 2006
Net Cash (Used in) Provided by Operating Activities		$	(6,756	)		$	(33,332	)		$	55,111
Net Cash Used in Investing Activities		(2,292		)		(880,101		)		(6,231		)
Net Cash Provided by (Used in) Financing Activities		11,017				920,397				(41,781		)

Historically, we financed our capital and working capital requirements through a combination of cash flows from operating activities and transfers from the predecessor parent companies. We did not incur interest-bearing debt during the year ended April 2, 2004. In connection with the 2005 Acquisition, we entered into a $75.0 million revolving credit facility available to fund working capital and other cash requirements not funded from ongoing operations. Subsequently, in January 2006, this revolving credit facility was amended to $90.0 million. Leading up to the 2005 Acquisition, Computer Sciences Corporation accelerated collection of receivables where possible and delayed payments to vendors and subcontractors. As a result, we had to draw $20.0 million on the revolving credit facility shortly after the closing of the 2005 Acquisition, and as of April 1, 2005 the outstanding balance was $35.0 million. We repaid our revolving credit facility during the three months ended July 1, 2005.

Cash and cash equivalents as of March 31, 2006 were $20.6 million compared to $13.5 million as of April 1, 2005. Concurrently with, and as a condition to, the offering of our senior subordinated notes, we entered into a senior secured credit facility. Our senior secured credit facility provided us with a $345.0 million term loan, maturing in 2011, and up to $90.0 million in available revolving loan borrowings, maturing in 2010. As of March 31, 2006, our revolving credit facility was undrawn and we had $661.6 million of indebtedness, of which $341.6 million was secured, including the senior subordinated notes and excluding interest accrued thereon. The foregoing does not take into account the partial redemption of our senior subordinated notes with a portion of the proceeds that we received from our Equity Offering. On the same date, we had approximately $82.5 million available under our senior secured

44

credit facility (which gives effect to $7.5 million of outstanding letters of credit). For more information regarding our senior secured credit facility, see notes to the consolidated financial statements elsewhere in this Form 10-K.

During fiscal 2006, $77.8 million of interest expense was incurred, which included both the interest costs applicable to the fiscal year, as well as amortization of the deferred financing fees resulting from the 2005 Acquisition. This interest expense includes the interest on the senior secured credit facility, the revolving credit facility, the senior subordinated notes and the accrued and unpaid dividends for the preferred stock. On May 9, 2006, we redeemed all of our outstanding preferred stock, of which $222.8 million in stated amount included accrued and unpaid dividends thereon as of May 9, 2006, with a portion of the proceeds from the Equity Offering.

On May 9, 2006, we consummated an Equity Offering of 25,000,000 shares of our Class A common stock, par value $0.01 per share, at a price of $15.00 per share. The gross proceeds from the Equity Offering of $375.0 million, together with cash on hand, were used: (i) to redeem all of our outstanding preferred stock, of which $222.8 million in stated amount, including accrued and unpaid dividends thereon, was outstanding as of May 9, 2006; (ii) to pay a special Class B distribution in the amount of $100.0 million to the holder of the Company’s common stock, DIV Holding LLC; (iii) to redeem $28.0 million of our senior subordinated notes on June 8, 2006; (iv) to pay prepayment penalties of $8.4 million as of May 9, 2006, $5.7 million of which represented prepayment penalties on our preferred stock and $2.7 million of which represented prepayment penalties on our senior subordinated notes; and (v) to pay transaction expenses of approximately $35.0 million, including an underwriters’ commission of $22.5 million, a fee of $5.0 million to Veritas Capital and $7.5 million of miscellaneous fees and expenses related to the Equity Offering.

In addition, we used cash on hand to pay special cash bonuses subsequent to the Equity Offering of $3.125 million in the aggregate to our executive officers and certain other members of management. Of that amount, Messrs. Cannon, Gorman, Thorne and Rosenkranz and Ms. Morrel received $1,000,000, $750,000, $500,000, $100,000 and $100,000, respectively. These bonuses rewarded management for their efforts in connection with the successful consummation of our Equity Offering.

Cash Flows

Operating Activities.Net cash provided by operating activities for the fiscal year ended March 31, 2006 was $55.1 million, while net cash required by operating activities for the fiscal year ended April 1, 2005 pro forma was $(33.3) million. Cash provided by operating activities for the fiscal year ended March 31, 2006, consisted of $147.4 million of operating income before considering depreciation and amortization, less $77.7 million of cash paid for interest and normal short-term payment timing of trade receivables and payables.

Net cash used in operating activities for the period April 1, 2005 pro forma was $33.3 million. This cash requirement during the seven week period from February 12, 2005 to April 1, 2005 was primarily the result of a $58.3 million increase in accounts receivable, partially offset by increases in accounts payable and accruals of $12.0 million, and prepaid expenses and other current assets of $9.9 million. The primary driver behind the increase in accounts receivable was the timing of collections before and after the 2005 Acquisition. Net cash used in operating activities for the period from April 3, 2004 to February 11, 2005 was $2.1 million, while net cash used in operating activities for the fiscal year ended April 2, 2004 was $6.8 million. This decrease in operating cash flows was due primarily to a significant increase in accounts receivable more than offset by an increase in net income and accounts payable and accruals also related to growth in our revenues. The increase in accounts receivable was related to overall growth in our revenue and an increase in unbilled receivables for revenue under our Civilian Police program, which we were not able to bill until we received contract modification.

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Investing Activities.Net cash used in investing activities was $2.3 million, $880.1 million and $6.2 million for the fiscal year ended April 2, 2004, fiscal year ended April 1, 2005 pro forma and fiscal year ended March 31, 2006, respectively. For fiscal year ended April 2, 2004 and March 31, 2006, the primary use of cash was to purchase property and equipment. For fiscal year ended April 1, 2005 pro forma, the primary use of cash was to purchase the Company.

Financing Activities.Net cash provided by financing activities was $920.4 million and $41.8 million for the fiscal year ended April 1, 2005 pro forma and March 31, 2006, respectively. The cash used in financing activities during the fiscal year ended March 31, 2006 is due to the repayment of borrowings under our revolving credit facility in the amount of $35.0 million, scheduled repayment of our bank note borrowings in the amount of $3.5 million, payment for offering expenses of $1.9 million, payment of debt issuance cost of $0.9 million and the purchase of an interest rate cap for $0.5 million, which limits our exposure to upward movements in variable rate debt. The net cash provided for fiscal year ended April 1, 2005 pro forma is primarily from the 2005 Acquisition. The net cash flow for fiscal 2004 is due to net transfers from our predecessor parent.

We expect that cash generated from operating activities and availability under our senior secured credit facility will be our principal sources of liquidity. Based on our current level of operations, we believe our cash flow from operations and available borrowings under our senior secured credit facility will be adequate to meet our liquidity needs for at least the next twelve months. We cannot assure you, however, that our business will generate sufficient cash flow from operations, or that future borrowings will be available to us under our senior secured credit facility in an amount sufficient to enable us to repay our indebtedness, including the notes, or to fund our other liquidity needs. Servicing our indebtedness will require a significant amount of cash. Our ability to generate sufficient cash depends on numerous factors beyond our control, and we may be unable to generate sufficient cash flow to service our debt obligations, including making payments on the notes.

Debt and Other Obligations

Concurrently with the offering of our senior subordinated notes and subsequently amended on January 9, 2006, we entered into a senior secured credit facility. Our senior secured credit facility provided us with a $345.0 million term loan, maturing in 2011, and up to $90.0 million in available revolving loan borrowings, as amended, maturing in 2010. As of March 31, 2006, our revolving credit facility was undrawn, and, we had $661.6 million of indebtedness including the senior subordinated notes and excluding interest accrued thereon, of which $341.6 million was secured. The foregoing does not take into account the partial redemption of our senior subordinated notes with a portion of the proceeds that we received from our Equity Offering. On the same date, we had approximately $82.5 million available under our senior secured credit facility (which gives effect to $7.5 million of outstanding letters of credit that reduced our availability by that amount).

Our senior secured credit facility contains financial covenants, including a minimum interest coverage ratio and a maximum total debt to EBITDA ratio, and places certain restrictions on our ability to make capital expenditures. These financial ratios include a minimum interest coverage ratio and a leverage ratio. The interest coverage ratio is the ratio of EBITDA (as defined in our senior revolving credit facility) to cash interest expense for trailing quarters. The minimum interest coverage ratio increases from 2:1 to 3.2:1 during the term of the senior secured credit facility. The maximum leverage coverage ratio decreases from 6:1 to 3:1 during the term of the senior secured credit facility. The senior secured credit facility also restricts the maximum amount of our capital expenditures during each year of the senior credit facility. Capital expenditures are expenditures that are required by generally accepted accounting principles to be included in the “purchase of property and equipment.” Our senior secured credit facility is secured by substantially all of our assets and the assets of our domestic subsidiaries, and by a pledge of all of the capital stock of our domestic subsidiaries and 65% of the capital stock of our first tier foreign subsidiaries.

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The initial borrowings thereunder are subject to customary closing conditions. For more information regarding our senior secured credit facility, see notes to the consolidated financial statements elsewhere in this Form 10-K.

On June 28, 2006, the Company and its operating company entered into a second amendment and waiver of our senior secured credit facility, dated February 11, 2005. The second amendment and waiver provided for a new term loan in the amount of $431.6 million, which was the outstanding balance of the existing term loan under our senior secured credit facility on the date of the second amendment and waiver. The maturity date of the new term loan is unchanged from the maturity date of the existing term loan. The proceeds from the new term loan were used to repay the existing term loan. The second amendment and waiver also, among other things, (i) decreases the interest rate applicable to the term loan under our senior secured credit facility; (ii) permits us to request an increase in our revolving credit facility by an aggregate amount of up to $30.0 million provided that none of the existing lenders or any other lender is committed to provide such increase; (iii) increases the amount of capital expenditures permitted under our senior secured credit facility from $4.0 million per fiscal year to $8.0 million per fiscal year; (iv) increases the amount of capitalized leases permitted under our senior secured credit facility; (v) allows for the payment of dividends and the repurchase of our capital stock in the amount of $10.0 million plus, if our leverage ratio (as defined in our senior secured credit facility) is below 3.25:1.00, 25% of our excess cash flow (as defined in our senior secured credit facility) for each fiscal year; and (vi) postpones the first prepayment of the senior secured credit facility based on our excess cash flow until 90 days following our fiscal year which ends on March 30, 2007.

On January 9, 2006, we entered into a first amendment and waiver of our senior secured credit facility. The first amendment and waiver increased the revolving commitment under our senior secured credit facility by $15.0 million to $90.0 million, which includes an increase in the sub-limit for letters of credit equal to the same amount. The first amendment and waiver also permitted us to: (i) pay a transaction fee to Veritas Capital related to the Equity Offering of up to $10.0 million; (ii) pay a distribution to the holders of our Class B common stock in an amount equal to the sum of (x) $100.0 million plus (y) the proceeds, if any, of the underwriters’ over-allotment option, net of discount and estimated offering expenses; (iii) redeem all of our then currently outstanding preferred stock; and (iv) redeem up to $65.0 million of the $320.0 million aggregate principal amount of the senior subordinated notes. The first amendment and waiver waived the requirement in the senior secured credit facility that we use 50% of the net cash proceeds from the Equity Offering to prepay loans under the senior secured credit facility and/or permanently reduce the revolving commitments.

In February 2005, we completed an offering of $320.0 million of our 9.50% senior subordinated notes due 2013.

Our capital expenditures are primarily related to contractual requirements. We spent an aggregate of approximately $3.5 million and $8.7 million for capital expenditures primarily relating to the purchase of vehicles, equipment and for certain leasehold improvements in fiscal 2006 and 2005, respectively. We customarily lease our vehicles and equipment; however, our former parent elected to purchase certain equipment in fiscal 2005. As a result, fiscal 2005 capital expenditures of $8.7 million were significantly higher than fiscal 2004 capital expenditures of $2.0 million due to this one time vehicle and equipment purchases for the Andrews contract, and leasehold improvements requested for the AH-1/UH-1 contract. We intend to continue our practice of leasing our vehicles and equipment in the future. Our senior secured credit facility limits our annual capital expenditures to $4.0 million. We do not expect this limitation to have a material effect on our business. In addition, the senior secured credit facility contains various customary affirmative and negative covenants (subject to customary exceptions and certain existing obligations and liabilities), including, but not limited to, restrictions on our ability and the ability of our subsidiaries to: (i) dispose of assets; (ii) incur additional indebtedness and guarantee obligations; (iii) repay other indebtedness; (iv) pay certain restricted payments and dividends; (v) create or prohibit the creation

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of liens on assets; (vi) make investments, loans or advances; (vii) restrict distributions to us from our subsidiaries; (viii) make certain acquisitions; (ix) engage in mergers or consolidations; (x) enter into sale and leaseback transactions; (xi) engage in certain transactions with subsidiaries that are not guarantors of the senior secured credit facility or with affiliates; or (xii) amend the terms of the notes and otherwise restrict corporate activities.

These covenants limit our ability to, among other things:

·incur additional indebtedness or guarantee obligations;

·repay indebtedness (including the senior subordinated notes) prior to stated maturities;

·pay dividends or make certain other restricted payments;

·make investments or acquisitions;

·create liens or other encumbrances; and

·transfer or sell certain assets or merge or consolidate with another entity.

Contractual Commitments

The following table represents our contractual commitments associated with our debt and other obligations, giving effect to the application of the use of proceeds of our Equity Offering, as of March 31, 2006:

	Fiscal 2007		Fiscal 2008		Fiscal 2009		Fiscal 2010		Fiscal 2011		Thereafter			Total
	(dollars in millions)
Contractual Obligations:
Senior Secured Credit Facility
Term Loan(1)	$	2.6	$	3.5	$	4.3	$	3.4	$	327.8		$	—	$	341.6
Revolving Credit Facility(2)	—		—		—		—		—			—		—
Senior Subordinated Notes	—		—		—		—		—			320.0		320.0
Operating Leases(3)	4.6		4.2		2.5		2.2		2.2			12.0		27.7
Interest on Indebtedness(4)	54.6		54.1		53.8		53.5		43.0			52.0		311.0
Management Fee(5)	0.3		0.3		0.3		0.3		0.3			0.3		1.8
Total Contractual Obligations	$	62.1	$	62.1	$	60.9	$59.4		$	373.3		$	384.3	$	1,002.1

(1)Assumes that our senior secured revolving credit facility will be undrawn. Also does not include outstanding letters of credit which, as of March 31, 2006, were approximately $7.5 million.

(2)Does not give effect to mandatory payment of term loan, if any, with excess cash flow.

(3)For additional information about our operating leases, see Note 10 to our consolidated financial statements presented elsewhere in this Form 10-K.

(4)Represents interest expense calculated using interest rates of: (i) 7.80% on our $345.0 million term loan; and (ii) 9.50% on the senior subordinated notes.

(5)For additional information on the management fee, see “Certain Relationships and Related Transactions.”

Off-Balance-Sheet Arrangements

As of March 31, 2006, other than the operating leases discussed above, we had no off-balance-sheet arrangements.

Fiscal Periods

We use a 52/53-week fiscal year ending on the closest Friday to March 31. The period from April 3, 2004 to February 11, 2005 is a 45-week period. The fiscal year ended April 2, 2004 was a 53-week year.

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Effects of Inflation

We have generally been able to anticipate increases in costs when pricing our contracts. Bids for longer-term fixed-price and time-and-materials type contracts typically include sufficient labor and other cost escalations in amounts expected to cover cost increases over the period of performance. Consequently, because costs and revenues include an inflationary increase commensurate with the general economy in which we operate, net income as a percentage of revenues has not been significantly impacted by inflation.

Critical Accounting Policies

Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which are prepared in accordance with GAAP. The preparation of these financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingencies at the date of the financial statements as well as the reported amounts of revenues and expenses during the reporting period. Management evaluates these estimates and assumptions on an ongoing basis, including those relating to revenue recognition and cost estimation on long-term contracts, allowance for doubtful accounts, determination of goodwill and customer-related intangible assets, goodwill impairment, accounting for contingencies and litigation and accounting for income taxes. Our estimates and assumptions have been prepared on the basis of the most current available information. The results of these estimates form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could materially differ from these estimates under different assumptions and conditions.

We have several critical accounting policies that are both important to the portrayal of our financial condition and results of operations and require management’s most difficult, subjective and complex judgments. Typically, the circumstances that make these judgments complex and difficult have to do with making estimates about the effect of matters that are inherently uncertain. Our critical accounting estimates are as follows:

Revenue Recognition and Cost Estimation on Long-Term Contracts

We provide our services under cost-reimbursement, time-and-materials and fixed-price contracts. The form of contract, rather than the type of service offering, is the primary determinant of revenue recognition. Revenues are recognized when persuasive evidence of an arrangement exists, services or products have been provided to the client, the sales price is fixed or determinable and collectibility is reasonably assured. For fiscal 2005 and 2006, approximately 34%, 39%, 27% and approximately 28%, 38% and 34% of our revenues were derived from cost-reimbursement, time-and-materials and fixed-price contracts, respectively. For more information on our contract types, see “Business—Contract Types.”

Revenue on fixed-price contracts is generally recognized ratably over the contract period, measured by either output or input methods appropriate to the services or products provided. For example, “output measures” can include period of service, such as for aircraft fleet maintenance; and units delivered or produced, such as aircraft for which modification has been completed. “Input measures” can include a cost-to-cost method, such as for procurement-related services.

Revenue on fixed-price construction or production-type contracts, when they occur, is recognized on the basis of the estimated percentage of completion. Progress towards completion is typically measured based on achievement of specified contract milestones, when available, or based on costs incurred as a proportion of estimated total costs. Profit in a given period is reported at the expected profit margin to be achieved on the overall contract. This method can result in the deferral of costs or profit on these contracts. Management regularly reviews project profitability and underlying estimates. Revisions to the

49

estimates at completion are reflected in results of operations as a change in accounting estimate in the period in which the facts that give rise to the revision become known by management. Revenue on fixed-price contracts that have a duration of less than six months is recognized on the completed contract method. Work in progress is classified as a component of inventory.

We provide for anticipated losses on contracts by a charge to income during the period in which the losses are first identified. Amounts billed but not yet recognized as revenue under certain types of contracts are deferred. Unbilled receivables are stated at estimated realizable value. Contract costs on U.S. government contracts, including indirect costs, are subject to audit and adjustment by negotiations between us and government representatives. Substantially all of our indirect contract costs have been agreed upon through 2004. Contract revenues on U.S. government contracts have been recorded in amounts that are expected to be realized upon final settlement.

Contract costs are expensed as incurred, except as described above and on certain other production-type fixed-price contracts, where costs are deferred until such time that associated revenue is recognized.

Client contracts may include the provision of more than one of our services. For revenue arrangements with multiple deliverables, revenue recognition includes the proper identification of separate units of accounting and the allocation of revenue across all elements based on relative fair values.

Many of our contracts are time-and-materials or fixed hourly/daily rate contracts. For these contracts, revenue is recognized each month based on actual hours/days charged to the program during that month multiplied by the fixed hourly/daily rate in the contract for the type of labor charged. Any material or other direct charges are recognized as revenue based on the actual direct cost plus Defense Contract Audit Agency-approved indirect rates.

Cost-reimbursement type contracts can be either Cost Plus Fixed Fee, or Cost Plus Award Fee. Revenue recognition for these two contract types is very similar. In both cases, revenue is based on actual direct cost plus Defense Contract Audit Agency-approved indirect rates. In the case of Cost Plus Fixed Fee, the fixed fee is recognized based on the ratio of the fixed fee for the contract to the total estimated cost of the contract. In the case of Cost Plus Award Fee contracts, the fee is made up of two components, base fee and award fee. Base fee is recognized in the same manner as the fee on Cost Plus Fixed Fee contracts. The award fee portion is recognized based on an average of the last two award fee periods or award experience for similar contracts for new contracts that lack specific experience.

Allowance for Doubtful Accounts

We establish allowance for doubtful accounts against specific billed receivables based upon the latest information available to determine whether invoices are ultimately collectible. Such information includes the historical trends of write-offs and recovery of previously written-off accounts, the financial strength of the respective customer and projected economic and market conditions. The evaluation of these factors involves subjective judgments and changes in these factors may cause a misstatement of our accounts receivable, which could significantly impact our consolidated financial statements by incurring bad debt expense. Given that we primarily serve the U.S. government, we believe the risk to be relatively low that a misstatement of accounts receivable would have a material impact on our financial results.

Determination of Goodwill and Customer-Related Intangible Assets

In accordance with Statement of Financial Accounting Standards (“SFAS”) No. 141, “Business Combinations,”the 2005 Acquisition was accounted for using the purchase method of accounting. This method requires estimates to determine the fair values of assets and liabilities acquired, including judgments to determine any acquired intangible assets such as customer-related intangibles, internally developed technology and tradename, as well as assessments of the fair value of tangible assets such as

50

property and equipment. Liabilities acquired included reserves for litigation and other contingency reserves established prior to, or at the time of, acquisition and require judgment in ascertaining a reasonable value as well.

Third-party valuation firms assisted management in the appraisal of certain assets and liabilities, but even those determinations were based on significant estimates provided by us. For example, the value ultimately assigned to customer-related intangibles and internally developed technology were determined by a third-party valuation firm as of the date of acquisition, based on estimates and judgments provided by us regarding expectations for the estimated future after-tax cash flows from those assets over their lives, including the probability of expected future contract renewals and sales, less a cost-of-capital charge, all of which was discounted to present value. If actual future after-tax cash flows are significantly lower than our estimates, we may be required to record an impairment charge to write down the identifiable intangible assets to their realizable values.

The value assigned to the 2005 Acquisition goodwill equaled the amount of the purchase price in excess of the sum of the amounts assigned to the identifiable acquired assets, both tangible and intangible, less liabilities assumed. At March 31, 2006, we had goodwill of $420.2 million and identifiable intangible assets of $272.7 million.

Goodwill and Intangible Impairment

We review goodwill and intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable, and also review goodwill annually, during our fourth fiscal quarter, in accordance with SFAS No. 142, “Goodwill and Other Intangible Assets.”  SFAS No. 142 requires that goodwill be tested, at a minimum, annually for each reporting unit using a two-step process. A reporting unit is an operating segment, as defined in paragraph 10 of SFAS No. 131, “Disclosures About Segments of an Enterprise and Related Information,” or a component of an operating segment. The goodwill impairment test is a two-step process that requires management to make judgments in determining what assumptions to use in the calculation. Management judgments include, but are not limited to, estimates for future sales, operating income, depreciation and amortization, income tax payments, working capital changes and capital expenditures, as well as, expected growth rates for cash flows and long-term interest rates. The first step of the process consists of estimating the fair value of each of the reporting units based on a discounted cash flow model and comparing those estimated fair values with the carrying values, which includes the allocated goodwill. If a potential impairment is identified, the second step is to measure the impairment loss by comparing the implied fair value of goodwill with the carrying value of goodwill of the reporting unit. The implied fair value of goodwill is the residual fair value derived by deducting the fair value of a reporting unit’s identifiable assets and liabilities from its estimated fair value calculated in step one. The impairment charge, if any, would represent the excess of the carrying amount of the reporting unit’s goodwill over the implied fair value of their goodwill. A decline in estimated fair value of a reporting unit could result in an impairment charge to goodwill, which could have a material adverse effect on our business, financial condition and results of operations. We completed our impairment analysis of goodwill as of February 24, 2006, noting no indications of impairment for any of our reporting units. In addition, as of March 31, 2006, there have been no events or circumstances that would indicate an impairment of other identifiable intangibles, such as customer-related intangibles.

Accounting for Contingencies and Litigation

We are subject to various claims and contingencies associated with lawsuits, insurance, tax and other issues arising out of the normal course of business. The consolidated financial statements reflect the treatment of claims and contingencies based on our view of the expected outcome. We consult with legal counsel on issues related to litigation and seek input from other experts and advisors with respect to

51

matters in the ordinary course of business. If the likelihood of an adverse outcome is probable and the amount is estimable, we accrue a liability in accordance with SFAS No. 5, “Accounting for Contingencies.”  Significant changes in the estimates or assumptions used in assessing the likelihood of an adverse outcome could have a material effect on our consolidated financial results.

Accounting for Income Taxes

Realization of our deferred tax assets is primarily dependent on future U.S. taxable income. SFAS No. 109, “Accounting for Income Taxes,” provides for the recognition of deferred tax assets if realization of such assets is more likely than not. As a result of recent U.S. operating results together with the Company’s forecasts of future pretax operating results, we believe that net deferred tax assets in the amount of $12.3 million are realizable based on the “more likely than not” standard required for recognition.

We are a U.S.-based multinational company subject to tax in multiple U.S. and foreign tax jurisdictions. The Company’s provision for income taxes is based on a jurisdictional mix of earnings, statutory rates and enacted tax rules. Significant judgment is required in determining the Company’s provision for income taxes and in evaluating its tax positions on a worldwide basis. The Company believes its tax position is consistent with the tax laws in the jurisdictions in which it conducts its business. It is possible that these positions may be challenged, which may have a significant impact on the Company’s effective tax rate.

Accounting Pronouncements

In December 2004, the Financial Accounting Standards Board (“FASB”) revised SFAS No. 123, “Accounting for Stock-Based Compensation.”  The revised SFAS No. 123 (“SFAS No. 123(R)”), “Share-Based Payment,” supersedes Accounting Principles Board No. 25 (“APB No. 25”), “Accounting for Stock Issued to Employees.”  SFAS No. 123(R) requires all companies to measure and recognize compensation expense for all stock-based payments at fair value. Effective October 1, 2005, the Company adopted SFAS No. 123(R) using the modified prospective application transition method. SFAS No. 123(R) requires the measurement and recognition of compensation expense for all share-based payment awards made to employees and directors, including employee stock options and restricted stock grants related to the Company’s incentive plans, to be based on fair values. SFAS No. 123(R) supersedes the Company’s previous accounting for these plans under APB No. 25 for the periods beginning October 1, 2005. The adoption of SFAS No. 123(R) did not have a material impact on the Company’s consolidated financial statements. Financial statements for prior interim periods, fiscal years and predecessor periods do not reflect any restated amounts as a result of this adoption in accordance with the modified prospective application transition method under SFAS No. 123(R).

In March 2005, the FASB issued FASB Interpretation No. 47 (“FIN 47”), “Accounting for Conditional Retirement Obligations,” which clarifies the term “conditional asset retirement obligations,” as used in FASB Statement No. 143, “Accounting for Asset Retirement Obligations.”  FIN 47 clarifies that an entity is required to recognize a liability for a legal obligation to perform asset retirement activities when the retirement is conditional on a future event and if the liability’s fair value can be reasonably estimated. If the liability’s fair value cannot be reasonably estimated, then the entity must disclose a description of the obligation, the fact that a liability has not been recognized and the reasons why the liability cannot be reasonably estimated. The requirements of FIN 47 are effective for fiscal periods ending after December 15, 2005. The adoption of FIN 47 did not have any effect on the Company’s consolidated financial statements.

In May 2005, the FASB issued SFAS No. 154, “Accounting Changes and Error Corrections,” which is effective for voluntary changes in accounting principles made in fiscal years beginning after December 15, 2005. SFAS No. 154 replaces APB Opinion No. 20 (“APB 20”), “Accounting Changes” and SFAS No. 3,

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“Reporting Accounting Changes in Interim Financial Statements.”  SFAS No. 154 requires that voluntary changes in accounting principle be applied on a retrospective basis to prior period financial statements and eliminates the provisions of APB 20 that cumulative effects of voluntary changes in accounting principles be recognized in net income in the period of change. The adoption of SFAS No. 154 did not have any effect on the Company’s consolidated financial statements.

In November 2005, the FASB issued FASB Staff Position No. FIN 45-3 (“FSP FIN 45-3”) “Application of FASB Interpretation No. 45 to Minimum Revenue Guarantees Granted to a Business or Its Owners,” which is effective for new minimum revenue guarantees issued or modified on or after the beginning of the first fiscal quarter following the date FSP FIN 45-3 was issued. FSP FIN 45-3 amends FASB Interpretation No. 45, “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others”to include guarantees granted to a business that the revenue of the business for a specified period of time will be at least a specified minimum amount under its recognition, measurement and disclosure provisions. This interpretation is effective for the Company beginning on January 1, 2006. The adoption of FSP FIN 45-3 did not have any effect on the Company’s consolidated financial statements.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

The inherent risk in market risk sensitive instruments and positions primarily relates to potential losses arising from adverse changes in interest rates and foreign currency exchange rates. For further discussion of market risks we may encounter, see “Risk Factors.”

Interest Rate Risk

We have interest rate risk relating to changes in interest rates on our variable rate debt. Our policy is to manage interest rate exposure through the use of a combination of fixed and floating rate debt instruments. Our senior secured credit facility is a variable rate arrangement. The interest rate is based on a floating Eurodollar benchmark rate plus a fixed spread. As of March 31, 2006, we had $661.6 million of indebtedness, without giving effect to the application of the use of proceeds of our Equity Offering, including the senior subordinated notes and excluding interest thereon, of which $341.6 million was secured. On the same date, we had approximately $82.5 million available under our senior secured credit facility (which gives effect to $7.5 million of outstanding letters of credit). Each quarter point change in interest rates results in approximately $0.9 million change in annual interest expense on the term loan and, assuming the entire revolving loan was drawn, an approximately $0.2 million change in annual interest expense on the revolving loan. Subsequent to April 1, 2005, we entered into an interest rate cap agreement that caps the maximum interest rate for 50% of the term loan over the next three years.

The table below provides information about our fixed rate and variable rate long-term debt agreements, without giving effect to the application of the use of proceeds of our Equity Offering to redeem a portion of our senior subordinated notes, as of March 31, 2006.

	Expected Maturity as of March 31, 2006 Fiscal Year															Average Interest
	2007		2008		2009		2010		2011		Thereafter			Total		Rate
	(dollars in millions)
Fixed rate	$	—	$	—	$	—	$	—	$	—		$	320.0	$	320.0		9.5	%
Variable rate	2.6		3.5		4.3		3.4		327.8			—		341.6			7.8	%
Total debt	$	2.6	$	3.5	$	4.3	$	3.4	$	327.8		$	320.0	$	661.6

The carrying amount of our borrowings under the senior secured credit facility approximates fair value based on the variable interest rates of this debt. The fair value of senior subordinated notes is based

53

on their quoted market value. The above table does not give effect to $7.5 million of outstanding letters of credit as of March 31, 2006.

Foreign Currency Exchange Rate Risk

We are exposed to changes in foreign currency rates. At present, we do not utilize any derivative instruments to manage risk associated with currency exchange rate fluctuations. We have determined local currencies are the functional currencies of certain foreign operations. Accordingly, these foreign entities translate assets and liabilities from their local currencies to U.S. dollars using year-end exchange rates while income and expense accounts are translated at the average rates in effect during the year. The resulting translation adjustment is recorded as accumulated other comprehensive (loss) income (“OCI”). As of April 1, 2005 and March 31, 2006, the balance of currency translation adjustment included in OCI was an unrealized gain of $22,000 and $42,000, respectively. Currency exchange rate fluctuations may also affect our competitive position in international markets as a result of their impact on our profitability and the pricing offered to our non-U.S. customers.

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ITEM 8.FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

	Page
Report of Independent Registered Public Accounting Firm	56
Consolidated Statements of Operations for the fiscal year ended April 2, 2004, for the period from April 3, 2004 to February 11, 2005 (Immediate Predecessor), for the 49 Days ended April 1, 2005 and for the fiscal year ended March 31, 2006 (Successor)	57
Consolidated Balance Sheets as of April 1, 2005 and March 31, 2006 (Successor)	58
Consolidated Statements of Cash Flows for the fiscal year ended April 2, 2004, for the period from April 3, 2004 to February 11, 2005 (Immediate Predecessor), for the 49 Days ended April 1, 2005 and for the fiscal year ended March 31, 2006 (Successor)	60
Consolidated Statements of Shareholder’s Equity for the fiscal year ended April 2, 2004, for the period from April 3, 2004 to February 11, 2005 (Immediate Predecessor), for the 49 Days ended April 1, 2005 and for the fiscal year ended March 31, 2006 (Successor)	61
Notes to Consolidated Financial Statements	62
Financial Statement Schedule:
Schedule I – Condensed Financial Information of Registrant	90
Schedule II – Valuation and Qualifying Accounts for the fiscal year ended April 2, 2004, for the period from April 3, 2004 to February 11, 2005, for the 49 days ended April 1, 2005 and for the fiscal year ended March 31, 2006	94

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of DynCorp International Inc.
Irving, Texas

We have audited the accompanying consolidated balance sheets of DynCorp International Inc. and subsidiaries (the “Company”) as of April 1, 2005  and March 31, 2006 (Successor), and the related consolidated statements of operations, shareholder’s equity, and cash flows for the fiscal year ended April 2, 2004, the period from April 3, 2004 to February 11, 2005 (Immediate Predecessor), the 49 days ended April 1, 2005 and the fiscal year ended March 31, 2006 (Successor). Our audits also included the financial statement schedules listed in the Index at Item 15. These financial statements and financial statement schedules are the responsibility of the Company’s management. Our responsibility is to express an opinion on the financial statements and financial statement schedules based on our audits.

We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

As discussed in Note 1 to the financial statements, DynCorp International LLC was a wholly owned subsidiary of DynCorp, which was acquired by a newly formed entity, DynCorp International Inc., on February 11, 2005. As a result, the periods presented in the accompanying financial statements reflect a new basis of accounting beginning February 12, 2005.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of the Company as of April 1, 2005 and March 31, 2006, and the results of their operations and their cash flows for the fiscal year ended April 2, 2004, the period from April 3, 2004 to February 11, 2005 (Immediate Predecessor), the 49 days ended April 1, 2005 and the fiscal year ended March 31, 2006 (Successor), in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, such financial statement schedules, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly in all material respects the information set forth therein.

/s/ Deloitte & Touche LLP
Fort Worth, Texas
June 28, 2006

56

DYNCORP INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands)

	Immediate Predecessor							Successor
	Fiscal Year Ended April 2, 2004			Period From April 3, 2004 to Feb. 11, 2005				49 Days Ended April 1, 2005				Fiscal Year Ended March 31, 2006
Revenues	$1,214,289				$1,654,305				$266,604				$1,966,993
Costs of services (excluding depreciation and amortization disclosed below)	1,106,571				1,496,109				245,406				1,722,089
Selling, general and administrative	48,350				57,755				8,408				97,520
Depreciation and amortization	8,148				5,922				5,605				46,147
Operating income	51,220				94,519				7,185				101,237
Other expense (income):
Interest expense	—				—				8,054				56,686
Interest on mandatory redeemable shares	—				—				2,182				21,142
Interest income	(64		)		(170		)		(7		)		(461		)
Income (loss) before income taxes	51,284				94,689				(3,044		)		23,870
Provision for income taxes	19,924				34,956				60				16,627
Net income (loss)	$	31,360			$	59,733			$	(3,104	)		$	7,243

See notes to consolidated financial statements.

57

DYNCORP INTERNATIONAL INC.
CONSOLIDATED BALANCE SHEETS
ASSETS
(Dollars in thousands)

	Successor
	April 1, 2005		March 31, 2006
Current assets:
Cash and cash equivalents	$	13,474		$	20,573
Receivables, net of allowances for doubtful accounts of $4,500 and $8,479 at April 1, 2005 and March 31, 2006, respectively	422,514			440,195
Prepaid expenses and other current assets	26,248			43,733
Deferred tax asset	—			795
Total current assets	462,236			505,296
Property and equipment at cost, less accumulated depreciation of $227 and $1,296 at April 1, 2005 and March 31, 2006, respectively	10,657			8,769
Other assets:
Goodwill	344,545			420,180
Tradename	18,318			18,318
Customer related intangibles, net of accumulated amortization of $5,094 and $43,471 at April 1, 2005 and March 31, 2006, respectively	285,287			246,910
Other intangibles, net of accumulated amortization of $383 and $3,672 at April 1, 2005 and March 31, 2006, respectively	6,833			7,453
Deferred financing costs, net of accumulated amortization of $383 and $3,261 at April 1, 2005 and March 31, 2006, respectively	19,438			17,469
Deferred income taxes	—			11,518
Other assets	879			3,176
Total other assets	675,300			725,024
Total assets	$	1,148,193		$	1,239,089

See notes to consolidated financial statements.

58

DYNCORP INTERNATIONAL INC.
CONSOLIDATED BALANCE SHEETS (Continued)
LIABILITIES AND SHAREHOLDER’S EQUITY
(Dollars in thousands, except per share amount)

	Successor
	April 1, 2005			March 31, 2006
Current liabilities:
Current portion of long-term debt	$	37,588			$	2,588
Accounts payable	135,677				132,396
Accrued payroll and employee costs	56,187				65,586
Accrued expenses - related party	8,866				11,272
Other accrued liabilities	23,491				33,845
Income taxes	60				8,280
Total current liabilities	261,869				253,967
Long-term debt - less current portion	662,412				658,963
Other long-term liabilities	4				—
Shares subject to mandatory redemption Series A preferred stock, stated value $125,000 and $195,550; 350,000 shares authorized; 125,000 shares and 190,550 shares issued and outstanding; redemption value of $127,182 and $219,821 at April 1, 2005 and March 31, 2006, respectively	126,990				219,821
Commitments and contingencies
Shareholder’s equity:
Common stock, $0.01 par value - 500,000 shares authorized; 500,000 shares issued and outstanding at April 1, 2005 and March 31, 2006, respectively	5				5
Additional paid-in capital	99,995				102,412
(Accumulated deficit) retained earnings	(3,104		)		4,139
Accumulated other comprehensive income (loss)	22				(218		)
Total shareholder’s equity	96,918				106,338
Total liabilities and shareholder’s equity	$	1,148,193			$	1,239,089

See notes to consolidated financial statements.

59

DYNCORP INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)

	Immediate Predecessor								Successor
					Period From								Fiscal Year
	Fiscal Year				April 3, 2004				49 Days				Ended
	Ended				to Feb. 11,				Ended				March 31,
	April 2, 2004				2005				April 1, 2005				2006
Cash flows from operating activities
Net income (loss)		$	31,360			$	59,733			$	(3,104	)		$	7,243
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities from continuing operations:
Depreciation and amortization		8,788				6,637				5,704				47,020
Non-cash interest expense (redeemable preferred stock dividends)		—				—				2,182				21,142
Deferred financing cost amortization		—				—				383				2,878
Loss on disposition of assets		14				21				—				—
Provision for losses on accounts receivable		—				4,338				—				4,204
Income from equity joint ventures		(135		)		(65		)		(4		)		(214		)
Deferred taxes		8,729				225				—				(9,407		)
Compensation expense related to Class B equity participation		—				—				—				2,417
Changes in current assets and liabilities:
Accounts receivable		(85,190		)		(133,185		)		(58,344		)		(21,885		)
Prepaid expenses and other current assets		(17,948		)		(20,672		)		9,866				(17,485		)
Accounts payable and accruals		47,736				80,658				12,017				10,828
Income taxes payable		(110		)		218				60				8,370
Net cash (used in) provided by operating activities		(6,756		)		(2,092		)		(31,240		)		55,111
Cash flows from investing activities
Net cash paid for businesses acquired		—				—				(865,053		)		—
Purchase of property and equipment		(2,047		)		(8,473		)		(244		)		(2,271		)
Payment for computer software upgrade		—				—				—				(3,909		)
Other assets		(245		)		(2,234		)		(4,097		)		(51		)
Net cash used in investing activities		(2,292		)		(10,707		)		(869,394		)		(6,231		)
Cash flows from financing activities
Net transfers from parent company		11,017				14,325				—				—
Capital contributions		—				—				224,825				—
Issuance of acquisition debt		—				—				665,000				—
Payments for offering costs		—				—				—				(1,940		)
Net proceeds (payments) from credit line		—				—				35,000				(35,000		)
Payments on credit facility		—				—				—				(3,449		)
Debt issuance costs		—				—				(18,753		)		(909		)
Purchase of interest rate cap		—				—				—				(483		)
Net cash provided by (used in) financing activities		11,017				14,325				906,072				(41,781		)
Net increase in cash and cash equivalents		1,969				1,526				5,438				7,099
Cash and cash equivalents, beginning of period		4,541				6,510				8,036				13,474
Cash and cash equivalents, end of period		$	6,510			$	8,036			$	13,474			$	20,573

See notes to consolidated financial statements.

60

DYNCORP INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDER’S EQUITY
(Dollars and shares in thousands)

				Accumulated
				Other
	Parent’s Net			Comprehensive
	Investment			Income (Loss)				Total
Immediate Predecessor
Balance at March 29, 2003		$	354,189		$	9		$	354,198
Comprehensive income:
Net income		31,360			—			31,360
Currency translation adjustment		—			(2		)	(2		)
Comprehensive income								31,358
Net transfers to Computer Sciences Corporation		11,017			—			11,017
Balance at April 2, 2004		396,566			7			396,573
Comprehensive income:
Net income		59,733			—			59,733
Currency translation adjustment		—			60			60
Comprehensive income		—			67			59,793
Net transfers to Computer Sciences Corporation		14,325			—			14,325
Balance at February 11, 2005		$	470,624		$	67		$	470,691

	Common Stock
													Accumulated
						Additional			(Accumulated				Other
						Paid-In			Deficit) Retained				Comprehensive
	Shares		Amount			Capital			Earnings				Income (Loss)				Total
Successor
Initial Capitalization-February 12, 2005 .		500		$	5		$	99,995		$	—			$	—		$	100,000
Comprehensive loss:
Net loss										(3,104		)		—			(3,104		)
Currency translation adjustment										—				22			22
Comprehensive loss										(3,104		)		22			(3,082		)
Balance at April 1, 2005		500		5			99,995			(3,104		)		22			96,918
Comprehensive income:
Net income							—			7,243				—			7,243
Interest rate cap							—			—				(260		)	(260		)
Currency translation adjustment							—			—				20			20
Comprehensive income							—			7,243				(240		)	7,003
Deferred compensation expense on Class B equity							2,417										2,417
Balance at March 31, 2006		500		$	5		$	102,412		$	4,139			$	(218	)	$	106,338

See notes to consolidated financial statements.

61

DYNCORP INTERNATIONAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)

For the Fiscal Year Ended April 2, 2004, Period from April 3, 2004 to February 11, 2005,
49 Days Ended April 1, 2005 and Fiscal Year Ended March 31, 2006

Note 1—Summary of Significant Accounting Policies

Description of Business and Organization

DynCorp International Inc. through its subsidiaries (together, the “Company”) provides defense and technical services and government outsourced solutions primarily to U.S. government agencies throughout the United States and internationally. Key offerings include aviation services, such as maintenance and related support, as well as base maintenance/operations and personal and physical security services. Primary customers include the U.S. Departments of Defense and State, but also include other government agencies, foreign governments and commercial customers.

On February 11, 2005, Computer Sciences Corporation and DynCorp, its former parent, sold DynCorp International LLC to DynCorp International Inc. (the “Successor Parent”), a newly formed entity controlled by The Veritas Capital Fund II, L.P. and its affiliates (“Veritas”). The Successor Parent has no operations independent of DynCorp International LLC. The primary reason for the acquisition and most significant factor contributing to the goodwill value is the Company’s ability to leverage its infrastructure and management expertise in addressing the government outsourcing trend. Prior to the February 11, 2005 acquisition, the entities to be sold were reorganized under DynCorp International LLC by transfers of net assets and other wholly owned legal entities by companies under common control. The reorganization was recorded at historical cost and accounted for on an “as if pooled” basis. Accordingly, the accompanying consolidated financial statements give retroactive effect to such transactions as of the beginning of the first period presented. All significant intercompany balances and transactions were eliminated.

The acquisition was accounted for under the purchase method, and accordingly, the purchase price was allocated to the net assets acquired based on an estimate of the fair value at the date of the acquisition. (See Note 3 for further discussion.)  Therefore, the period presented in the accompanying financial statements reflects a new basis of accounting beginning February 12, 2005. The financial statements from March 29, 2003 to February 11, 2005, are referred to as the “immediate predecessor period” statements and the statements from February 12, 2005 forward are referred to as the “successor period” statements.

The consolidated financial statements have been prepared from the separate records maintained by segments comprising the Company and may not necessarily be indicative of the conditions that would have existed, or the results of operations, if the Company had been operated as a separate company prior to February 12, 2005.

The historical financial statements prior to February 12, 2005, do not reflect the impact of many significant events and changes that have occurred as a result of the separation from Computer Sciences Corporation, including, but not limited to, the establishment of a stand-alone capital structure; the issuance of the debt securities necessary to effect the sale (and the related incurrence of interest expense); and the creation of independent information technology, purchasing, banking, insurance and employee benefits programs.

Historically, the Company has relied upon Computer Sciences Corporation to provide it with certain services more fully described in Note 2. As a separate entity, the Company developed and implemented the

62

DYNCORP INTERNATIONAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands)

Note 1—Summary of Significant Accounting Policies (Continued)

systems and infrastructure necessary to support current and future business. The Company and Computer Sciences Corporation have entered into a transition services agreement (see Note 2) whereby Computer Sciences Corporation provided some of these functions to the Company for a specified period following the closing of the sale. Following the expiration of the transition services agreement, the Company will be required to perform such functions internally or purchase them from unaffiliated vendors or both. Management estimates that the stand-alone costs for all of the various functions performed by Computer Sciences Corporation approximate the amounts allocated. It is possible that the Company may not be able to: (a) obtain services from unaffiliated providers, or (b) employ staff to handle these functions internally at the same costs or other terms and conditions as those enjoyed as a subsidiary of Computer Sciences Corporation or pursuant to the transition services agreement.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its domestic and foreign subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. All wholly owned subsidiaries have been included in the financial statements. The Company has no active majority-owned subsidiaries. Investments in which the Company owns a 20% to 50% ownership interest are accounted for by the equity method. These investments are in business entities in which the Company does not have control, but has the ability to exercise significant influence over operating and financial policies. The Company has no investments in business entities of less than 20%.

The following table sets forth the Company’s ownership in joint ventures and companies that are not consolidated into the Company’s financial statements as of March 31, 2006, and are accounted for by the equity method. For all of the entities listed below, the Company has the right to elect half of the board of directors or other management body. Economic rights are indicated by the ownership percentages listed below.

Dyn Al-Rushaid Services LLC	50.0	%
DynCorp-Hiberna Ltd.	50.0	%
DynEgypt LLC	50.0	%
DynPuertoRico Corporation	49.9	%
Babcock DynCorp Limited	40.0	%

Industry Segments

The Company operates in two principal operating segments, International Technical Services (“ITS”) and Field Technical Services (“FTS”).

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Management evaluates these estimates and assumptions on an ongoing basis, including those relating to allowances for doubtful accounts, fair value and impairment of intangible assets and goodwill, income taxes, profitability on

63

DYNCORP INTERNATIONAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands)

Note 1—Summary of Significant Accounting Policies (Continued)

contracts, anticipated contract modifications, contingencies and litigation. Actual results could differ from those estimates.

Parent Net Investment

Parent net investment represents Computer Sciences Corporation’s net investments in DynCorp International LLC for the immediate predecessor period. No intercompany interest income or expense was allocated to, or included in, the accompanying financial statements.

Revenue Recognition

The Company provides its services under cost-reimbursement, time-and-materials and fixed-price contracts. The form of contract, rather than the type of service offering, is the primary determinant of revenue recognition. Revenues are recognized when persuasive evidence of an arrangement exists, services or products have been provided to the client, the sales price is fixed or determinable, and collectibility is reasonably assured. Revenues by contract type for fiscal 2004 and 2006 and the combined period in fiscal 2005 were as follows:

	2004			2005			2006
Cost-Reimbursement		44	%		34	%		28	%
Time-and-Materials		32			39			38
Fixed-Price		24			27			34
Total		100	%		100	%		100	%

Revenue on fixed-price contracts is generally recognized ratably over the contract period, measured by either output or input methods appropriate to the services or products provided. For example, “output measures” can include period of service, such as for aircraft fleet maintenance; and units delivered or produced, such as aircraft for which modification has been completed. “Input measures” can include a cost-to-cost method, such as for procurement-related services.

Revenue on fixed-price construction or production-type contracts, when they occur, is recognized on the basis of the estimated percentage-of-completion. Progress toward completion is typically measured based on achievement of specified contract milestones, when available, or based on costs incurred as a proportion of estimated total costs. Profit in a given period is reported at the expected profit margin to be achieved on the overall contract. This method can result in the deferral of costs or profit on these contracts. Management regularly reviews project profitability and underlying estimates. Revisions to the estimates at completion are reflected in results of operations as a change in accounting estimate in the period in which the facts that give rise to the revision become known by management. Revenue on fixed-price contracts that have a duration of less than six months is recognized on the completed contract method. Work in progress is classified as a component of inventory.

The Company provides for anticipated losses on contracts by a charge to income during the period in which the losses are first identified. Amounts billed but not yet recognized as revenue under certain types of contracts are deferred. Unbilled receivables are stated at estimated realizable value. Contract costs on U.S. government contracts, including indirect costs, are subject to audit and adjustment by negotiations

64

DYNCORP INTERNATIONAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands)

Note 1—Summary of Significant Accounting Policies (Continued)

between the Company and government representatives. Substantially all of the Company’s indirect contract costs have been agreed upon through 2004. Contract revenues on U.S. government contracts have been recorded in amounts that are expected to be realized upon final settlement.

Contract costs are expensed as incurred, except as described above and on certain other production-type fixed-price contracts, where costs are deferred until such time that associated revenue is recognized.

Client contracts may include the provision of more than one of the Company’s services. For revenue arrangements with multiple deliverables, revenue recognition includes the proper identification of separate units of accounting and the allocation of revenue across all elements based on relative fair values.

Many of the Company contracts are time-and-materials or fixed hourly/daily rate contracts. For these contracts, revenue is recognized each month based on actual hours/days charged to the program during that month multiplied by the fixed hourly/daily rate in the contract for the type of labor charged. Any material or other direct charges are recognized as revenue based on the actual direct cost plus Defense Contract Audit Agency-approved indirect rates.

Cost-reimbursement type contracts can be either Cost Plus Fixed Fee, or Cost Plus Award Fee. Revenue recognition for these two contract types is very similar. In both cases, revenue is based on actual direct cost plus Defense Contract Audit Agency-approved indirect rates. In the case of Cost Plus Fixed Fee, the fixed fee is recognized based on the ratio of the fixed fee for the contract to the total estimated cost of the contract. In the case of Cost Plus Award Fee contracts, the fee is made up of two components, base fee and award fee. Base fee is recognized in the same manner as the fee on Cost Plus Fixed Fee contracts. The award fee portion is recognized based on an average of the last two award fee periods or award experience for similar contracts for new contracts that lack specific experience.

Allowance for Doubtful Accounts

The Company establishes an allowance for doubtful accounts against specific billed receivables based upon the latest information available to determine whether invoices are ultimately collectible. Such information includes the historical trends of write-offs and recovery of previously written-off accounts, the financial strength of the respective customer and projected economic and market conditions. The evaluation of these factors involves subjective judgments and changes in these factors may cause a misstatement of accounts receivable, which could significantly impact our consolidated financial statements by incurring bad debt expense. Given that the Company primarily serves the U.S. government, management believes the risk to be relatively low that a misstatement of accounts receivable would have a material impact on the Company’s financial results.

Property and Equipment

The Company’s depreciation and amortization policies are as follows:

Property and equipment:
Computer and related equipment	3 to 5 years
Furniture and other equipment	2 to 10 years
Leasehold improvements	Shorter of lease term or useful life

65

DYNCORP INTERNATIONAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands)

Note 1—Summary of Significant Accounting Policies (Continued)

The cost of property and equipment, less applicable residual values, is depreciated using the straight-line method. Depreciation commences when the specific asset is complete, installed and ready for normal use. As part of the purchase accounting, which resulted from the acquisition of the Company by the Successor Parent, all fixed assets were adjusted to fair value on February 11, 2005, thus resetting accumulated depreciation to $0 at the acquisition date. See Note 3 for further discussion of the acquisition.

Indefinite Lived Assets

Indefinite-lived assets, including goodwill, are not amortized but are subject to an annual impairment test. The first step of the impairment test, used to identify potential impairment, compares the fair value of each of the Company’s reporting units with its carrying amount, including indefinite-lived assets. If the fair value of a reporting unit exceeds its carrying amount, indefinite-lived assets of the reporting unit are not considered impaired, and the second step of the impairment test is unnecessary. If the carrying amount of a reporting unit exceeds its fair value, the second step of the impairment test shall be performed to measure the amount of the impairment loss, if any. Effective April 1, 2005 and February 24, 2006, the Company completed its annual impairment tests. Based on the results of these tests, no impairment losses were identified.

Impairment of Long-Lived Assets

The Company evaluates the carrying value of long-lived assets to be held and used, other than goodwill and intangible assets with indefinite lives, when events and circumstances indicate a potential impairment. The carrying value of a long-lived asset is considered impaired when the anticipated undiscounted cash flow from such asset is separately identifiable and is less than its carrying value. In that case, a loss is recognized based on the amount by which the carrying value exceeds the fair value of the long-lived asset. Fair value is determined primarily using the estimated cash flows associated with the asset under review, discounted at a rate commensurate with the risk involved. Losses on long-lived assets to be disposed of are determined in a similar manner, except that fair values are reduced for the cost of disposal. Changes in estimates of future cash flows could result in a write-down of the asset in a future period. As of March 31, 2006, management believes there have been no events or circumstances that would indicate an impairment of long-lived assets.

Income Taxes

The Company’s operating results historically have been included in Computer Sciences Corporation’s consolidated U.S. and state income tax returns and in tax returns of certain Computer Sciences Corporation foreign subsidiaries. Operating results from February 12, 2005 forward will be included in such returns of the Company. The provision for income taxes in the Company’s consolidated financial statements has been determined on a separate return basis. Deferred tax assets and liabilities are recognized for expected tax consequences of temporary differences between the tax bases of assets and liabilities and their reported amounts.

Fair Values of Financial Instruments

Fair values of financial instruments are estimated by the Company using available market information and other valuation methods. Values are based on available market quotes or estimates using a discounted

66

DYNCORP INTERNATIONAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands)

Note 1—Summary of Significant Accounting Policies (Continued)

cash flow approach based on the interest rates currently available for similar instruments. The fair values of financial instruments for which estimated fair value amounts are not specifically presented are estimated to approximate the related recorded values.

Cash Flows

For purposes of reporting cash and cash equivalents, the Company considers all investments purchased with an original maturity of three months or less to be cash equivalents.

Cash payments (refunds) for taxes on income (loss) are noted in the table below. Amounts through February 11, 2005 are for foreign taxes on income (loss). Domestic payments were processed and paid by Computer Sciences Corporation between March 29, 2003 and February 11, 2005 and by DynCorp International Inc. from February 12, 2005 forward.

	Immediate Predecessor							Successor
	Fiscal Year Ended April 2, 2004			Period From April 3, 2004 to Feb. 11, 2005				49 Days Ended April 1, 2005			Fiscal Year Ended March 31, 2006
Taxes on income (loss)		$	2,446		$	(10	)		$	2		$	19,025

The Company paid interest of $322 and $57,464 during the 49 days ended April 1, 2005 and the fiscal year ended March 31, 2006, respectively.

The Company had non-cash investing activities of $1,194 related to property and equipment purchases that were accrued at March 31, 2006. In addition, goodwill, preferred stock and deferred tax assets increased by $75,635, $71,689 and $6,884, respectively, related to the purchase price working capital settlement agreement and adjustments.

Recent Accounting Pronouncements

In December 2004, the Financial Accounting Standards Board (“FASB”) revised Statement of Financial Accounting Standards (“SFAS”) No. 123, “Accounting for Stock-Based Compensation.”  The revised SFAS No. 123 (“SFAS No. 123(R)”), “Share-Based Payment,” supersedes Accounting Principles Board No. 25 (“APB No. 25”), “Accounting for Stock Issued to Employees.”  SFAS No. 123(R) requires all companies to measure and recognize compensation expense for all stock-based payments at fair value. Effective October 1, 2005, the Company adopted SFAS No. 123(R) using the modified prospective application transition method. SFAS No. 123(R) requires the measurement and recognition of compensation expense for all share-based payment awards made to employees and directors, including employee stock options and restricted stock grants related to the Company’s incentive plans, to be based on fair values. SFAS No. 123(R) supersedes the Company’s previous accounting for these plans under APB No. 25 for the periods beginning October 1, 2005. The adoption of SFAS No. 123(R) did not have a material impact on the Company’s consolidated financial statements. Financial statements for prior interim periods, fiscal years and predecessor periods do not reflect any restated amounts as a result of this adoption in accordance with the modified prospective application transition method under SFAS No. 123(R).

67

DYNCORP INTERNATIONAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands)

Note 1—Summary of Significant Accounting Policies (Continued)

In March 2005, the FASB issued FASB Interpretation No. 47 (“FIN 47”) “Accounting for Conditional Retirement Obligations,” which clarifies the term “conditional asset retirement obligations,” as used in FASB Statement No. 143, “Accounting for Asset Retirement Obligations.”  FIN 47 clarifies that an entity is required to recognize a liability for a legal obligation to perform asset retirement activities when the retirement is conditional on a future event and if the liability’s fair value can be reasonably estimated. If the liability’s fair value cannot be reasonably estimated, then the entity must disclose a description of the obligation, the fact that a liability has not been recognized and the reasons why the liability cannot be reasonably estimated. The requirements of FIN 47 are effective for fiscal periods ending after December 15, 2005. The adoption of FIN 47 did not have any effect on the Company’s consolidated financial statements.

In May 2005, the FASB issued SFAS No. 154, “Accounting Changes and Error Corrections,” which is effective for voluntary changes in accounting principles made in fiscal years beginning after December 15, 2005. SFAS No. 154 replaces APB Opinion No. 20 (“APB 20”), “Accounting Changes” and SFAS No. 3, “Reporting Accounting Changes in Interim Financial Statements.”  SFAS No. 154 requires that voluntary changes in accounting principle be applied on a retrospective basis to prior period financial statements and eliminates the provisions of APB 20 that cumulative effects of voluntary changes in accounting principles be recognized in net income in the period of change. The adoption of SFAS No. 154 did not have any effect on the Company’s consolidated financial statements.

In November 2005, the FASB issued FASB Staff Position No. FIN 45-3 (“FSP FIN 45-3”) “Application of FASB Interpretation No. 45 to Minimum Revenue Guarantees Granted to a Business or Its Owners,” which is effective for new minimum revenue guarantees issued or modified on or after the beginning of the first fiscal quarter following the date FSP FIN 45-3 was issued. FSP FIN 45-3 amends FASB Interpretation No. 45, “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others” to include guarantees granted to a business that the revenue of the business for a specified period of time will be at least a specified minimum amount under its recognition, measurement and disclosure provisions. This interpretation is effective for the Company beginning on January 1, 2006. The adoption of FSP FIN 45-3 did not have any effect on the Company’s consolidated financial statements.

Reclassifications

Certain amounts from previous periods have been reclassified in the accompanying consolidated financial statements to conform to the 2006 presentation. These reclassifications did not affect net
income (loss).

Note 2—Transactions Between Immediate Predecessor Parent and the Company

During the period of fiscal 2004 and the period from April 3, 2004 to February 11, 2005, the Company’s predecessor parent allocated $12,700 and $11,900, respectively, of expenses to the Company incurred for providing executive oversight and corporate headquarter functions, consolidation accounting, treasury, tax, legal, public affairs, human resources, information technology and other services. The Company considers the allocations to be reasonable reflections of the utilization of services provided to, or the benefit received by, the Company. Computer Sciences Corporation continued to perform certain of

68

DYNCORP INTERNATIONAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands)

Note 2—Transactions Between Immediate Predecessor Parent and the Company (Continued)

these functions under a transition services agreement, described below, until the Company assumed full responsibility for them as a separate company. Until then, the Company’s costs for these functions will be included both as charges from Computer Sciences Corporation under the transition services agreement and as the Company’s own costs to initiate and perform these functions.

Transition Services Agreement

The Company and Computer Sciences Corporation entered into a transition services agreement (the “Agreement”) at the closing of the sale of the Company on February 11, 2005. The Agreement sets forth the terms and conditions under which the Company and Computer Sciences Corporation provide certain services to each other.

The Agreement commenced on the closing of the sale, and each party is obligated to provide specified services for terms ranging from six months to ten years following the closing, unless terminated earlier by either party.

Fees are generally payable on an hourly basis for services performed by individuals or on a fixed monthly charge for the use of systems and related support.

Under the Agreement, the Company is obligated to provide, upon Computer Sciences Corporation’s request, consultative services relating to legacy employee benefit plans and related matters, and is required to continue to host electronic mail services for specified units of DynCorp that remain as subsidiaries of Computer Sciences Corporation.

Under the Agreement, Computer Sciences Corporation agreed to provide the Company with the following significant services:

·infrastructure and application support for the Company’s financial and enterprise resource planning systems through May 2006;

·payroll tax processing services for a significant portion of the employees of the Company through May 2005; and

·upon request of the Company, consultative services in the areas of risk management.

Client Service Agreements—Computer Sciences Corporation and the Company have agreed to continuation and transition terms for certain areas where the two entities support each other’s clients.

Intellectual Property Agreements—Computer Sciences Corporation has entered into various intellectual property agreements (“IP Agreements”) with the Company for certain Computer Sciences Corporation-owned intellectual property, such as tradename and software license agreements. There is no fee for the granting of the identified licenses to the Company. The IP Agreements were recorded at fair value on February 11, 2005 (see Note 3). The IP Agreements generally provide the Company with an exclusive, perpetual, irrevocable (but terminable) worldwide, royalty-free, fully paid license to use the intellectual properties. The term of the IP Agreements commenced on the date of the sale of the Company to the Successor Parent and continues as long as the licensee continues to use any of the intellectual property, unless sooner terminated. The IP Agreements may be terminated if an acquisition of the Company takes place or the Company submits in writing to Computer Sciences Corporation a request to

terminate the contract, and Computer Sciences Corporation may terminate if the Company commits a material breach of these IP Agreements, as described in the IP Agreements.

69

DYNCORP INTERNATIONAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands)

Note 2—Transactions Between Immediate Predecessor Parent and the Company (Continued)

Transactions under the above agreements were as follows for the 49 days ended April 1, 2005 and the fiscal year ended March 31, 2006:

	49 Days Ended April 1, 2005			Fiscal Year Ended March 31, 2006
Service Provider
Computer Sciences Corporation		$	355		$	1,613
Company		$	3		$	59

Management Fee

The Company agreed to pay Veritas minimum annual management fees of $300. The Company recorded $25 and $300 in fees during the 49 days ended April 1, 2005 and the fiscal year March 31, 2006, respectively.

Note 3—Acquisition

February 11, 2005 Transaction

On February 11, 2005, the Successor Parent completed the acquisition of all of the outstanding equity securities of DynCorp International LLC for a purchase price of $865,288, including $775,000 of cash, preferred stock of the Successor Parent valued at $75,000 and transaction expenses. The cash payment and transaction expenses were financed through the issuance of the 9.5% senior subordinated notes, borrowings under the Credit Facility (see Note 9) and the issuance of common stock and preferred stock for $100,000 and $50,000, respectively.

The original purchase price was subject to an adjustment to the extent that the net working capital of the Company differed from the original agreed-upon level. As required under the purchase agreement related to the 2005 Acquisition, Computer Sciences Corporation delivered to the Company a draft calculation of the net working capital on April 6, 2005. The Company delivered to Computer Sciences Corporation a notice objecting to the draft calculation on May 5, 2005. The Company and Computer Sciences Corporation agreed upon the final calculation (the “working capital settlement agreement”), on October 27, 2005.  The working capital settlement agreement resulted in an increase to the purchase price in an amount of $65,550 payable in shares of preferred stock of the Successor Parent. The preferred shares issued in connection with the working capital settlement agreement accumulated dividends from the date of acquisition, February 11, 2005. The Company has recorded the settlement amount, which includes both the preferred stock issued (i.e., $65,550) and the accumulated dividend through October 27, 2005 (i.e., $6,139), as an increase to goodwill and shareholder’s equity at March 31, 2006. Related to the accumulated amount of $6,139, the Company recorded a deferred tax liability in the amount of $2,201 with a corresponding increase to goodwill.

In addition to the working capital settlement previously described, the Company agreed to assume additional liability to insurance related items, such as workers’ compensation, in effect prior to the acquisition date. The Company has recorded an adjustment to the original purchase price by increasing workers’ compensation liability by $6,884 and increasing goodwill in a like amount.

70

DYNCORP INTERNATIONAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands)

Note 3—Acquisition (Continued)

The goodwill recorded related to the 2005 Acquisition was based on preliminary purchase price allocations. The Company finalized the tax treatment on two items during the third quarter, which resulted in an increase of deferred tax assets and a reduction of goodwill in the amount of $5,139.

The acquisition was accounted for under the purchase method, and accordingly, the purchase price of the acquisition was allocated to the net assets acquired based on the fair values at the date of the acquisition.

A summary of the assets acquired and liabilities assumed in the acquisition is as follows:

	Estimated Fair Values
Accounts receivable	$	364,170
Prepaid expenses and other current assets	36,008
Intangible assets	312,068
Property and equipment	10,640
Other assets	13,831
Accounts payable and accrued expenses	(217,662		)
Other long-term liabilities	(2,258		)
Goodwill	420,180
Purchase price	936,977
Less cash received	(8,036		)
Purchase price, net of cash received	$	928,941

The intangible assets include customer relationships and internally developed technologies of $290,381 and $3,369, respectively. The customer relationships were valued at the contract level and are amortized ratably over the estimated life used in determining contract specific value. When measuring across all contracts, customer relationships have a weighted-average estimated useful life of approximately 8.5 years. The internally developed technologies have an estimated useful life of two years and are amortized ratably over the useful life. The tradename of $18,318 is assigned to the reportable segments as follows: Field Technical Services—$1,040 and International Technical Services—$17,278. The tradename is not amortized for financial reporting purposes but is deductible for tax purposes.

Goodwill of $420,180 is assigned to the reportable segments as follows: Field Technical Services—$100,314 and International Technical Services—$319,866. The goodwill is not amortized for financial reporting purposes but is deductible for tax purposes.

In connection with the acquisition, Veritas was paid a $12,100 transaction fee and reimbursed for $880 of expenses. The Company also paid $3,875 of employee retention bonuses, which were expensed over a six-month period beginning February 12, 2005.

71

DYNCORP INTERNATIONAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands)

Note 4—Goodwill and Tradename

A summary of the changes in the carrying amount of indefinite-lived assets by segment is as follows:

	FTS			ITS			Total
Immediate Predecessor
Balance as of April 3, 2004	$	120,115		$	139,574		$	259,689
Adjustments	(120,115		)	(139,574		)	(259,689		)
Balance as of February 11, 2005	$	—		$	—		$	—
Successor
Balance as of February 12, 2005	$	83,254		$	279,609		$	362,863
Additions	—			—			—
Balance as of April 1, 2005	83,254			279,609			362,863
Additions	18,100			57,535			75,635
Balance as of March 31, 2006	$	101,354		$	337,144		$	438,498

Adjustments are to remove prior goodwill upon the acquisitions of the Company by Computer Sciences Corporation and the Successor Parent on February 11, 2005. Indefinite-lived assets as of February 12, 2005 are the result of the Successor Parent’s acquisition of the Company as of February 11, 2005.

Note 5—Other Intangible Assets

A summary of amortizable intangible assets is as follows:

	April 1, 2005
Successor	Weighted- Average Amortization Period		Gross Carrying Value			Accumulated Amortization				Net
Customer-related intangible assets		8.5		$	290,381		$	(5,094	)	$	285,287
Other		2.0		7,216			(383		)	6,833
Deferred financing cost		7.1		19,821			(383		)	19,438
				$	317,418		$	(5,860	)	$	311,558

	March 31, 2006
Successor	Weighted- Average Amortization Period		Gross Carrying Value			Accumulated Amortization				Net
Customer-related intangible assets		8.5		$	290,381		$	(43,471	)	$	246,910
Other		4.1		11,124			(3,671		)	7,453
Deferred financing cost		7.1		20,730			(3,261		)	17,469
				$	322,235		$	(50,403	)	$	271,832

Amortization expense for customer-related and other intangibles was $7,915, $5,300, $5,477 and $41,665 for the fiscal year ended April 2, 2004, the period from April 3, 2004 to February 11, 2005, the

72

DYNCORP INTERNATIONAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands)

Note 5—Other Intangible Assets (Continued)

49 days ended April 1, 2005 and the fiscal year ended March 31, 2006, respectively. Deferred financing cost is amortized through interest expense. Amortization related to deferred financing costs was $383 and $2,878 for the 49 days ended April 1, 2005 and the fiscal year ended March 31, 2006, respectively. Estimated amortization related to intangible assets at March 31, 2006 for fiscal years 2007 through 2011, is as follows: $44,359, $42,409, $39,239, $38,957 and $35,392, respectively.

Note 6—Income Taxes

The sources of income (loss) before taxes, classified as between domestic entities and those entities domiciled outside of the United States are as follows:

	Immediate Predecessor						Successor
	Fiscal Year Ended April 2, 2004			Period From April 3, 2004 to Feb. 11, 2005			49 Days Ended April 1, 2005				Fiscal Year Ended March 31, 2006
Domestic entities		$	50,865		$	94,334		$	(3,038	)		$	23,679
Entities outside the United States		419			355			(6		)		191
		$	51,284		$	94,689		$	(3,044	)		$	23,870

The provision (benefit) for taxes on income (loss) classified between current and deferred and between taxing jurisdictions consists of the following:

	Immediate Predecessor						Successor
	Fiscal Year Ended April 2, 2004			Period From April 3, 2004 to Feb. 11, 2005			49 Days Ended April 1, 2005				Fiscal Year Ended March 31,  2006
Current portion:
Federal		$	9,446		$	32,658		$	—			$	22,849
State		1,540			1,627			—				1,448
Foreign		209			446			60				1,618
		11,195			34,731			60				25,915
Deferred portion:
Federal		7,505			214			(349		)		(8,797		)
State		1,224			11			(14		)		(338		)
Foreign		—			—			—				(153		)
		8,729			225			(363		)		(9,288		)
Total provision (benefit) for income taxes before valuation allowance		$	19,924		$	34,956		$	(303	)		$	16,627
Valuation allowance		—			—			363				—
		$	19,924		$	34,956		$	60			$	16,627

73

DYNCORP INTERNATIONAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands)

Note 6—Income Taxes (Continued)

The major elements contributing to the difference between the federal statutory tax rate and the effective tax rate are as follows:

	Immediate Predecessor						Successor
	Fiscal Year Ended April 2, 2004			Period From April 3, 2004 to Feb. 11, 2005			49 Days Ended April 1, 2005			Fiscal Year Ended March 31,  2006
Statutory rate		35.0	%		35.0	%		(35.0	)%		35.0	%
State income tax, less effect of federal deduction		3.5			1.7			(4.6	)		2.6
Other		0.4			0.2			0.4			0.8
Nondeductible preferred stock dividends		—			—			29.8			32.8
Valuation allowance		—			—			11.4			(1.5	)
Effective tax rate		38.9	%		36.9	%		2.0	%		69.7	%

The Company’s blended state tax rate has been computed by using the same weighted apportionment factor as DynCorp, which is not expected to be materially different from the Company’s expected state tax rate on a separate basis.

The tax effects of significant temporary differences that comprise deferred tax balances are as follows:

	Successor
	April 1,  2005				March 31,  2006
Deferred tax (liabilities) assets
Customer intangibles		$	184			$	(897	)
Contract accounting		(297		)		(1,801		)
Net operating loss carryforwards		146				—
Foreign tax credit carryforwards		60				—
Depreciable assets		—				765
Accrued health costs		—				853
Workers’ compensation		—				3,351
Accrued vacation		—				5,853
Bad debt		—				3,096
Prepaid insurance		—				(5,754		)
Accrued liability insurance		—				1,206
Accrued executive incentives		—				1,729
Contract loss reserve		—				1,030
Completion bonus		—				2,370
Other		270				512
Valuation allowance		(363		)		—
Total deferred taxes		$	—			$	12,313

74

DYNCORP INTERNATIONAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands)

Note 6—Income Taxes (Continued)

Deferred tax liabilities associated with contract accounting, bad debts, prepaid expenses, completion bonus and accrued expenses are classified as current deferred taxes on the balance sheet. The remaining deferred balances are non-current deferred taxes  on the balance sheet.

Note 7—Receivables

Receivables consist of the following:

	Successor
	April 1,  2005		March 31,  2006
Billed	$	169,229	$	188,458
Unbilled	243,362		248,994
Unbilled—related party	6,409		495
Other receivables	3,514		2,248
	$	422,514	$	440,195

Unbilled receivables at April 1, 2005 and March 31, 2006 include $54,484 and $31,303, respectively, related to costs incurred on projects for which the Company has been requested by the customer to begin work under a new contract or extend work under an existing contract, and for which formal contracts or contract modifications have not been executed at the end of the year. The Company records revenue, to the extent of costs, for these anticipated contract modifications. The balance of unbilled receivables consists of costs and fees billable on contract completion or other specified events, the majority of which is expected to be billed and collected within one year. Contract retentions are billed when the Company has negotiated final indirect rates with the U.S. government and, once billed, are subject to audit and approval by outside third parties. Consequently, the timing of collection of retention balances of $40 and $10 as of April 1, 2005 and March 31, 2006, respectively, is outside the Company’s control. Based on the Company’s historical experience, the majority of the retention balance is expected to be collected beyond one year.

Note 8—Savings Plans

Defined Contribution Savings Plans

For the periods presented through February 11, 2005, substantially all domestic Company employees and certain foreign employees were able to participate in (a) one of two legacy defined contribution savings plans sponsored by DynCorp, its former parent, until July 2, 2004, and (b) after July 2, 2004, in a defined contribution savings plan sponsored by Computer Sciences Corporation, into which the legacy plans merged. The plans allowed employees to contribute a portion of their earnings in accordance with specified guidelines. For the plans sponsored by its former parent at April 2, 2004, plan assets included 6,703,868 shares of Computer Sciences Corporation’s common stock, of which 3,073,632 shares were held for Company participants. During the year ended April 2, 2004 and the period from April 3, 2004 to February 11, 2005, the Company contributed $7,838, and $6,783, respectively.

75

DYNCORP INTERNATIONAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands)

Note 8—Savings Plans (Continued)

In July 2004, the savings plans were merged into Computer Sciences Corporation’s defined contribution plan, the Matched Asset Plan (“MAP”). After the plan merger, the match and employer contribution formulas in the MAP remained substantially unchanged from their form in the savings plans.

Effective January 6, 2005, the MAP was bifurcated into two mirror image plans, the Computer Sciences Corporation MAP plan and the DynCorp International LLC MAP plan. The Company adopted an amendment to the DynCorp International LLC MAP plan that prevented any new Company or participant contributions going to the Computer Sciences Corporation stock fund, changed all new Company contributions to cash, made all Computer Sciences Corporation stock fund amounts diversifiable and offered the Computer Sciences Corporation stock fund as an investment alternative for two years. All other terms of the plan are unchanged. During the 49 days ended April 1, 2005 and the fiscal year ended March 31, 2006, the Company contributed $1,226 and $8,343, respectively, to the DynCorp International LLC MAP plan.

Other Benefit Plans

In 1997, DynCorp established the supplemental executive retirement plan, which offered certain executives additional retirement benefits in the form of a 10-year certain stream of payments based on a percentage of final-year annual compensation. The plan also included pre- and post-retirement lump-sum death benefit provisions. For Company participants in the plan, the Company recorded a liability in the amount of $200 as of April 2, 2004, for these retirement balances. At the date of the sale of the Company to Veritas Capital, participants were deemed to be terminated and the Company’s obligations under the plan ceased. However, a successor plan will be established, giving credit for prior service, the effect of which will be to establish a comparable liability. The Company has recorded a related liability of $222 at April 1, 2005 and March 31, 2006.

Note 9—Long-Term Debt

Long-term debt consists of the following:

	Successor
	April 1,  2005			March 31,  2006
Senior Secured Credit Facility:
Revolving credit line	$	35,000		$	—
Term loans	345,000			341,551
Senior subordinated notes	320,000			320,000
	700,000			661,551
Less current portion of long-term debt	(37,588		)	(2,588		)
	$	662,412		$	658,963

Senior Secured Credit Facility—The Company entered into a senior secured credit facility (the “Senior Secured Credit Facility”)on February 11, 2005, which provides for a revolving credit line and term loans. Borrowings under the senior Secured Credit Facility are secured by substantially all assets of the Company and the capital stock of the Company’s subsidiaries.

76

DYNCORP INTERNATIONAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands)

Note 9—Long-Term Debt (Continued)

The amended revolving credit line provides for borrowings of up to $90,000, less outstanding letters of credit. The Company may elect to receive advances under the revolving credit line in the form of either Base Rate advances or Eurodollar advances, as defined by the Senior Secured Credit Facility. The outstanding advances bear interest at the applicable Base Rate plus the Applicable Margin (1.5% at March 31, 2006) or Eurodollar Rate plus the Applicable Margin (2.5% at March 31, 2006), as defined by the Credit Facility agreement, and are due in 2010. At March 31, 2006, availability under the revolving credit line for additional borrowings was approximately $82,478 (which gives effect to $7,522 of outstanding letters of credit, which reduced our availability by that amount). The Senior Secured Credit Facility requires an unused line fee equal to 0.5% per annum, payable monthly in arrears, of the unused portion of the revolving credit facility.

The Senior Secured Credit Facility also provides for a commitment guarantee of a maximum of $15,000 for letters of credit, subsequently amended to $30,000 in January 2006. The Senior Secured Credit Facility requires letter of credit fees equal to 2.5%, payable monthly in arrears on the amount available for drawing under all letters of credit. The Company has $7,522 outstanding letters of credit at March 31, 2006.

Term loans under the Senior Secured Credit Facility initially provided $345,000 to the Company and are due in quarterly payments of $863 through April 1, 2010, and $81,938 thereafter, with final payment due February 11, 2011. Interest is due quarterly at the Base Rate plus the Applicable Margin or the Eurodollar Rate plus the Applicable Margin (1.75% per annum and 2.75% per annum at March 31, 2006, respectively).

On January 9, 2006, the Company entered into the first amendment and waiver of its Senior Secured Credit Facility. The first amendment and waiver increased the revolving commitment under its Senior Secured Credit Facility by $15,000 to $90,000, which includes an increase in the sub-limit for letters of credit equal to the same amount. The first amendment and waiver also permits the Company to: (i) pay a transaction fee to Veritas Capital Management II, L.L.C. related to the Equity Offering of up to $10,000; (ii) pay a distribution to the holders of the Class B common stock in an amount equal to the sum of (x) $100,000 plus (y) the proceeds, if any, of the underwriters’ over-allotment option, net of discount and estimated offering expenses; (iii) redeem all of the currently outstanding preferred stock; and (iv) redeem up to $65,000 of the $320,000 aggregate principal amount of the Company’s senior subordinated notes. The first amendment and waiver waives the requirement in the Senior Secured Credit Facility agreement that the Company use 50% of the net cash proceeds from the Equity Offering to prepay loans under the Senior Secured Credit Facility and/or permanently reduce the revolving commitments.

On June 28, 2006, the Company and its domestic subsidiaries entered into a second amendment and waiver of our Senior Secured Credit Facility, dated February 11, 2005. The second amendment and waiver provided for a new term loan in the amount of $431,550, which was the outstanding balance of the existing term loan under our Senior Secured Credit Facility on the date of the second amendment and waiver. The maturity date of the new term loan is unchanged from the maturity date of the existing term loan. The proceeds from the new term loan were used to repay the existing term loan. The second amendment and waiver also, among other things, (i) decreases the interest rate applicable to the term loan under our Senior Secured Credit Facility; (ii) permits us to request an increase in our revolving credit facility by an aggregate amount of up to $30,000 provided that none of the existing lenders or any other lender is

77

DYNCORP INTERNATIONAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands)

Note 9—Long-Term Debt (Continued)

committed to provide such increase; (iii) increases the amount of capital expenditures permitted under our senior secured credit facility from $4,000 per fiscal year to $8,000 per fiscal year; (iv) increases the amount of capitalized leases permitted under our senior secured credit facility; (v) allows for the payment of dividends and the repurchase of our capital stock in the amount of $10,000 plus, if our leverage ratio (as defined in our senior secured credit facility) is below 3.25:1.00, 25% of our excess cash flow (as defined in our senior secured credit facility) for each fiscal year; and (vi) postpones the first prepayment of the senior secured credit facility based on our excess cash flow until 90 days following our fiscal year which ends on March 30, 2007.

The Credit Facility requires defined prepayments of borrowings based on excess cash flows and certain other events.

9.5% Senior Subordinated Notes—The Company issued senior subordinated notes totaling $320,000 that are held by various financial institutions at March 31, 2006. Interest on the senior subordinated notes is due semi-annually at a fixed annual rate of 9.5%. The senior subordinated notes are due on February 15, 2013, or upon a defined change in control or certain offering and are general unsecured obligations of DynCorp International LLC and certain guarantor subsidiaries.

Prior to February 15, 2009, the Company may redeem the senior subordinated notes, in whole or in part, at a price equal to 100% of the principal amount of the senior subordinated notes plus a defined make-whole premium, plus accrued interest to the redemption date. After February 15, 2009, the Company can redeem the senior subordinated notes, in whole or in part, at defined redemption prices, plus accrued interest to the redemption date. The Company can also redeem up to 35% of the original aggregate principal amount of the senior subordinated notes at any time before February 15, 2008, with the net cash proceeds of certain equity offerings at a price equal to 109.5% of the principal amount of the senior subordinated notes, plus accrued interest to the redemption date. The holders of the senior subordinated notes may require the Company to repurchase the senior subordinated notes at defined prices in the event of certain asset sales or change-of-control events.

The Senior Secured Credit Facility and the senior subordinated notes contain various financial covenants, including minimum levels of EBITDA, minimum interest and fixed charge coverage ratios, and maximum capital expenditures and total leverage ratio. Nonfinancial covenants restrict the ability of the Company and its subsidiaries to dispose of assets; incur additional indebtedness, prepay other indebtedness or amend certain debt instruments; pay dividends; create liens on assets; enter into sale and leaseback transactions; make investments, loans or advances; issue certain equity instruments; make acquisitions; engage in mergers or consolidations or engage in certain transactions with affiliates; and otherwise restrict certain corporate activities.

At March 31, 2006, the Company was not able to pay any dividend based on the restrictions limiting the payment of dividends by the Company and its subsidiaries under the Senior Secured Credit Facility and the notes.

The Company was in compliance with its various financial and nonfinancial covenants at March 31, 2006.

78

DYNCORP INTERNATIONAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands)

Note 9—Long-Term Debt (Continued)

Scheduled maturities of long-term debt for each of the fiscal years subsequent to March 31, 2006, are as follows:

2007	$	2,588
2008	3,450
2009	4,313
2010	3,450
2011	327,750
Thereafter	320,000
	$	661,551

The fair value of the Company’s debt instruments as of March 31, 2006 is as follows:

Senior Secured Credit Facility
Revolving credit line	$	—
Term loans	341,551
Senior subordinated notes	331,600
	$	673,151

The fair value of the term loan approximates to its carrying value due to the variable interest rate. The fair value of the senior subordinated notes is based on their quoted market value.

On June 9, 2006, in connection with the Equity Offering, the Company redeemed approximately $28,000 of the $320,000 aggregate principal amount of the senior subordinated notes. The Company also paid approximately $800 in accrued interest through the redemption date and a prepayment penalty of approximately $2,719 related to the senior subordinated notes. See Note 17 for further discussion of this Equity Offering.

Note 10—Commitments and Contingencies

Commitments

The Company has operating leases for the use of certain property and equipment. Operating leases are noncancelable, cancelable only by the payment of penalties or cancelable upon one month’s notice. All lease payments are based on the lapse of time but include, in some cases, payments for insurance, maintenance and property taxes. There are no purchase options on operating leases at favorable terms, but most leases have one or more renewal options. Certain leases on real estate property are subject to annual escalations for increases in utilities and property taxes. Lease rental expense amounted to $19,588, $11,271, $1,748 and $54,175 for the year ended April 2, 2004, the period from April 3, 2004 to February 11, 2005, the 49 days ended April 1, 2005 and March 31, 2006, respectively.

79

DYNCORP INTERNATIONAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands)

Note 10—Commitments and Contingencies (Continued)

Minimum fixed rentals required for the next five years and thereafter under operating leases in effect at March 31, 2006, are as follows:

Fiscal Year	Real Estate		Equipment
2007		$3,801		$843
2008		3,465		751
2009		2,432		55
2010		2,186		—
2011		2,186		—
Thereafter		12,023		—
		$26,093		$1,649

The Company has no significant long-term purchase agreements with service providers.

Contingencies

The primary financial instruments that potentially subject the Company to concentrations of credit risk are accounts receivable. Departments and agencies of the U.S. federal government account for all but minor portions of the Company’s customer base, minimizing credit risk. Furthermore, the Company continuously reviews all accounts receivable and records provisions for doubtful accounts as needed.

Litigation

The Company and its subsidiaries and affiliates are involved in various lawsuits and claims that have arisen in the normal course of business. In most cases, the Company has denied, or believes it has a basis to deny, liability. The Company has recorded its best estimate of the aggregate liability that will result from these matters and believes that these matters are adequately reserved. While it is not possible to predict with certainty the outcome of litigation and other matters discussed above, it is the opinion of the Company’s management, based in part upon opinions of counsel, insurance in force and the facts currently known, that liabilities in excess of those recorded, if any, arising from such matters would not have a material adverse effect on the results of operations, consolidated financial condition or liquidity of the Company over the long term.

In addition, the Company is occasionally the subject of investigations by various agencies of the U.S. government. Such investigations, whether related to its U.S. government contracts or conducted for other reasons, could result in administrative, civil or criminal liabilities, including repayments, fines or penalties being imposed upon the Company, or could lead to suspension or debarment from future U.S. government contracting. In management’s opinion, there are no outstanding issues of this nature at March 31, 2006, that will have a material adverse effect on the Company’s consolidated financial condition, results of operations or liquidity.

On September 11, 2001, a class action lawsuit seeking $100,000 on behalf of approximately 10,000 citizens of Ecuador was filed against DynCorp International LLC and several of its former affiliates in the U.S. District Court for the District of Columbia. The action alleges personal injury, property damage and wrongful death as a consequence of the spraying of narcotic plant crops along the Colombian border adjacent to Ecuador. The spraying operations are conducted under a Department of State contract in

80

DYNCORP INTERNATIONAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands)

Note 10—Commitments and Contingencies (Continued)

cooperation with the Colombian government. The terms of the Department of State contract provide that the Department of State will indemnify DynCorp International LLC against third-party liabilities arising out of the contract, subject to available funding. The Company is also entitled to indemnification by Computer Sciences Corporation in connection with this lawsuit, subject to certain limitations. Additionally, any damage award would have to be apportioned between the other defendants and the Company.

On May 29, 2003, Gloria Longest, a former accounting manager for the Company, filed suit against the DynCorp International LLC under the False Claims Act and the Florida Whistleblower Statute, alleging that it submitted false claims to the government under the International Narcotics and Law Enforcement Affairs contract with the Department of State. The action, titled U.S. ex rel. Longest v. DynCorp and DynCorp International LLC, was filed in the U.S. District Court for the Middle District of Florida under seal. The case was unsealed in 2005, and the Company learned of its existence on August 15, 2005 when it was served with the complaint. After conducting an investigation of the allegations made by the plaintiff, the U.S. government did not join the action. The complaint does not demand any specific monetary damages; however, in the event that a court decides against the Company in this lawsuit, it could have a material adverse effect on its operating performance.

Note 11—Shareholder’s Equity and Shares Subject to Mandatory Redemption

The certificate of incorporation, prior to being amended and restated in connection with the Equity Offering, authorized the Company to issue up to:

(1)   50,000 shares of Series A-1 cumulative preferred stock, par value $0.01 per share; and

(2)   300,000 shares of Series A-2 cumulative preferred stock, par value $0.01 per share.

At April 1, 2005, 50,000 shares of Series A-1 preferred stock and 75,000 shares of Series A-2 preferred stock were issued and outstanding. At March 31, 2006, 50,000 shares of Series A-1 preferred stock and 140,550 shares of Series A-2 preferred stock were issued and outstanding. On May 9, 2006, all of the Company’s outstanding preferred stock, including accrued and unpaid dividends, was redeemed during the Equity Offering. See Note 17 for further discussion of this Equity Offering.

Each series of the preferred stock accumulated dividends at the rate of 13.0% per annum. Dividends compounded to the extent not paid in cash. Noncompliance with the terms of the preferred stock triggered dividends accruing and compounding quarterly at a rate of 15.0% per annum.

In February 2015, the Company is required to redeem the Series A-1 and A-2 preferred stock and to pay all accumulated but unpaid dividends. Subject to restrictions imposed by certain indebtedness, the Company may redeem shares of the Series A-1 and A-2 preferred stock at a redemption price equal to 100% of liquidation value plus accumulated and unpaid dividends plus a defined premium.

If the Company consummates a defined initial public offering prior to February 12, 2008, and the initial public offering proceeds are used to redeem the preferred stock, the premium shall equal 3.0% of the issuance price.

In certain circumstances (including a change of control of the Company), subject to restrictions imposed by certain indebtedness, the Company may be required to repurchase shares of the preferred

81

DYNCORP INTERNATIONAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands)

Note 11—Shareholder’s Equity and Shares Subject to Mandatory Redemption (Continued)

stock at liquidation value plus accumulated and unpaid dividends. If the Company liquidates, dissolves or winds up, whether voluntary or involuntary, no distribution shall be made either: (i) to those holders of stock ranking junior to the preferred stock, unless prior thereto the holders of the preferred stock receive the total value for each share of preferred stock plus an amount equal to all accrued dividends thereon as of the date of such payment; or (ii) to the holders of stock ranking pari passu with the preferred stock (the “parity stock”), except distributions made ratably on the preferred stock and all such parity stock in proportion to the total amounts to which the holders of all such shares are entitled upon liquidation, dissolution or winding up of the Company.

The Company classifies the liquidation value of Series A-1 and A-2 preferred stock and the related accumulated and unpaid dividends as long-term liabilities since these amounts are required to be redeemed in February 2015. The preferred dividends related to the Series A-1 and A-2 preferred stock are included in interest expense.

Accumulated but unpaid dividends amounted to $2,182 and $29,271 and are included in the redemption value at April 1, 2005 and March 31, 2006, respectively.

Note 12—Derivatives

Derivative financial instruments are recognized as either assets or liabilities in the balance sheet and carried at fair value. Gains or losses on derivatives designated as cash flow hedges are initially reported as a component of other comprehensive income and later classified into earnings in the period in which the hedged item also affects earnings.

The Company has entered into an interest rate cap for a notional amount of $172,500 to limit, through May 4, 2008, its interest rate risk on $172,500 of variable rate debt. The Company entered into the interest rate cap effective May 4, 2005 and paid a premium of $483. The interest rate cap has been designated by the Company as a cash flow hedge. As of March 31, 2006, the fair value of the interest rate cap was $75, which was recorded in the accompanying condensed consolidated balance sheet in other assets with the reduction in fair value, net of tax, recorded in equity as other comprehensive loss. The interest rate cap has the effect of placing a ceiling on the interest expense the Company could incur on $172,500 of variable debt indexed to the London Interbank Offering Rate at 6.5% plus the applicable floating spread (2.75% at March 31, 2006) as defined by the Senior Secured Credit Facility agreement.

82

DYNCORP INTERNATIONAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands)

Note 13—Stock-Based Compensation, Equity Incentive Plans and Class B Equity Participation

At times, Computer Sciences Corporation issued stock options to employees, including Company employees. In the predecessor period, the Company accounted for stock-based employee compensation under the recognition and measurement principles of APB Opinion No. 25, Accounting for Stock Issued to Employees, and related interpretations. In accordance with SFAS No. 123, Accounting for Stock-Based Compensation, as amended by SFAS No. 148, Accounting for Stock-Based Compensation—Transition and Disclosure, the following pro forma net income information for the immediate predecessor period is presented as if the Company had accounted for stock-based employee compensation using the fair-value-based method. Under the fair-value method, the estimated fair value of stock incentive awards is charged against income on a straight-line basis over the vesting period.

	Immediate Predecessor
	Fiscal Year Ended April 2, 2004				Period From April 3, 2004 to Feb. 11, 2005
Net income, as reported		$	31,360			$	59,733
Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects		(170		)		(53		)
Pro forma net income		$	31,190			$	59,680

The weighted-average fair value of stock awards granted during fiscal 2004 and the period from April 3, 2004 to February 11, 2005, was $14.60 and $15.96, respectively. The fair value of each stock award was estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions:

	Immediate Predecessor
	Fiscal Year Ended  April 2, 2004			Period From April 3, 2004 to Feb. 11, 2005
Risk-free interest rate		2.32	%		3.58	%
Expected volatility		48	%		48	%
Expected option term (for volatility calculation)		6.55 years			6.52 years
Expected lives (for Black-Scholes model input)		3.66 years			3.90 years
Annual rate of quarterly dividends		0	%		0	%

Immediately prior to the acquisition of DynCorp by Computer Sciences Corporation on March 7, 2003, all outstanding and exercisable DynCorp stock options, whether or not vested, were canceled and the holders became entitled to receive a cash payment equal to the excess, if any, of the merger consideration over the exercise price of the DynCorp stock option. Each outstanding share of DynCorp stock was converted into $15.00 cash and 1.394 shares of Computer Sciences Corporation stock.

The Company participated in Computer Sciences Corporation’s eight stock incentive plans, which authorized the issuance of stock options, restricted stock and other stock-based incentives to employees upon terms approved by the compensation committee of the Company’s board of directors.

83

DYNCORP INTERNATIONAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands)

Note 13—Stock-Based Compensation, Equity Incentive Plans and Class B Equity Participation (Continued)

Information concerning Computer Sciences Corporation stock options granted to employees of the Company is as follows:

	Fiscal Year Ended April 2, 2004					Period From April 3, 2004 to Feb. 11, 2005
	Number of Shares		Weighted Average Exercise Price			Number of Shares		Weighted Average Exercise Price
Outstanding, beginning of period		—		—			45,000		$	33.83
Granted		45,000		$	33.83		57,725		39.04
Exercised		—		—			—		—
Canceled		—		—			81,225		37.27
Outstanding, end of period		45,000		$	33.83		21,500		$	34.86

No Computer Sciences Corporation stock options were granted to Company employees prior to fiscal 2004. At April 2, 2004 and February 12, 2005, there were 3,000 and 21,500 stock options exercisable, respectively.

	April 2, 2004
	Options Outstanding
Range of Option Exercise Price	Number Outstanding		Weighted Average Exercise Price			Weighted Average Remaining Contractual Life
$33.16		40,000		$	33.16		9.08
$39.19		5,000		$	39.19		9.48

On February 12, 2005, all unvested Computer Sciences Corporation stock options were canceled as a result of the sale.

During fiscal year ended March 31, 2006, certain members of management and the Successor Parent’s outside directors were granted a participating interest in the profits through a plan that granted them Class B interests in an affiliate, DIV Holding LLC. DIV Holding LLC conducts no operations and was established for the primary purpose of holding the equity of the Successor Parent. At March 31, 2006, the aggregate individual grants are approximately 6.4% of the Class B interests of DIV Holding LLC. Pursuant to the terms of the operating agreement governing DIV Holding LLC, the holders of Class B interests are entitled to receive up to 7.5% of all distributions made by DIV Holding LLC after the holders of the Class A interests in DIV Holding LLC have received a return of their invested capital, provided that the holders of the Class A interests have received 8% per annum internal rate of return (compounded annually) on their invested capital. The Class B interests are subject to a five-year vesting schedule with any unvested interest reverting to the holders of Class A interests in the event they are forfeited or repurchased. The Company retained an independent party to conduct a fair value analysis of the Class B interests granted to management and outside directors. Based on this analysis, the fair value of the Class B

84

DYNCORP INTERNATIONAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands)

Note 13—Stock-Based Compensation, Equity Incentive Plans and Class B Equity Participation (Continued)

interests granted to certain members of management and outside directors was determined to be $7,589. In accordance with SFAS No. 123(R), the Company records compensation expense based on the fair value and commensurate with their graded vesting schedules. For the fiscal year ended March 31, 2006, the Company recognized non-cash compensation expense of $2,417.

Assuming each grant fully vests, the Company will recognize additional non-cash compensation expense as follows:

FY 2007	FY 2008	FY 2009	FY 2010	FY 2011
$2,616	$1,439	$782	$324	$11

Note 14—Composition of Certain Financial Statement Captions

	April 1, 2005			March 31, 2006
Prepaid expenses and other current assets:
Prepaid expenses	$	13,074			$	24,000
Inventories	3,596				3,653
Work-in-process	9,320				16,080
Note receivable	258				—
	$	26,248			$	43,733
Property and equipment at cost:
Computers and other equipment	$	6,239			$	5,695
Buildings and improvements	428				377
Leasehold improvements	1,263				142
Office furniture and fixtures	2,954				3,851
	10,884				10,065
Less accumulated depreciation and amortization	(227		)		(1,296		)
	$	10,657			$	8,769
Other assets:
Investment in affiliates	$	629			$	911
Deferred offering costs	—				1,940
Other	250				325
	$	879			$	3,176
Other accrued liabilities:
Insurance	$	11,902			$	18,613
Interest	7,349				3,692
Billings in excess of revenues on uncompleted contracts	3,044				6,837
Accrued contract losses	602				2,835
Other	594				1,868
	$	23,491			$	33,845
Accrued payroll and employee costs:
Salaries, bonuses, and amounts withheld from employees’ compensation	$	37,615			$	43,344
Accrued vacation	16,883				20,357
Accrued contributions to employee benefit plans	1,689				1,885
	$	56,187			$	65,586

85

DYNCORP INTERNATIONAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands)

Note 15—Segment and Geographic Information

The Company’s business primarily involves providing worldwide maintenance support to U.S. military aircraft and various defense technical services. The Company is organized into two segments, FTS and ITS. FTS primarily offers aviation services, including maintenance and modifications, training, aftermarket logistics support, avionics upgrades, field installations, and aircraft operations and training. ITS primarily offers base maintenance/operations and personal and physical security services. The Company provides services domestically and in foreign countries under contracts with the U.S. government and some foreign customers. The risks associated with the Company’s foreign operations relating to foreign currency fluctuation and political and economic conditions in foreign countries have not had a significant negative impact on the Company. The Company operates principally within a regulatory environment subject to governmental contracting and accounting requirements, including Federal Acquisition Regulations, Cost Accounting Standards and audits by various U.S. federal agencies.

The DynCorp International Home Office component represents assets not included in a reporting segment and is primarily comprised of cash and cash equivalents, deferred tax assets and liabilities, internally developed software, fixed assets, unallocated general corporate costs, and depreciation and amortization related to the long-lived assets.

The reporting segments follow the same accounting policies outlined in Note 1. All inter-segment transactions and balances have been eliminated from the reporting segments’ presented results.

86

DYNCORP INTERNATIONAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands)

Note 15—Segment and Geographic Information (Continued)

The table below presents financial information for the respective periods, for the two reportable segments and for financial items that cannot be allocated to either operating segment:

	Field Technical Services			International Technical Services			DynCorp International Home Office				Total
Immediate Predecessor
Fiscal Year Ended April 2, 2004
Revenues		$	582,476		$	631,672		$	141		$	1,214,289
Earnings before interest and taxes		25,144			26,189			(113		)	51,220
Depreciation and amortization		2,358			6,382			48			8,788
Assets		253,673			326,158			(2		)	579,829
Period From April 3, 2004 to February 11, 2005
Revenues		$	594,480		$	1,059,713		$	112		$	1,654,305
Earnings before interest and taxes		27,755			68,198			(1,434		)	94,519
Depreciation and amortization		3,878			2,731			28			6,637
Assets		257,747			462,662			14,638			735,047
Successor
49 Days Ended April 1, 2005
Revenues		$	93,674		$	173,007		$	(77	)	$	266,604
Earnings before interest and taxes		3,662			3,447			76			7,185
Depreciation and amortization		1,397			3,765			542			5,704
Assets		310,303			821,649			16,241			1,148,193
Fiscal Year Ended March 31, 2006
Revenues		$	702,407		$	1,264,586		$	—		$	1,966,993
Earnings before interest and taxes		10,017			93,637			(2,417		)	101,237
Depreciation and amortization		12,872			32,437			1,711			47,020
Assets		320,303			874,366			44,420			1,239,089

A reconciliation of earnings before interest and taxes to net income (loss) is as follows:

	Immediate Predecessor								Successor
	Fiscal Year Ended April 2, 2004				Period From April 3, 2004 to Feb. 11, 2005				49 Days Ended April 1, 2005			Fiscal Year Ended March 31, 2006
Earnings before interest and taxes		$	51,220			$	94,519		$	7,185			$	101,237
Interest income		64				170			7				461
Interest expense		—				—			(10,236		)		(77,828		)
Income taxes		(19,924		)		(34,956		)	(60		)		(16,627		)
Net income (loss)		$	31,360			$	59,733		$	(3,104	)		$	7,243

87

DYNCORP INTERNATIONAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands)

Note 15—Segment and Geographic Information (Continued)

The Company’s management believes that earnings before interest and taxes provides useful information in order to assess the Company’s performance and results of operations. The measure is utilized to determine executive compensation, along with other measures.

Revenue by geography for the fiscal year ended April 2, 2004, the period from April 3, 2004 to February 11, 2005, the 49 days ended April 1, 2005 and the fiscal year ended March 31, 2006, is as noted below. Revenue by geography is based on the location of the provision of service.

	Immediate Predecessor				Successor
	Fiscal Year Ended April 2,  2004		Period From April 3, 2004 to Feb. 11,  2005		49 Days Ended April 1,  2005		Fiscal Year Ended March 31,  2006
United States	$	578,671	$	557,700	$	97,455	$	703,117
Middle East	338,868		816,084		130,312		952,496
Other Americas	146,892		132,920		20,023		194,429
Europe	93,827		88,449		8,192		41,410
Other	56,031		59,152		10,622		75,541
Total	$	1,214,289	$	1,654,305	$	266,604	$	1,966,993

The Company operates with insignificant values of property and equipment.

The Company derives the majority of its revenues from departments and agencies of the U.S. government. U.S. federal government revenue accounted for 95.3%, 98.0% and 96.7% of the Company’s revenues for the fiscal year 2004, the combined fiscal year 2005 and for fiscal year 2006, respectively. At April 1, 2005 and March 31, 2006, accounts receivable due from the U.S. federal government represented 98.1% and 96.8% of total receivables, respectively.

Note 16—Quarterly Financial Data (Unaudited)

The following summarizes the unaudited quarterly results of operations for the fiscal year ended April 1, 2005 and March 31, 2006:

	Fiscal Year 2005
	Immediate Predecessor								Successor
	First Quarter		Second Quarter		Third Quarter		Fourth Quarter(1)		Fourth Quarter(2)
Revenues	$	406,894	$	523,619	$	469,541	$	254,251	$	266,604
Operating income	22,450		31,568		31,075		9,426		7,185
Net income (loss)	13,898		19,306		21,240		5,289		(3,104		)

(1)Represents the period from January 1, 2005 through February 11, 2005.

(2)Represents the period from February 12, 2005 through April 1, 2005.

	Fiscal Year 2006 (Successor)
	First Quarter		Second Quarter	Third Quarter	Fourth Quarter
Revenues	$425,005		$439,629	$553,561	$548,798
Operating income	16,553		23,337	23,463	37,884
Net (loss) income	(1,974	)	1,825	1,634	5,758

88

DYNCORP INTERNATIONAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands)

Note 17—Subsequent Event

On May 9, 2006, the Company consummated an equity offering of 25.0 million shares of Class A common stock, par value $0.01 per share, at a price of $15.00 per share (the “Equity Offering”). The Class A common stock is listed on the New York Stock Exchange. The gross proceeds of the Equity Offering of $375,000, together with cash on hand, were used for the following transactions:

(a)the redemption of all of the Company’s outstanding preferred stock, including accrued and unpaid dividends, as of the date of redemption of May 9, 2006 in the amount of $222,823;

(b)the payment of a special distribution to the holders of the Company’s Class B stock in the amount of $100,000 and additional special distribution payable to the holders of Class B common stock;

(c)the redemption on June 8, 2006 of $28,000 of the $320,000 aggregate principal amount of our senior subordinated notes;

(d)the payment of certain prepayment penalties of $8,446, $5,717 of which represents the prepayment penalties on our preferred stock and $2,729 of which represents prepayment penalties on our senior subordinated notes; and

(e)the payment of transaction expenses of $35,000, including an underwriters’ commission of $22,500, a fee of $5,000 paid to Veritas and $7,500 of miscellaneous fees and expenses related to the Equity Offering.

* * * * *

89

Schedule I — Condensed Financial Information of Registrant
DynCorp International Inc.
Condensed Balance Sheets
(Dollars in thousands, except per share data)

	April 1, 2005			March 31, 2006
Assets
Investment in subsidiaries	$	223,908		$	326,159
Liabilities
Shares subject to mandatory redemption—Series A preferred stock, stated value $125,000 and $190,550; 350,000 share authorized; 125,000 shares and 190,550 issued and outstanding; redemption value of $127,182 and $219,821 at April 1, 2005 and March 31, 2006, respectively	$	126,990		$	219,821
Shareholder’s Equity
Common stock, $0.01 par value—500,000 shares authorized; 500,000 shares issued and outstanding at April 1, 2005 and March 31, 2006, respectively	5			5
Additional paid-in capital	99,995			102,412
(Accumulated deficit) retained earnings	(3,104		)	4,139
Accumulated other comprehensive income (loss)	22			(218		)
Total	96,918			106,338
Total liabilities and shareholder’s equity	$	223,908		$	326,159

p

See notes to this schedule.

90

Schedule I — Condensed Financial Information of Registrant (Continued)
DynCorp International Inc.
Condensed Statements of Operations
(Dollars in thousands)

	49 Days Ended April 1, 2005			Fiscal Year Ended March 31, 2006
Equity in (loss) income of subsidiaries, net of tax	$	(922	)		$	28,385
Interest on mandatory redeemable shares	2,182				21,142
Net (loss) income	$	(3,104	)		$	7,243

See notes to this schedule.

91

Schedule I — Condensed Financial Information of Registrant (Continued)
DynCorp International Inc.
Condensed Statements of Cash Flows
(Dollars in thousands)

	49 Days Ended April 1, 2005			Fiscal Year Ended March 31, 2006
Net cash flows from operating activities:
Net (loss) income	$	(3,104	)		$	7,243
Adjustments to reconcile net (loss) income to net cash used for operations:
Non-cash interest expense (redeemable preferred stock dividend)	2,182				21,142
Equity in loss (income) of subsidiaries	922				(28,385		)
Net cash from operating activities	—				—
Net cash flows from investing activities:
Businesses acquired	(224,825		)		—
Net cash flows from financing activities:
Capital contributions	224,825				—
Net change in cash and cash equivalents	—				—
Cash and cash equivalents at beginning of period	—				—
Cash and cash equivalents at end of period	$	—			$	—

See notes to this schedule.

92

Schedule I — Condensed Financial Information of Registrant (Continued)
DynCorp International Inc.
Notes to Schedule

Note 1.   Basis of Presentation

Pursuant to rules and regulations of the Securities and Exchange Commission, the unconsolidated condensed financial statements of DynCorp International Inc. (the “Company”) do not reflect all of the information and notes normally included with financial statements prepared in accordance with generally accepted accounting principles. Therefore, these financial statements should be read in conjunction with the Company’s consolidated financial statements and related notes.

Accounting for subsidiaries—The Company has accounted for the (loss) income of its subsidiaries under the equity method in the unconsolidated condensed financial statements.

Note 2.   Dividends Received from Consolidated Subsidiaries

The Company has received no dividends from its consolidated subsidiaries. DynCorp International LLC (“LLC”), a consolidated subsidiary of the Company, has covenants related to its long-term debt, including restrictions on dividend payments at April 1, 2005 and March 31, 2006. As of that date, LLC’s accumulated deficit and net assets were not free from such restrictions.

* * * * *

93

Schedule II — Valuation and Qualifying Accounts

DynCorp International Inc.

For the Fiscal Year ended April 2, 2004, Period from April 3, 2004
to February 11, 2005, 49 Days Ended April 1, 2005
and Fiscal Year Ended March 31, 2006
(Dollars in thousands)

	Balance at Beginning of Period			Additions Charged to Expense		Deductions(1)			Balance at End of Period
Allowance for doubtful accounts:
March 29, 2003—April 2, 2004		$	2,060		—		(872	)		$	1,188
April 3, 2004—February 11, 2005		$	1,188		4,338		(1,026	)		$	4,500
February 12, 2005—April 1, 2005		$	4,500		—		—			$	4,500
April 2, 2005—March 31, 2006		$	4,500		4,203		(224	)		$	8,479

(1)Uncollectible accounts written off net of recoveries.

* * * * *

94

ITEM 9.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

None.

ITEM 9A.CONTROLS AND PROCEDURES.

1.   Disclosure Controls and Procedures

The Company’s management, with the participation of its chief executive officer and chief financial officer, evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), as of March 31, 2006. Based on this evaluation, the Company’s chief executive officer and chief financial officer concluded that, as of March 31, 2006, the Company’s disclosure controls and procedures were: (1) designed to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to the Company’s management, including the Company’s chief executive officer and chief financial officer, by others within those entities, as appropriate to allow timely decisions regarding required disclosure, particularly during the period in which this report was being prepared; and (2) effective, in that they provide reasonable assurance that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

2.   Changes In Internal Control Over Financial Reporting

No change in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the fiscal quarter ended March 31, 2006, that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

ITEM 9B.OTHER INFORMATION.

On June 28, 2006, the Company and its operating company entered into a second amendment and waiver of our senior secured credit facility, dated February 11, 2005.  The second amendment and waiver provided for a new term loan in the amount of $431.6 million, which was the outstanding balance of the existing term loan under our senior secured credit facility on the date of the second amendment and waiver.  The maturity date of the new term loan is unchanged from the maturity date of the existing term loan.  The proceeds from the new term loan were used to repay the existing term loan.  The second amendment and waiver also, among other things, (i) decreases the interest rate applicable to the term loan under our senior secured credit facility; (ii) permits us to request an increase in our revolving credit facility by an aggregate amount of up to $30.0 million provided that none of the existing lenders or any other lender is committed to provide such increase; (iii) increases the amount of capital expenditures permitted under our senior secured credit facility from $4.0 million per fiscal year to $8.0 million per fiscal year; (iv) increases the amount of capitalized leases permitted under our senior secured credit facility; (v) allows for the payment of dividends and the repurchase of our capital stock in the amount of $10.0 million plus, if our leverage ratio (as defined in our senior secured credit facility) is below 3.25:1.00, 25% of our excess cash flow (as defined in our senior secured credit facility) for each fiscal year; and (vi) postpones the first prepayment of the senior secured credit facility based on our excess cash flow until 90 days following our fiscal year which ends on March 30, 2007.  A copy of this second amendment and waiver is attached to this Form 10-K as Exhibit 10.16.

95

PART III

ITEM 10.DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

Management

The following table sets forth certain information regarding the members of our board of directors and executive officers, as of June 1, 2006. Each of the individuals set forth below served in the respective positions as of June 1, 2006 and has served in such capacity since the dates indicated below in their biographical data.

Name	Age	Position
Robert B. McKeon.	51	Chairman of the Board
Stephen J. Cannon	52	President, Chief Executive Officer and Director
Jay K. Gorman	48	Executive Vice President and Chief Operating Officer of our operating company
Michael J. Thorne	49	Senior Vice President, Chief Financial Officer and Treasurer
R. Y. Morrel	51	Senior Vice President and General Counsel
Robert B. Rosenkranz	66	President, International Technical Services of our operating company
Natale S. DiGesualdo	66	President, Field Technical Services of our operating company
Ambassador Marc Grossman	54	Director
Thomas J. Campbell .	47	Director
General Richard E. Hawley (USAF Ret.)	64	Director
Herbert J. Lanese.	61	Director
General Barry R. McCaffrey (USA Ret.)	63	Director
Ramzi M. Musallam	37	Director
Admiral Joseph W. Prueher (USN Ret.)	63	Director
Charles S. Ream	62	Director
Admiral Leighton W. Smith, Jr. (USN. Ret.)	66	Director
William G. Tobin	68	Director
General Anthony C. Zinni (USMC Ret.) .	62	Director

Robert B. McKeon has been the Chairman of our board of directors since February 11, 2005. Mr. McKeon is a member of our compensation committee, corporate governance and nominating committee and executive committee. Mr. McKeon is the President of Veritas Capital, a New York-based private equity investment firm he founded in 1992. Mr. McKeon is on the Board of Trustees of Fordham University, a member of the Board of Fellows of Trinity College, a member of the Council on Foreign Relations and is a member of the boards of directors of several private companies. Mr. McKeon holds a Bachelor’s degree from Fordham University and a Master’s degree in business administration from Harvard Business School.

96

Stephen J. Cannon has served as our President and Chief Executive Officer since March 24, 2005. Mr. Cannon has been a member of our board of directors since February 11, 2005 and serves on our corporate governance and nominating committee. Before assuming the role of President in 2001, Mr. Cannon served as Senior Vice President of DynCorp Technical Services. He was responsible for operational and financial management, business development and strategic planning. He has also held management positions for DynCorp’s Aerospace Operations Division, which subsequently became DynCorp Technical Services, Inc. Mr. Cannon is also on the board of directors of Offshore Logistics, Inc. Mr. Cannon holds Bachelor’s and Master’s degrees from Virginia Polytechnic Institute and State University. As of March 31, 2006, Mr. Cannon has been employed by DynCorp International and our predecessors for 24 years commencing February 1982.

Jay K. Gormanhas been our Executive Vice President and Chief Operating Officer of our operating company since March 8, 2005. Before assuming his current position, Mr. Gorman served as Vice President of International Operations and as Senior Vice President of DynCorp Technical Services and prior to that as Vice President of Middle East/Africa Operations within DynCorp Technical Services. He was responsible for operational and financial management, business development and strategic planning for operations in Saudi Arabia, Oman, Kuwait, Bahrain, Jordan and the UAE. He has held management positions for our operating company’s Aerospace Operations Division, which subsequently became DynCorp Technical Services. As of March 31, 2006, Mr. Gorman has been employed by DynCorp International and its predecessors for 12 years commencing January 1994.

Michael J. Thorne has served as our Senior Vice President, Chief Financial Officer (“CFO”) and Treasurer since March 24, 2005. Before assuming this position, he was Vice President of Contracts and a director for joint ventures in the U.K. (Dyn-Hibernia), Saudi Arabia (Dyn-Al Rushaid) and Puerto Rico (DynPuertoRico). Mr. Thorne’s other responsibilities have included financial forecasts, forward pricing rates, incurred cost submissions, disclosure statements and program/contract pricing. He joined the Company in 2001 after spending 22 years with Lockheed Martin in various key financial positions. His background includes roles at both the manufacturing and the service divisions of Lockheed. In 1978, Mr. Thorne graduated from the University of Georgia with a BBA degree in Finance, and subsequently earned his MBA in Finance in 1979. As of March 31, 2006, Mr. Thorne has been employed by DynCorp International and its predecessors for five years commencing July 2001.

R. Y. Morrel has been our Senior Vice President and General Counsel since September 12, 2005. From1994 to February 2005, Ms. Morrel served as a vice president of our former corporate parent, DynCorp. Prior to DynCorp’s acquisition by Computer Sciences Corporation in March 2003, Ms. Morrel was responsible for all legal matters arising within DynCorp’s operations, including the conduct, strategy and oversight of all litigation, heading DynCorp’s overall compliance program and managing the law department. Ms. Morrel was a vice president of DynCorp and assistant general counsel for Computer Sciences Corporation from March 2003 to February 2005. In addition to her law degree from Cleveland-Marshall College of Law, Ms. Morrel received an M.A. from Villanova University and a B.A. from Temple University. Ms. Morrel is licensed to practice before the United States Supreme Court, the United States Court of Federal Claims, and in Virginia, Maryland, Pennsylvania and the District of Columbia. As of March 31, 2006, Ms. Morrel has been employed by the Company and its predecessors for 22 years.

Robert B. Rosenkranz has served as our operating company’s President of International Technical Services since August 29, 2005. He is responsible for managing the International Technical Services segment, including law enforcement services, counter-narcotics support, contingency and logistic support services, facility operations, infrastructure development and security services. He graduated from the U.S. Military Academy, holds a Masters degree from the University of Pennsylvania and retired from the U.S. Army as a major general. He served as Senior Vice President for range and logistics services of the Company’s predecessor from 1995 to 2001; as Vice President of business development for MPRI/L-3 from 2001 to 2003; as General Manager of Beamhit from 2003 to 2004; and as a Vice President of business

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development for KEI Pearson, Inc. from January to August 2005. Mr. Rosenkranz joined DynCorp International in his current capacity on August 29, 2005.

Natale S. DiGesualdo has been our operating company’s President of Field Technical Services since March 8, 2005. He is responsible for managing and directing the operations and financial management for more than 5,000 employees worldwide. Mr. DiGesualdo has more than 45 years of experience applicable to aviation maintenance and maintenance management, of which more than 40 years are with DynCorp International Contract Field Teams operations. He has served in various positions, ranging from Avionics Technician to Supervisor, rising to his current position as President, Field Technical Services. Mr. DiGesualdo attended Wichita State University, under the continuing education program, toward a Bachelor’s degree in Business Administration. As of March 31, 2006, Mr. DiGesualdo has been employed by DynCorp International and its predecessors for 43 years commencing September 1961.

Ambassador Marc Grossman has been a member of our board of directors since March 16, 2006. Ambassador Grossman is a member of our corporate governance and nominating committee. He is Vice Chairman of The Cohen Group, a strategic business consulting firm. In 2005, Ambassador Grossman retired after he completed 29 years of public service with the State Department as the Under Secretary of State for Political Affairs. Ambassador Grossman was the Under Secretary of State for Political Affairs from 2001 to 2005 and the Director General of the Foreign Service and Director of Human Resources from 2000 to 2001. Ambassador Grossman previously served as the Assistant Secretary of State for European Affairs from 1997 to 2000 and U.S. Ambassador to Turkey from 1994 to 1997. Ambassador Grossman holds a Bachelor’s degree from the University of California, Santa Barbara and a MSc in International Relations from the London School of Economics and Political Science.

Thomas J. Campbellhas been a member of our board of directors since February 11, 2005. Mr. Campbell is a member of our executive committee. Mr. Campbell is a partner at Veritas Capital, which he has been associated with since 1992. He is also a member of the boards of directors of several private companies. Mr. Campbell holds a Bachelor’s degree in Accounting and Finance from Lehigh University.

General Richard E. Hawley (USAF Ret.) has been a member of our board of directors since February 11, 2005. Since 1999, Gen. Hawley has been an independent consultant to the U.S. government and various aerospace companies. Gen. Hawley retired in July 1999 after a 35-year career in the U.S. Air Force where he served as Commander, Air Combat Command from 1996 to 1999; as Commander, Allied Air Forces Central Europe; and as Commander, U.S. Air Forces Europe from 1995 to 1996. Gen. Hawley holds a Bachelor’s degree from the U.S. Air Force Academy and a Master’s degree in Economics from Georgetown University. He is a director of the Astronautics Corporation of America, McNeil Technologies, Inc., Enterprise Electronics Corporation, Continental Electronics Corporation and DFI International and a member of the Board of Advisors of Christopher Newport University’s School of Business.

Herbert J. Lanesehas been a member of our board of directors since March 16, 2006. Mr. Lanese is the Chairman of our compensation committee and a member of our audit committee. Mr. Lanese has been an independent businessman and private investor for the past five years. He is a former President of McDonnell Douglas Aircraft. Mr. Lanese also held positions of Executive Vice President and CFO at McDonnell Douglas Corporation. Prior to joining McDonnell Douglas Corporation, he served as Corporate Vice President of Tenneco, Inc., where he was responsible for strategic planning, capital structure, accounting and information systems. Earlier, he held positions as Vice President and CFO of Tenneco Inc.’s Newport News Shipbuilding business and Vice President of Finance of Tenneco Chemicals. He began his career in Engineering and Production Management at General Motors Corporation before becoming Director, U.S. Chemical Operations, at BF Goodrich Company. Mr. Lanese has been director of Atlas Air Worldwide Holdings, Inc. since 2004. Mr. Lanese holds a Bachelor’s degree and a Master’s degree in Business Administration from Bowling Green State University.

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General Barry R. McCaffrey (USA Ret.) has been a member of our board of directors since February 11, 2005. Gen. McCaffrey was Director, White House Office of National Drug Control Policy from February 1996 to January 2001, serving as a member of the President’s Cabinet and the National Security Council. During his service career, he served overseas for 13 years, including service as Commander-in-Chief, U.S. Southern Command from 1994 to 1996. Gen. McCaffrey holds a Bachelor’s degree in General Engineering from the U.S. Military Academy and holds a Master’s degree in Civil Government from American University. Gen. McCaffrey is the president of a private consulting firm. He is also a member of the boards of several private companies.

Ramzi M. Musallamhas been a member of our board of directors since February 11, 2005. Mr. Musallam is our assistant secretary, a member of our compensation committee and a member of our executive committee. Mr. Musallam is a partner at Veritas Capital, which he has been associated with since 1997. He is also a member of the boards of directors of several private companies. Mr. Musallam holds a Bachelor’s degree from Colgate University with a double major in Economics and Mathematics and a Master’s degree in Business Administration from the University of Chicago Graduate School of Business.

Admiral Joseph W. Prueher (USN Ret.) has been a member of our board of directors since February 11, 2005. Admiral Prueher is the Chairman of our corporate governance and nominating committee. Admiral Prueher served as U.S. Ambassador to the People’s Republic of China from November 1999 to May 2001. His diplomatic post followed a 35-year career in the U.S. Navy, where he served as Commander-in-Chief, U.S. Pacific Command from January 1996 to February 1999. From 1989 through 1995, Admiral Prueher served as Commandant of Midshipmen at the U.S. Naval Academy at Annapolis, Commander of Carrier Battle Group ONE based in San Diego, Commander of the U.S. Mediterranean Sixth Fleet and of NATO Striking Forces and as Vice Chief of Naval Operations in the Pentagon. Admiral Prueher holds a Bachelor’s degree in Naval Science from the U.S. Naval Academy and a Master’s degree in International Relations from George Washington University. He is a consulting professor at Stanford and Harvard universities and a trustee of The Nature Conservancy of Virginia. He is a member of the board of directors of Fluor Corporation, Merrill Lynch &Co, Inc., New York Life Insurance Company and Emerson Electric Co.

Charles S. Ream has been a member of our board of directors since March 16, 2006. Mr. Ream is the Chairman of our audit committee and a member of our compensation committee. Mr. Ream retired as the Executive Vice President and CFO of Anteon International Corporation, having served in that capacity from May 2003 to June 2006. Mr. Ream also served as Senior Vice President and CFO of Newport News Shipbuilding Inc. from October 2000 to 2001. Previously, he served as Senior Vice President, Finance of Raytheon Systems Company and Senior Vice President and CFO at Hughes Aircraft Company. He was formerly a partner at Deloitte & Touche LLP. Mr. Ream holds a Master of Accountancy degree from the University of Arizona and is a Certified Public Accountant. He is a director of Stewart & Stevenson Services, Inc.

Admiral Leighton W. Smith, Jr. (USN. Ret.) has been a member of our board of directors since February 11, 2005. Admiral Smith is a member of our audit committee. Admiral Smith was appointed to four star rank in April 1994, became Commander-in-Chief, Allied Forces Southern Europe and concurrently assumed the command of the NATO-led Implementation Force in Bosnia in December 1995. Admiral Smith has served as a Senior Fellow at the Center for Naval Analysis and as a Senior Advisor to the Institute for Defense Analysis. He is a member of the boards of directors of CAE USA Inc. and Billing Services Group. Admiral Smith is a Presidential appointee to the U.S. Naval Academy Board of Visitors.

William G. Tobin has been a member of our board of directors since February 11, 2005. Mr. Tobin is a member of our compensation committee. Mr. Tobin has been a Managing Director and Chairman of the Defense & Aerospace practice of Korn/Ferry International since September 1986. From 1961 to 1981, Mr. Tobin was a professional military officer serving in a variety of command and staff positions

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worldwide. Mr. Tobin holds a Bachelor’s degree in Engineering from the U.S. Military Academy and advanced degrees from both George Washington University and Long Island University.

General Anthony C. Zinni (USMC Ret.) has been a member of our board of directors since February 11, 2005. Gen. Zinni retired from the U.S. Marine Corps after 39 years of service in September 2000. During his military career, Gen. Zinni served as the Commanding General, the First Marine Expeditionary Force from 1994 to 1996, and as Commander-in-Chief, U.S. Central Command from 1997 to 2000. Gen. Zinni has participated in numerous humanitarian operations and presidential diplomatic missions. In November 2001, Gen. Zinni was appointed senior adviser and U.S. envoy to the Middle East by Secretary of State Colin Powell. Gen. Zinni holds a Bachelor’s degree in Economics from Villanova University and Master’s degrees in International Relations from Central Michigan University and in Management and Supervision from Salve Regina University.

Board of Directors

We have thirteen directors, including Mr. Lanese and Mr. Ream who qualify as financial experts under the rules and regulations of the SEC and New York Stock Exchange. We are a controlled company within the meaning of the New York Stock Exchange rules, and because of this, until such time as we are no longer a controlled company, we are exempt from the New York Stock Exchange requirements that our board be composed of a majority of independent directors and that our compensation and corporate governance committees be composed entirely of independent directors. Any director may be removed from office by our stockholder. Veritas Capital is the beneficial owner of a majority of our common stock and will be able to unilaterally remove directors. Subject to the terms and conditions set forth in their employment agreements, if applicable, our executive officers serve at the discretion of our board of directors.

Director Independence

Our board has reviewed the independence of each of its members based on the criteria for independence set forth under applicable securities laws, including the Exchange Act, applicable rules and regulations of the SEC and applicable rules and regulations of the NYSE. The NYSE Listed Company Manual and corresponding listing standards provide that, in order to be independent, the board must determine that a director has no material relationship with the Company other than as a director.

Our board of directors is divided into three classes, as nearly equal in number as possible, with each director serving a three-year term and one class being elected at each year’s annual meeting of stockholders. As of March 31, 2006, the following individuals are directors and will serve for the terms indicated:

Class I Directors (term expiring at the first annual meeting of stockholders held following the closing of initial public offering)

Robert B. McKeon
General Barry R. McCaffrey
Admiral Joseph W. Prueher
Herbert J. Lanese
Admiral Leighton W. Smith, Jr.

Class II Directors (term expiring at the second annual meeting of stockholders held following the closing of initial public offering)

Stephen J. Cannon
Thomas J. Campbell

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General Anthony C. Zinni
Charles S. Ream

Class III Directors (term expiring at the third annual meeting of stockholders held following the closing of initial public offering)

General Richard E. Hawley
Ramzi M. Musallam
William G. Tobin
Ambassador Marc Grossman

Generals Hawley, McCaffrey and Zinni, Admirals Prueher and Smith and Mr. Tobin are also members of the Defense & Aerospace Advisory Council of Veritas Capital.

Each of our directors, other than Robert B. McKeon, Stephen J. Cannon, Thomas J. Campbell and Ramzi M. Musallam, are independent.

Board Committees.Our board of directors has the authority to appoint committees to perform certain management and administration functions. Our board has an audit committee, a compensation committee, a nominating/corporate governance committee and an executive committee. The composition of our board committees comply when required, with the applicable rules of the New York Stock Exchange and the provisions of the Sarbanes-Oxley Act of 2002.

Audit Committee.Our audit committee is comprised of three directors who satisfy the independence standards promulgated under the requirements of the New York Stock Exchange and the SEC. The audit committee consists of Charles S. Ream as Chairman, Admiral Leighton W. Smith, Jr. and Herbert J. Lanese. Mr. Ream and Mr. Lanese are financial experts pursuant to the requirements of the New York Stock Exchange and the SEC. Our board of directors has determined that Admiral Leighton W. Smith, Jr. meets the financial literacy requirements of the New York Stock Exchange. Our audit committee is responsible for, among other things, making recommendations concerning the engagement of our independent registered public accounting firm, reviewing with the independent registered public accounting firm the plans and results of the audit engagement, approving professional services provided by the independent registered public accounting firm, reviewing the independence of the independent registered public accounting firm, considering the range of audit and non-audit fees and reviewing the adequacy of our internal accounting controls.

Compensation Committee.The compensation committee is primarily concerned with administering programs and policies regarding the compensation of executive officers and employee benefit plans. The committee is responsible for determining compensation of our executive officers and other employees and overseeing the administration of all employee benefit plans and programs. Our compensation committee is comprised of Messrs. McKeon, Musallam, Lanese (Chairman), Ream and Tobin.

Corporate Governance and Nominating Committee.The corporate governance and nominating committee is primarily concerned with selecting the director nominees for the next annual stockholder meeting and review of our corporate governance policies. The committee is responsible for reviewing director compensation and benefits, overseeing the annual self-evaluations of our board of directors and making recommendations to the board concerning the structure and membership of the other board committees. Our corporate governance and nominating committee is comprised of Messrs. McKeon, Cannon, Prueher (Chairman) and Grossman.

Executive Committee.The executive committee is responsible for reviewing major operating, contractual and expenditure issues. Our executive committee is comprised of Messrs. McKeon, Campbell and Musallam.

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Compensation of Directors

The nine outside directors, Generals Hawley, McCaffrey and Zinni, Admirals Prueher and Smith, Mr. Grossman, Mr. Lanese, Mr. Ream and Mr. Tobin, are paid $35,000 annually, an additional fee of $2,000 for the attendance of each regular quarterly board meeting, and an additional fee of $6,250 for each board meeting other than regular quarterly meetings. In addition, our outside directors were granted Class B interests in DIV Holding LLC, see “Executive Compensation—Management Incentives Plans.”  We do not maintain a medical, dental or retirement benefits plan for these directors. The remaining directors are employed either by us or by Veritas Capital and do not receive any separate compensation from us for their services as directors although they are reimbursed for expenses incurred in connection with attending board and committee meetings.

Compensation Committee Interlocks and Insider Participation

There are no compensation committee interlocks (i.e., no executive officer serves as a member of the board or the compensation committee of another entity which has an executive officer serving on the board or on the compensation committee of such entity).

Code of Ethics

The Company has adopted a code of ethics, referred to within the Company as the Standards of Conduct, that applies to its principal executive officer, principal financial officer, principal accounting officer or controller, and all other employees and directors of the Company and its subsidiaries. The Company has posted its code of ethics on its website (www. dyn-intl.com), and it is available in print to any stockholder upon request. The Company will post any amendments to, or any waivers from, a provision of its Standards of Conduct.

ITEM 11.EXECUTIVE COMPENSATION.

The following table summarizes compensation awarded or paid during fiscal year 2006, 2005 and 2004 to our operating company’s President and Chief Executive Officer and our operating company’s four other most highly compensated executive officers as of March 31, 2006, the completion of our last fiscal year. Compensation amounts reflect compensation paid while the individuals listed below were employed while our operating company was a subsidiary of Computer Sciences Corporation. The compensation amounts referred to below do not reflect participation in any Computer Sciences Corporation stock-based incentive plan.

	Annual Compensation
Name and Principal Position	Fiscal Year	Salary		Bonus(1)			Other  Annual Compensation(2)
Stephen J. Cannon	2006	$	563,029	$	1,510,000	(3)		$	14,400
President and Chief Executive Officer	2005	369,221		592,000				1,662
	2004	359,401		334,496				7,983
Jay K. Gorman	2006	$	365,253	$	976,950	(3)		$	6,134
Executive Vice President and Chief	2005	245,094		308,000				708
Operating Officer	2004	218,603		159,296				7,938
Michael J. Thorne	2006	$	285,590	$	651,300	(3)		$	12,000
Senior Vice President and Chief Financial	2005	186,737		190,000				1,385
Officer	2004	135,268		75,600				—
Natale S. DiGesualdo	2006	$	253,449	$	590,300	(3)		$	4,324
President, Field Technical Services	2005	190,430		153,400				447
	2004	185,514		100,807				6,735
R. Y. Morrel	2006	$	330,044	$	183,000			$	10,385
Senior Vice President and General Counsel	2005	207,713		135,000				1,246
	2004	192,769		75,000				6,060

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(1)Executive incentive plan bonuses have been included in the respective fiscal year when earned.

(2)Includes payment of certain insurance premiums during fiscal 2004 and car allowance.

(3)Amount includes a special retention bonus in connection with the 2005 Acquisition. See “—Special Retention Plan” described below.

Employment Agreements

General

Our operating company has entered into employment agreements with eight individuals, including Stephen J. Cannon, Jay K. Gorman, Michael J. Thorne, Natale S. DiGesualdo and R. Y. Morrel for an initial term of five years commencing on April 1, 2006 and ending at midnight on March 31, 2011. Following the initial term, each employment agreement will automatically renew for additional one-year periods each April 1, unless either our operating company or the executive delivers written notice of intent not to renew. Messrs. Cannon, Gorman, Thorne, DiGesualdo and Ms. Morrel will be paid an annual base salary of $750,000, $475,000, $350,000, $253,000 and $330,000, respectively. In addition, each of Messrs. Cannon, Gorman, Thorne, DiGesualdo and Ms. Morrel will be eligible to receive an annual bonus of 100%, 75%, 60%, 50% and 50%, respectively, of his or her base salary subject to achieving performance targets.

Termination Provisions

If any of Messrs. Cannon, Gorman, Thorne or DiGesualdo or Ms. Morrel is terminated without “cause” or terminates his or her employment for “good cause,” as those terms are defined in the applicable employment agreement, in addition to receiving accrued base salary and accrued and unused vacation earned through the date of termination and a prorated portion of his or her annual bonus based on our operating company’s projected performance through the date of termination, after executing an irrevocable waiver and release of claims, he or she will be entitled to:

(1)a payment equal to two times the sum of the executive’s base salary for the year of termination, payable in two equal lump sum payments, the first on the first payroll date that is six months following the date of termination and the second on the first payroll date that is twelve months following the date of termination;

(2)exercise any vested stock options to purchase stock in our operating company or any equivalent or similar vested rights that appreciate or tend to appreciate as the value of our operating company’s common stock appreciates for a period of ninety days; and

(3)reimbursement from our operating company for the same portion of his or her health insurance premium that our operating company paid during the executive’s employment until the earlier of (i) the last day that the executive is entitled to health care continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 and (ii) the date on which the executive becomes covered under any other group health plan (as an employee or otherwise).

If any of Messrs. Cannon, Gorman, Thorne or DiGesualdo or Ms. Morrel is terminated for any other reason, other than retirement, death or disability, neither the executive nor his or her estate will be entitled to any severance payments other than accrued salary and accrued and unused vacation earned through the date of termination. If any of the executives retires, dies or becomes disabled, the executive or his or her estate, in addition to receiving accrued base salary and accrued and unused vacation earned through the date of termination, after executing an irrevocable waiver and release of claims, will be entitled to: (i) receive a pro rata portion of the executive’s annual bonus based on our operating company’s projected performance through the date of termination; and (ii) exercise any vested stock options to purchase stock

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in our operating company or any equivalent or similar vested rights that appreciate or tend to appreciate as the value of our operating company’s common stock appreciates for a period of ninety days.

Non-Solicitation Provision

Each of Messrs. Cannon, Gorman, Thorne and DiGesualdo and Ms. Morrel agrees not to employ or solicit for employment any employee of our operating company during the executive’s employment and for a period of one year following the executive’s termination of employment for any reason.

Special Cash Bonus

Upon consummation of the Equity Offering, we used cash on hand to pay special cash bonuses of $3.125 million in the aggregate to our executive officers and certain other members of management. Of that amount, Messrs. Cannon, Gorman, Thorne, Rosenkranz and Ms. Morrel received $1,000,000, $750,000, $500,000, $100,000 and $100,000, respectively. These bonuses were intended to reward management for their efforts in connection with the successful consummation of this offering. The bonuses were paid on May 12, 2006.

Special Retention Plan

In connection with the 2005 Acquisition, our operating company adopted the DynCorp International LLC Special Retention Plan, under which fifteen key management employees became eligible to receive an incentive payment payable thirty days following the six-month anniversary of the consummation of the 2005 Acquisition transactions, provided they remained continuously employed by our operating company, any subsidiary, division or affiliated unit divested by DynCorp in the 2005 Acquisition transactions until six months following the closing of such transactions. Nine of the eligible employees received fixed payments aggregating $525,000. Amounts for the remaining six eligible employees were based on a percentage of the purchase price over $400 million. The total value of the payment to these six employees was $3.375 million. The retention payments paid to Stephen J. Cannon, Jay K. Gorman, James Wickham, George Fleischmann, Michael J. Thorne and Natale S. DiGesualdo on August 12, 2005 were determined based on the formula discussed above and were $900,000, $675,000, $450,000, $450,000, $450,000 and $450,000, respectively.

Management Incentive Plans

DIV Holding LLC Class B Interests.Stephen J. Cannon, our chief executive officer, and certain other members of management, including Natale S. DiGesualdo, Jay K. Gorman, Michael J. Thorne and R. Y. Morrel, and all of our outside directors, which include Ambassador Marc Grossman, General Richard E. Hawley, Herbert J. Lanese, General Barry R. McCaffrey, Admiral Joseph W. Prueher, Charles S. Ream, Admiral Leighton W. Smith Jr., William G. Tobin and General Anthony C. Zinni, participate in our profits through a plan that granted them Class B interests in DIV Holding LLC. Pursuant to the terms of the operating agreement governing DIV Holding LLC, the holders of Class B interests are entitled to receive up to 7.5% of all distributions made by DIV Holding LLC after the holders of the Class A interests in DIV Holding LLC have received a return of their invested capital (of which DIV Holding LLC has granted to date Class B interests representing the right to receive a total of 6.4% of its distributions once the holders of the Class A interests have achieved the Class A Return (as defined below), provided that the holders of the Class A interests have received an 8% per annum internal rate of return (compounded annually) on their invested capital (the “Class A Return”). The Class B interests are subject to a five-year vesting schedule with any unvested interests reverting to the holders of Class A interests in the event they are forfeited or repurchased.

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Incentive Compensation Plans.   Our operating company has adopted an executive incentive plan in which certain officers and other key employees are selected to participate. The executive incentive plan provides for cash awards to be paid from a budgeted bonus pool for each plan year based on the achievement of financial and non-financial objectives established at the beginning of the year. Award amounts are based on a percentage of base salary ranging from 20% to 100% multiplied by the ratio of actual to targeted performance.

Indemnification Agreements

Our Amended and Restated Certificate of Incorporation provides that none of our directors shall be liable to us or our stockholder for monetary damages for any breach of fiduciary duty as a director, except to the extent otherwise required by the Delaware General Corporation Law (the “DGCL”). The effect of this provision is to eliminate our rights, and our stockholder’s rights, to recover monetary damages against a director for breach of a fiduciary duty of care as a director. This provision does not limit or eliminate our right, or the right of any stockholder, to seek non-monetary relief, such as an injunction or rescission in the event of a breach of a director’s duty of care. In addition, our Amended and Restated Certificate of Incorporation provides that, if the DGCL is amended to authorize the further elimination or limitation of the liability of a director or officer, then the liability of the directors and officers shall be eliminated or limited to the fullest extent permitted by the DGCL, as so amended. These provisions do not alter the liability of directors or officers under federal or state securities laws. Our Amended and Restated Certificate of Incorporation also includes provisions for the indemnification of our directors and officers to the fullest extent permitted by Section 145 of the DGCL. We have entered into an indemnification agreement with each of our directors and executive officers which requires us, among other things, to indemnify them against certain liabilities that may arise by reason of his or her status or service as a director or officer (other than liabilities arising from willful misconduct of a culpable nature). We currently have, and intend to maintain, director and officer liability insurance.

ITEM 12.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

The following table sets forth information with respect to the beneficial ownership as of June 1, 2006 by:

·each person who is known by us to beneficially own 5% or more of our outstanding equity;

·each of our directors;

·each of our executive officers of our operating company named in the table under “Directors and Executive Officers of the Registrant—Management”; and

·all members of our board of directors and our executive officers as a group.

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To our knowledge, each of the holders listed below has sole voting and investment power as to the membership interests owned unless otherwise noted.

Name and Address of Beneficial Owner	Number of Shares of Common Stock(1)(2)	Percent
Veritas Capital Management II, L.L.C.	32,000,000		56.1	%
Robert B. McKeon(3)(4)	32,000,000		56.1	%
Stephen J. Cannon(5)	—		—
Jay K. Gorman(5)	—		—
Michael J. Thorne(5)	2,000		*
R. Y. Morrel(5)(6)	13,000		*
Robert B. Rosenkranz(5)	600		*
Natale S. DiGesualdo(5)	5,000		*
Thomas J. Campbell	—		—
Ambassador Marc Grossman	—		—
General Richard E. Hawley (USAF Ret.)(5)	3,000		*
Herbert J. Lanese	10,000		*
General Barry R. McCaffrey (USA Ret.)(5)	—		—
Ramzi M. Musallam	—		—
Admiral Joseph W. Prueher (USN Ret.)(5)	3,000		*
Charles S. Ream	4,000		*
Admiral Leighton W. Smith, Jr. (USN. Ret.)(5)	1,000		*
William G. Tobin(5)	1,000		*
General Anthony C. Zinni (USMC Ret.)(5)	—		—
All Named Executive Officers and Directors as a Group (14 Persons)(4)(5)	32,042,600		56.2	%

*Reflects less than 1% ownership interest.

(1)Except as otherwise indicated, the address for each of the named security owners is 8445 Freeport Parkway, Suite 400, Irving, Texas 75063. The address for Messrs. McKeon, Campbell and Musallam is c/o Veritas Capital, and the address for Veritas Capital is 590 Madison Avenue, New York, New York 10022.

(2)32,000,000 issued and outstanding shares of Class A common stock are held by DIV Holding LLC, a Delaware limited liability company and an affiliate of Veritas Capital. Veritas Capital Management II, L.L.C.’s interest is held indirectly through DIV Holding LLC. The Veritas Capital Fund II, L.P., a Delaware limited partnership of which Veritas Capital Management II, L.L.C. is the general partner and the manager of DIV Holding LLC. Veritas Capital owns 86% of the Class A membership interests of DIV Holding LLC, and Carlisle Ventures Inc., through VCDI Holding LLC, owns 14% of the Class A membership interests. Accordingly, the shareholdings of Veritas Capital Management II, L.L.C. reflected in the table above reflect indirect beneficial ownership in DynCorp International held through membership interests in DIV Holding LLC.

(3)Robert B. McKeon, Chairman of our board of directors, is the managing member of Veritas Capital Management II, L.L.C., and as such may be deemed a beneficial owner of the shares owned beneficially by Veritas Capital Management II, L.L.C. or voted under the direction of Veritas Capital Management II, L.L.C. Mr. McKeon disclaims this beneficial ownership, except to the extent of his pecuniary interest in The Veritas Capital Fund II, L.P. and DIV Holding LLC.

(4)Includes 100% of the Class A interests held by Veritas Capital and Carlisle Ventures, Inc. (an affiliate of The Northwestern Mutual Life Insurance Company), beneficial ownership of which may be deemed to be shared by Mr. McKeon, as the managing member of Veritas Capital Management II, L.L.C. See footnote 3 above. Mr. McKeon disclaims this beneficial ownership except to the extent of his pecuniary interest in The Veritas Capital Fund II, L.P. and DIV Holding LLC.

(5)Messsrs. Cannon, Gorman, Thorne, Rosenkranz, DiGesualdo, Grossman, Hawley, Lanese, McCaffrey, Prueher, Ream, Smith Jr., Tobin and Zinni and Ms. Morrel own indirect interests in the Company through Class B interests in DIV Holding LLC. Stephen J. Cannon owns a 2.0% Class B interest in DIV Holding LLC and each of Messrs. Gorman, Thorne, Rosenkranz, DiGesualdo, Grossman, Hawley, Lanese, McCaffrey, Prueher, Ream, Smith Jr., Tobin and Zinni and Ms. Morrel own less than a 1% Class B interest in DIV Holding LLC. Pursuant to the terms of the operating agreement governing DIV Holding LLC, the holders of Class B interests are entitled to receive up to 7.5% of all distributions made by DIV Holding LLC after the holders of Class A interests in DIV Holding LLC have received a return of their invested capital, provided that the holders of Class A interests have received an 8% per annum internal rate of return (compounded annually) on their invested capital. The Class B

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interests are subject to a five year vesting schedule with any unvested interests reverting to the holders of Class A interests in the event they are forfeited or repurchased.

(6)Ms. Morrel disclaims beneficial ownership of 6,500 shares owned by her spouse.

ITEM 13.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

Certain Fees Payable to Veritas Capital

We pay Veritas Capital an annual management fee of $300,000 to provide us with general business management, financial, strategic and consulting services. The amount of the management fee is comparable to the fees we would have been charged by third parties performing similar services. We also paid to Veritas Capital a one-time transaction fee of $12.0 million at the closing of the 2005 Acquisition, as consideration for its assistance in connection with planning, structuring and consummating the 2005 Acquisition. Upon consummation of our Equity Offering, we paid a fee of $5.0 million to Veritas Capital.

DIV Holding LLC

Special Class B Distribution

Subsequent to fiscal year ended March 31, 2006, we paid a special Class B distribution of $100.0 million. Based on our accumulated net profits since inception through March 31, 2006, the entire distribution to the holders of our Class B common stock is a return of capital.

Upon consummation of the Equity Offering, DIV Holding LLC was the only holder of our Class B common stock. Therefore, DIV Holding LLC was the only stockholder entitled to receive the payment of the special Class B distribution. DIV Holding LLC has Class A and Class B interests. 100% of the Class A interests are held by Veritas Capital and Carlisle Ventures, Inc. (an affiliate of The Northwestern Mutual Life Insurance Company). The Class B interests of DIV Holding are held by Messrs. Stephen J. Cannon, Gorman, Thorne, Charles C. Cannon, DiGesualdo and other employees and outside directors. DIV Holding LLC distributed the special Class B distribution proceeds; Veritas Capital received $86.0 million of the $100.0 million special Class B distribution; and Carlisle Ventures, Inc. received the balance of $14.0 million.

Pursuant to the terms of the operating agreement governing DIV Holding LLC, the holders of Class B interests are entitled to receive up to 7.5% of all distributions made by DIV Holding LLC after the holders of the Class A interests in DIV Holding LLC have received a return of their invested capital (of which DIV Holding LLC has granted to date Class B interests representing the right to receive a total of 6.4% of its distributions once the holders of Class A interests have achieved the Class A Return), provided that the holders of the Class A interests have received an 8% per annum internal rate of return (compounded annually) on their invested capital. The Class B interests are subject to a five-year vesting schedule with any unvested interests reverting to the holders of Class A interests in the event they are forfeited or repurchased.

Registration Rights Agreement

We entered into a registration rights agreement with DIV Holding LLC, our principal stockholder. Pursuant to that agreement, DIV Holding LLC will be entitled to registration rights and it may require us to effect the registration of any shares of our Class A common stock held by DIV Holding LLC on not more than five occasions upon demand. Under the terms of this agreement, we will be required to pay all registration expenses in connection with any demand registration. In addition, if we propose to register additional shares of Class A common stock, DIV Holding LLC will be entitled to notice of the registration and is entitled to include its shares of Class A common stock in that registration with all registration expenses paid by us.

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Notwithstanding the foregoing, DIV Holding LLC has agreed that it will not exercise its registration rights until 180 days following the effective date of our registration statement (May 3, 2006) without the prior consent of Credit Suisse Securities (USA) LLC.

Transition Services Agreement

Following the 2005 Acquisition, support for the business applications and communications technology of our operating company’s business was provided by a combination of DynCorp and our operating company’s dedicated resources and centralized Computer Sciences Corporation administrative and information technology resources. Our operating company entered into a transition services agreement with Computer Sciences Corporation upon the closing of the 2005 Acquisition, which covered support services for certain operating areas, including information technology, business systems, financial operations, payroll/HR and employee benefits. Pursuant to the agreement, Computer Sciences Corporation continues to perform personnel accounting and communication services. We provide all other services not extended under this agreement without any support from Computer Sciences Corporation. The total cost of transition services during fiscal 2005 and 2006, was $355,000 and $1,613,000, respectively. On May 15, 2006, we terminated the transition services agreement with Computer Sciences Corporation. All services previously provided by Computer Sciences Corporation are now performed by our own employees.

Purchase Agreement

For a discussion of the terms of the purchase agreement between us and Computer Sciences Corporation (including ongoing indemnification obligations), see “Business—The 2005 Acquisition.”

Shares Eligible for Future Sale

Prior to the Equity Offering, there had been no market for our Class A common stock. Upon completion of the Equity Offering, we have an aggregate of 57.0 million shares of Class A common stock outstanding on a fully diluted basis. All of the shares that we sold in the Equity Offering will be freely tradable without restriction or further registration under the Securities Act, except that any shares purchased by our affiliates, as that term is defined in Rule 144, may generally only be sold in compliance with the limitations of Rule 144, which is summarized below. The remaining 32.0 million shares of our Class A common stock that are outstanding after the Equity Offering (after giving effect to the automatic conversion of the Class B common stock into Class A common stock) will be restricted shares under the terms of the Securities Act. All of these shares are subject to lock-up agreements. Restricted shares may be sold in the public market only if registered or if they qualify for an exemption from registration under Rule 144 promulgated under the Securities Act, which rules are summarized below.

Sales of Restricted Securities

Restricted shares may be sold in the public market only if registered or if they qualify for an exemption from registration under Rule 144 promulgated under the Securities Act, as discussed below.

In general, under Rule 144 as currently in effect, beginning 90 days after the Equity Offering date, a person who has beneficially owned restricted shares for at least one year and has complied with the requirements described below would be entitled to sell a specified number of shares within any three-month period. That number of shares cannot exceed the greater of one percent of the number of shares of Class A common stock then outstanding, which will equal approximately 570,000 shares and conversion of the Class B common stock, or the average weekly trading volume of our Class A common stock on The New York Stock Exchange during the four calendar weeks preceding the filing of a notice on Form 144 reporting the sale. Sales under Rule 144 are also restricted by manner of sale provisions, notice

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requirements and the availability of current public information about us. Rule 144 also provides that our affiliates who are selling shares of our common stock that are not restricted shares must comply with the same restrictions applicable to restricted shares with the exception of the holding period requirement.

Under Rule 144(k), a person who is not deemed to have been our affiliate at any time during the 90 days preceding a sale, and who has beneficially owned the shares proposed to be sold for at least two years, is entitled to sell those shares without complying with the manner of sale, public information, volume limitation or notice provisions of Rule 144.

As a result of lock-up agreements and the provisions of Rule 144, 32.0 million additional shares may be available for sale in the public market after the expiration of the lock-up period provided for in the lock-up agreements, subject, in some cases, to volume limits.

Effects of Sales of Shares

No predictions can be made as to the effect, if any, that sales of shares of our Class A common stock from time to time, or the availability of shares of our Class A common stock for future sale, may have on the market price for shares of our Class A common stock. Sales of substantial amounts of Class A common stock, or the perception that such sales could occur, could adversely affect prevailing market prices for our Class A common stock and could impair our future ability to obtain capital through an offering of equity securities. For a discussion of risks related to our equity, see “Risk Factors.”

Special Retention Plan

Our operating company adopted a special retention plan that applies to certain members of our senior management that entitles them to receive an incentive payment payable within thirty days after the six-month anniversary of the consummation of the 2005 Acquisition, provided they remain continuously employed by us, any subsidiary, division or affiliated unit divested by DynCorp in the 2005 Acquisition transactions until six months following the closing of such transaction. Nine of the eligible employees received aggregate payments equal to $525,000. Amounts for the remaining six eligible employees were based on a percentage of the purchase price over $400 million. The total value of these six employees was $3.375 million. The retention payments paid to Messrs. Cannon, Gorman, Wickham, Fleischmann, Thorne and DiGesualdo on August 12, 2005 were determined based on a formula discussed above and the payments were $900,000, $675,000, $450,000, $450,000, $450,000 and $450,000, respectively.

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Other Relationships

Mr. Jay K. Gorman’s brother, Rock Gorman, is employed by us. In fiscal 2006, Rock Gorman received compensation of $121,134.

Mr. Natale S. DiGesualdo’s son, Steve DiGesualdo, is employed by us. In fiscal 2006, Steve DiGesualdo received compensation of $116,414.

ITEM 14.PRINCIPAL ACCOUNTING FEES AND SERVICES.

The following table represents the aggregate fees billed for services rendered by Deloitte & Touche LLP, our independent registered public accounting firm, for the fiscal years ended April 1, 2005 and March 31, 2006 (dollars in thousands):

	April 1, 2005			March 31, 2006
Audit fees		$	719		$	1,950
Audit-related fees		—			—
Tax fees		50			50
All other fees		—			—
Total fees		$	769		$	2,000

Audit Fees

Audit fees consist of fees for the audit of our financial statements, the review of the interim financial statements included in our quarterly reports on Form 10-Q and services rendered in connection with our operating company’s Form S-4 registration statement and our Form S-1 registration statement.

Audit-Related Fees

We did not incur audit-related fees with Deloitte & Touche LLP.

Tax Fees

Tax fees consist of fees for tax compliance and tax advice services associated with the preparation of international tax returns.

All Other Fees

We did not incur any fees with Deloitte & Touche LLP other than those described above.

Audit Committee’s Pre-approval Policy and Procedures

Our audit committee has adopted policies and procedures relating to the approval of all audit and non-audit services that are to be performed by our independent registered public accounting firm. This policy generally provides that we will not engage our independent registered public accounting firm to render audit or non-audit services unless the service is specifically approved in advance by the audit committee or the engagement is entered into pursuant to one of the pre-approval procedures described below.

From time to time, the audit committee may pre-approve specified types of services that are expected to be provided to us by our independent registered public accounting firm during the next 12 months. Any such pre-approval would be detailed as to the particular service or type of services to be provided and would be also generally subject to a maximum dollar amount.

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De minimis non-audit services that were not recognized at the time of the engagement to be non-audit services, may be approved by the audit committee prior to the completion of the audit in accordance with applicable SEC rules governing de minimis non-audit services.

The audit committee may delegate to one or more members of the audit committee the authority to pre-approve audit or non-audit services to be provided by the independent accountants, provided that any such pre-approval shall be reported to the full audit committee at its next scheduled meeting.

During fiscal year 2006, no services were provided to us by Deloitte & Touche LLP or any other accounting firm other than in accordance with the pre-approval policies and procedures described above.

PART IV

ITEM 15.EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a)Financial statements:   The following consolidated financial statements and schedules of DynCorp International Inc. are included in this report:

·Report of Independent Registered Public Accounting Firm

·Consolidated Statement of Operations – Fiscal year ended April 2, 2004, for the period from April 3, 2004 to February 11, 2005 (Immediate Predecessor), for the 49 Days ended April 1, 2005 and for the fiscal year ended March 31, 2006 (Successor)

·Consolidated Balance Sheets – April 1, 2005 and March 31, 2006 (Successor)

·Consolidated Statement of Cash Flows – Fiscal year ended April 2, 2004, for the period from April 3, 2004 to February 11, 2005 (Immediate Predecessor), for the 49 Days ended April 1, 2005 and for the fiscal year ended March 31, 2006 (Successor)

·Consolidated Statements of Stockholder’s Equity – Fiscal year ended April 2, 2004, for the period from April 3, 2004 to February 11, 2005 (Immediate Predecessor), for the 49 Days ended April 1, 2005 and for the fiscal year ended March 31, 2006 (Successor)

·Notes to Consolidated Financial Statements.

(b)Financial Statement Schedules:

·Schedule I – Condensed Financial Information of Registrant

·Schedule II – Valuation and Qualifying Accounts for the fiscal year ended April 2, 2004, for the period from April 3, 2004 to February 11, 2005, for the 49 days ended April 1, 2005 and for the fiscal year ended March 31, 2006

(c)Exhibits:  The exhibits, which are filed with this Annual Report or which are incorporated herein by reference, are set forth in the Exhibit Index, which is incorporated herein by reference.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

DYNCORP INTERNATIONAL INC.
Date: June 29, 2006
/s/ STEPHEN J. CANNON
Name:	Stephen J. Cannon
Title:	Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities below on the dates indicated.

Signature	Title	Date
/s/ STEPHEN J. CANNON	President and Chief Executive Officer and	June 29, 2006
Stephen J. Cannon	Director (principal executive officer)
/s/ MICHAEL J. THORNE	Senior Vice President, Chief Financial Officer	June 29, 2006
Michael J. Thorne	and Treasurer (principal financial and
	principal accounting officer)
/s/ ROBERT B. MCKEON	Director	June 29, 2006
Robert B. McKeon
/s/ MARC GROSSMAN	Director	June 29, 2006
Marc Grossman
/s/ THOMAS J. CAMPBELL	Director	June 29, 2006
Thomas J. Campbell
/s/ RICHARD E. HAWLEY	Director	June 29, 2006
General Richard E. Hawley
/s/ HERBERT J. LANESE	Director	June 29, 2006
Herbert J. Lanese

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/s/ BARRY R. MCCAFFREY	Director	June 29, 2006
General Barry R. McCaffrey
/s/ RAMZI M. MUSALLAM	Director	June 29, 2006
Ramzi M. Musallam
/s/ JOSEPH W. PRUEHER	Director	June 29, 2006
Admiral Joseph W. Prueher
/s/ CHARLES S. REAM	Director	June 29, 2006
Charles S. Ream
/s/ LEIGHTON W. SMITH, JR.	Director	June 29, 2006
Admiral Leighton W. Smith, Jr.
/s/ WILLIAM G. TOBIN	Director	June 29, 2006
William G. Tobin
/s/ ANTHONY C. ZINNI	Director	June 29, 2006
General Anthony C. Zinni

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EXHIBIT INDEX

Exhibit Number	Description
1.1	Purchase Agreement, dated as of December 12, 2004, by and among Computer Sciences Corporation, Predecessor DynCorp, Veritas and DI Acquisition	(A)
1.2	First Amendment to Purchase Agreement, dated as of February 11, 2005, by and between Computer Sciences Corporation, Predecessor DynCorp, Veritas and DI Acquisition	(A)
3.1	Certificate of Incorporation of DynCorp International Inc.	(B)
3.2*	Amended and Restated Certificate of Incorporation of DynCorp International Inc.
3.3*	Certificate of Correction to the Amended and Restated Certificate of Incorporation of DynCorp International Inc.
3.4	Bylaws of DynCorp International Inc.	(C)
3.5*	Amended and Restated Bylaws of DynCorp International Inc.
3.6	Certificate of Formation of DIV Holding LLC	(A)
3.7	Amended and Restated Limited Liability Company Operating Agreement of DIV Holding LLC	(A)
3.8	Amendment No. 1 to the Amended and Restated Limited Liability Company Operating Agreement of DIV Holding LLC	(B)
3.9	Amendment No. 2 to the Amended and Restated Limited Liability Company Operating Agreement of DIV Holding LLC	(D)
3.10*	Amendment No. 3 to the Amended and Restated Limited Liability Company Operating Agreement of DIV Holding LLC
4.1	Indenture dated February 11, 2005 by and among DynCorp International Inc., DIV Capital Corporation, the Guarantors and The Bank of New York, as Trustee	(A)
4.2	Supplemental Indenture dated May 6, 2005 among DynCorp International of Nigeria LLC, DynCorp International LLC, DIV Capital Corporation, the Guarantors and The Bank of New York, as Trustee	(A)
4.3	Guarantee (included in Exhibit 4.1)	(A)
4.4	Specimen of Common Stock Certificate	(D)
4.5*	Certificate of Designation for Series B participating preferred stock (included in Exhibit 4.7)
4.6*	Registration Rights Agreement, dated as of May 3, 2006, by and among DynCorp International Inc. and DIV Holding LLC
4.7*	Rights Agreement, dated as of May 3, 2006, by and among DynCorp International Inc. and The Bank of New York
10.1	Securities Purchase Agreement, dated as of February 1, 2005 among DynCorp International LLC and DIV Capital Corporation, and Goldman, Sachs & Co. and Bear, Stearns & Co. Inc., as Initial Purchasers	(A)

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10.2	Credit and Guaranty Agreement, dated as of February 11, 2005, by and among Finance, DI Acquisition and the other Guarantors party thereto, various Lenders party thereto, Goldman Sachs Credit Partners L.P., Bear Stearns Corporate Lending Inc., Bear, Stearns & Co. Inc. and Bank of America, N.A.	(A)
10.3	Pledge and Security Agreement, dated as of February 11, 2005, among VCDI, DI Acquisition Corp., DynCorp International LLC, DIV Capital Corporation, DTS Aviation Services LLC, DynCorp Aerospace Operations LLC, DynCorp International Services LLC, Dyn Marine Services LLC, Dyn Marine Services of Virginia LLC, Services International LLC, Worldwide Humanitarian Services LLC, Guarantors and Goldman Sachs Credit Partners L.P., as Collateral Agent	(A)
10.4	Revolving Loan Note, issued by DynCorp International LLC under the SPA, dated February 1, 2005	(A)
10.5	Form of Director Indemnification Agreement	(B)
10.6	First Amendment and Waiver, dated January 9, 2006, among DynCorp International LLC, DynCorp International Inc., and certain subsidiaries of the Company, the lenders party thereto, Goldman Sachs Credit Partners L.P. and Bank of America, N.A.	(E)
10.7	Employment Agreement effective as of April 12, 2006 between DynCorp International LLC and Stephen J. Cannon.	(F)
10.8	Employment Agreement effective as of April 12, 2006 between DynCorp International LLC and Jay K. Gorman.	(F)
10.9	Employment Agreement effective as of April 12, 2006 between DynCorp International LLC and Michael J. Thorne.	(F)
10.10	Employment Agreement effective as of April 12, 2006 between DynCorp International LLC and Natale S. DeGesualdo.	(F)
10.11*	Employment Agreement effective as of April 12, 2006 between DynCorp International LLC and R. Y. Morrel.
10.12	The DynCorp International LLC Executive Incentive Plan	(G)
10.13	The DynCorp International LLC Management Incentive Plan	(G)
10.14	The DynCorp International LLC Key Contributor Plan	(G)
10.15	Form of Officer Indemnification Agreement	(B)
10.16*	Second Amendment and Waiver, dated June 28, 2006, among DynCorp International LLC, DynCorp International Inc., and certain subsidiaries of the Company, the lenders party thereto, Goldman Sachs Credit Partners L.P. and Bank of America, N.A.
12.1*	Statement Re: computation of ratios.
21.1	List of subsidiaries of DynCorp International LLC	(A)
31.1*	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

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32.1*	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

*Filed herewith.

(A)Previously filed as an exhibit to DynCorp International LLC’s Registration Statement on Form S-4/A (Reg. No. 333-127343) filed with the SEC on September 27, 2005.

(B)Previously filed as an exhibit to Amendment No. 2 to Form S-1 (Reg. No. 333-128637) filed with the SEC on November 30, 2005.

(C)Previously filed as an exhibit to Amendment No. 1 to Form S-1 (Reg. No. 333-128637) filed with the SEC on November 10, 2005.

(D)Previously filed as an exhibit to Amendment No. 3 to Form S-1 (Reg. No. 333-128637) filed with the SEC on March 27, 2006.

(E)Previously filed as an exhibit to DynCorp International LLC’s Form 8-K filed with the SEC on January 11, 2006.

(F)Previously filed as an exhibit to DynCorp International LLC’s Form 8-K filed with the SEC on April 17, 2006.

(G)Previously filed as an exhibit to DynCorp International LLC’s Form 8-K filed with the SEC on April 4, 2006.

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EX-3.2

Exhibit 3.2

AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
DYNCORP INTERNATIONAL INC.

Pursuant to Sections 242 and 245 of the
General Corporation Law of the State of Delaware

The undersigned, DynCorp International Inc. (the “Corporation”), a corporation existing under the laws of the State of Delaware, hereby certifies as follows:

1.             The name of the Corporation is DYNCORP INTERNATIONAL INC. The name under which the Corporation was originally formed was DI Acquisition Corp.

2.             The original Certificate of Incorporation of the Corporation was filed with the Secretary of State of the State of Delaware on December 1, 2004.

3.             The Amended and Restated Certificate of Incorporation as hereinafter set forth has been duly adopted in accordance with the provisions of Sections 228, 242 and 245 of the General Corporation Law of the State of Delaware (the “DGCL”).

4.             The text of the Certificate of Incorporation is amended and restated in full to read as follows:

FIRST:           NAME. The name of the corporation (the “Corporation”) is “DynCorp International Inc.”

SECOND:      REGISTERED OFFICE AND REGISTERED AGENT. The address of the registered office of the Corporation in the State of Delaware is 1209 Orange Street, Wilmington, New Castle County, DE 19801, and the name of its registered agent at such address is The Corporation Trust Company.

THIRD:          PURPOSE. The purpose for which the Corporation is organized is to engage in any lawful act or activity for which a corporation may be organized under the DGCL.

FOURTH:      CAPITALIZATION. The total number of shares of capital stock which the Corporation shall have authority to issue is 282,000,000 shares, comprised of: (i) 50,000,000 shares of preferred stock, par value of $0.01 per share (“Preferred Stock”); (ii) 200,000,000 shares of Class A Common Stock, par value of $0.01 per share (“Class A Common Stock”); and (iii) 32,000,000 shares of Class B Common Stock, par value $0.01 per share (the “Class B Common Stock” and together with the Class A Common Stock, the “Common Stock”).

Upon this Amended and Restated Certificate of Incorporation of the Corporation becoming effective pursuant to the DGCL (the “Effective Time”), each share of the Corporation’s common stock, par value $0.01 per share (the “Old Common Stock”), issued and outstanding immediately prior to the Effective Time, will be automatically reclassified as and converted into 64 shares of Class B Common Stock. Any stock certificate that, immediately prior to the Effective Time, represented shares of the Old Common Stock will, from and after the Effective Time, automatically and without the necessity of presenting the same for exchange, represent the number of shares of Class B Common Stock as equals the product obtained by multiplying the number of shares of Old Common Stock represented by such certificate immediately prior to the Effective Time by 64.

The following is a description of each of such classes of stock, and a statement of the preferences, limitations, voting rights and relative rights in respect of the shares of each such class:

A.            Preferred Stock.

1.             Authority to Fix Rights of Preferred Stock. The Board of Directors shall have authority, by resolution or resolutions, at any time and from time to time to divide and establish any or all of the unissued shares of Preferred Stock not then allocated to any series of Preferred Stock into one or more series, and, without limiting the generality of the foregoing, to fix and determine the designation of each such series, the number of shares that shall constitute such series and the powers, preferences and rights of the shares of each such series and the qualifications, limitations and restrictions thereof. The authority of the Board of Directors with respect to each series shall include, but not be limited to, determination of the following:

(a)           the annual or other periodic dividend, if any, payable on shares of such series, the time of payment thereof, whether any such dividends shall be cumulative or non-cumulative, the relative rights of priority, if any, of payment of dividends on the shares of that series and the date or dates from which any cumulative dividends shall commence to accrue;

(b)           the rights of the shares of that series in the event of voluntary or involuntary liquidation, dissolution or winding up of the Corporation, and the relative rights of priority, if any, of payment of shares of that series;

(c)           whether or not the shares of that series shall be redeemable, and, if so, the terms and conditions of such redemption, including the date or dates upon or after which they shall be redeemable, and the amount per share payable in case of redemption, which amount may vary under different conditions and at different redemption prices;

(d)           whether that series shall have a sinking fund for the redemption or purchase of shares of that series, and if so, the amount of such sinking fund;

(e)           whether that series shall have voting rights (including multiple or fractional votes per share) and, if so, the terms of such voting rights;

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(f)            the terms and conditions, if any, on which shares of such series may be converted into shares of stock of the Corporation of any other class or classes or into shares of any other series of the same or any other class or classes, including provision for adjustment of the conversion rate in such events as the Board of Directors shall determine;

(g)           whether, and if so the extent to which, shares of such series may participate with the Common Stock in any dividends in excess of the preferential dividend fixed for shares of such series or in any distribution of the assets of the Corporation, upon a liquidation, dissolution or winding-up thereof, in excess of the preferential amount fixed for shares of such series;

(h)           any other preferences and relative, optional or other special rights; and

(i)            the qualifications, limitations or restrictions of such preferences or rights, of shares of such series not fixed and determined by law or in this Article FOURTH.

2.             Distinctive Designations of Series. Each series of Preferred Stock shall be so designated as to distinguish the shares thereof from the shares of all other series. Different series of Preferred Stock shall not be considered to constitute different voting groups of shares for the purpose of voting by voting groups except as required by the DGCL or as otherwise specified by the Board of Directors, as reflected in a certificate of designation with respect to any series.

Pursuant to the authority conferred upon the Board of Directors of the Corporation by the Certificate of Incorporation, the Board of Directors created a series of 50,000 shares of Preferred Stock designated as Series A-1 Preferred Stock by filing a Certificate of Designations of the Corporation with the Secretary of State of the State of Delaware (the “Secretary of State”) on February 8, 2005, and the voting powers, designations, preferences and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions of the Corporation’s Series A-1 Preferred Stock are set forth in Exhibit A hereto and are incorporated herein by reference.

Pursuant to the authority conferred upon the Board of Directors of the Corporation by the Certificate of Incorporation, the Board of Directors created a series of 300,000 shares of Preferred Stock designated as Series A-2 Preferred Stock by filing a Certificate of Designations of the Corporation with the Secretary of State on February 8, 2005 and the voting powers, designations, preferences and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions of the Corporation’s Series A-2 Preferred Stock are set forth in Exhibit B hereto and are incorporated herein by reference.

B.            Common Stock.

1.             General. Except for the Mandatory Dividends (as defined herein) or as otherwise provided below or required by the DGCL, all shares of Class A Common Stock and Class B Common Stock shall have the same powers, privileges, preferences and relative

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participating, optional or other special rights, and the same qualifications, limitations and restrictions thereof, and shall rank equally, share ratably in all dividends or other distributions and be identical in all respects as to all matters, including, without limitation, rights upon the liquidation, dissolution or winding up of the Corporation.

2.             Voting Rights. Subject to the provisions of the DGCL or of the Bylaws of the Corporation as from time to time in effect with respect to the closing of the transfer books or the fixing of a record date for the determination of stockholders entitled to vote, and except as otherwise provided by the DGCL or in this Amended and Restated Certificate of Incorporation, each holder of record of shares of Class A Common Stock and each holder of record of shares of Class B Common Stock shall have one vote for each share of such class of Common Stock that is outstanding in his, her or its name on the books of the Corporation on all matters on which such share is entitled to vote. The holders of record of Class A Common Stock and the holders of record of Class B Common Stock shall vote together as a single class on all matters, except as otherwise required by applicable law or this Amended and Restated Certificate of Incorporation.

3.             Dividend.

(a)           General. Subject to the rights of the holders of Preferred Stock, holders of Common Stock shall be entitled to receive such dividends and other distributions in cash, stock of the Corporation or property of the Corporation when, as and if declared thereon by the Board of Directors from time to time out of assets or funds of the Corporation legally available therefor. Except for the Mandatory Dividends, a dividend declared in connection with a stockholders rights agreement, or as otherwise required by the DGCL, subject to the limitations set forth in Section 3(c) of Paragraph B of this Article FOURTH, in any circumstance where the Corporation declares dividends or otherwise makes distributions (including, without limitation, any distribution upon the liquidation, dissolution or winding-up of the Corporation) on either the Class A Common Stock or the Class B Common Stock, the Corporation shall declare the same per share dividends or make the same per share distributions, as the case may be, on the other class of Common Stock; provided, however, that if any such dividends or distributions are declared with respect to one class of Common Stock in the form of additional shares of such class of Common Stock, such dividends or distributions shall be made with respect to the other class of Common Stock in shares of such other class of Common Stock based on the same ratio.

(b)           Mandatory Dividends. Prior to the closing of the issuance and sale by the Corporation of shares of Class A Common Stock to the underwriters of the initial public offering of shares of such class of Common Stock contemplated by the Corporation’s Registration Statement on Form S-1 (Reg. No. 333-128637) filed with the Securities and Exchange Commission (the “SEC”) on September 28, 2005, as amended from time to time (the “IPO”), the Board of Directors shall declare (i) a mandatory dividend (the “Mandatory Dividend”), payable in cash, subject to the legal availability of funds for the payment thereof, and subject to the consummation of the IPO to the holders of record on May 3, 2006 of the then-outstanding shares of Class B Common Stock, in an aggregate amount of $100.0 million and (ii) an additional mandatory dividend (the “Additional Mandatory Dividend,” and together with the Mandatory Dividend, the “Mandatory Dividends”) payable in cash, subject to the legal

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availability of funds for the payment thereof, and subject to the exercise (if any) by such underwriters of the option to purchase additional shares of Class A Common Stock to be granted to them under the underwriting agreement to be entered into by the Corporation in connection with such offering (the “Underwriters’ Overallotment Option”) to the holders of record on May 3, 2006 of the then-outstanding shares of Class B common Stock, in an amount equal to 50% of the proceeds (net of discounts and commissions, if any), received by the Corporation from the exercise of the Underwriters’ Overallotment Option. The Corporation shall pay the Mandatory Dividend, subject only to the legal availability of funds for the payment thereof, on May 9, 2006. The Corporation shall pay the Additional Dividend, subject only to the legal availability of funds for the payment thereof, on or before June 15, 2006. For the avoidance of doubt, in no event shall any holder of one or more shares of Class A Common Stock, in respect of the Class A Common Stock, be entitled to receive any portion of the Mandatory Dividends. The Corporation shall take all actions required or permitted under the DGCL to permit the payment in full of the Mandatory Dividends on May 9, 2006 and June 15, 2006 or as soon as reasonably practical thereafter and shall declare and pay the Mandatory Dividends to the extent there are funds legally available therefor.

(c)           Limitation on Dividends. Until the occurrence of the Mandatory Conversion Event (as defined herein), without the prior written approval of the holders of a majority of the then-outstanding shares of the Class B Common Stock (which may be withheld in their sole discretion), the Corporation shall not declare dividends or otherwise make distributions on either the Class A Common Stock or the Class B Common Stock, except for (x) the Mandatory Dividends with respect to the Class B Common Stock and (y) dividends or distributions with respect to such class of Common Stock in the form of additional shares of such class of Common Stock (subject to the proviso set forth in Section 3(a) of paragraph B of this Article FOURTH), or (z) a dividend authorized and declared by the Board pursuant to a rights agreement.

4.             Rights upon Dissolution. Except as required by the DGCL or this Amended and Restated Certificate of Incorporation with respect to any rights upon dissolution of the Preferred Stock or any one or more series thereof and subject to any prior or superior right of the holders of any shares of one or more class or series of stock of the Corporation then outstanding, the holders of the Common Stock shall have the exclusive right to receive, pro rata according to the number of shares of Common Stock owned of record by each of them, the net assets of the Corporation available for distribution to stockholders upon dissolution. Neither the holders of shares of Class A Common Stock nor the holders of shares of Class B Common Stock shall have any preference over the other in connection with such distribution.

5.             Consent Required for Amendment of Amended and Restated Certificate of Incorporation and Bylaws.  In addition to any other vote of stockholders required by law or this Amended and Restated Certificate of Incorporation, the affirmative vote of the holders of a majority of the outstanding shares of Class B Common Stock, voting separately as a class, shall be required for any amendment, alteration or repeal (including by merger, consolidation or otherwise) of any provision of this Amended and Restated Certificate of Incorporation or the Bylaws of the Corporation that would adversely affect the powers, privileges or rights of the Class B Common Stock or the holders thereof in such capacity except for changes affecting only those powers, privileges or rights shared by both classes of Common

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Stock and affecting such powers, privileges or rights equally with respect to both classes of Common Stock.

6.             Conversion of Class B Common Stock.

(a)           Optional Conversion. At any time and from time to time any holder of Class B Common Stock may, at such holder’s option, convert all or any portion of such holder’s shares of Class B Common Stock into an equal number of fully paid and nonassessable shares of Class A Common Stock by delivery and surrender to the Corporation or to the Transfer Agent of the certificates representing the shares of Class B Common Stock to be so converted together with written notice of such conversion. Any conversion pursuant to this Section 6(a) shall be deemed to have been effected at the time of the surrender of such certificates to the Corporation. Immediately upon the occurrence of such conversion, the holder of shares of Class B Common Stock represented by such certificates shall cease to be the holder of such shares of Class B Common Stock and such holder shall be treated for all purposes as having become the holder of the shares of Class A Common Stock issuable upon such conversion; provided, however, that such holder shall be entitled to receive when paid any dividends declared on such shares of Class B Common Stock as of a record date preceding such conversion and unpaid as of the time of such conversion. With respect to shares of Class B Common Stock to be converted, as promptly as practicable upon the delivery to the Corporation of the certificates representing such shares of Class B Common Stock, the Corporation shall deliver or cause to be delivered to or upon the written order of the record owner of such shares of Class B Common Stock certificates representing the number of fully paid and nonassessable shares of Class A Common Stock into which the shares of Class B Common Stock represented by such surrendered certificates have been converted in accordance with the provisions of this Section 6(a).

(b)           Mandatory Conversion. Upon the earlier of (i) the payment in full of the Additional Dividend to the holders of Class B Common Stock and (ii) the expiration of the Underwriters’ Option (both such events, the “Mandatory Conversion Event”), without any action on the part of the Corporation or any holder or holders of Class B Common Stock, each share of Class B Common Stock then issued and outstanding shall automatically be converted into one fully paid and nonassessable share of Class A Common Stock. Upon the occurrence of the Mandatory Conversion Event, prompt written notice thereof and of the resulting conversion of the Class B Common Stock shall be given by first-class mail, postage prepaid, to each person who immediately prior to the Mandatory Conversion Event was a holder of record of shares of Class B Common Stock, at such person’s address as the same appears on the stock register of the Corporation; provided, however, that neither a failure to give such notice nor any defect therein shall affect the effectiveness of the conversion of any shares of Class B Common Stock into shares of Class A Common Stock. Each such notice shall include a statement setting forth the place or places where certificates formerly representing shares of Class B Common Stock are to be surrendered in accordance with this paragraph. The conversion of the Class B Common Stock pursuant to this Section 6(b) shall be deemed to have been effected at the time of the Mandatory Conversion Event. Immediately upon the occurrence of the Mandatory Conversion Event, the holders of shares of Class B Common Stock shall cease to be holders of Class B Common Stock and such holders shall be treated for all purposes as having become the holders of the shares of Class A Common Stock issuable upon such conversion;

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provided, however, that such Persons shall be entitled to receive when paid any dividends declared on the Class B Common Stock as of a record date preceding the Mandatory Conversion Event and unpaid as of the time of the Mandatory Conversion Event. As promptly as practicable upon the delivery to the Corporation of the certificates formerly representing such shares of Class B Common Stock, the Corporation shall deliver or cause to be delivered to or upon the written order of the record owner of such shares of Class B Common Stock certificates representing the number of fully paid and nonassessable shares of Class A Common Stock into which the shares of Class B Common Stock formerly represented by such surrendered certificates have been converted in accordance with the provisions of this Section 6 (b).

(c)           Taxes. The Corporation will pay any and all documentary, stamp or similar issuance or transfer taxes payable in respect of the issuance or delivery of shares of Class A Common Stock on the conversion of shares of Class B Common Stock pursuant to paragraph (a) or (b) of this Section 6; provided, however, that the Corporation shall not be required to pay any tax which may be payable in respect of any registration of transfer involved in the issuance or delivery of shares of Class A Common Stock in a name other than that of the record owner of the shares of Class B Common Stock converted or to be converted, and no such issuance or delivery shall be made unless and until the person requesting such issuance has paid to the Corporation the amount of any such tax or has established, to the reasonable satisfaction of the Corporation, that such tax has been paid.

(d)           Reservation of Class A Common Stock. As long as any shares of Class B Common Stock shall be outstanding, the Corporation shall reserve and keep available out of its authorized but unissued shares of Class A Common Stock, solely for the purpose of effecting the conversion of shares of Class B Common Stock in accordance with the provisions of this Section 6, that number of shares of Class A Common Stock necessary to effect the conversion of all of the then outstanding shares of Class B Common Stock into shares of Class A Common Stock in accordance with the provisions of this Section 6. If at any time, the Board of Directors determines that the number of authorized but unissued shares of Class A Common Stock would be insufficient to effect such conversion of all of the then outstanding shares of Class B Common Stock, the Corporation shall take such action as may be necessary to increase its authorized but unissued shares of Class A Common Stock to such number of shares as shall be sufficient to effect such conversion.

(e)           Cancellation of Converted Class B Common Stock. Upon the occurrence of the Mandatory Conversion Event or a conversion of all or any portion of the outstanding shares of Class B Common Stock pursuant to the provisions of Section 6(a) of this Article FOURTH, the Class B Common Stock so converted shall be cancelled and retired and may not be reissued.

7.             Adjustments. In the event that the Corporation shall at any time, when any shares of Class B Common Stock are outstanding, effect a subdivision, combination or consolidation of the outstanding shares of Class A Common Stock (by reclassification or otherwise) into a greater or lesser number of shares of Class A Common Stock, then, in each case, the Corporation shall, at the same time, effect an equivalent subdivision, combination or consolidation of the outstanding shares of Class B Common Stock (by reclassification or otherwise) into a greater or lesser number of shares of Class B Common Stock. In the event that

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the Corporation shall at any time when any shares of Class A Common Stock are outstanding effect a subdivision, combination or consolidation of the outstanding shares of Class B Common Stock (by reclassification or otherwise) into a greater or lesser number of shares of Class B Common Stock, then in each case the Corporation shall, at the same time, effect an equivalent subdivision, combination or consolidation of the outstanding shares of Class A Common Stock (by reclassification or otherwise) into a greater or lesser number of shares of Class A Common Stock.

C.            General Provisions.

Redeemed or Reacquired Shares. Shares of any series of Preferred Stock that have been redeemed or otherwise reacquired by the Corporation (whether through the operation of a sinking fund, upon conversion or otherwise) shall have the status of authorized and unissued shares of Preferred Stock and may be redesignated and reissued as a part of such series (unless prohibited by the certificate of designation creating each series) or of any other series of Preferred Stock.

FIFTH:   DIRECTORS.

1.             Number, Term and Classification. Subject to section 4 of this Article FIFTH, the exact number of directors shall be determined from time to time by resolution adopted by the affirmative vote of a majority of the Board of Directors. The directors shall be divided into three classes, designated Class I, Class II and Class III. Each class shall consist, as nearly as may be possible, of one-third of the total number of directors constituting the entire Board of Directors. Class I directors shall be elected initially for a term expiring at the first annual meeting of the stockholders held following the closing of the IPO, Class II directors initially for a term expiring at the second annual meeting of the stockholders held following the closing of the IPO and Class III directors initially for a term expiring at the third annual meeting of the stockholders held following the closing of the IPO. At each annual meeting of stockholders, beginning at the first annual meeting of the stockholders held following the closing of the IPO, successors to the class of directors whose term expires at that annual meeting shall be elected for a term expiring at the third successive annual meeting. If the number of directors is changed, any increase or decrease shall be apportioned among the classes so as to maintain the number of directors in each class as nearly equal as possible, but in no case will a decrease in the number of directors shorten the term of any incumbent director.

2.             Director Removal. Subject to the rights of the holders of any series of Preferred Stock then outstanding, for so long as Veritas Capital Management II, L.L.C. beneficially owns at least 50 percent of the then outstanding shares of capital stock of the Corporation that are entitled to vote generally in the election of directors (“Voting Shares”), directors may be removed, with or without cause, by the affirmative vote of a majority of the votes entitled to be cast by the then outstanding Voting Shares, voting together as a single class. Subject to the rights of the holders of any series of Preferred Stock then outstanding, at any time Veritas Capital Management II, L.L.C. does not beneficially own at least 50 percent of the then outstanding Voting Shares, directors may be removed, only with cause, by the affirmative vote of 80 percent of the then outstanding Voting Shares, voting together as a single class.

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3.             Vacancies. Subject to the rights of the holders of any Preferred Stock then outstanding and to any limitations set forth in the DGCL, newly-created directorships resulting from any increase in the number of directors and any vacancies in the Board of Directors resulting from death, resignation, disqualification, removal or other cause shall only be filled by the Board of Directors. If the directors remaining in office constitute fewer than a quorum of the Board, they may fill the vacancy by the affirmative vote of a majority of the directors remaining in office. Any director elected by the Board of Directors to fill any vacancy shall hold office for a term that shall coincide with the remaining term of the class of directors to which such person has been elected.

4.             Additional Directors. During any period when the holders of any series of Preferred Stock have the right to elect additional directors as provided for or fixed pursuant to the provisions of Article FOURTH hereof, then upon commencement and for the duration of the period during which such right continues:  (i) the then otherwise total authorized number of directors of the Corporation shall automatically be increased by such specified number of directors, and the holders of such Preferred Stock shall be entitled to elect the additional directors so provided for or fixed pursuant to said provisions, and (ii) each such additional director shall serve until such director’s successor shall have been duly elected and qualified, or until such director’s right to hold such office terminates pursuant to said provisions, whichever occurs earlier, subject to his earlier death, disqualification, resignation or removal. Except as otherwise provided by the Board of Directors in the resolution or resolutions establishing such series, whenever the holders of any series of Preferred Stock having such right to elect additional directors are divested of such right pursuant to the provisions of such stock, the terms of office of all such additional directors elected by the holders of such stock, or elected to fill any vacancies resulting from the death, resignation, disqualification or removal of such additional directors, shall forthwith terminate and the total authorized number of directors of the Corporation shall automatically be reduced accordingly.

SIXTH:   VOTING; AMENDMENTS.

1.             At any time that Veritas Capital Management II, L.L.C. beneficially owns a majority of the then outstanding Voting Shares, in addition to any other vote of stockholders required by law or this Amended and Restated Certificate of Incorporation, the affirmative vote of a majority of the votes entitled to be cast by the then outstanding Voting Shares, voting together as a single class, shall be required to amend, alter, change or repeal (by merger, consolidation or otherwise) the provisions set forth in Section 5 of paragraph B of Article FOURTH, any provision of Article FIFTH, Sections 1 or 2 of this Article SIXTH or Section 1 of Article EIGHTH. At all other times, in addition to any other vote of stockholders required by law or this Amended and Restated Certificate of Incorporation, the affirmative vote of at least 80 percent of the votes entitled to be cast by the then outstanding Voting Shares, voting together as a single class, shall be required to amend, alter, change or repeal (by merger, consolidation or otherwise) the provisions set forth in paragraph B of Section 5 of Article FOURTH, any provision of Article FIFTH, Section 2  of this Article SIXTH or Section 1 of Article EIGHTH.

2.             In furtherance of, and not in limitation of, the powers conferred by the DGCL and subject to the provisions of Section 5 of paragraph B of Article FOURTH, the

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Board of Directors is expressly authorized and empowered to adopt, amend or repeal the Bylaws of the Corporation. The Bylaws may also be altered, amended or repealed by the stockholders having the requisite voting power with respect thereto, provided that, in the case of any such action by stockholders, the affirmative vote of at least 50 percent of the votes entitled to be cast by the then outstanding Voting Shares, voting together as a single class, until such time as Veritas Capital Management II, L.L.C. beneficially owns less than 50 percent of the outstanding Voting Shares, and thereafter, at least 80 percent of the votes entitled to be cast by the then outstanding Voting Shares, voting together as a single class, shall be required in order for the stockholders to amend, alter, change or repeal any provision of the Bylaws or to adopt any additional Bylaw.

SEVENTH:             LIABILITY AND INDEMNIFICATION.

1.             Liability. A director of the Corporation shall not be personally liable to the Corporation or any of its stockholders for monetary damages for breach of fiduciary duty as a director, except to the extent such exemption from liability or limitation thereof is not permitted under the DGCL as the same exists or may hereafter be amended. Any repeal, modification or amendment of this Article SEVENTH shall not adversely affect any right or protection of a director of the Corporation existing at the time of such repeal, modification or amendment with respect to acts of omissions occurring prior to such repeal, modification or amendment.

2.             Indemnification.

(a)           Each person (a “Covered Person”) who was or is made a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (a “proceeding”) (including an action by or in the right of the Corporation), by reason of the fact that he or she is or was serving as a director or officer of the Corporation (or, while a director or officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, employee or agent of another entity, including employees benefit plans), shall be indemnified and held harmless by the Corporation to the fullest extent authorized by the DGCL. To the fullest extent authorized by the DGCL, this indemnification will cover all expense, liability and loss (including attorneys’ fees, judgments, fines, ERISA excise taxes or penalties and settlement amounts) reasonably incurred by the director in connection with a proceeding. All such indemnification shall continue as to a director or officer who has ceased to be a director or officer and shall continue to the benefit of such director’s or officer’s heirs, executors and administrators. Except as provided in paragraph (2)(b) of this Article SEVENTH with respect to proceedings to enforce rights to indemnification, the Corporation shall indemnify any such director or officer who initiates a proceeding (or part thereof) only if such proceeding (or part thereof) was authorized in advance by the Board of Directors of the Corporation. The right to indemnification conferred by this Article SEVENTH shall be a contract right. The Corporation shall pay the expenses incurred by a Covered Person in defending any such proceeding in advance of its final disposition (“advancement of expenses”). If the DGCL requires, an advancement of expenses incurred by a director or officer in his or her capacity as a director or officer shall be made only upon delivery to the Corporation of an undertaking by such director or officer to repay all amounts so advanced if it is ultimately determined by final judicial decision that such director or

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officer is not entitled to be indemnified for such expenses under this Article SEVENTH or otherwise (hereinafter an “undertaking”).

(b)           If a claim under paragraph (2)(a) of this Article SEVENTH is not paid in full by the Corporation within ninety days after receipt of a written claim; the director or officer may bring suit against the Corporation to recover the unpaid amount provided, that, in the case of a claim for advancement of expenses, the applicable period will be twenty days. If successful in any such suit, the director or officer will also be entitled to be paid the expense of prosecuting such suit. In any suit brought by the director or officer to enforce a right to indemnification hereunder (but not in a suit brought by the director or officer to enforce a right to an advancement of expenses), it shall be a defense that the director or officer has not met the applicable standard of conduct under the DGCL. In any suit by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, it shall be entitled to recover such expenses upon a final adjudication that the director or officer has not met the applicable standard of conduct set forth in the DGCL. Neither the failure of the Board of Directors of the Corporation to determine prior to the commencement of such suit that the director or officer has met the applicable standard of conduct for indemnification set forth in the DGCL, nor an actual determination by the Board of Directors of the Corporation that the director or officer has not met such applicable standard of conduct, shall create a presumption that the director or officer has not met the applicable standard of conduct, and, in the case of such a suit brought by the director or officer to enforce a right hereunder or by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the burden of proving that the director or officer is not entitled to be indemnified or to such advancement of expenses under this Article SEVENTH or otherwise shall be on the Corporation.

(c)           The rights to indemnification and to the advancement of expenses conferred in this Article SEVENTH are not exclusive of any other right which any person may have or hereafter acquire under any statue, this Amended and Restated Certificate of Incorporation, the Corporation’s Bylaws, any agreement, any vote of stockholders or disinterested directors or otherwise.

(d)           The Corporation may maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of the Corporation or other entity against any expense, liability or loss, whether or not the Corporation would have the power to indemnify such person under the DGCL.

(e)           The Corporation may, if authorized by the Board of Directors, grant rights to indemnification and to the advancement of expenses to any employee or agent of the Corporation to the same extent as for directors of the Corporation.

(f)            No amendment to or repeal of the provisions of this Article SEVENTH shall deprive a director or officer of the benefit hereof with respect to any act or failure to act occurring prior to such amendment or repeal.

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EIGHTH:                STOCKHOLDER MEETINGS

1.             Calling a Special Meeting. Subject to the rights of the holders of any Preferred Stock then outstanding, from and after the closing of the IPO, a special meeting of the stockholders for any purpose or purposes, unless otherwise provided by law, may be called only by order of the Chairman of the Board, the Chief Executive Officer, the President or the Board of Directors or, at any time when Veritas Capital Management II, L.L.C. beneficially owns at least 50 percent of the then outstanding Voting Shares, by Veritas Capital Management II, L.L.C.

2.             Action by Written Consent. When Veritas Capital Management II, L.L.C. beneficially owns at least 50 percent of the then outstanding Voting Shares, any action required or permitted by the DGCL to be taken at a stockholders’ meeting may be taken without a meeting and without prior notice if the action is taken by the written consent of stockholders who would be entitled to vote at a meeting of holders of outstanding shares and who have voting power to cast not less than the minimum number (or the applicable minimum numbers, in the case of voting by classes) of votes that would be necessary to authorize or take the action at a meeting at which all stockholders entitled to vote thereon were present and voted. When Veritas Capital Management II, L.L.C. does not beneficially own at least 50 percent of the then outstanding Voting Shares, then no action required or permitted by the DGCL to be taken at a stockholders’ meeting may be taken by the written consent of stockholders in lieu of a meeting.

3.             Definition of “Own.”  As used in the Amended and Restated Certificate of Incorporation (other than Article TENTH), the words “own” and “beneficially own” shall mean “beneficially own” as determined pursuant to Rule 13d-3 (or any successor provision thereto) under the Securities Exchange Act of 1934, as amended.

NINTH:  OTHER CORPORATE MATTERS. In furtherance of and not in limitation of powers conferred by statute, it is further provided that:

1.             Corporate Books. Subject to any applicable requirements of law, the books of the Corporation may be kept outside the State of Delaware at such location or locations as may be designated by the Board of Directors of the Corporation or in the Bylaws of the Corporation.

2.             Number of Authorized Shares. Except as provided to the contrary in the provisions establishing a class of stock, the number of authorized shares of such class may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the then outstanding Voting Shares, voting together as a single class, and no separate class vote of the class of stock whose authorized number is to be increased or decreased shall be required under Section 242(b)(2) of the DGCL.

TENTH: BUSINESS COMBINATIONS WITH INTERESTED STOCKHOLDERS. The Corporation shall not be governed by Section 203 of the DGCL (“Section 203”), and the restrictions contained in Section 203 shall not apply to the Corporation, until the first such time, if ever, as both of the following conditions exist:  (a) Section 203 by its terms would, but for the provisions of this Article, apply to the Corporation; and (b) any person who on the date of filing of this Amended and Restated Certificate of Incorporation owns in excess of 20% of the then outstanding Voting Shares (together with the person’s affiliates and

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associates and entities the person controls directly or indirectly, and trusts, foundations or other non-profit organizations with which the person is associated or to which the person has contributed shares of the Corporation) cease to own 20% or more of the then outstanding Voting Shares. Once the Corporation shall become governed by Section 203 pursuant to the preceding sentence, the Corporation shall be governed by Section 203 for so long as Section 203 by its terms shall apply to the Corporation, regardless of whether any person shall thereafter become the owner of more than 20% of the then outstanding Voting Shares. For purposes of this Article TENTH, the terms “person”, “owner” and “own” shall have the meanings ascribed to them in Section 203, as Section 203 may be amended from time to time.

ELEVENTH:             CORPORATE POWER. The Corporation reserves the right to amend, alter, change or repeal any provision contained in this Amended and Restated Certificate of Incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred on stockholders herein are granted subject to this reservation.

[SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, DynCorp International Inc. has caused this Amended and Restated Certificate of Incorporation to be signed by Stephen J. Cannon, its President and Chief Executive Officer, this 3rd day of May, 2006.

DYNCORP INTERNATIONAL INC.
By:	/s/ Stephen J. Cannon
	Stephen J. Cannon President and Chief Executive Officer

EXHIBIT A

DYNCORP INTERNATIONAL INC.

CERTIFICATE OF DESIGNATIONS OF
SERIES A-1 PREFERRED STOCK

DYNCORP INTERNATIONAL INC. (the “Corporation”), a corporation organized and existing under the General Corporation Law of the State of Delaware (“DGCL”), does hereby certify that, pursuant to authority conferred upon the Board of Directors of the Corporation (the “Board”) by the Corporation’s Articles of Incorporation, and pursuant to Sections 151 of the DGCL, the Board adopted resolutions (i) authorizing a series of the Corporation’s preferred stock, par value $0.01 per share, and (ii) providing for the designations, preferences and relative, participating, optional or other rights, and the qualifications, limitations or restrictions thereof, of 50,000 shares of Series A-1 Preferred Stock of the Corporation, as follows:

RESOLVED, that the Corporation is authorized to issue 50,000 shares of Series A-1 Preferred Stock (the “Series
A-1 Preferred Stock”), which shall have the following powers, designations, preferences and other special rights:

1.     Ranking. The Series A-1 Preferred Stock, with respect to dividend distributions and distributions upon a Liquidation Event (as hereinafter defined) shall rank (i) equal to and on a parity with the Series A-2 Preferred Stock of the Corporation (the “Series A-2 Preferred Stock,” and together with the Series A-1 Preferred Stock, the “Series A Preferred Stock”), (ii) senior to all classes of common stock of the Corporation (including the common stock, par value $0.01 per share, of the Corporation (the “Common Stock”)), and (iii) other than the Series A-2 Preferred Stock, to which the Series A-1 Preferred Stock shall rank pari passu, senior to any other class of capital stock or series of preferred stock established after the Series A-1 Issuance Date (as hereinafter defined) by the Corporation. All classes of common stock of the Corporation and any other class of capital stock or series of preferred stock established after the Series A-1 Issuance Date to which the Series A Preferred Stock is senior, are collectively referred to herein as “Junior Securities”.

2.     Dividend Provisions. The holders of shares of Series A-1 Preferred Stock shall be entitled to receive dividends, pro rata among the holders of the Series A-1 Preferred Stock in proportion to the number of shares of Series A-1 Preferred Stock owned by each such holder, prior and in preference to any declaration or payment of any dividends on any Junior Securities, and pari passu with the declaration or payment of any dividend on any Equity Interests of the Corporation that are pari passu with the Series A-1 Preferred Stock as to liquidation, dissolution or winding up (the “Pari Passu Securities”), at the rate of 13.0% of the Series A-1 Liquidation Preference Payment (as hereinafter defined) per annum (adjusted for any subdivisions, combinations, consolidations or stock distributions or stock dividends with respect to such shares). Dividends on the Series A-1 Preferred Stock shall be cumulative, shall

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compound semi-annually and shall accrue daily from the date that any shares of Series A-1 Preferred Stock are first issued (the “Series A-1 Issuance Date”) until paid.

3.     Liquidation Preference.

A.            In the event of any liquidation, dissolution or winding up of the Corporation or other event described in Section 3(b) hereof (a “Liquidation Event”), whether voluntary or involuntary, the holders of shares of Series A-1 Preferred Stock shall be entitled to receive, prior and in preference to any payment or distribution of any of the assets or surplus funds of the Corporation to the holders of any Junior Securities, by reason of their ownership thereof, an amount per share equal to the sum of (i) $1,000 per share (the “Series A-1 Issuance Price”) and (ii) an amount equal to all accrued and/or declared but unpaid dividends on such share, computed to the date payment thereof is made (together with the Series A-1 Issuance Price, the “Series A-1 Liquidation Preference Payment”). If upon the occurrence of any Liquidation Event, the assets and funds to be distributed among the holders of Series A-1 Preferred Stock shall be insufficient to permit the payment to such holders of the full aforesaid preferential amounts, then the entire assets and funds of the Corporation legally available for distribution shall be distributed pro rata among the holders of Series A-1 Preferred Stock and any Pari Passu Securities, ratably in proportion to the respective amounts that would be payable to such holders if such assets were sufficient to permit payment in full.

B.            For purposes of this Certificate of Designations, a sale, conveyance, transfer, license, lease, abandon or other disposition or transfer of all or substantially all of the assets of the Corporation, in one or more related transactions shall be deemed a Liquidation Event of the Corporation.

C.            In the event the Corporation proposes to distribute assets other than cash in connection with any Liquidation Event, the value of the assets to be distributed to the holder of shares of Series A-1 Preferred Stock, the Pari Passu Securities and the Junior Securities shall be the Fair Value (the “Fair Value”). The Fair Value of any securities not subject to investment letter or similar restrictions on free marketability shall be as follows:

1.             if traded on a securities exchange, the average of the security’s closing prices on such exchange over the thirty (30) day period ending one (1) day prior to the distribution;

2.             if actively traded over-the-counter, the average of the closing bid prices over the thirty (30) day period ending three (3) days prior to the distribution; and

3.             if neither clause (i) nor clause (ii) apply, the Fair Market Value.

The Fair Value of securities subject to investment letter or similar restrictions on free marketability shall be adjusted to make an appropriate discount from the market value determined as above in clauses (i), (ii) or (iii) to reflect the Fair Value thereof. The holders of at least a majority of the outstanding Series A-1 Preferred Stock shall have the right to challenge any determination by the Board of Fair Value (including without limitation, any determination of Fair Market Value) pursuant to this Section 3(c), in which case the determination of Fair Market Value shall be made by an independent appraiser selected jointly by the Board and the

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challenging parties, the cost of such appraisal to be borne equally by the Corporation and the challenging parties.

4.     Redemption

A.            Optional Redemption. Subject to the restrictions set forth in Section 4(d) hereof, at any time and from time to time after the Series A-1 Issuance Date, the Corporation shall have the right to redeem, at the option of the Board, all or any portion (in increments of not less than $5,000,000) of the outstanding shares of Series A-1 Preferred Stock (the “Redemption Date”), in cash, out of any assets of the Corporation legally available therefore, at a price per share equal to the Series A-1 Liquidation Preference Payment plus a premium equal to the percentage of the Series A-1 Issuance Price (the “Redemption Price”) set forth below:

Redemption Occurs On or After	But Prior to	Premium
Series A-1 Issuance Date	Second Anniversary	10.0%
Second Anniversary	Third Anniversary	8.0%
Third Anniversary	Fourth Anniversary	6.0%
Fourth Anniversary	Fifth Anniversary	4.0%
Fifth Anniversary	Sixth Anniversary	2.0%
Sixth Anniversary		0.0%

Notwithstanding the foregoing, in the event that the Corporation consummates an IPO within three (3) years of the Series A-1 Issuance Date and a portion of the IPO proceeds are used to redeem the Series A-1 Preferred Stock in full, the Redemption Price shall be at a price per share equal to the Series A-1 Liquidation Preference Payment plus a premium equal to 3.0% of the Series A-1 Issuance Price.

B.            Mandatory Redemption. On the tenth Anniversary of the Series A-1 Issuance Date, the Corporation shall redeem all, but not less than all, of the shares of the Series A-1 Preferred Stock out of funds legally available therefor, at a price equal to the Series A-1 Liquidation Preference Payment in effect on the date of redemption; provided, that if the Corporation does not have sufficient legally available funds for the redemption of all of the outstanding Series A Preferred Stock at that time, it shall redeem the maximum number of shares of  Series A Preferred Stock that it then has legally available funds to redeem, ratably in accordance with Section 4(c) hereof, and shall thereafter redeem the remainder of the Series A Preferred Stock as soon as it has sufficient legally available funds to do so, ratably in accordance with Section 4(c) hereof.

C.            Mechanics of Redemption. At least 5 business days but not more than 60 days prior to the Redemption Date, written notice (the “Redemption Notice”) shall be given by the Corporation by mail, postage prepaid, or by facsimile or email transmission, to each holder of record (at the close of business on the business day next preceding the day on which the Redemption Notice is given) of shares of Series A-1 Preferred Stock notifying such holder of the redemption and specifying the Redemption Price, the Redemption Date and the place where said Redemption Price shall be payable. The Redemption Notice shall be addressed to each holder at its address as shown by the records of the Corporation. From and after the close of business on the Redemption Date, all rights of holders of such shares of Series A-1 Preferred Stock subject to

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redemption (except the right to receive the Redemption Price) shall cease with respect to such shares, and such shares shall not thereafter be transferred on the books of the Corporation or be deemed to be outstanding for any purpose whatsoever; provided, however, that if the Redemption Price is not paid in full on the Redemption Date, then all of the rights of holders of the Series A-1 Preferred Stock provided herein shall be reinstated in full until such time as the Redemption Price is paid in full. Any shares of Series A-1 Preferred Stock redeemed pursuant to this Section 4 or otherwise acquired by the Corporation in any manner whatsoever shall be canceled and shall not under any circumstances be reissued; and the Corporation may from time to time take such appropriate corporate action as may be necessary to reduce accordingly the number of authorized shares of Series A-1 Preferred Stock; and the shares of Series A-1 Preferred Stock not redeemed, if any, shall remain outstanding and shall be entitled to all rights and preferences provided herein. Any redemption of the Series A Preferred Stock pursuant to Section 4(a) or Section 4(b) hereof, and pursuant to Section 4(a) or Section 4(b) of the Certificate of Designations for the Series A-2 Preferred Stock, shall be allocated to all Series A Preferred Stock at the time outstanding in proportion to the respective outstanding Series A-1 Liquidation Preference Payment and Series A-2 Liquidation Preference Payment (as such term is defined in the Certificate of Designations for Series A-2 Preferred Stock) thereof. The Corporation will not redeem or otherwise acquire any shares of Series A-2 Preferred Stock unless the Corporation concurrently redeems or acquires a pro rata amount of the Series A-1 Preferred Stock on the same terms.

D.            Restrictions on Redemptions. No shares of Series A-1 Preferred Stock shall be redeemed in whole or in part under Section 4 hereof at any time that such redemption is prohibited by the DGCL.

5.     Offer to Purchase.

A.            Promptly after the occurrence of a Change of Control (as hereinafter defined) (the date of such occurrence being the “Offer Date”), the Corporation shall commence (or cause to be commenced) an offer to purchase for cash all outstanding shares of Series A-1 Preferred Stock pursuant to the terms described in Section 5(b) below (the “Offer”) at a purchase price per share equal to the applicable Redemption Price, and shall purchase (or cause the purchase of) any shares of Series A-1 Preferred Stock tendered in the Offer pursuant to the terms hereof.

B.            Within 5 days following the date on which a Change in Control has occurred, the Corporation shall send, by first-class mail, postage prepaid, a notice to each holder of Series A-1 Preferred Stock. Such notice shall contain all instructions and materials necessary to enable such holders to tender Series A-1 Preferred Stock pursuant to the Offer. Such notice shall state:

1.             that a Change of Control has occurred;

2.             the Redemption Price and the purchase date (which must be no earlier than 30 days nor later than 60 days from the date such notice is mailed, other than as may be required by law) (the “Payment Date”);

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3.             that any shares of Series A-1 Preferred Stock not tendered will remain outstanding and shall be entitled to all rights and preference provided herein;

4.             that, unless the Corporation defaults in making payment therefor, any share of Series A-1 Preferred Stock accepted for payment pursuant to the Offer shall cease to accrue dividends after the Payment Date;

5.             that holders electing to have any share of Series A-1 Preferred Stock purchased pursuant to the Offer will be required to surrender stock certificates representing such shares of Series A-1 Preferred Stock, properly endorsed for transfer, together with such other customary documents as the Corporation may reasonably request at the address specified in the notice prior to the close of business on the business day prior to the Payment Date; and

6.             that holders who tender only a portion of the shares of Series A-1 Preferred Stock represented by a certificate delivered will, upon purchase of the shares tendered, be issued a new certificate representing the unpurchased shares of Series A-1 Preferred Stock.

C.            The Corporation will comply with any tender offer rules under the Exchange Act, which then may be applicable in connection with any offer made by the Corporation to repurchase the shares of Series A-1 Preferred Stock as a result of a Change of Control. To the extent that the provisions of any securities laws or regulations conflict with provisions of this Certificate of Designations, the Corporation shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligation under this Certificate of Designations by virtue thereof.

D.            On the Payment Date, the Corporation shall (i) accept for payment the shares of Series A-1 Preferred Stock validly tendered pursuant to the Offer, (ii) pay to the holders of shares so accepted the purchase price therefor in cash and (iii) cancel each surrendered certificate and retire the shares represented thereby that were validly tendered pursuant to the Offer. Unless the Corporation defaults in the payment for the shares of Series A-1 Preferred Stock tendered pursuant to the Offer, as of the Payment Date dividends will cease to accrue with respect to the shares of Series A-1 Preferred Stock tendered and all rights of holders of such tendered shares will terminate, except for the right to receive payment therefor on the Payment Date.

E.             The holder of a share of Series A-1 Preferred Stock shall deliver, prior to the close of business on the fifth business day prior to the Payment Date, written notice to the Corporation (or an agent designated by the Corporation for such purpose) whether such holder accepts or rejects such Offer. The failure of a holder of Series A-1 Preferred Stock to respond to such Offer shall be deemed to constitute an acceptance of such Offer by such holder.

6.     Voting Rights. Except as specifically set forth herein or in the DGCL, the holders of shares of Series A-1 Preferred Stock shall not be entitled to any voting rights with respect to any matters voted upon by stockholders of the Corporation. To the extent that the holders of shares of Series A-1 Preferred Stock shall be entitled, by reason of the terms hereof or the DGCL, to any voting rights with respect to any matters to be voted upon by any class or

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group of stockholders of the Corporation, the holders of shares of Series A-1 Preferred Stock shall be entitled to the number of votes per share of Series A-1 Preferred Stock equal to the number of votes per share of the Common Stock of the Corporation at the record date for determination of the stockholders entitled to vote on such matters, or, if no such record date is established, at the date such vote is taken or any written consent of stockholders is solicited, such votes to be counted together with all other shares of stock of the Corporation having general voting power and not counted separately as a class, unless otherwise required by the express provisions hereof or by applicable law.

7.     Protective Provisions.

A.            The Corporation shall not, and shall not permit DynCorp International LLC (“DI”) or any of the Restricted Subsidiaries to, without the affirmative vote or written consent of the holders of a majority of the then outstanding shares of Series A-1 Preferred Stock, voting or consenting as a separate class:

1.             Make any Restricted Payment. Notwithstanding anything to the contrary set forth herein, the foregoing provisions of Section 7(a)(i) will not require the vote or consent of any holders of the outstanding shares of Series A-1 Preferred Stock for:

(a)           the repurchase, redemption, defeasance or other acquisition or retirement for value of Junior Securities with the net cash proceeds from a substantially concurrent incurrence of Permitted Refinancing;

(b)           so long as no Non-Compliance Event has occurred and is continuing or would be caused thereby, the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Corporation, DI or any Restricted Subsidiary held by any current or former officer, director, consultant or employee of the Corporation, DI or any of the Restricted Subsidiaries, and any dividends payment or other distribution by the Corporation, DI or a Restricted Subsidiary to a direct or indirect parent holding company of the Corporation utilized for the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of such direct or indirect parent holding company held by any current or former officer, director, employee or consultant of the Corporation, DI or any Restricted Subsidiaries or in each case, to the extent applicable, their respective estates, spouses, former spouses or family members, in each case, pursuant to any equity subscription agreement, stock option agreement, shareholders’ agreement or similar agreement or benefit plan of any kind; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $1,000,000 in any calendar year period (with unused amounts in any immediately preceding calendar year being carried over to the succeeding calendar year subject to a maximum carry-over amount of $2,000,000 in any calendar year); provided further that such amount in any calendar year may be increased by an amount not to exceed:

(i)            the cash proceeds from the sale of Equity Interests of the Corporation and, to the extent contributed to the Corporation as common equity capital, Equity Interests of any of the Corporation’s direct or indirect parent entities, in each case to members of management, directors or consultants of the Corporation, any of its Subsidiaries or any of its direct or indirect parent entities that occurs after the Series A-1 Issuance Date, plus

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(ii)           the cash proceeds of key man life insurance policies received by the Corporation and its Subsidiaries after the Series A-1 Issuance Date, less

(iii)          the amount of any Restricted Payments previously made pursuant to clauses (1) and (2) of this clause (B);

(c)           the repurchase of Equity Interests deemed to occur upon the exercise of stock options or warrants to the extent such Equity Interests represent a portion of the exercise price of those stock options or warrants;

(d)           Permitted Payments to Parent; and

(e)           so long as no Non-Compliance Event has occurred and is continuing or would be caused thereby, other Restricted Payments in an aggregate amount not to exceed $15,000,000 since the Series A-1 Issuance Date.

The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Corporation or DI, as the case may be, pursuant to the Restricted Payment. The Fair Market Value of any assets or securities that are required to be valued by this covenant will be determined by the Board whose resolution with respect thereto will be delivered to each holder of Series A-1 Preferred Stock. The Board’s determination must be based upon an opinion or appraisal issued by an accounting, appraisal or investment banking firm of national standing if the Fair Market Value of any Restricted Payment or series of related Restricted Payments exceeds $15,000,000.

2.             Engage in any reclassification, recapitalization or other change in respect of any shares of capital stock of the Corporation or DI.

3.             Amend, alter, change, repeal or waive any provision of its Certificate of Incorporation (whether by way of a Certificate of Designations or otherwise) or Limited Liability Company Agreement, as applicable, or this Certificate of Designations or its respective By-laws in any manner (whether by merger, consolidation or otherwise) that would adversely affect the rights, preferences or privileges of the Series A-1 Preferred Stock, including without limitation, increasing the rights, preferences or privileges of the Series A-2 Preferred Stock relative to the rights, preferences or privileges of the Series A-1 Preferred Stock;

4.             Create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt) and no Restricted Subsidiary will issue any shares of preferred stock (other than preferred stock that does not pay cash dividends, and is not redeemable while shares of Series A-1 Preferred Stock are outstanding); provided, however, the Corporation, DI and the Restricted Subsidiaries may incur Indebtedness (including Acquired Debt), and with respect to Restricted Subsidiaries, issue preferred stock, if the Indebtedness/EBITDA Ratio for the Corporation, for the most recently ended period of four fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may be, would have been less than 7.5 to 1.0, determined on a pro forma basis (including

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pro forma application of the net proceeds therefrom), as if such additional Indebtedness had been incurred or such preferred stock issued, as the case may be at the beginning of such four-quarter period; provided, further, however, that the provisions of this Section 7(a)(iv) shall not require the vote or consent of any holders of the outstanding shares of any Series A-1 Preferred Stock for the incurrence by the Corporation, DI or Restricted Subsidiaries of Permitted Indebtedness and/or Permitted Refinancing Indebtedness.

5.             Permit a Change of Control, unless the Corporation consummates the offer to repurchase obligations of the Corporation pursuant to Section 5 hereof in connection therewith.

6.             Enter into or consummate any Asset Sale unless (A) the Corporation, DI or any Restricted Subsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value of the assets or Equity Interests issued or sold or otherwise disposed of, (B) at least 75% of the consideration received by the Corporation , DI or such Restricted Subsidiary is in the form of cash or Cash Equivalents, and (C) to the extent that not all of the Net Cash Proceeds from such Asset Sale are applied by the Corporation, DI or the applicable Restricted Subsidiary, as the case may be, within 365 days following the receipt of such Net Cash Proceeds, to the extent the Corporation, DI or the applicable Restricted Subsidiary, as the case may be, elects, (1) to repay Indebtedness (and, if such Indebtedness repaid is revolving credit Indebtedness, to correspondingly reduce commitments with respect thereto), (2) to acquire (including by way of merger or consolidation) all or substantially all of the assets of, or a majority of the voting securities of, another Permitted Business, (3) to make capital expenditures, or (4) to acquire other assets that are not classified as current assets under GAAP and that are used or useful in a Permitted Business, the amount of Net Cash Proceeds not so applied (the “Excess Proceeds”) shall, in the case of Excess Proceeds realized by the Corporation, be used by the Corporation to redeem the outstanding shares of the Series A-1 Preferred Stock in accordance with the procedures set forth in Section 4 and, in the case of Excess Proceeds realized by DI or a Restricted Subsidiary, such Excess Proceeds shall be provided to the Corporation by DI or the applicable Restricted Subsidiary, as the case may be, by way of payment of dividends to, or the making of loans to, any direct or indirect parent in order to permit the Corporation to effectuate such redemption by the Corporation; provided, however, that if any Excess Proceeds remain after consummation of the redemption of all of the outstanding shares of the Series A-1 Preferred Stock, the Corporation may use such Excess Proceeds for any purpose not otherwise prohibited by the terms of this Certificate of Designations.

For the purposes of Section 7(a)(vi), the following shall be deemed to be cash:  (A) the amount of any liabilities, as shown on the Corporation’s most recent balance sheet or in the notes thereto, of the Corporation, DI or any Restricted Subsidiary that are assumed by the transferee of any such assets; (B) Replacement Assets; (C) any securities, notes or other obligations received by the Corporation, DI or any such Restricted Subsidiary from such transferee that are, within 180 days of the Asset Sale, converted by the Corporation, DI or such Restricted Subsidiary into cash or Cash Equivalents (to the extent of the cash or Cash Equivalents received in that conversion); (D) property received as consideration for such Asset Sale that would otherwise constitute a permitted application of Net Cash Proceeds (or other cash in such amount) under Section 7(a)(vi)(C)(2) or (4) above; and (E) any Designated Noncash

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Consideration received by the Corporation, DI or any Restricted Subsidiary in such Asset Sale having a Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this clause (E) that is at that time outstanding, not to exceed $2,500,000 at the time of receipt of such Designated Noncash Consideration, with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received without giving effect to subsequent changes in value.

7.             Make any payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction, contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate of the Corporation (each, an “Affiliate Transaction”), unless: (A)  the Affiliate Transaction is on terms that are no less favorable to the Corporation, DI or the relevant Restricted Subsidiary (as applicable) than those that would have been obtained in a comparable transaction by the Corporation, DI or such Restricted Subsidiary (as applicable) with a Person that is not an Affiliate; and (B) the Corporation delivers to each holder of Series A-1 Preferred Stock: (1) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $1,000,000, a resolution of the Board set forth in an officers’ certificate certifying that such Affiliate Transaction complies with this covenant and that such Affiliate Transaction has been approved by a majority of the disinterested members of the Board; and (2) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $15,000,000 (other than transactions with Affiliates in connection with joint venture, joint bidding, joint marketing or other similar arrangements), an opinion as to the fairness to the Corporation or DI of such Affiliate Transaction from a financial point of view issued by an accounting, appraisal or investment banking firm of national standing.

Notwithstanding the foregoing, the following items will not be deemed to be Affiliate Transactions and, therefore, will not be subject to the provisions of the prior paragraph:

(a)           any consulting or employment agreement, employee benefit plan, officer or director indemnification agreement or any similar arrangement entered into by the Corporation, DI or any of the Restricted Subsidiaries with any director or officer in the ordinary course of business and payments pursuant thereto;

(b)           transactions between or among the Corporation, DI and/or its Subsidiaries;

(c)           transactions with a Person (other than a Subsidiary of DI that is not a Restricted Subsidiary) that is an Affiliate of the Corporation solely because the Corporation owns, directly or through a Subsidiary, an Equity Interest in, or controls, such Person;

(d)           payment of reasonable directors’ fees to Persons who are not otherwise Affiliates of the Corporation;

(e)           any issuance of Equity Interests (other than Disqualified Stock) of the Corporation to Affiliates of the Corporation;

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(f)            Restricted Payments that do not violate the provisions of Section 7(a)(i);

(g)           payment of management fees not in excess of $300,000 per annum to the Permitted Holder;

(h)           loans or advances to employees in the ordinary course of business not to exceed $1,000,000 in the aggregate at any one time outstanding;

(i)            Permitted Parent Payments; and

(j)            transactions with a joint venture engaged in a Permitted Business; provided that all the outstanding ownership interests of such joint venture are owned only by the Corporation, its Restricted Subsidiaries and Persons that are not Affiliates of the Corporation.

8.             Engage in any business other than Permitted Businesses, except to such extent as would not be material to the Corporation, DI and the Restricted Subsidiaries taken as a whole.

9.             Issue or create any Disqualified Stock or any other equity security or interest which ranks pari passu with or has priority over the Series A-1 Preferred Stock as to dividends, liquidation rights or otherwise or is in any way senior in right of payment to the Series A-1 Preferred Stock, other than the Series A-2 Preferred Stock issued on the Series A-1 Issuance Date and the additional Series A-2 Preferred Stock in the amount required under the Acquisition Agreement, which shall rank pari passu with the Series A-1 Preferred Stock.

10.           Directly or indirectly (and applicable only to the Corporation): (a) consolidate or merge with or into another Person (whether or not the Corporation is the surviving corporation); or (b) sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of the properties or assets of the Corporation, DI and the Restricted Subsidiaries, taken as a whole, in one or more related transactions, to another Person, unless:

(a)           either: (1) the Corporation is the surviving corporation; or (2) the Person formed by or surviving any such consolidation or merger (if other than the Corporation) or to which such sale, assignment, transfer, conveyance or other disposition has been made is an entity organized or existing under the laws of the United States, any state of the United States or the District of Columbia;

(b)           the Person formed by or surviving any such consolidation or merger (if other than the Corporation) or the Person to which such sale, assignment, transfer, conveyance or other disposition has been made assumes all the obligations of the Corporation under this Certificate of Designations;

(c)           immediately after such transaction, a Non-Compliance Event does not exist (other than a Non-Compliance Event as a result of non-compliance with Section 7(a)(iv) in which case Section 7(a)(x)(D) shall apply); and

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(d)           the Corporation or the Person formed by or surviving any such consolidation or merger (if other than the Corporation), or to which such sale, assignment, transfer, conveyance or other disposition has been made would, on the date of such transaction after giving pro forma effect thereto and any related financing transactions as if the same had occurred at the beginning of the applicable four-quarter period have an Indebtedness/EBITDA Ratio that is not greater than 7.5 to 1.0.

This restrictions set forth in this paragraph will not apply to a merger of the Corporation with an Affiliate solely for the purpose of reincorporating the Corporation in another jurisdiction within the United States. The restrictions set forth in clauses (c) and (d) of this paragraph will not apply to any consolidation or merger, or any sale, assignment, transfer, conveyance, lease or other disposition of assets between or among the Corporation and the Restricted Subsidiaries.

11.           Enter into any contract, agreement, commitment or understanding with respect to any of the foregoing clauses (i) through (x).

8.     Non-Compliance Event. A “Non-Compliance Event” shall occur if (i) the Corporation fails to comply with any of its obligations set forth in Section 7 or (ii) if Veritas sells or transfers to any Person, other than an Affiliate, any of the shares of Parent held by it (or if any such Affiliate sells or transfers to any Person, other than an Affiliate of Veritas, any shares of Parent sold or transferred to it by Veritas), and shall continue until the Corporation or Permitted Holder cures the event or circumstances giving rise to such non-compliance. If a Non-Compliance Event shall occur and be continuing, the dividend rate as referenced in Section 2 shall increase to 15% of the Series A-1 Liquidation Preference Payment per annum; provided, that upon the cure or waiver of such Non-Compliance Event, the dividend rate as referenced in Section 2 shall revert to 13% of the Series A-1 Liquidation Preference Payment per annum.

9.     Severability of Provisions. Whenever possible, each provision of this Certificate of Designations shall be interpreted in a manner as to be effective and valid under applicable law, but if any provision hereof is held to be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating or otherwise adversely affecting the remaining provisions hereof. If a court of competent jurisdiction should determine that a provision hereof would be valid or enforceable if a period of time were extended or shortened or a particular percentage were increased or decreased, then such court may make such change as shall be necessary to render the provision in question effective and valid under applicable law.

10.   Amendment, Waiver or Discharge. Except as otherwise expressly provided herein, neither this Certificate of Designations nor any term hereof may be amended, waived, modified, discharged or terminated without the written consent or affirmative vote of the holders of a majority of the outstanding shares of Series A-1 Preferred Stock. Notwithstanding anything to the contrary contained herein, no provision of this Certificate of Designations that applies to any person or entity specifically designated by name shall be amended, waived, discharged or terminated without the written consent of such named person or entity.

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11.   Information and Access Rights.

A.            Information Rights. Each holder of Series A-1 Preferred Stock that, together with its Affiliates, holds an aggregate number of shares of Series A-1 Preferred Stock with an aggregate Series A-1 Issuance Price at such time that is greater than $5,000,000 will have the right to receive (i) within fifteen (15) days after they are or would have been required to be contained in a filing with the Commission, all quarterly and annual financial information that would be required to be contained in a filing with the Commission on Forms 10-Q and 10-K if the Corporation were required to file such Forms, including a “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and, with respect to the annual information only, a report on the annual financial statements by the Corporation’s certified independent accountants; (ii) within five (5) days after they are or would have been required to be contained in a filing with the Commission, all current reports that would be required to be filed with the Commission on Form 8-K if the Corporation were required to file such reports; (iii) the annual consolidated business plan of the Corporation and its Subsidiaries, and (iv) notice of any event of default on any Indebtedness in the aggregate amount exceeding $15,000,000, subject to the acknowledgment in writing by each such holder of Series A-1 Preferred Stock that the Corporation and/or any of its Subsidiaries may be reporting companies under the Exchange Act, and subject to the execution by each such holder of Series A-1 Preferred Stock of a confidentiality and nondisclosure agreement, in form and substance reasonably acceptable to the Corporation and its counsel. So long as all or substantially all of the assets of the Corporation are comprised of DI and its Subsidiaries, the information required to be delivered by the Corporation pursuant to clauses (a) and (b) of this Section 11 may, at the election of the Corporation, be satisfied by delivering such information with respect to DI and its Subsidiaries; provided, that if DI files any of the documents listed in clause (i) of this Section 11(a) with the Commission, the delivery requirement under clause (i) shall be satisfied by such filing.

B.            Access Rights. Each holder of Series A-1 Preferred Stock that, together with its Affiliates, holds an aggregate number of shares of Series A-1 Preferred Stock with an aggregate Series A-1 Issuance Price at such time that is greater than $5,000,000 will have reasonable access, during normal business hours, to the facilities, records and personnel (including outside accountants) of the Corporation and its Subsidiaries to the extent that the same reasonably relates to such holder’s interest in the Corporation, subject to reasonable prior written notice delivered to the Corporation and subject to execution by each such holder of Series A-1 Preferred Stock of a confidentiality and nondisclosure agreement in the form agreed to prior to the date hereof. The Corporation shall be entitled to designate one or more representatives of the Corporation to be present during all such periods of access.

12.   Transfer of Series A-1 Preferred Stock. The Corporation shall not place any restrictions on the transferability of the Series A-1 Preferred Stock, and each holder of the Series A-1 Preferred Stock may assign or otherwise transfer some or all of the Series A-1 Preferred Stock and the accompanying rights hereunder held by such holder without the consent of the Corporation; provided that such assignment is in compliance with the applicable securities laws.

13.   Definitions. For purposes of this Certificate of Designations, the following terms shall have the following meanings:

“Acquired Debt” means, with respect to any specified Person: (a) Indebtedness of any other Person existing at the time such other Person is merged with or into or became a

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Restricted Subsidiary of such specified Person, whether or not such Indebtedness is incurred in connection with, or in contemplation of, such other Person merging with or into, or becoming a Subsidiary of, such specified Person; and (b) Indebtedness secured by a Lien encumbering any asset acquired by such specified Person.

“Acquisition Agreement” means that certain Purchase Agreement dated as of December 12, 2004 among Computer Sciences Corporation, DynCorp, The Veritas Fund II, L.P. and the Corporation, as in effect on the Series A-1 Issuance Date.

“Affiliate” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, “control,” as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise; provided that beneficial ownership of 10% or more of the Voting Stock of a Person will be deemed to be control. For purposes of this definition, the terms “controlling,” “controlled by” and “under common control with” have correlative meanings.

“Anniversary” means an anniversary of the Series A-1 Issuance Date.

“Asset Sale” means (1) the sale, lease, conveyance or other disposition of any assets or rights and (2) the issuance of Equity Interests in any of the Restricted Subsidiaries (other than directors’ qualifying Equity Interests or Equity Interests required by applicable law to be held by a Person other than the Corporation or a Restricted Subsidiary). Notwithstanding the preceding, none of the following items will be deemed to be an Asset Sale:  (a) any single transaction or series of related transactions that involves assets having a Fair Market Value of less than $1,000,000; (b) a transfer of assets between or among the Corporation, DI and the Restricted Subsidiaries; (c) an issuance of Equity Interests by DI or a Restricted Subsidiary to the Corporation, DI or to a Restricted Subsidiary; (d) the licensing of intellectual property or other general intangibles to third persons on customary terms as determined by the Board in good faith and the ordinary course of business; (e) the sale or disposition of any property or equipment that has become damaged, worn-out or obsolete, in the ordinary course of business; (f) to the extent allowable under Section 1031 of the Internal Revenue Code of 1986, any exchange of like property for use in a Permitted Business; (g) the sale or other disposition of cash or Cash Equivalents at Fair Market Value; (h) a Restricted Payment that is permitted by Section 7(a)(i) or a Permitted Investment; and (i) the sale, lease, sub-lease, license, sub-license, consignment, conveyance or other disposition of equipment, inventory or other assets in the ordinary course of business, including leases with a duration of no greater than 24 months with respect to facilities that are temporarily not in use or pending their disposition, or accounts receivable in connection with the compromise, settlement or collection thereof.

“Attributable Debt” in respect of a sale and leaseback transaction means, at the time of determination, the present value of the obligation of the lessee for net rental payments during the remaining term of the lease included in such sale and leaseback transaction including any period for which such lease has been extended or may, at the option of the lessor, be extended. Such present value shall be calculated using a discount rate equal to the rate of interest implicit in such transaction, determined in accordance with GAAP.

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“Beneficial Owner” has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial ownership of any particular “person” (as that term is used in Section 13(d)(3) of the Exchange Act), such “person” will be deemed to have beneficial ownership of all securities that such “person” has the right to acquire by conversion or exercise of other securities, whether such right is currently exercisable or is exercisable only after the passage of time. The terms “Beneficially Owns” and “Beneficially Owned” have a corresponding meaning.

“Capital Lease Obligation” means, at the time any determination is to be made, the amount of the liability in respect of a capital lease that would at that time be required to be capitalized on a balance sheet prepared in accordance with GAAP, and the Stated Maturity thereof shall be the date of the last payment of rent or any other amount due under such lease prior to the first date upon which such lease may be prepaid by the lessee without payment of a penalty.

“Capital Stock” means (a) in the case of a corporation, corporate stock; (b) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock; (c) in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited); and (d) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person.

“Cash Equivalents” means (a) United States dollars; (b) securities issued or directly and fully guaranteed or insured by the United States government or any agency or instrumentality of the United States government (provided that the full faith and credit of the United States is pledged in support of those securities) having maturities of not more than 360 days from the date of acquisition; (c) certificates of deposit and eurodollar time deposits with maturities of six months or less from the date of acquisition, bankers’ acceptances with maturities not exceeding six months and overnight bank deposits, in each case, with any lender party to the Credit Agreement or with any domestic commercial bank having capital and surplus in excess of $500,000,000 and a Thomson Bank Watch Rating of “B” or better at the time of acquisition; (d) repurchase obligations for underlying securities of the types described in clauses (b) and (c) above entered into with any financial institution meeting the qualifications specified in clause (c) above; (e) commercial paper having at the time of acquisition one of the two highest ratings obtainable from Moody’s Investors Service, Inc. or Standard & Poor’s Rating Service and, in each case, maturing within nine months after the date of acquisition; (f) securities issued by any state of the United States of America or any political subdivision of any such state or any public instrumentality thereof maturing within one year from the date of acquisition thereof and at the time of acquisition thereof, having one of the two highest ratings obtainable from either Standard & Poor’s Rating Services or Moody’s Investors Service, Inc.; (g) money market funds at least 95% of the assets of which constitute Cash Equivalents of the kinds described in clauses (a) through (f) of this definition; and (h) local currencies held by the Corporation and DI, from time to time in the ordinary course of business and consistent with past practice.

“Change of Control” means the occurrence of any of the following: (a) the direct or indirect sale, lease, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the

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properties or assets of the Corporation and its Subsidiaries taken as a whole to any “person” (as that term is used in Section 13(d) of the Exchange Act) other than a Permitted Holder; (b) the adoption of a plan relating to the liquidation or dissolution of the Corporation; (c) the consummation of any transaction (including, without limitation, any merger or consolidation), the result of which is that any “person” (as defined above), other than a Permitted Holder or a Related Party of a Permitted Holder, becomes the Beneficial Owner, directly or indirectly, of more than 50% of the Voting Stock of the Corporation, measured by voting power rather than number of shares; (d) after an IPO of the Corporation or any direct or indirect parent of the Corporation, the first day on which a majority of the members of the Board are not Continuing Directors; or (e) the first day on which the Corporation ceases to own 100% of the outstanding Equity Interests of DI.

“Commission” means the Securities and Exchange Commission.

“Consolidated EBITDA” of any Person for any period, means the Consolidated Net Income of such Person and its Subsidiaries for such period plus, without duplication and to the extent deducted in the calculation of such Consolidated Net Income for such period, the sum of (a) income tax expense (including franchise, value added and similar taxes), (b) interest expense of such Person and its Subsidiaries whether paid or accrued and whether or not capitalized (including, without limitation, noncash interest payments, the interest component of any deferred payment obligations, the interest component of all payments associated with Capital Lease Obligations, imputed interest with respect to Attributable Debt, and net of the effect of all payments made or received (if any) pursuant to Hedging Obligations), amortization or write-off of debt discount and debt issuance costs and commissions, discounts and other fees and charges associated with Indebtedness, (c) depreciation and amortization expenses, (d) amortization of intangibles (including, but not limited to, goodwill) and organization costs, (e) any extraordinary, unusual or non-recurring expenses or losses (including, whether or not otherwise includable as a separate item in the statement of such Consolidated Net Income for such period, losses on sales of assets outside of the ordinary course of business) and (f) any other non-cash charges (including non-cash expenses for grants of options), non-recurring salary and benefit expenses and headcount reductions,minus, without duplication and to the extent included in the calculation of such Consolidated Net Income for such period, the sum of (A) interest income (except to the extent deducted in determining such Consolidated Net Income), (B) any extraordinary, unusual or non-recurring income or gains (including, whether or not otherwise includable as a separate item in the statement of such Consolidated Net Income for such period, gains on the sales of assets outside of the ordinary course of business), (C) any other non-cash income (other than the accrual of revenue in the ordinary course of business) and (D) any cash payments made during such period reducing reserves or liabilities for accruals made in any prior fiscal quarter but only to the extent such reserves or accruals were included in the determination of Consolidated EBITDA for such prior fiscal quarter, all as determined on a consolidated basis; provided that for purposes of calculating Consolidated EBITDA of the Corporation and its Subsidiaries for any period, (i) the Consolidated EBITDA of any Person acquired by the Corporation or its Subsidiaries during such period shall be included on a pro forma basis (including adjustments for non-recurring items) for such period (assuming the consummation of such acquisition and the incurrence or assumption of any Indebtedness in connection therewith occurred on the first day of such period) if the consolidated balance sheet of such acquired Person and its consolidated Subsidiaries as at the end of the period preceding the acquisition of

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such Person and the related consolidated statements of income and stockholders’ equity and of cash flows for the period in respect of which Consolidated EBITDA is to be calculated (x) have been previously provided to the holders of the Series A-1 Preferred Stock and (y) either (1) have been reported on without a qualification arising out of the scope of the audit by independent certified public accountants of nationally recognized standing or (2) have been found reasonably acceptable by the holders of at least a majority of the outstanding shares of Series A-1 Preferred Stock; and (ii) the Consolidated EBITDA of any Person disposed of by the Corporation or its Subsidiaries during such period shall be excluded for such period (assuming the consummation of such disposition and the repayment of any Indebtedness in connection therewith occurred on the first day of such period); provided, further, that for purposes of calculating the Consolidated EBITDA of the Corporation and its Subsidiaries for any period, only the Consolidated EBITDA of the Corporation, DI and the Restricted Subsidiaries shall be included for such period.

“Consolidated Net Income” means, with respect to any specified Person for any period, the aggregate of the Net Income of such Person and its Subsidiaries for such period, on a consolidated basis, determined in accordance with GAAP; provided that: (a) the Net Income (but not loss) of any Person that is not a Subsidiary or that is accounted for by the equity method of accounting will be included only to the extent of the amount of dividends or similar distributions paid in cash to the specified Person or a Subsidiary of the Person; (b) the Net Income of any Subsidiary will be excluded to the extent that the declaration or payment of dividends or similar distributions by that Subsidiary of that Net Income is not at the date of determination permitted without any prior governmental approval (that has not been obtained) or, directly or indirectly, by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Subsidiary or its stockholders; (c) the cumulative effect of a change in accounting principles will be excluded; and (d) non-cash compensation charges or other non-cash expenses or charges arising from the grant of or issuance or repricing of stock, stock options or other equity-based award to directors, officers or employees of the Corporation and DI will be excluded.

“Continuing Directors” means, as of any date of determination, any member of the Board who (a) was a member of such Board on the Series A-1 Issuance Date; or (b) was nominated for election or elected to such Board with the approval of a majority of the Continuing Directors who were members of such Board at the time of such nomination or election.

“Credit Agreement” means that certain Credit Agreement, dated as of the Series A-1 Issuance Date, by and among the DI, DI Finance Sub LLC, the Corporation, the other guarantors party thereto, the lenders party thereto, Goldman Sachs Credit Partners L.P., as Administrative Agent, Collateral Agent, Joint Lead Arranger and Joint Book Runner and Bear, Stearns & Co. Inc. as Joint Lead Arranger and Joint Book Runner and Bear, Stearns Corporate Lending Inc., including any related notes, Guarantees, collateral documents, instruments and agreements executed in connection therewith, and, in each case, as amended, restated, modified, renewed, refunded, replaced (whether upon or after termination or otherwise) or refinanced (including by means of sales of debt securities to institutional investors) in whole or in part from time to time, including any agreement extending the maturity of, refinancing, replacing or otherwise restructuring (including increasing the amount of available borrowings or letters of credit thereunder or adding Subsidiaries of the DI as additional borrowers or guarantors

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thereunder) all or any portion of the Indebtedness under such agreement or any successor or replacement agreement and whether by the same or any other agent, lender or group of lenders.

“Credit Facilities” means, one or more debt facilities, indentures or commercial paper facilities, in each case, with banks or other institutional lenders or a trustee providing for revolving credit loans, term loans, receivables financing (including through the sale of receivables to such lenders or to special purpose entities formed to borrow from such lenders against such receivables) or letters of credit or issuances of notes, in each case, as amended, restated, modified, renewed, refunded, replaced (whether upon or after termination or otherwise), substituted or refinanced (including by means of sales of debt securities to institutional investors) in whole or in part from time to time.

“Designated Noncash Consideration” means the Fair Market Value of noncash consideration received by the Corporation or DI in connection with an Asset Sale that is so designated as Designated Noncash Consideration pursuant to an officers’ certificate, setting for the basis of such valuation, less the amount of cash or Cash Equivalents received in connection with a subsequent sale of such Designated Noncash Consideration.

“Disqualified Stock” means any Capital Stock that, by its terms (or by the terms of any security into which it is convertible, or for which it is exchangeable, in each case, at the option of the holder of the Capital Stock), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at the option of the holder of the Capital Stock, in whole or in part, on or prior to the date that is 91 days after the tenth anniversary of the Series A-1 Issuance Date. Notwithstanding the preceding sentence, any Capital Stock that would constitute Disqualified Stock solely because the holders of the Capital Stock have the right to require the Corporation to repurchase such Capital Stock upon the occurrence of a change of control or an asset sale will not constitute Disqualified Stock if the terms of such Capital Stock provide that the Corporation may not repurchase or redeem any such Capital Stock pursuant to such provisions unless such repurchase or redemption complies with Section 7(a)(i). The amount of Disqualified Stock deemed to be outstanding at any time will be the maximum amount that the Corporation and DI may become obligated to pay upon the maturity of, or pursuant to any mandatory redemption provisions of, such Disqualified Stock, exclusive of accrued dividends.

“Equity Interests” means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock).

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

“Fair Market Value” means the value that would be paid by a willing buyer to an unaffiliated willing seller in a transaction not involving distress or necessity of either party, determined in good faith by the Board.

“GAAP” means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards

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Board or in such other statements by such other entity as have been approved by a significant segment of the accounting profession, which are in effect on the Series A-1 Issuance Date.

“Guarantee” means a guarantee other than by endorsement of negotiable instruments for collection in the ordinary course of business, direct or indirect, in any manner including, without limitation, by way of a pledge of assets or through letters of credit or reimbursement agreements in respect thereof, of all or any part of any Indebtedness (whether arising by virtue of partnership arrangements, or by agreements to keep-well, to purchase assets, goods, securities or services, to take or pay or to maintain financial statement conditions or otherwise).

“Hedging Obligations” means, with respect to any specified Person, the obligations of such Person under (a) interest rate swap agreements (whether from fixed to floating or from floating to fixed), interest rate cap agreements, interest rate collar agreements and other agreements or arrangements designated for the purpose of fixing, hedging or swapping interest rate risk; (b) other agreements or arrangements designed to manage interest rates or interest rate risk; and (c) other agreements or arrangements designed to protect such Person against fluctuations in currency exchange rates or commodity prices.

“Indebtedness” means, with respect to any specified Person, any indebtedness of such Person (excluding accrued expenses and trade payables), whether or not contingent: (a) in respect of borrowed money; (b) evidenced by bonds, notes, debentures or similar instruments or letters of credit (or reimbursement agreements in respect thereof) (other than letters of credit issued in respect of trade payables entered into in the ordinary course); (c) in respect of banker’s acceptances; (d) representing Capital Lease Obligations; (e) representing the balance deferred and unpaid of the purchase price of any property or services due more than six months after such property is acquired or such services are completed; or (f) representing any Hedging Obligations, if and to the extent any of the preceding items (other than letters of credit and Hedging Obligations) would appear as a liability upon a balance sheet of the specified Person prepared in accordance with GAAP. In addition, the term “Indebtedness” includes all Indebtedness of others secured by a Lien on any asset of the specified Person (whether or not such Indebtedness is assumed by the specified Person) and, to the extent not otherwise included, the Guarantee by the specified Person of any Indebtedness of any other Person.

“Indebtedness/EBITDA Ratio” means with respect to the Corporation for any period, the ratio of Indebtedness of the Corporation, DI and the Restricted Subsidiaries at the date of determination to the Consolidated EBITDA of the Corporation for such period.

“Indenture” means that certain Indenture dated as of the Series A-1 Issuance Date by and among, among others, DI, DIV Capital Corporation and The Bank of New York, as trustee (the “Trustee”).

“Investment” means, with respect to any Person, all direct or indirect investments by such Person in other Persons (including Affiliates) in the forms of loans (including Guarantees or other obligations), advances or capital contributions (excluding commission, travel and similar advances to officers and employees made in the ordinary course of business), purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other

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securities, together with all items that are or would be classified as investments on a balance sheet prepared in accordance with GAAP. If the Corporation, DI or any Restricted Subsidiary sells or otherwise disposes of any Equity Interests of DI or any Restricted Subsidiary such that, after giving effect to any such sale or disposition, such Person is no longer a Subsidiary of the Corporation, the Corporation will be deemed to have made the Investment on the date of such sale or disposition equal to the Fair Market Value of the Corporation’s Investments in such Subsidiary that were not sold or disposed of in an amount determined as provided in final paragraph of Section 7(a)(i). The acquisition by the Corporation or any Subsidiary of a Person that holds an Investment in a third Person will be deemed to be an Investment by the Corporation, DI or such Restricted Subsidiary in such third Person in an amount equal to the Fair Market Value of the Investments held by the acquired Person in such third Person in an amount determined as provided in final paragraph of Section 7(a)(i). Except as otherwise provided herein, the amount of an Investment will be determined at the time the Investment is made and without giving effect to subsequent changes in value.

“IPO” means the Corporation’s sale of its Common Stock in a firm commitment, fully underwritten public offering through a nationally recognized investment banking firm and pursuant to a registration statement under the United States Securities Act of 1933, as amended.

“Lien” means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law, including any conditional sale or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell or give a security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction.

“Net Cash Proceeds” means the aggregate cash proceeds received by the Corporation, DI or any of the Restricted Subsidiaries in respect of any Asset Sale (including, without limitation, any cash received upon the sale or other disposition of any non-cash consideration received in any Asset Sale), net of the direct costs relating to such Asset Sale, including, without limitation, legal, accounting and investment banking fees, and sales commissions, and any relocation expenses incurred as a result of the Asset Sale, taxes paid or payable as a result of the Asset Sale, in each case, after taking into account any available tax credits or deductions and any tax sharing arrangements, and amounts required to be applied to the repayment of Indebtedness, secured by a Lien on the asset or assets that were the subject of such Asset Sale and any reserve for adjustment in respect of the sale price of such asset or assets established in accordance with GAAP, including cash escrows in connection with purchase price adjustments, reserves or indemnities (until released).

“Net Income” means, with respect to any specified Person, the net income (loss) of such Person, determined in accordance with GAAP and before any reduction in respect of preferred stock dividends, excluding, however (a) any gain (or loss), together with any related provision for taxes on such gain (or loss), realized in connection with: (1) any Asset Sale (without giving effect to the $1,000,000 threshold provided in the definition thereof); or (2) the disposition of any securities by such Person or any of its Subsidiaries or the extinguishment of any Indebtedness of such Person or any of its Subsidiaries; and (b) any extraordinary gain (or loss), together with any related provision for taxes on such extraordinary gain (or loss).

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“Notes” means 9.5% Senior Subordinated Notes due 2013, of DI and DIV Capital Corporation, issued under the Indenture.

“Obligations” means any principal, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities payable under the documentation governing any Indebtedness.

“Parent” means DIV Holding LLC, a Delaware limited liability company.

“Permitted Business” means any business engaged in by the Corporation, DI or any of the Restricted Subsidiaries on the Series A-1 Issuance Date and any business or other activities that are reasonably similar, ancillary, complementary or related to, or a reasonable extension, development or expansion of, the businesses in which the Corporation, DI and the Restricted Subsidiaries are engaged on the Series A-1 Issuance Date.

“Permitted Holder” means Veritas Capital Management II, L.L.C. or any Affiliate thereof.

“Permitted Indebtedness” means (a) the Indebtedness of the Corporation, DI or any Restricted Subsidiaries under one or more Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (a) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Corporation, DI and the Restricted Subsidiaries thereunder) not to exceed $420,000,000 less the aggregate amount of all Net Cash Proceeds of Asset Sales applied by the Corporation, DI or any Restricted Subsidiary since the Series A-1 Issuance Date to repay any term Indebtedness under a Credit Facility or to repay any revolving credit Indebtedness under a Credit Facility and effect a corresponding commitment reduction thereunder pursuant to Section 7(a)(vi); (b) Indebtedness of DI and the Restricted Subsidiaries represented by the Notes; (c) the incurrence by the Corporation, DI or any Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Corporation, DI or any Restricted Subsidiaries, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (c), not to exceed $10,000,000 at any time outstanding; (d) the incurrence by the Corporation, DI or any Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Certificate of Designations to be incurred under the first paragraph of Section 7(a)(iv) or clauses (b), (c), (d) or (k) of this definition; (e) the incurrence by the Corporation, DI or any of the Restricted Subsidiaries of intercompany Indebtedness between or among the Corporation, DI and any of the Restricted Subsidiaries; provided, however, that any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Corporation, DI or a Restricted Subsidiary and any sale or other transfer of any such Indebtedness to a Person that is not either the Corporation, DI or a Restricted Subsidiary, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Corporation, DI or a Restricted Subsidiary, as the case may be, that was not permitted by this clause (e); (f) the

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issuance by DI or any of the Restricted Subsidiaries to the Corporation or to any of its Restricted Subsidiaries of shares of preferred stock; provided, however, that: (1)  any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Corporation, DI or a Restricted Subsidiary of the Corporation and (2)  any sale or other transfer of any such preferred stock to a Person that is not either the Corporation, DI or a Restricted Subsidiary, will be deemed, in each case, to constitute an issuance of such preferred stock by DI or a Restricted Subsidiary that was not permitted by this clause (f); (g) the incurrence by the Corporation, DI or any of the Restricted Subsidiaries of Hedging Obligations in the ordinary course of business; (h) the guarantee by the Corporation, DI or any Restricted Subsidiary of Indebtedness of the Corporation, DI or a Restricted Subsidiary of DI that was permitted to be incurred by another provision of this definition; (i) the incurrence by the Corporation, DI or any Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, performance, completion and surety bonds, completion guarantees and similar obligations in the ordinary course of business; (j) the incurrence by the Corporation, DI or any Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five business days; (k) the incurrence by the Corporation, DI or a Restricted Subsidiary of Indebtedness arising from agreements of the Corporation, DI or any such Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the sale or other disposition of any business, assets or Capital Stock of the Corporation, DI or any Restricted Subsidiary other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Capital Stock; provided that (1) the maximum aggregate liability in respect of all such Indebtedness shall at no time exceed the gross proceeds, whether or not cash, actually received by the Corporation, DI and the Restricted Subsidiaries in connection with such disposition and (2) such Indebtedness is not reflected in the balance sheet of the Corporation, DI or any Restricted Subsidiary (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (2)); (l) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business; and (m) the incurrence by the Corporation, DI or any of the Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (m), not to exceed $15,000,000.

For purposes of determining compliance with Section 7(a)(iv), in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Indebtedness, or is entitled to be incurred pursuant to the Section 7(a)(iv), the Corporation (in its sole discretion) will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with Section 7(a)(iv). Indebtedness under Credit Facilities outstanding on the Series A-1 Issuance Date will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (a) of the definition of Permitted Indebtedness. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of

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preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Stock or preferred stock in the form of additional shares of the same class of Disqualified Stock or preferred stock will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock or preferred stock for purposes of this covenant. Notwithstanding any other provision of this covenant, the maximum amount of Indebtedness that the Corporation, DI or any Restricted Subsidiary may incur pursuant to this covenant shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values.

The amount of any Indebtedness outstanding as of any date will be (a) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount; (b) the principal amount of the Indebtedness, in the case of any other Indebtedness; and (c) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of: (1) the Fair Market Value of such assets at the date of determination; and (2) the amount of the Indebtedness of the other Person.

“Permitted Investment” means (a) any Investment in the Corporation, DI or a Restricted Subsidiary; (b) any Investment in Cash Equivalents; (c) any Investment by the Corporation, DI or any Restricted Subsidiary of DI in a Person, if as a result of such Investment, (1) such Person becomes a Restricted Subsidiary; or (2) such Person is merged, consolidated or amalgamated with or into, or transfers or conveys substantially all of its assets to, or is liquidated into, the Corporation, DI or a Restricted Subsidiary; (d) any Investment made as a result of the receipt of non-cash consideration from an Asset Sale that was made pursuant to and in compliance with Section 7(a)(vi); (e) any acquisition of assets or Capital Stock solely in exchange for the issuance of Equity Interests (other than Disqualified Stock) of the Corporation; (f) any Investment acquired by the Corporation, DI or any of the Restricted Subsidiaries (1) in exchange for any other Investment or accounts receivable held by the Corporation, DI or any such Restricted Subsidiary in connection with or as a result of a bankruptcy, workout, reorganization or recapitalization of a Person or the good faith settlement of delinquent obligations of a Person, or (2) as a result of a foreclosure by the Corporation, DI or any of the Restricted Subsidiaries with respect to any secured Investment or other transfer of title with respect to any secured Investment in default; (g) Investments represented by Hedging Obligations; (h) loans or advances to employees made in the ordinary course of business of the Corporation, DI or any Restricted Subsidiary in an aggregate principal amount not to exceed $1,000,000 at any one time outstanding; (i) redemption of the Series A-1 Preferred Stock; (j) any Investment of the Corporation, DI or any of the Restricted Subsidiaries existing on the Series A-1 Issuance Date; (k) guarantees otherwise permitted herein; (l) receivables owing to the Corporation, DI or any Restricted Subsidiary, prepaid expenses and deposits, if created,  acquired or entered into in the ordinary course of business; (m) payroll, business-related travel, and similar advances to cover matters that are expected at the time of such advances to be ultimately treated as expenses for accounting purposes and that are made in the ordinary course of business; (n) Investments in joint ventures having an aggregate value (measured on the date such Investment was made and without giving effect to subsequent changes in value), when taken together with all other Investments made pursuant to this clause (n) since the Series A-1 Issuance Date not to exceed $20,000,000; and (o) other Investments in any Person other than an Affiliate of the Corporation having an aggregate Fair Market Value (measured on the date each such Investment was made and without giving effect to subsequent changes in value), when

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taken together with all other Investments made pursuant to this clause (o) that are at the time outstanding, not to exceed $5,000,000.

“Permitted Payments to Parent” means, without duplication as to amounts: (a)  payments to the Parent to permit the Parent to pay reasonable accounting, legal and administrative expenses of the Parent when due, in an aggregate amount not to exceed $750,000 per annum; and (b) for so long as the Corporation is a member of a group filing a consolidated or combined tax return with the Parent, payments to the Parent in respect of an allocable portion of the tax liabilities of such group that is attributable to the Corporation and its Subsidiaries (“Tax Payments”) and to pay franchise or similar taxes and fees of Parent required to maintain Parent’s corporate existence. The Tax Payments shall not exceed the lesser of (i) the amount of the relevant tax (including any penalties and interest) that the Corporation would owe if the Corporation were filing a separate tax return (or a separate consolidated or combined return with its Subsidiaries that are members of the consolidated or combined group), taking into account any carryovers and carrybacks of tax attributes (such as net operating losses) of the Corporation and such Subsidiaries from other taxable years and (ii) the net amount of the relevant tax that the Parent actually owes to the appropriate taxing authority. Any Tax Payments received from the Corporation shall be paid over to the appropriate taxing authority within 60 days of the Parent’s receipt of such Tax Payments or refunded to the Corporation.

“Permitted Refinancing” means any Junior Securities of the Corporation issued in exchange for, or the net proceeds of which are used to renew, refund, replace, defease or discharge other Junior Securities of the Corporation; provided that: (1) the liquidation or face value of such Permitted Refinancing does not exceed the liquidation or face value of the Junior Securities so renewed, refunded, refinanced, replaced, defeased or discharged (plus all accrued interest or dividends thereon and the amount of any reasonably determined premium incurred in connection therewith) and (2) such new Junior Securities are not Disqualified Stock.

“Permitted Refinancing Indebtedness” means (a) any Indebtedness of the Corporation, DI or any of the Restricted Subsidiaries (other than Disqualified Stock) issued in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge other Indebtedness of the Corporation, DI or any of the Restricted Subsidiaries (other than Disqualified Stock and intercompany Indebtedness); provided that: (1) the principal amount (or accreted value, if applicable) of such Permitted Refinancing Indebtedness does not exceed the principal amount (or accreted value, if applicable) of the Indebtedness renewed, refunded, refinanced, replaced, defeased or discharged (plus all accrued interest on the Indebtedness and the amount of all fees and expenses, including premiums, incurred in connection therewith); (2) such Permitted Refinancing Indebtedness has a final maturity date later than the final maturity date of, and has a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of, the Indebtedness being renewed, refunded, refinanced, replaced, defeased or discharged; (3) if the Indebtedness being renewed, refunded, refinanced, replaced, defeased or discharged is subordinated in right of payment to the Notes, such Permitted Refinancing Indebtedness has a final maturity date later than the final maturity date of, and is subordinated in right of payment to, the Notes on terms at least as favorable to the holders of Notes as those contained in the documentation governing the Indebtedness being renewed, refunded, refinanced, replaced, defeased or discharged; and (4) such Indebtedness is incurred either by the Corporation, DI or by any Restricted Subsidiary who

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is the obligor on the Indebtedness being renewed, refunded, refinanced, replaced, defeased or discharged; and (b) Disqualified Stock of the Corporation, DI or any of the Restricted Subsidiaries issued in exchange for, or the net proceeds of which are used to renew, refund, replace, defease or discharge other Indebtedness or Disqualified Stock of the Corporation, DI or any of the Restricted Subsidiaries (other than Indebtedness or Disqualified Stock held by the Corporation, DI or any Restricted Subsidiary including intercompany Indebtedness); provided that: (1) the liquidation or face value of such Permitted Refinancing Indebtedness does not exceed the principal amount (or accreted value, if applicable) of the Indebtedness, or the liquidation or face value of the Disqualified Stock, as applicable, so renewed, refunded, refinanced, replaced, defeased or discharged (plus all accrued interest or dividends thereon and the amount of any reasonably determined premium incurred in connection therewith); (2) such Permitted Refinancing Indebtedness has a final redemption date equal to or later than the final maturity or redemption date of, and has a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of, the Indebtedness or Disqualified Stock being renewed, refunded, refinanced, replaced, defeased or discharged; (3) such Permitted Refinancing Indebtedness has a final redemption date equal to or later than the final maturity date of, and is subordinated in right of payment to, the Notes on terms at least as favorable to the holders of Notes as those contained in the documentation governing the Indebtedness or Disqualified Stock being; and (4) such Disqualified Stock is issued either by the Corporation or by DI who is the issuer of the Indebtedness or Disqualified Stock being renewed, refunded, refinanced, replaced, defeased or discharged.

“Person” means any individual, partnership, firm, trust, corporation, limited liability company or other similar entity. When two or more Persons act as a partnership, limited partnership, syndicate or other group for the purpose of acquiring, holding or disposing of shares of the Corporation, such partnership, limited partnership, syndicate or group shall be deemed a “Person.”

“Related Party” means (a) any controlling stockholder, partner, member, 80% (or more) owned Subsidiary, or immediate family member (in the case of an individual) of a Permitted Holder; or (b) any trust, corporation, partnership, limited liability company or other entity, the beneficiaries, stockholders, partners, members, owners or Persons beneficially holding an 80% or more controlling interest of which consist of any one or more Permitted Holders and/or such other Persons referred to in the immediately preceding clause (a).

“Replacement Assets” means (a) assets that will be used or useful in a Permitted Business, (b) all or substantially all of the assets of a Permitted Business or a majority of Voting Stock of any Person engaged in a Permitted Business that will become on the date of acquisition thereof a Restricted Subsidiary or (c) a Permitted Investment under clause (o) of the definition of Permitted Investment that is otherwise permitted herein.

“Restricted Investment” means an Investment other than a Permitted Investment.

“Restricted Payment” means (a) the declaration or payment of any dividends or any other payment or distribution on account of the Corporation’s, DI’s or any of the Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation involving the Corporation, DI or any of the Restricted Subsidiaries) or to

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or for the benefit of the direct or indirect holders of the Corporation’s, DI’s or any of the Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the Corporation); (b) the purchase, redemption or other acquisition or retirement for value (including, without limitation, in connection with any merger or consolidation involving the Corporation or DI) of any Junior Securities, or any Equity Interests of any direct or indirect parent of the Corporation; (c) any payment on, or the purchase, redemption, defeasance or other acquisition or retirement for value of any Junior Securities (excluding any Junior Securities held by the Corporation, DI and any of the Restricted Subsidiaries), except (i) a payment of interest or principal at the Stated Maturity thereof or (ii) the purchase, repurchase or other acquisition of any such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or final maturity, in each case, due within one year of the date of such purchase, repurchase or other acquisition; or (d) any Restricted Investment.

“Restricted Subsidiary” shall have such meaning as defined in the Indenture as in effect on the Series A-1 Issuance Date; provided that any deliveries required to be delivered to the Trustee under the Indenture or the holder of the Notes in connection with the designation of a Subsidiary as a “Restricted Subsidiary” or an “Unrestricted Subsidiary” shall be delivered to the holders of Series A-1 Preferred Stock.

“Stated Maturity” means, with respect to any installment of interest or principal on any series of Indebtedness, the date on which the payment of interest or principal was scheduled to be paid in the documentation governing such Indebtedness as of the Series A-1 Issuance Date, and will not include any contingent obligations to repay, redeem or repurchase any such interest or principal prior to the date originally scheduled for the payment thereof.

“Subsidiary” means, with respect to any specified Person (a) any corporation, association or other business entity of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency and after giving effect to any voting agreement or stockholders’ agreement that effectively transfers voting power) to vote in the election of directors, managers or trustees of the corporation, association or other business entity is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person (or a combination thereof); and (b) any partnership (i) the sole general partner or the managing general partner of which is such Person or a Subsidiary of such Person or (ii) the only general partners of which are that Person or one or more Subsidiaries of that Person (or any combination thereof).

“Veritas” means The Veritas Capital Fund II, L.P.

“Voting Stock” of any specified Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the Board of Directors of such Person.

“Weighted Average Life to Maturity” means, when applied to any Indebtedness at any date, the number of years obtained by dividing: (a) the sum of the products obtained by multiplying (1) the amount of each then remaining installment, sinking fund, serial maturity or other required payments of principal, including payment at final maturity, in respect of the

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Indebtedness, by (2) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment; by (b) the then outstanding principal amount of such Indebtedness.

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EXHIBIT B

DYNCORP INTERNATIONAL INC.

CERTIFICATE OF DESIGNATIONS OF
SERIES A-2 PREFERRED STOCK

DYNCORP INTERNATIONAL INC. (the “Corporation”), a corporation organized and existing under the General Corporation Law of the State of Delaware (“DGCL”), does hereby certify that, pursuant to authority conferred upon the Board of Directors of the Corporation (the “Board”) by the Corporation’s Articles of Incorporation, and pursuant to Sections 151 of the DGCL, the Board adopted resolutions (i) authorizing a series of the Corporation’s preferred stock, par value $0.01 per share, and (ii) providing for the designations, preferences and relative, participating, optional or other rights, and the qualifications, limitations or restrictions thereof, of 300,000 shares of Series A-2 Preferred Stock of the Corporation, as follows:

RESOLVED, that the Corporation is authorized to issue 300,000 shares of Series A-2 Preferred Stock (the “Series A-2 Preferred Stock”), which shall have the following powers, designations, preferences and other special rights:

1.     Ranking. The Series A-2 Preferred Stock, with respect to dividend distributions and distributions upon a Liquidation Event (as hereinafter defined) shall rank (i) equal to and on a parity with the Series A-1 Preferred Stock of the Corporation (the “Series A-1 Preferred Stock,” and together with the Series A-2 Preferred Stock, the “Series A Preferred Stock”), (ii) senior to all classes of common stock of the Corporation (including the common stock, par value $0.01 per share, of the Corporation (the “Common Stock”)), and (iii) other than the Series A-1 Preferred Stock, to which the Series A-2 Preferred Stock shall rank pari passu, senior to any other class of capital stock or series of preferred stock established after the Series A-2 Issuance Date (as hereinafter defined) by the Corporation. All classes of common stock of the Corporation and any other class of capital stock or series of preferred stock established after the Series A-2 Issuance Date to which the Series A Preferred Stock is senior, are collectively referred to herein as “Junior Securities”.

2.     Dividend Provisions. The holders of shares of Series A-2 Preferred Stock shall be entitled to receive dividends, pro rata among the holders of the Series A-2 Preferred Stock in proportion to the number of shares of Series A-2 Preferred Stock owned by each such holder, prior and in preference to any declaration or payment of any dividend on any Junior Securities, and pari passu with the declaration or payment of any dividend on any Equity Interests of the Corporation that are pari passu with the Series A-2 Preferred Stock as to liquidation, dissolution or winding up (the “Pari Passu Securities”), at the rate of 13.0% of the Series A-2 Liquidation Preference Payment (as hereinafter defined) per annum (adjusted for any subdivisions, combinations, consolidations or stock distributions or stock dividends with respect to such shares). Dividend on the Series A-2 Preferred Stock shall be cumulative, shall compound semi-annually and shall accrue daily from the date that any shares of Series A-2 Preferred Stock are first issued (the “Series A-2 Issuance Date”) until paid.

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3.     Liquidation Preference.

A.In the event of any liquidation, dissolution or winding up of the Corporation or other event described in Section 3(b) hereof (a “Liquidation Event”), whether voluntary or involuntary, the holders of shares of Series A-2 Preferred Stock shall be entitled to receive, prior and in preference to any payment or distribution of any of the assets or surplus funds of the Corporation to the holders of any Junior Securities, by reason of their ownership thereof, an amount per share equal to the sum of (i) $1,000 per share (the “Series A-2 Issuance Price”) and (ii) an amount equal to all accrued and/or declared but unpaid dividends on such share, computed to the date payment thereof is made (together with the Series A-2 Issuance Price, the “Series A-2 Liquidation Preference Payment”). If upon the occurrence of any Liquidation Event, the assets and funds to be distributed among the holders of Series A-2 Preferred Stock shall be insufficient to permit the payment to such holders of the full aforesaid preferential amounts, then the entire assets and funds of the Corporation legally available for distribution shall be distributed pro rata among the holders of Series A-2 Preferred Stock and any Pari Passu Securities, ratably in proportion to the respective amounts that would be payable to such holders if such assets were sufficient to permit payment in full.

B.            For purposes of this Certificate of Designations, a sale, conveyance, transfer, license, lease, abandon or other disposition or transfer of all or substantially all of the assets of the Corporation, in one or more related transactions shall be deemed a Liquidation Event of the Corporation.

C.            In the event the Corporation proposes to distribute assets other than cash in connection with any Liquidation Event, the value of the assets to be distributed to the holder of shares of Series A-2 Preferred Stock, the Pari Passu Securities and the Junior Securities shall be the Fair Value (the “Fair Value”). The Fair Value of any securities not subject to investment letter or similar restrictions on free marketability shall be as follows:

1.             if traded on a securities exchange, the average of the security’s closing prices on such exchange over the thirty (30) day period ending one (1) day prior to the distribution;

2.             if actively traded over-the-counter, the average of the closing bid prices over the thirty (30) day period ending three (3) days prior to the distribution; and

3.             if neither clause (i) nor clause (ii) apply, the Fair Market Value.

The Fair Value of securities subject to investment letter or similar restrictions on free marketability shall be adjusted to make an appropriate discount from the market value determined as above in clauses (i), (ii) or (iii) to reflect the Fair Value thereof. The holders of at least a majority of the outstanding Series A-2 Preferred Stock shall have the right to challenge any determination by the Board of Fair Value (including without limitation, any determination of Fair Market Value) pursuant to this Section 3(c), in which case the determination of Fair Market Value shall be made by an independent appraiser selected jointly by the Board and the challenging parties, the cost of such appraisal to be borne equally by the Corporation and the challenging parties.

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4.     Redemption.

A.            Optional Redemption. Subject to the restrictions set forth in Section 4(d) hereof, at any time and from time to time after the Series A-2 Issuance Date, the Corporation shall have the right to redeem, at the option of the Board, all or any portion (in increments of not less than $5,000,000) of the outstanding shares of Series A-2 Preferred Stock (the “Redemption Date”), in cash, out of any assets of the Corporation legally available therefore, at a price per share equal to the Series A-2 Liquidation Preference Payment plus a premium equal to the percentage of the Series A-2 Issuance Price (the “Redemption Price”) set forth below:

Redemption Occurs On or After	But Prior to	Premium
Series A-2 Issuance Date	Second Anniversary	10.0%
Second Anniversary	Third Anniversary	8.0%
Third Anniversary	Fourth Anniversary	6.0%
Fourth Anniversary	Fifth Anniversary	4.0%
Fifth Anniversary	Sixth Anniversary	2.0%
Sixth Anniversary		0.0%

Notwithstanding the foregoing, in the event that the Corporation consummates an IPO within three (3) years of the Series A-2 Issuance Date and a portion of the IPO proceeds are used to redeem the Series A-2 Preferred Stock in full, the Redemption Price shall be at a price per share equal to the Series A-2 Liquidation Preference Payment plus a premium equal to 3.0% of the Series A-2 Issuance Price.

B.            Mandatory Redemption. On the tenth Anniversary of the Series A-2 Issuance Date, the Corporation shall redeem all, but not less than all, of the shares of the Series A-2 Preferred Stock out of funds legally available therefor, at a price equal to the Series A-2 Liquidation Preference Payment in effect on the date of redemption; provided, that if the Corporation does not have sufficient legally available funds for the redemption of all of the outstanding Series A Preferred Stock at that time, it shall redeem the maximum number of shares of  Series A Preferred Stock that it then has legally available funds to redeem, ratably in accordance with Section 4(c) hereof, and shall thereafter redeem the remainder of the Series A Preferred Stock as soon as it has sufficient legally available funds to do so, ratably in accordance with Section 4(c) hereof.

C.            Mechanics of Redemption. At least 5 business days but not more than 60 days prior to the Redemption Date, written notice (the “Redemption Notice”) shall be given by the Corporation by mail, postage prepaid, or by facsimile or email transmission, to each holder of record (at the close of business on the business day next preceding the day on which the Redemption Notice is given) of shares of Series A-2 Preferred Stock notifying such holder of the redemption and specifying the Redemption Price, the Redemption Date and the place where said Redemption Price shall be payable. The Redemption Notice shall be addressed to each holder at its address as shown by the records of the Corporation. From and after the close of business on the Redemption Date, all rights of holders of such shares of Series A-2 Preferred Stock subject to redemption (except the right to receive the Redemption Price) shall cease with respect to such shares, and such shares shall not thereafter be transferred on the books of the Corporation or be deemed to be outstanding for any purpose whatsoever; provided, however, that if the

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Redemption Price is not paid in full on the Redemption Date, then all of the rights of holders of the Series A-2 Preferred Stock provided herein shall be reinstated in full until such time as the Redemption Price is paid in full. Any shares of Series A-2 Preferred Stock redeemed pursuant to this Section 4 or otherwise acquired by the Corporation in any manner whatsoever shall be canceled and shall not under any circumstances be reissued; and the Corporation may from time to time take such appropriate corporate action as may be necessary to reduce accordingly the number of authorized shares of Series A-2 Preferred Stock; and the shares of Series A-2 Preferred Stock not redeemed, if any, shall remain outstanding and shall be entitled to all rights and preferences provided herein. Any redemption of the Series A Preferred Stock pursuant to Section 4(a) or Section 4(b) hereof, and pursuant to Section 4(a) or Section 4(b) of the Certificate of Designations for the Series A-1 Preferred Stock, shall be allocated to all Series A Preferred Stock at the time outstanding in proportion to the respective outstanding Series A-2 Liquidation Preference Payment and Series A-1 Liquidation Preference Payment (as such term is defined in the Certificate of Designations for Series A-1 Preferred Stock) thereof. The Corporation will not redeem or otherwise acquire any shares of Series A-1 Preferred Stock unless the Corporation concurrently redeems or acquires a pro rata amount of the Series A-2 Preferred Stock on the same terms.

D.            Restrictions on Redemptions. No shares of Series A-2 Preferred Stock shall be redeemed in whole or in part under Section 4 hereof at any time that such redemption is prohibited by the DGCL.

5.     Offer to Purchase.

A.            Promptly after the occurrence of a Change of Control (as hereinafter defined) (the date of such occurrence being the “Offer Date”), the Corporation shall commence (or cause to be commenced) an offer to purchase for cash all outstanding shares of Series A-2 Preferred Stock pursuant to the terms described in Section 5(b) below (the “Offer”) at a purchase price per share equal to the applicable Redemption Price, and shall purchase (or cause the purchase of) any shares of Series A-2 Preferred Stock tendered in the Offer pursuant to the terms hereof.

B.            Within 5 days following the date on which a Change in Control has occurred, the Corporation shall send, by first-class mail, postage prepaid, a notice to each holder of Series A-2 Preferred Stock. Such notice shall contain all instructions and materials necessary to enable such holders to tender Series A-2 Preferred Stock pursuant to the Offer. Such notice shall state:

1.             that a Change of Control has occurred;

2.             the Redemption Price and the purchase date (which must be no earlier than 30 days nor later than 60 days from the date such notice is mailed, other than as may be required by law) (the “Payment Date”);

3.             that any shares of Series A-2 Preferred Stock not tendered will remain outstanding and shall be entitled to all rights and preference provided herein;

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4.             that, unless the Corporation defaults in making payment therefor, any share of Series A-2 Preferred Stock accepted for payment pursuant to the Offer shall cease to accrue dividends after the Payment Date;

5.             that holders electing to have any share of Series A-2 Preferred Stock purchased pursuant to the Offer will be required to surrender stock certificates representing such shares of Series A-2 Preferred Stock, properly endorsed for transfer, together with such other customary documents as the Corporation may reasonably request at the address specified in the notice prior to the close of business on the business day prior to the Payment Date; and

6.             that holders who tender only a portion of the shares of Series A-2 Preferred Stock represented by a certificate delivered will, upon purchase of the shares tendered, be issued a new certificate representing the unpurchased shares of Series A-2 Preferred Stock.

C.            The Corporation will comply with any tender offer rules under the Exchange Act, which then may be applicable in connection with any offer made by the Corporation to repurchase the shares of Series A-2 Preferred Stock as a result of a Change of Control. To the extent that the provisions of any securities laws or regulations conflict with provisions of this Certificate of Designations, the Corporation shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligation under this Certificate of Designations by virtue thereof.

D.            On the Payment Date, the Corporation shall (i) accept for payment the shares of Series A-2 Preferred Stock validly tendered pursuant to the Offer, (ii) pay to the holders of shares so accepted the purchase price therefor in cash and (iii) cancel each surrendered certificate and retire the shares represented thereby that were validly tendered pursuant to the Offer. Unless the Corporation defaults in the payment for the shares of Series A-2 Preferred Stock tendered pursuant to the Offer, as of the Payment Date dividends will cease to accrue with respect to the shares of Series A-2 Preferred Stock tendered and all rights of holders of such tendered shares will terminate, except for the right to receive payment therefor on the Payment Date.

E.             The holder of a share of Series A-2 Preferred Stock shall deliver, prior to the close of business on the fifth business day prior to the Payment Date, written notice to the Corporation (or an agent designated by the Corporation for such purpose) whether such holder accepts or rejects such Offer. The failure of a holder of Series A-2 Preferred Stock to respond to such Offer shall be deemed to constitute an acceptance of such Offer by such holder.

6.     Voting Rights. Except as specifically set forth herein or in the DGCL, the holders of shares of Series A-2 Preferred Stock shall not be entitled to any voting rights with respect to any matters voted upon by stockholders of the Corporation. To the extent that the holders of shares of Series A-2 Preferred Stock shall be entitled, by reason of the terms hereof or the DGCL, to any voting rights with respect to any matters to be voted upon by any class or group of stockholders of the Corporation, the holders of shares of Series A-2 Preferred Stock shall be entitled to the number of votes per share of Series A-2 Preferred Stock equal to the number of votes per share of the Common Stock of the Corporation at the record date for

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determination of the stockholders entitled to vote on such matters, or, if no such record date is established, at the date such vote is taken or any written consent of stockholders is solicited, such votes to be counted together with all other shares of stock of the Corporation having general voting power and not counted separately as a class, unless otherwise required by the express provisions hereof or by applicable law.

7.     Protective Provisions.

A.            The Corporation shall not, and shall not permit DynCorp International LLC (“DI”) or any of the Restricted Subsidiaries to, without the affirmative vote or written consent of the holders of a majority of the then outstanding shares of Series A-2 Preferred Stock, voting or consenting as a separate class:

1.             Make any Restricted Payment. Notwithstanding anything to the contrary set forth herein, the foregoing provisions of Section 7(a)(i) will not require the vote or consent of any holders of the outstanding shares of Series A-2 Preferred Stock for:

(a)           the repurchase, redemption, defeasance or other acquisition or retirement for value of Junior Securities with the net cash proceeds from a substantially concurrent incurrence of Permitted Refinancing;

(b)           so long as no Non-Compliance Event has occurred and is continuing or would be caused thereby, the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Corporation, DI or any Restricted Subsidiary held by any current or former officer, director, consultant or employee of the Corporation, DI or any of the Restricted Subsidiaries, and any dividend payment or other distribution by the Corporation, DI or a Restricted Subsidiary to a direct or indirect parent holding company of the Corporation utilized for the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of such direct or indirect parent holding company held by any current or former officer, director, employee or consultant of the Corporation, DI or any Restricted Subsidiaries or in each case, to the extent applicable, their respective estates, spouses, former spouses or family members, in each case, pursuant to any equity subscription agreement, stock option agreement, shareholders’ agreement or similar agreement or benefit plan of any kind; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $1,000,000 in any calendar year period (with unused amounts in any immediately preceding calendar year being carried over to the succeeding calendar year subject to a maximum carry-over amount of $2,000,000 in any calendar year); provided further that such amount in any calendar year may be increased by an amount not to exceed:

(i)            the cash proceeds from the sale of Equity Interests of the Corporation and, to the extent contributed to the Corporation as common equity capital, Equity Interests of any of the Corporation’s direct or indirect parent entities, in each case to members of management, directors or consultants of the Corporation, any of its Subsidiaries or any of its direct or indirect parent entities that occurs after the Series A-2 Issuance Date, plus

(ii)           the cash proceeds of key man life insurance policies received by the Corporation and its Subsidiaries after the Series A-2 Issuance Date, less

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(iii)          the amount of any Restricted Payments previously made pursuant to clauses (1) and (2) of this clause (B);

(c)           the repurchase of Equity Interests deemed to occur upon the exercise of stock options or warrants to the extent such Equity Interests represent a portion of the exercise price of those stock options or warrants;

(d)           Permitted Payments to Parent; and

(e)           so long as no Non-Compliance Event has occurred and is continuing or would be caused thereby, other Restricted Payments in an aggregate amount not to exceed $15,000,000 since the Series A-2 Issuance Date.

The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Corporation or DI, as the case may be, pursuant to the Restricted Payment. The Fair Market Value of any assets or securities that are required to be valued by this covenant will be determined by the Board whose resolution with respect thereto will be delivered to each holder of Series A-2 Preferred Stock. The Board’s determination must be based upon an opinion or appraisal issued by an accounting, appraisal or investment banking firm of national standing if the Fair Market Value of any Restricted Payment or series of related Restricted Payments exceeds $15,000,000.

2.             Engage in any reclassification, recapitalization or other change in respect of any shares of capital stock of the Corporation or DI.

3.             Amend, alter, change, repeal or waive any provision of its Certificate of Incorporation (whether by way of a Certificate of Designations or otherwise) or Limited Liability Company Agreement, as applicable, or this Certificate of Designations or its respective By-laws in any manner (whether by merger, consolidation or otherwise) that would adversely affect the rights, preferences or privileges of the Series A-2 Preferred Stock, including without limitation, increasing the rights, preferences or privileges of the Series A-1 Preferred Stock relative to the rights, preferences or privileges of the Series A-2 Preferred Stock;

4.             Create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt) and no Restricted Subsidiary will issue any shares of preferred stock (other than preferred stock that does not pay cash dividends, and is not redeemable while shares of Series A-2 Preferred Stock are outstanding); provided, however, the Corporation, DI and the Restricted Subsidiaries may incur Indebtedness (including Acquired Debt), and with respect to Restricted Subsidiaries, issue preferred stock, if the Indebtedness/EBITDA Ratio for the Corporation, for the most recently ended period of four fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may be, would have been less than 7.5 to 1.0, determined on a pro forma basis (including pro forma application of the net proceeds therefrom), as if such additional Indebtedness had been incurred or such preferred stock issued, as the case may be at the beginning of such four-quarter

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period; provided, further, however, that the provisions of this Section 7(a)(iv) shall not require the vote or consent of any holders of the outstanding shares of any Series A-2 Preferred Stock for the incurrence by the Corporation, DI or Restricted Subsidiaries of Permitted Indebtedness and/or Permitted Refinancing Indebtedness.

5.             Permit a Change of Control, unless the Corporation consummates the offer to repurchase obligations of the Corporation pursuant to Section 5 hereof in connection therewith.

6.             Enter into or consummate any Asset Sale unless (A) the Corporation, DI or any Restricted Subsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value of the assets or Equity Interests issued or sold or otherwise disposed of, (B) at least 75% of the consideration received by the Corporation , DI or such Restricted Subsidiary is in the form of cash or Cash Equivalents, and (C) to the extent that not all of the Net Cash Proceeds from such Asset Sale are applied by the Corporation, DI or the applicable Restricted Subsidiary, as the case may be, within 365 days following the receipt of such Net Cash Proceeds, to the extent the Corporation, DI or the applicable Restricted Subsidiary, as the case may be, elects, (1) to repay Indebtedness (and, if such Indebtedness repaid is revolving credit Indebtedness, to correspondingly reduce commitments with respect thereto), (2) to acquire (including by way of merger or consolidation) all or substantially all of the assets of, or a majority of the voting securities of, another Permitted Business, (3) to make capital expenditures, or (4) to acquire other assets that are not classified as current assets under GAAP and that are used or useful in a Permitted Business, the amount of Net Cash Proceeds not so applied (the “Excess Proceeds”) shall, in the case of Excess Proceeds realized by the Corporation, be used by the Corporation to redeem the outstanding shares of the Series A-2 Preferred Stock in accordance with the procedures set forth in Section 4 and, in the case of Excess Proceeds realized by DI or a Restricted Subsidiary, such Excess Proceeds shall be provided to the Corporation by DI or the applicable Restricted Subsidiary, as the case may be, by way of payment of dividends to, or the making of loans to, any direct or indirect parent in order to permit the Corporation to effectuate such redemption by the Corporation; provided, however, that if any Excess Proceeds remain after consummation of the redemption of all of the outstanding shares of the Series A-2 Preferred Stock, the Corporation may use such Excess Proceeds for any purpose not otherwise prohibited by the terms of this Certificate of Designations.

For the purposes of Section 7(a)(vi), the following shall be deemed to be cash:  (A) the amount of any liabilities, as shown on the Corporation’s most recent balance sheet or in the notes thereto, of the Corporation, DI or any Restricted Subsidiary that are assumed by the transferee of any such assets; (B) Replacement Assets; (C) any securities, notes or other obligations received by the Corporation, DI or any such Restricted Subsidiary from such transferee that are, within 180 days of the Asset Sale, converted by the Corporation, DI or such Restricted Subsidiary into cash or Cash Equivalents (to the extent of the cash or Cash Equivalents received in that conversion); (D) property received as consideration for such Asset Sale that would otherwise constitute a permitted application of Net Cash Proceeds (or other cash in such amount) under Section 7(a)(vi)(C)(2) or (4) above; and (E) any Designated Noncash Consideration received by the Corporation, DI or any Restricted Subsidiary in such Asset Sale having a Fair Market Value, taken together with all other Designated Noncash Consideration

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received pursuant to this clause (E) that is at that time outstanding, not to exceed $2,500,000 at the time of receipt of such Designated Noncash Consideration, with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received without giving effect to subsequent changes in value.

7.             Make any payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction, contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate of the Corporation (each, an “Affiliate Transaction”), unless: (A)  the Affiliate Transaction is on terms that are no less favorable to the Corporation, DI or the relevant Restricted Subsidiary (as applicable) than those that would have been obtained in a comparable transaction by the Corporation, DI or such Restricted Subsidiary (as applicable) with a Person that is not an Affiliate; and (B) the Corporation delivers to each holder of Series A-2 Preferred Stock: (1) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $1,000,000, a resolution of the Board set forth in an officers’ certificate certifying that such Affiliate Transaction complies with this covenant and that such Affiliate Transaction has been approved by a majority of the disinterested members of the Board; and (2) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $15,000,000 (other than transactions with Affiliates in connection with joint venture, joint bidding, joint marketing or other similar arrangements), an opinion as to the fairness to the Corporation or DI of such Affiliate Transaction from a financial point of view issued by an accounting, appraisal or investment banking firm of national standing.

Notwithstanding the foregoing, the following items will not be deemed to be Affiliate Transactions and, therefore, will not be subject to the provisions of the prior paragraph:

(a)           any consulting or employment agreement, employee benefit plan, officer or director indemnification agreement or any similar arrangement entered into by the Corporation, DI or any of the Restricted Subsidiaries with any director or officer in the ordinary course of business and payments pursuant thereto;

(b)           transactions between or among the Corporation, DI and/or its Subsidiaries;

(c)           transactions with a Person (other than a Subsidiary of DI that is not a Restricted Subsidiary) that is an Affiliate of the Corporation solely because the Corporation owns, directly or through a Subsidiary, an Equity Interest in, or controls, such Person;

(d)           payment of reasonable directors’ fees to Persons who are not otherwise Affiliates of the Corporation;

(e)           any issuance of Equity Interests (other than Disqualified Stock) of the Corporation to Affiliates of the Corporation;

(f)            Restricted Payments that do not violate the provisions of Section 7(a)(i);

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(g)           payment of management fees not in excess of $300,000 per annum to the Permitted Holder;

(h)           loans or advances to employees in the ordinary course of business not to exceed $1,000,000 in the aggregate at any one time outstanding;

(i)            Permitted Parent Payments; and

(j)            transactions with a joint venture engaged in a Permitted Business; provided that all the outstanding ownership interests of such joint venture are owned only by the Corporation, its Restricted Subsidiaries and Persons that are not Affiliates of the Corporation.

8.             Engage in any business other than Permitted Businesses, except to such extent as would not be material to the Corporation, DI and the Restricted Subsidiaries taken as a whole.

9.             Issue or create any Disqualified Stock or any other equity security or interest which ranks pari passu with or has priority over the Series A-2 Preferred Stock as to dividends, liquidation rights or otherwise or is in any way senior in right of payment to the Series A-2 Preferred Stock, other than the Series A-1 Preferred Stock issued on the Series A-2 Issuance Date, which shall rank pari passu with the Series A-2 Preferred Stock.

10.           Directly or indirectly (and applicable only to the Corporation): (a) consolidate or merge with or into another Person (whether or not the Corporation is the surviving corporation); or (b) sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of the properties or assets of the Corporation, DI and the Restricted Subsidiaries, taken as a whole, in one or more related transactions, to another Person, unless:

(a)           either: (1) the Corporation is the surviving corporation; or (2) the Person formed by or surviving any such consolidation or merger (if other than the Corporation) or to which such sale, assignment, transfer, conveyance or other disposition has been made is an entity organized or existing under the laws of the United States, any state of the United States or the District of Columbia;

(b)           the Person formed by or surviving any such consolidation or merger (if other than the Corporation) or the Person to which such sale, assignment, transfer, conveyance or other disposition has been made assumes all the obligations of the Corporation under this Certificate of Designations;

(c)           immediately after such transaction, a Non-Compliance Event does not exist (other than a Non-Compliance Event as a result of non-compliance with Section 7(a)(iv) in which case Section 7(a)(x)(D) shall apply); and

(d)           the Corporation or the Person formed by or surviving any such consolidation or merger (if other than the Corporation), or to which such sale, assignment, transfer, conveyance or other disposition has been made would, on the date of such transaction after giving pro forma effect thereto and any related financing transactions as if the same had

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occurred at the beginning of the applicable four-quarter period have an Indebtedness/EBITDA Ratio that is not greater than 7.5 to 1.0.

This restrictions set forth in this paragraph will not apply to a merger of the Corporation with an Affiliate solely for the purpose of reincorporating the Corporation in another jurisdiction within the United States. The restrictions set forth in clauses (c) and (d) of this paragraph will not apply to any consolidation or merger, or any sale, assignment, transfer, conveyance, lease or other disposition of assets between or among the Corporation and the Restricted Subsidiaries.

11.           Enter into any contract, agreement, commitment or understanding with respect to any of the foregoing clauses (i) through (x).

8.     Non-Compliance Event. A “Non-Compliance Event” shall occur if (i) the Corporation fails to comply with any of its obligations set forth in Section 7 or (ii) if Veritas sells or transfers to any Person, other than an Affiliate, any of the shares of Parent held by it (or if any such Affiliate sells or transfers to any Person, other than an Affiliate of Veritas, any shares of Parent sold or transferred to it by Veritas), and shall continue until the Corporation or Permitted Holder cures the event or circumstances giving rise to such non-compliance. If a Non-Compliance Event shall occur and be continuing, the dividend rate as referenced in Section 2 shall increase to 15% of the Series A-2 Liquidation Preference Payment per annum; provided, that upon the cure or waiver of such Non-Compliance Event, the dividend rate as referenced in Section 2 shall revert to 13% of the Series A-2 Liquidation Preference Payment per annum.

9.     Severability of Provisions. Whenever possible, each provision of this Certificate of Designations shall be interpreted in a manner as to be effective and valid under applicable law, but if any provision hereof is held to be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating or otherwise adversely affecting the remaining provisions hereof. If a court of competent jurisdiction should determine that a provision hereof would be valid or enforceable if a period of time were extended or shortened or a particular percentage were increased or decreased, then such court may make such change as shall be necessary to render the provision in question effective and valid under applicable law.

10.   Amendment, Waiver or Discharge. Except as otherwise expressly provided herein, neither this Certificate of Designations nor any term hereof may be amended, waived, modified, discharged or terminated without the written consent or affirmative vote of the holders of a majority of the outstanding shares of Series A-2 Preferred Stock. Notwithstanding anything to the contrary contained herein, no provision of this Certificate of Designations that applies to any person or entity specifically designated by name shall be amended, waived, discharged or terminated without the written consent of such named person or entity.

11.   Information and Access Rights.

A.            Information Rights. Each holder of Series A-2 Preferred Stock that, together with its Affiliates, holds an aggregate number of shares of Series A-2 Preferred Stock with an aggregate Series A-2 Issuance Price at such time that is greater than $5,000,000 will

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have the right to receive (i) within fifteen (15) days after they are or would have been required to be contained in a filing with the Commission, all quarterly and annual financial information that would be required to be contained in a filing with the Commission on Forms 10-Q and 10-K if the Corporation were required to file such Forms, including a “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and, with respect to the annual information only, a report on the annual financial statements by the Corporation’s certified independent accountants; (ii) within five (5) days after they are or would have been required to be contained in a filing with the Commission, all current reports that would be required to be filed with the Commission on Form 8-K if the Corporation were required to file such reports; (iii) the annual consolidated business plan of the Corporation and its Subsidiaries, and (iv) notice of any event of default on any Indebtedness in the aggregate amount exceeding $15,000,000, subject to the acknowledgment in writing by each such holder of Series A-2 Preferred Stock that the Corporation and/or any of its Subsidiaries may be reporting companies under the Exchange Act, and subject to the execution by each such holder of Series A-2 Preferred Stock of a confidentiality and nondisclosure agreement, in form and substance reasonably acceptable to the Corporation and its counsel. So long as all or substantially all of the assets of the Corporation are comprised of DI and its Subsidiaries, the information required to be delivered by the Corporation pursuant to clauses (a) and (b) of this Section 11 may, at the election of the Corporation, be satisfied by delivering such information with respect to DI and its Subsidiaries; provided, that if DI files any of the documents listed in clause (i) of this Section 11(a) with the Commission, the delivery requirement under clause (i) shall be satisfied by such filing.

B.            Access Rights. Each holder of Series A-2 Preferred Stock that, together with its Affiliates, holds an aggregate number of shares of Series A-2 Preferred Stock with an aggregate Series A-2 Issuance Price at such time that is greater than $5,000,000 will have reasonable access, during normal business hours, to the facilities, records and personnel (including outside accountants) of the Corporation and its Subsidiaries to the extent that the same reasonably relates to such holder’s interest in the Corporation, subject to reasonable prior written notice delivered to the Corporation and subject to execution by each such holder of Series A-2 Preferred Stock of a confidentiality and nondisclosure agreement in the form agreed to prior to the date hereof. The Corporation shall be entitled to designate one or more representatives of the Corporation to be present during all such periods of access.

12.   Transfer of Series A-2 Preferred Stock. The Corporation shall not place any restrictions on the transferability of the Series A-2 Preferred Stock, and each holder of the Series A-2 Preferred Stock may assign or otherwise transfer some or all of the Series A-2 Preferred Stock and the accompanying rights hereunder held by such holder without the consent of the Corporation; provided that such assignment is in compliance with the applicable securities laws.

13.   Definitions. For purposes of this Certificate of Designations, the following terms shall have the following meanings:

“Acquired Debt” means, with respect to any specified Person: (a) Indebtedness of any other Person existing at the time such other Person is merged with or into or became a Restricted Subsidiary of such specified Person, whether or not such Indebtedness is incurred in connection with, or in contemplation of, such other Person merging with or into, or becoming a

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Subsidiary of, such specified Person; and (b) Indebtedness secured by a Lien encumbering any asset acquired by such specified Person.

“Affiliate” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, “control,” as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise; provided that beneficial ownership of 10% or more of the Voting Stock of a Person will be deemed to be control. For purposes of this definition, the terms “controlling,” “controlled by” and “under common control with” have correlative meanings.

“Anniversary” means an anniversary of the Series A-2 Issuance Date.

“Asset Sale” means (1) the sale, lease, conveyance or other disposition of any assets or rights and (2) the issuance of Equity Interests in any of the Restricted Subsidiaries (other than directors’ qualifying Equity Interests or Equity Interests required by applicable law to be held by a Person other than the Corporation or a Restricted Subsidiary). Notwithstanding the preceding, none of the following items will be deemed to be an Asset Sale:  (a) any single transaction or series of related transactions that involves assets having a Fair Market Value of less than $1,000,000; (b) a transfer of assets between or among the Corporation, DI and the Restricted Subsidiaries; (c) an issuance of Equity Interests by DI or a Restricted Subsidiary to the Corporation, DI or to a Restricted Subsidiary; (d) the licensing of intellectual property or other general intangibles to third persons on customary terms as determined by the Board in good faith and the ordinary course of business; (e) the sale or disposition of any property or equipment that has become damaged, worn-out or obsolete, in the ordinary course of business; (f) to the extent allowable under Section 1031 of the Internal Revenue Code of 1986, any exchange of like property for use in a Permitted Business; (g) the sale or other disposition of cash or Cash Equivalents at Fair Market Value; (h) a Restricted Payment that is permitted by Section 7(a)(i) or a Permitted Investment; and (i) the sale, lease, sub-lease, license, sub-license, consignment, conveyance or other disposition of equipment, inventory or other assets in the ordinary course of business, including leases with a duration of no greater than 24 months with respect to facilities that are temporarily not in use or pending their disposition, or accounts receivable in connection with the compromise, settlement or collection thereof.

“Attributable Debt” in respect of a sale and leaseback transaction means, at the time of determination, the present value of the obligation of the lessee for net rental payments during the remaining term of the lease included in such sale and leaseback transaction including any period for which such lease has been extended or may, at the option of the lessor, be extended. Such present value shall be calculated using a discount rate equal to the rate of interest implicit in such transaction, determined in accordance with GAAP.

“Beneficial Owner” has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial ownership of any particular “person” (as that term is used in Section 13(d)(3) of the Exchange Act), such “person” will be deemed to have beneficial ownership of all securities that such “person” has the right to acquire by conversion or exercise of other securities, whether such right is currently exercisable

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or is exercisable only after the passage of time. The terms “Beneficially Owns” and “Beneficially Owned” have a corresponding meaning.

“Capital Lease Obligation” means, at the time any determination is to be made, the amount of the liability in respect of a capital lease that would at that time be required to be capitalized on a balance sheet prepared in accordance with GAAP, and the Stated Maturity thereof shall be the date of the last payment of rent or any other amount due under such lease prior to the first date upon which such lease may be prepaid by the lessee without payment of a penalty.

“Capital Stock” means (a) in the case of a corporation, corporate stock; (b) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock; (c) in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited); and (d) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person.

“Cash Equivalents” means (a) United States dollars; (b) securities issued or directly and fully guaranteed or insured by the United States government or any agency or instrumentality of the United States government (provided that the full faith and credit of the United States is pledged in support of those securities) having maturities of not more than 360 days from the date of acquisition; (c) certificates of deposit and eurodollar time deposits with maturities of six months or less from the date of acquisition, bankers’ acceptances with maturities not exceeding six months and overnight bank deposits, in each case, with any lender party to the Credit Agreement or with any domestic commercial bank having capital and surplus in excess of $500,000,000 and a Thomson Bank Watch Rating of “B” or better at the time of acquisition; (d) repurchase obligations for underlying securities of the types described in clauses (b) and (c) above entered into with any financial institution meeting the qualifications specified in clause (c) above; (e) commercial paper having at the time of acquisition one of the two highest ratings obtainable from Moody’s Investors Service, Inc. or Standard & Poor’s Rating Service and, in each case, maturing within nine months after the date of acquisition; (f) securities issued by any state of the United States of America or any political subdivision of any such state or any public instrumentality thereof maturing within one year from the date of acquisition thereof and at the time of acquisition thereof, having one of the two highest ratings obtainable from either Standard & Poor’s Rating Services or Moody’s Investors Service, Inc.; (g) money market funds at least 95% of the assets of which constitute Cash Equivalents of the kinds described in clauses (a) through (f) of this definition; and (h) local currencies held by the Corporation and DI, from time to time in the ordinary course of business and consistent with past practice.

“Change of Control” means the occurrence of any of the following: (a) the direct or indirect sale, lease, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the properties or assets of the Corporation and its Subsidiaries taken as a whole to any “person” (as that term is used in Section 13(d) of the Exchange Act) other than a Permitted Holder; (b) the adoption of a plan relating to the liquidation or dissolution of the Corporation; (c) the consummation of any transaction (including, without limitation, any merger or consolidation), the result of which is that any “person” (as defined above), other than a Permitted Holder or a

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Related Party of a Permitted Holder, becomes the Beneficial Owner, directly or indirectly, of more than 50% of the Voting Stock of the Corporation, measured by voting power rather than number of shares; (d) after an IPO of the Corporation or any direct or indirect parent of the Corporation, the first day on which a majority of the members of the Board are not Continuing Directors; or (e) the first day on which the Corporation ceases to own 100% of the outstanding Equity Interests of DI.

“Commission” means the Securities and Exchange Commission.

“Consolidated EBITDA” of any Person for any period, means the Consolidated Net Income of such Person and its Subsidiaries for such period plus, without duplication and to the extent deducted in the calculation of such Consolidated Net Income for such period, the sum of (a) income tax expense (including franchise, value added and similar taxes), (b) interest expense of such Person and its Subsidiaries whether paid or accrued and whether or not capitalized (including, without limitation, noncash interest payments, the interest component of any deferred payment obligations, the interest component of all payments associated with Capital Lease Obligations, imputed interest with respect to Attributable Debt, and net of the effect of all payments made or received (if any) pursuant to Hedging Obligations), amortization or write-off of debt discount and debt issuance costs and commissions, discounts and other fees and charges associated with Indebtedness, (c) depreciation and amortization expenses, (d) amortization of intangibles (including, but not limited to, goodwill) and organization costs, (e) any extraordinary, unusual or non-recurring expenses or losses (including, whether or not otherwise includable as a separate item in the statement of such Consolidated Net Income for such period, losses on sales of assets outside of the ordinary course of business) and (f) any other non-cash charges (including non-cash expenses for grants of options), non-recurring salary and benefit expenses and headcount reductions,minus, without duplication and to the extent included in the calculation of such Consolidated Net Income for such period, the sum of (A) interest income (except to the extent deducted in determining such Consolidated Net Income), (B) any extraordinary, unusual or non-recurring income or gains (including, whether or not otherwise includable as a separate item in the statement of such Consolidated Net Income for such period, gains on the sales of assets outside of the ordinary course of business), (C) any other non-cash income (other than the accrual of revenue in the ordinary course of business) and (D) any cash payments made during such period reducing reserves or liabilities for accruals made in any prior fiscal quarter but only to the extent such reserves or accruals were included in the determination of Consolidated EBITDA for such prior fiscal quarter, all as determined on a consolidated basis; provided that for purposes of calculating Consolidated EBITDA of the Corporation and its Subsidiaries for any period, (i) the Consolidated EBITDA of any Person acquired by the Corporation or its Subsidiaries during such period shall be included on a pro forma basis (including adjustments for non-recurring items) for such period (assuming the consummation of such acquisition and the incurrence or assumption of any Indebtedness in connection therewith occurred on the first day of such period) if the consolidated balance sheet of such acquired Person and its consolidated Subsidiaries as at the end of the period preceding the acquisition of such Person and the related consolidated statements of income and stockholders’ equity and of cash flows for the period in respect of which Consolidated EBITDA is to be calculated (x) have been previously provided to the holders of the Series A-2 Preferred Stock and (y) either (1) have been reported on without a qualification arising out of the scope of the audit by independent certified public accountants of nationally recognized standing or (2) have been found reasonably

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acceptable by the holders of at least a majority of the outstanding shares of Series A-2 Preferred Stock; and (ii) the Consolidated EBITDA of any Person disposed of by the Corporation or its Subsidiaries during such period shall be excluded for such period (assuming the consummation of such disposition and the repayment of any Indebtedness in connection therewith occurred on the first day of such period); provided, further, that for purposes of calculating the Consolidated EBITDA of the Corporation and its Subsidiaries for any period, only the Consolidated EBITDA of the Corporation, DI and the Restricted Subsidiaries shall be included for such period.

“Consolidated Net Income” means, with respect to any specified Person for any period, the aggregate of the Net Income of such Person and its Subsidiaries for such period, on a consolidated basis, determined in accordance with GAAP; provided that: (a) the Net Income (but not loss) of any Person that is not a Subsidiary or that is accounted for by the equity method of accounting will be included only to the extent of the amount of dividends or similar distributions paid in cash to the specified Person or a Subsidiary of the Person; (b) the Net Income of any Subsidiary will be excluded to the extent that the declaration or payment of dividends or similar distributions by that Subsidiary of that Net Income is not at the date of determination permitted without any prior governmental approval (that has not been obtained) or, directly or indirectly, by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Subsidiary or its stockholders; (c) the cumulative effect of a change in accounting principles will be excluded; and (d) non-cash compensation charges or other non-cash expenses or charges arising from the grant of or issuance or repricing of stock, stock options or other equity-based award to directors, officers or employees of the Corporation and DI will be excluded.

“Continuing Directors” means, as of any date of determination, any member of the Board who (a) was a member of such Board on the Series A-2 Issuance Date; or (b) was nominated for election or elected to such Board with the approval of a majority of the Continuing Directors who were members of such Board at the time of such nomination or election.

“Credit Agreement” means that certain Credit Agreement, dated as of the Series A-2 Issuance Date, by and among the DI, DI Finance Sub LLC, the Corporation, the other guarantors party thereto, the lenders party thereto, Goldman Sachs Credit Partners L.P., as Administrative Agent, Collateral Agent, Joint Lead Arranger and Joint Book Runner and Bear, Stearns & Co. Inc. as Joint Lead Arranger and Joint Book Runner and Bear, Stearns Corporate Lending Inc., including any related notes, Guarantees, collateral documents, instruments and agreements executed in connection therewith, and, in each case, as amended, restated, modified, renewed, refunded, replaced (whether upon or after termination or otherwise) or refinanced (including by means of sales of debt securities to institutional investors) in whole or in part from time to time, including any agreement extending the maturity of, refinancing, replacing or otherwise restructuring (including increasing the amount of available borrowings or letters of credit thereunder or adding Subsidiaries of the DI as additional borrowers or guarantors thereunder) all or any portion of the Indebtedness under such agreement or any successor or replacement agreement and whether by the same or any other agent, lender or group of lenders.

“Credit Facilities” means, one or more debt facilities, indentures or commercial paper facilities, in each case, with banks or other institutional lenders or a trustee providing for revolving credit loans, term loans, receivables financing (including through the sale of receivables to such lenders or to special purpose entities formed to borrow from such lenders

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against such receivables) or letters of credit or issuances of notes, in each case, as amended, restated, modified, renewed, refunded, replaced (whether upon or after termination or otherwise), substituted or refinanced (including by means of sales of debt securities to institutional investors) in whole or in part from time to time.

“Designated Noncash Consideration” means the Fair Market Value of noncash consideration received by the Corporation or DI in connection with an Asset Sale that is so designated as Designated Noncash Consideration pursuant to an officers’ certificate, setting for the basis of such valuation, less the amount of cash or Cash Equivalents received in connection with a subsequent sale of such Designated Noncash Consideration.

“Disqualified Stock” means any Capital Stock that, by its terms (or by the terms of any security into which it is convertible, or for which it is exchangeable, in each case, at the option of the holder of the Capital Stock), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at the option of the holder of the Capital Stock, in whole or in part, on or prior to the date that is 91 days after the tenth anniversary of the Series A-2 Issuance Date. Notwithstanding the preceding sentence, any Capital Stock that would constitute Disqualified Stock solely because the holders of the Capital Stock have the right to require the Corporation to repurchase such Capital Stock upon the occurrence of a change of control or an asset sale will not constitute Disqualified Stock if the terms of such Capital Stock provide that the Corporation may not repurchase or redeem any such Capital Stock pursuant to such provisions unless such repurchase or redemption complies with Section 7(a)(i). The amount of Disqualified Stock deemed to be outstanding at any time will be the maximum amount that the Corporation and DI may become obligated to pay upon the maturity of, or pursuant to any mandatory redemption provisions of, such Disqualified Stock, exclusive of accrued dividends.

“Equity Interests” means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock).

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

“Fair Market Value” means the value that would be paid by a willing buyer to an unaffiliated willing seller in a transaction not involving distress or necessity of either party, determined in good faith by the Board.

“GAAP” means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as have been approved by a significant segment of the accounting profession, which are in effect on the Series A-2 Issuance Date.

“Guarantee” means a guarantee other than by endorsement of negotiable instruments for collection in the ordinary course of business, direct or indirect, in any manner including, without limitation, by way of a pledge of assets or through letters of credit or reimbursement agreements in respect thereof, of all or any part of any Indebtedness (whether arising by virtue of partnership arrangements, or by agreements to keep-well, to purchase assets, goods, securities or services, to take or pay or to maintain financial statement conditions or otherwise).

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“Hedging Obligations” means, with respect to any specified Person, the obligations of such Person under (a) interest rate swap agreements (whether from fixed to floating or from floating to fixed), interest rate cap agreements, interest rate collar agreements and other agreements or arrangements designated for the purpose of fixing, hedging or swapping interest rate risk; (b) other agreements or arrangements designed to manage interest rates or interest rate risk; and (c) other agreements or arrangements designed to protect such Person against fluctuations in currency exchange rates or commodity prices.

“Indebtedness” means, with respect to any specified Person, any indebtedness of such Person (excluding accrued expenses and trade payables), whether or not contingent: (a) in respect of borrowed money; (b) evidenced by bonds, notes, debentures or similar instruments or letters of credit (or reimbursement agreements in respect thereof) (other than letters of credit issued in respect of trade payables entered into in the ordinary course); (c) in respect of banker’s acceptances; (d) representing Capital Lease Obligations; (e) representing the balance deferred and unpaid of the purchase price of any property or services due more than six months after such property is acquired or such services are completed; or (f) representing any Hedging Obligations, if and to the extent any of the preceding items (other than letters of credit and Hedging Obligations) would appear as a liability upon a balance sheet of the specified Person prepared in accordance with GAAP. In addition, the term “Indebtedness” includes all Indebtedness of others secured by a Lien on any asset of the specified Person (whether or not such Indebtedness is assumed by the specified Person) and, to the extent not otherwise included, the Guarantee by the specified Person of any Indebtedness of any other Person.

“Indebtedness/EBITDA Ratio” means with respect to the Corporation for any period, the ratio of Indebtedness of the Corporation, DI and the Restricted Subsidiaries at the date of determination to the Consolidated EBITDA of the Corporation for such period.

“Indenture” means that certain Indenture dated as of the Series A-2 Issuance Date by and among, among others, DI, DIV Capital Corporation and The Bank of New York, as trustee (the “Trustee”).

“Investment” means, with respect to any Person, all direct or indirect investments by such Person in other Persons (including Affiliates) in the forms of loans (including Guarantees or other obligations), advances or capital contributions (excluding commission, travel and similar advances to officers and employees made in the ordinary course of business), purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities, together with all items that are or would be classified as investments on a balance sheet prepared in accordance with GAAP. If the Corporation, DI or any Restricted Subsidiary sells or otherwise disposes of any Equity Interests of DI or any Restricted Subsidiary such that, after giving effect to any such sale or disposition, such Person is no longer a Subsidiary of the Corporation, the Corporation will be deemed to have made the Investment on the date of such sale or disposition equal to the Fair Market Value of the Corporation’s Investments in such Subsidiary that were not sold or disposed of in an amount determined as provided in final paragraph of Section 7(a)(i). The acquisition by the Corporation or any Subsidiary of a Person that holds an Investment in a third Person will be deemed to be an Investment by the Corporation, DI or such Restricted Subsidiary in such third Person in an amount equal to the Fair Market Value of the Investments held by the acquired Person in such third Person in an amount determined as provided in final paragraph of Section 7(a)(i). Except as otherwise provided

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herein, the amount of an Investment will be determined at the time the Investment is made and without giving effect to subsequent changes in value.

“IPO” means the Corporation’s sale of its Common Stock in a firm commitment, fully underwritten public offering through a nationally recognized investment banking firm and pursuant to a registration statement under the United States Securities Act of 1933, as amended.

“Lien” means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law, including any conditional sale or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell or give a security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction.

“Net Cash Proceeds” means the aggregate cash proceeds received by the Corporation, DI or any of the Restricted Subsidiaries in respect of any Asset Sale (including, without limitation, any cash received upon the sale or other disposition of any non-cash consideration received in any Asset Sale), net of the direct costs relating to such Asset Sale, including, without limitation, legal, accounting and investment banking fees, and sales commissions, and any relocation expenses incurred as a result of the Asset Sale, taxes paid or payable as a result of the Asset Sale, in each case, after taking into account any available tax credits or deductions and any tax sharing arrangements, and amounts required to be applied to the repayment of Indebtedness, secured by a Lien on the asset or assets that were the subject of such Asset Sale and any reserve for adjustment in respect of the sale price of such asset or assets established in accordance with GAAP, including cash escrows in connection with purchase price adjustments, reserves or indemnities (until released).

“Net Income” means, with respect to any specified Person, the net income (loss) of such Person, determined in accordance with GAAP and before any reduction in respect of preferred stock dividends, excluding, however (a) any gain (or loss), together with any related provision for taxes on such gain (or loss), realized in connection with: (1) any Asset Sale (without giving effect to the $1,000,000 threshold provided in the definition thereof); or (2) the disposition of any securities by such Person or any of its Subsidiaries or the extinguishment of any Indebtedness of such Person or any of its Subsidiaries; and (b) any extraordinary gain (or loss), together with any related provision for taxes on such extraordinary gain (or loss).

“Notes” means 9.5% Senior Subordinated Notes due 2013, of DI and DIV Capital Corporation, issued under the Indenture.

“Obligations” means any principal, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities payable under the documentation governing any Indebtedness.

“Parent” means DIV Holding LLC, a Delaware limited liability company.

“Permitted Business” means any business engaged in by the Corporation, DI or any of the Restricted Subsidiaries on the Series A-2 Issuance Date and any business or other activities that are reasonably similar, ancillary, complementary or related to, or a reasonable

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extension, development or expansion of, the businesses in which the Corporation, DI and the Restricted Subsidiaries are engaged on the Series A-2 Issuance Date.

“Permitted Holder” means Veritas Capital Management II, L.L.C. or any Affiliate thereof.

“Permitted Indebtedness” means (a) the Indebtedness of the Corporation, DI or any Restricted Subsidiaries under one or more Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (a) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Corporation, DI and the Restricted Subsidiaries thereunder) not to exceed $420,000,000 less the aggregate amount of all Net Cash Proceeds of Asset Sales applied by the Corporation, DI or any Restricted Subsidiary since the Series A-2 Issuance Date to repay any term Indebtedness under a Credit Facility or to repay any revolving credit Indebtedness under a Credit Facility and effect a corresponding commitment reduction thereunder pursuant to Section 7(a)(vi); (b) Indebtedness of DI and the Restricted Subsidiaries represented by the Notes; (c) the incurrence by the Corporation, DI or any Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Corporation, DI or any Restricted Subsidiaries, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (c), not to exceed $10,000,000 at any time outstanding; (d) the incurrence by the Corporation, DI or any Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Certificate of Designations to be incurred under the first paragraph of Section 7(a)(iv) or clauses (b), (c), (d) or (k) of this definition; (e) the incurrence by the Corporation, DI or any of the Restricted Subsidiaries of intercompany Indebtedness between or among the Corporation, DI and any of the Restricted Subsidiaries; provided, however, that any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Corporation, DI or a Restricted Subsidiary and any sale or other transfer of any such Indebtedness to a Person that is not either the Corporation, DI or a Restricted Subsidiary, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Corporation, DI or a Restricted Subsidiary, as the case may be, that was not permitted by this clause (e); (f) the issuance by DI or any of the Restricted Subsidiaries to the Corporation or to any of its Restricted Subsidiaries of shares of preferred stock; provided, however, that: (1)  any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Corporation, DI or a Restricted Subsidiary of the Corporation and (2)  any sale or other transfer of any such preferred stock to a Person that is not either the Corporation, DI or a Restricted Subsidiary, will be deemed, in each case, to constitute an issuance of such preferred stock by DI or a Restricted Subsidiary that was not permitted by this clause (f); (g) the incurrence by the Corporation, DI or any of the Restricted Subsidiaries of Hedging Obligations in the ordinary course of business; (h) the guarantee by the Corporation, DI or any Restricted Subsidiary of Indebtedness of the Corporation, DI or a Restricted Subsidiary of DI that was permitted to be incurred by another provision of this definition; (i) the incurrence by the Corporation, DI or any Restricted Subsidiaries of Indebtedness in respect of workers’

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compensation claims, self-insurance obligations, bankers’ acceptances, performance, completion and surety bonds, completion guarantees and similar obligations in the ordinary course of business; (j) the incurrence by the Corporation, DI or any Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five business days; (k) the incurrence by the Corporation, DI or a Restricted Subsidiary of Indebtedness arising from agreements of the Corporation, DI or any such Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the sale or other disposition of any business, assets or Capital Stock of the Corporation, DI or any Restricted Subsidiary other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Capital Stock; provided that (1) the maximum aggregate liability in respect of all such Indebtedness shall at no time exceed the gross proceeds, whether or not cash, actually received by the Corporation, DI and the Restricted Subsidiaries in connection with such disposition and (2) such Indebtedness is not reflected in the balance sheet of the Corporation, DI or any Restricted Subsidiary (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (2)); (l) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business; and (m) the incurrence by the Corporation, DI or any of the Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (m), not to exceed $15,000,000.

For purposes of determining compliance with Section 7(a)(iv), in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Indebtedness, or is entitled to be incurred pursuant to the Section 7(a)(iv), the Corporation (in its sole discretion) will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with Section 7(a)(iv). Indebtedness under Credit Facilities outstanding on the Series A-2 Issuance Date will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (a) of the definition of Permitted Indebtedness. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Stock or preferred stock in the form of additional shares of the same class of Disqualified Stock or preferred stock will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock or preferred stock for purposes of this covenant. Notwithstanding any other provision of this covenant, the maximum amount of Indebtedness that the Corporation, DI or any Restricted Subsidiary may incur pursuant to this covenant shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values.

The amount of any Indebtedness outstanding as of any date will be (a) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount; (b) the principal amount of the Indebtedness, in the case of any other Indebtedness; and

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(c) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of: (1) the Fair Market Value of such assets at the date of determination; and (2) the amount of the Indebtedness of the other Person.

“Permitted Investment” means (a) any Investment in the Corporation, DI or a Restricted Subsidiary; (b) any Investment in Cash Equivalents; (c) any Investment by the Corporation, DI or any Restricted Subsidiary of DI in a Person, if as a result of such Investment, (1) such Person becomes a Restricted Subsidiary; or (2) such Person is merged, consolidated or amalgamated with or into, or transfers or conveys substantially all of its assets to, or is liquidated into, the Corporation, DI or a Restricted Subsidiary; (d) any Investment made as a result of the receipt of non-cash consideration from an Asset Sale that was made pursuant to and in compliance with Section 7(a)(vi); (e) any acquisition of assets or Capital Stock solely in exchange for the issuance of Equity Interests (other than Disqualified Stock) of the Corporation; (f) any Investment acquired by the Corporation, DI or any of the Restricted Subsidiaries (1) in exchange for any other Investment or accounts receivable held by the Corporation, DI or any such Restricted Subsidiary in connection with or as a result of a bankruptcy, workout, reorganization or recapitalization of a Person or the good faith settlement of delinquent obligations of a Person, or (2) as a result of a foreclosure by the Corporation, DI or any of the Restricted Subsidiaries with respect to any secured Investment or other transfer of title with respect to any secured Investment in default; (g) Investments represented by Hedging Obligations; (h) loans or advances to employees made in the ordinary course of business of the Corporation, DI or any Restricted Subsidiary in an aggregate principal amount not to exceed $1,000,000 at any one time outstanding; (i) redemption of the Series A-2 Preferred Stock; (j) any Investment of the Corporation, DI or any of the Restricted Subsidiaries existing on the Series A-2 Issuance Date; (k) guarantees otherwise permitted herein; (l) receivables owing to the Corporation, DI or any Restricted Subsidiary, prepaid expenses and deposits, if created,  acquired or entered into in the ordinary course of business; (m) payroll, business-related travel, and similar advances to cover matters that are expected at the time of such advances to be ultimately treated as expenses for accounting purposes and that are made in the ordinary course of business; (n) Investments in joint ventures having an aggregate value (measured on the date such Investment was made and without giving effect to subsequent changes in value), when taken together with all other Investments made pursuant to this clause (n) since the Series A-2 Issuance Date not to exceed $20,000,000; and (o) other Investments in any Person other than an Affiliate of the Corporation having an aggregate Fair Market Value (measured on the date each such Investment was made and without giving effect to subsequent changes in value), when taken together with all other Investments made pursuant to this clause (o) that are at the time outstanding, not to exceed $5,000,000.

“Permitted Payments to Parent” means, without duplication as to amounts: (a)  payments to the Parent to permit the Parent to pay reasonable accounting, legal and administrative expenses of the Parent when due, in an aggregate amount not to exceed $750,000 per annum; and (b) for so long as the Corporation is a member of a group filing a consolidated or combined tax return with the Parent, payments to the Parent in respect of an allocable portion of the tax liabilities of such group that is attributable to the Corporation and its Subsidiaries (“Tax Payments”) and to pay franchise or similar taxes and fees of Parent required to maintain Parent’s corporate existence. The Tax Payments shall not exceed the lesser of (i) the amount of the relevant tax (including any penalties and interest) that the Corporation would owe if the

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Corporation were filing a separate tax return (or a separate consolidated or combined return with its Subsidiaries that are members of the consolidated or combined group), taking into account any carryovers and carrybacks of tax attributes (such as net operating losses) of the Corporation and such Subsidiaries from other taxable years and (ii) the net amount of the relevant tax that the Parent actually owes to the appropriate taxing authority. Any Tax Payments received from the Corporation shall be paid over to the appropriate taxing authority within 60 days of the Parent’s receipt of such Tax Payments or refunded to the Corporation.

“Permitted Refinancing “ means any Junior Securities of the Corporation issued in exchange for, or the net proceeds of which are used to renew, refund, replace, defease or discharge other Junior Securities of the Corporation; provided that: (1) the liquidation or face value of such Permitted Refinancing does not exceed the liquidation or face value of the Junior Securities so renewed, refunded, refinanced, replaced, defeased or discharged (plus all accrued interest or dividends thereon and the amount of any reasonably determined premium incurred in connection therewith) and (2) such new Junior Securities are not Disqualified Stock.

“Permitted Refinancing Indebtedness” means (a) any Indebtedness of the Corporation, DI or any of the Restricted Subsidiaries (other than Disqualified Stock) issued in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge other Indebtedness of the Corporation, DI or any of the Restricted Subsidiaries (other than Disqualified Stock and intercompany Indebtedness); provided that: (1) the principal amount (or accreted value, if applicable) of such Permitted Refinancing Indebtedness does not exceed the principal amount (or accreted value, if applicable) of the Indebtedness renewed, refunded, refinanced, replaced, defeased or discharged (plus all accrued interest on the Indebtedness and the amount of all fees and expenses, including premiums, incurred in connection therewith); (2) such Permitted Refinancing Indebtedness has a final maturity date later than the final maturity date of, and has a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of, the Indebtedness being renewed, refunded, refinanced, replaced, defeased or discharged; (3) if the Indebtedness being renewed, refunded, refinanced, replaced, defeased or discharged is subordinated in right of payment to the Notes, such Permitted Refinancing Indebtedness has a final maturity date later than the final maturity date of, and is subordinated in right of payment to, the Notes on terms at least as favorable to the holders of Notes as those contained in the documentation governing the Indebtedness being renewed, refunded, refinanced, replaced, defeased or discharged; and (4) such Indebtedness is incurred either by the Corporation, DI or by any Restricted Subsidiary who is the obligor on the Indebtedness being renewed, refunded, refinanced, replaced, defeased or discharged; and (b) Disqualified Stock of the Corporation, DI or any of the Restricted Subsidiaries issued in exchange for, or the net proceeds of which are used to renew, refund, replace, defease or discharge other Indebtedness or Disqualified Stock of the Corporation, DI or any of the Restricted Subsidiaries (other than Indebtedness or Disqualified Stock held by the Corporation, DI or any Restricted Subsidiary including intercompany Indebtedness); provided that: (1) the liquidation or face value of such Permitted Refinancing Indebtedness does not exceed the principal amount (or accreted value, if applicable) of the Indebtedness, or the liquidation or face value of the Disqualified Stock, as applicable, so renewed, refunded, refinanced, replaced, defeased or discharged (plus all accrued interest or dividends thereon and the amount of any reasonably determined premium incurred in connection therewith); (2) such Permitted Refinancing Indebtedness has a final redemption date equal to or later than the final maturity or redemption date of, and has a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of, the Indebtedness or Disqualified Stock being renewed, refunded, refinanced, replaced, defeased or discharged; (3) such Permitted Refinancing Indebtedness has a final redemption date equal to or later than the final

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maturity date of, and is subordinated in right of payment to, the Notes on terms at least as favorable to the holders of Notes as those contained in the documentation governing the Indebtedness or Disqualified Stock being; and (4) such Disqualified Stock is issued either by the Corporation or by DI who is the issuer of the Indebtedness or Disqualified Stock being renewed, refunded, refinanced, replaced, defeased or discharged.

“Person” means any individual, partnership, firm, trust, corporation, limited liability company or other similar entity. When two or more Persons act as a partnership, limited partnership, syndicate or other group for the purpose of acquiring, holding or disposing of shares of the Corporation, such partnership, limited partnership, syndicate or group shall be deemed a “Person.”

“Related Party” means (a) any controlling stockholder, partner, member, 80% (or more) owned Subsidiary, or immediate family member (in the case of an individual) of a Permitted Holder; or (b) any trust, corporation, partnership, limited liability company or other entity, the beneficiaries, stockholders, partners, members, owners or Persons beneficially holding an 80% or more controlling interest of which consist of any one or more Permitted Holders and/or such other Persons referred to in the immediately preceding clause (a).

“Replacement Assets” means (a) assets that will be used or useful in a Permitted Business, (b) all or substantially all of the assets of a Permitted Business or a majority of Voting Stock of any Person engaged in a Permitted Business that will become on the date of acquisition thereof a Restricted Subsidiary or (c) a Permitted Investment under clause (o) of the definition of Permitted Investment that is otherwise permitted herein.

“Restricted Investment” means an Investment other than a Permitted Investment.

“Restricted Payment” means (a) the declaration or payment of any dividends or any other payment or distribution on account of the Corporation’s, DI’s or any of the Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation involving the Corporation, DI or any of the Restricted Subsidiaries) or to or for the benefit of the direct or indirect holders of the Corporation’s, DI’s or any of the Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the Corporation); (b) the purchase, redemption or other acquisition or retirement for value (including, without limitation, in connection with any merger or consolidation involving the Corporation or DI) of any Junior Securities, or any Equity Interests of any direct or indirect parent of the Corporation; (c) any payment on, or the purchase, redemption, defeasance or other acquisition or retirement for value of any Junior Securities (excluding any Junior Securities held by the Corporation, DI and any of the Restricted Subsidiaries), except (i) a payment of interest or principal at the Stated Maturity thereof or (ii) the purchase, repurchase or other acquisition of any such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or final maturity, in

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each case, due within one year of the date of such purchase, repurchase or other acquisition; or (d) any Restricted Investment.

“Restricted Subsidiary” shall have such meaning as defined in the Indenture as in effect on the Series A-2 Issuance Date; provided that any deliveries required to be delivered to the Trustee under the Indenture or the holder of the Notes in connection with the designation of a Subsidiary as a “Restricted Subsidiary” or an “Unrestricted Subsidiary” shall be delivered to the holders of Series A-2 Preferred Stock.

“Stated Maturity” means, with respect to any installment of interest or principal on any series of Indebtedness, the date on which the payment of interest or principal was scheduled to be paid in the documentation governing such Indebtedness as of the Series A-2 Issuance Date, and will not include any contingent obligations to repay, redeem or repurchase any such interest or principal prior to the date originally scheduled for the payment thereof.

“Subsidiary” means, with respect to any specified Person (a) any corporation, association or other business entity of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency and after giving effect to any voting agreement or stockholders’ agreement that effectively transfers voting power) to vote in the election of directors, managers or trustees of the corporation, association or other business entity is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person (or a combination thereof); and (b) any partnership (i) the sole general partner or the managing general partner of which is such Person or a Subsidiary of such Person or (ii) the only general partners of which are that Person or one or more Subsidiaries of that Person (or any combination thereof).

“Veritas” means The Veritas Capital Fund II, L.P.

“Voting Stock” of any specified Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the Board of Directors of such Person.

“Weighted Average Life to Maturity” means, when applied to any Indebtedness at any date, the number of years obtained by dividing: (a) the sum of the products obtained by multiplying (1) the amount of each then remaining installment, sinking fund, serial maturity or other required payments of principal, including payment at final maturity, in respect of the Indebtedness, by (2) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment; by (b) the then outstanding principal amount of such Indebtedness.

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EX-3.3

Exhibit 3.3

CERTIFICATE OF CORRECTION
TO THE
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
DYNCORP INTERNATIONAL INC.

DynCorp International Inc. (the “Corporation”), a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware, DOES HEREBY CERTIFY:

1.             The name of the Corporation is DynCorp International Inc.

2.             An Amended and Restated Certificate of Incorporation of the Corporation was filed with the Secretary of State of Delaware on May 3, 2006 and said Amended and Restated Certificate of Incorporation requires correction as permitted by subsection (f) of Section 103 of the General Corporation Law of the State of Delaware.

3.             The inaccuracy or defect of said Amended and Restated Certificate of Incorporation is that Article FOURTH, Paragraph B, Section 3(b) inadvertently references “May 8, 2006” instead of “May 9, 2006” in two places.

4.             Article FOURTH, Paragraph B, Section 3(b) of the Amended and Restated Certificate of Incorporation is corrected by changing the date “May 8, 2006” to “May 9, 2006” in both places where “May 8, 2006” is referenced to therein.

IN WITNESS WHEREOF, DnyCorp International Inc. has caused this Certificate to be executed this 4th day of May 2006.

DYNCORP INTERNATIONAL INC.
By:	/s/ R.Y. Morrel
	Name: R.Y. Morrel
	Title:   Senior Vice President and General Counsel

EX-3.5

Exhibit  3.5

AMENDED AND RESTATED

BYLAWS

OF

DYNCORP INTERNATIONAL INC.

Adopted May 3, 2006

ARTICLE I
MEETINGS OF STOCKHOLDERS

Section 1.1.Place of Meetings.

Except as otherwise provided in the Amended and Restated Certificate of Incorporation, as may be amended from time to time (the “Certificate”), of DynCorp International Inc. (the “Corporation”), all meetings of the stockholders of the Corporation shall be held at such place, if any, either within or without the State of Delaware, as may from time to time be fixed by the Board of Directors of the Corporation (the “Board”).

Section 1.2.Annual Meetings.

The annual meeting of the stockholders of the Corporation for the election of directors and for the transaction of such other business as may properly come before the meeting shall be held in each year on such day as may be fixed by the Board, at such hour as may be specified in the notice thereof.

Section 1.3. Special Meetings.

Unless otherwise required by applicable law or by the Certificate, special meetings of stockholders, for any purpose or purposes, may be called only by order of the Chairman of the Board, the Chief Executive Officer, the President or the Board or, at any time when Veritas Capital Management II, L.L.C. beneficially owns at least 50 percent of the then outstanding shares of capital stock of the Corporation that are entitled to vote generally in the election of directors (“Voting Shares”), by Veritas Capital Management II, L.L.C.

Section 1.4. Notice of Meetings.

Except as otherwise provided by law or the Certificate, not less than 10 nor more than 60 days’ notice of the place, if any, day, hour and, with respect to a special meeting, purpose or purposes of each meeting of the stockholders, shall be given to each stockholder of record of the Corporation entitled to vote at such meeting, either by the delivery thereof to such stockholder personally, by the mailing thereof to such stockholder in a postage prepaid envelope addressed to such stockholder at his address as it appears on the stock transfer books of the Corporation or by any other lawful means. Notice of any meeting of stockholders shall not be required to be given to any stockholder who shall waive notice thereof before, at or after such

meeting. Notice of any adjourned meeting need not be given except when expressly required by law.

Section 1.5. Waiver of Notice.

Whenever notice is required to be given of a meeting of stockholders, a written waiver, signed by the person entitled thereto, or a waiver by electronic transmission by the person entitled thereto, whether before or after the time stated therein, shall be deemed equivalent to notice. Attendance of a person entitled to notice of a meeting of stockholders at such meeting of stockholders shall constitute a waiver of notice of such meeting, except when the person attends the meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of  any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any meeting of stockholders need be specified in any such waiver of notice.

Section 1.6. Quorum.

Shares representing a majority of the votes entitled to be cast on a matter by all classes or series that are entitled to vote thereon and be counted together collectively, represented in person or by proxy at any meeting of the stockholders, shall constitute a quorum for the transaction of business thereat with respect to such matter, unless otherwise provided by law or the Certificate. In the absence of a quorum at any such meeting or any adjournment or adjournments thereof, the chairman of such meeting or the holder of shares representing a majority of the votes cast on the matter of adjournment, either in person or by proxy, may adjourn such meeting from time to time until a quorum is obtained. At any such adjourned meeting at which a quorum has been obtained, any business may be transacted that might have been transacted at the meeting as originally called.

Section 1.7. Organization and Order of Business.

At all meetings of the stockholders, the Chairman of the Board or, in the Chairman’s absence, such director of the Corporation as designated in writing by the Chairman of the Board shall act as chairman. In the absence of all of the foregoing persons, a majority of the shares entitled to vote at such meeting may appoint any person to act as chairman. The Secretary of the Corporation shall act as secretary at all meetings of the stockholders. In the absence of the Secretary, the chairman may appoint any person to act as secretary of the meeting.

The chairman shall have the right and authority to prescribe such rules, regulations and procedures and to do all such acts and things as are necessary or desirable for the proper conduct of the meeting, including, without limitation, the adjournment of the meeting, the establishment of procedures for the dismissal of business not properly presented, the maintenance of order and safety, limitations on the time allotted to questions or comments on the affairs of the Corporation, restrictions on entry to such meeting after the time prescribed for the commencement thereof and the opening and closing of the voting polls.

Section 1.8. Notice of Stockholder Business and Nominations.

(a)   Annual Meetings of Stockholders.

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(i)            Nominations of persons for election to the Board and the proposal of business to be considered by the stockholders may be made at an annual meeting of stockholders only (a) pursuant to the Corporation’s notice of meeting (or any supplement thereto), (b) by or at the direction of the Board or any committee thereof or (c) by any stockholder of the Corporation who was a stockholder of record of the Corporation at the time the notice provided for in this Section 1.8 is delivered to the Secretary of the Corporation, who is entitled to vote at the meeting and who complies with the notice procedures set forth in this Section 1.8.

For nominations or other business to be properly brought before an annual meeting by a stockholder pursuant to clause (c) of paragraph (a)(1) of this Section 1.8, the stockholder must have given timely notice thereof in writing to the Secretary of the Corporation and any such proposed business other than the nominations of persons for election to the Board must constitute a proper matter for stockholder action. To be timely, a stockholder’s notice shall be delivered to the Secretary at the principal executive offices of the Corporation not later than the close of business on the ninetieth (90th) day, nor earlier than the close of business on the one hundred twentieth (120th) day, prior to the first anniversary of the preceding year’s annual meeting (provided, however, that in the event that the date of the annual meeting is more than thirty (30) days before or more than seventy (70) days after such anniversary date, notice by the stockholder must be so delivered not earlier than the close of business on the one hundred twentieth (120th) day prior to such annual meeting and not later than the close of business on the later of the ninetieth (90th) day prior to such annual meeting or the tenth (10th) day following the day on which public announcement of the date of such meeting is first made by the Corporation). For purposes of the first annual meeting held after the initial public offering of the Company’s Class A Common Stock, the first anniversary of the preceding year’s annual meeting date shall be deemed to be May 3, 2007.

In no event shall the public announcement of an adjournment or postponement of an annual meeting commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described above. Such stockholder’s notice shall set forth: (a) as to each person whom the stockholder proposes to nominate for election as a director (i) all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors in an election contest, or is otherwise required, in each case pursuant to and in accordance with Regulation 14A under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and (ii) such person’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected; (b) as to any other business that the stockholder proposes to bring before the meeting, a brief description of the business desired to be brought before the meeting, the text of the proposal or business (including the text of any resolutions proposed for consideration and in the event that such business includes a proposal to amend the Bylaws of the Corporation, the language of the proposed amendment), the reasons for conducting such business at the meeting and any material interest in such business of such stockholder and the beneficial owner, if any, on whose behalf the proposal is made; and (c) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made (i) the name and address of such stockholder, as they appear on the Corporation’s books, and of such beneficial owner, (ii) the class and number of shares of capital stock of the Corporation which are owned beneficially and of record by such stockholder and such beneficial owner, (iii) a representation that the stockholder is a holder of record of stock

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of the Corporation entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to propose such business or nomination, and (iv) a representation whether the stockholder or the beneficial owner, if any, intends or is part of a group which intends (a) to deliver a proxy statement and/or form of proxy to holders of at least the percentage of the Corporation’s outstanding capital stock required to approve or adopt the proposal or elect the nominee and/or (b) otherwise to solicit proxies from stockholders in support of such proposal or nomination. Notwithstanding the forgoing, at any time that Veritas Capital Management II, L.L.C. beneficially owns a majority of the then outstanding shares of Class A and/or Class B Common Stock, $0.01 par value (the “Common Stock”) of the Corporation, notice by Veritas Capital Management II, L.L.C., shall be timely and complete if delivered in writing or orally at any time prior to the annual meeting. The foregoing notice requirements of this Section 1.8 shall be deemed satisfied by a stockholder if the stockholder has notified the Corporation of his, her or its intention to present a proposal or nomination at an annual meeting in compliance with applicable rules and regulations promulgated under the Exchange Act and such stockholder’s proposal or nomination has been included in a proxy statement that has been prepared by the Corporation to solicit proxies for such annual meeting. The Corporation may require any proposed nominee to furnish such other information as it may reasonably require to determine the eligibility of such proposed nominee to serve as a director of the Corporation.

(ii)           Notwithstanding anything in the second sentence of paragraph (a)(2) of this Section 1.8 to the contrary, in the event that the number of directors to be elected to the Board at an annual meeting is increased and there is no public announcement by the Corporation naming the nominees for the additional directorships at least one hundred (100) days prior to the first anniversary of the preceding year’s annual meeting, a stockholder’s notice required by this Section 1.8 shall also be considered timely, but only with respect to nominees for the additional directorships, if it shall be delivered to the Secretary at the principal executive offices of the Corporation not later than the close of business on the tenth (10th) day following the day on which such public announcement is first made by the Corporation.

(b)   Special Meetings of Stockholders. Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the Corporation’s notice of meeting. Nominations of persons for election to the Board may be made at a special meeting of stockholders at which directors are to be elected pursuant to the Corporation’s notice of meeting (1) by or at the direction of the Board or any committee thereof or (2) provided that the Board has determined that directors shall be elected at such meeting, by any stockholder of the Corporation who is a stockholder of record at the time the notice provided for in this Section 1.8 is delivered to the Secretary of the Corporation, who is entitled to vote at the meeting and upon such election and who complies with the notice procedures set forth in this Section 1.8. In the event the Corporation calls a special meeting of stockholders for the purpose of electing one or more directors to the Board, any such stockholder entitled to vote in such election of directors may nominate a person or persons (as the case may be) for election to such position(s) as specified in the Corporation’s notice of meeting, if the stockholder’s notice required by paragraph (a)(2) of this Section 1.8 shall be delivered to the Secretary at the principal executive offices of the Corporation not earlier than the close of business on the one hundred twentieth (120th) day prior to such special meeting and not later than the close of business on the later of the ninetieth (90th) day prior to such special meeting or the tenth (10th) day following the day on which public announcement is first made of the date of the

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special meeting and of the nominees proposed by the Board to be elected at such meeting. In no event shall the public announcement of an adjournment or postponement of a special meeting commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described above.

(c)   General.

(i)            Only such persons who are nominated in accordance with the procedures set forth in this Section 1.8 shall be eligible to be elected at an annual or special meeting of stockholders of the Corporation to serve as directors and only such business shall be conducted at a meeting of stockholders as shall have been brought before the meeting in accordance with the procedures set forth in this Section 1.8. Except as otherwise provided by law, the chairman of the meeting shall have the power and duty (a) to determine whether a nomination or any business proposed to be brought before the meeting was made or proposed, as the case may be, in accordance with the procedures set forth in this Section 1.8 (including whether the stockholder or beneficial owner, if any, on whose behalf the nomination or proposal is made solicited (or is part of a group which solicited) or did not so solicit, as the case may be, proxies in support of such stockholder’s nominee or proposal in compliance with such stockholder’s representation as required by clause (a)(2)(c)(iv) of this Section 1.8) and (b) if any proposed nomination or business was not made or proposed in compliance with this Section 1.8, to declare that such nomination shall be disregarded or that such proposed business shall not be transacted. Notwithstanding the foregoing provisions of this Section 1.8, unless otherwise required by law, if the stockholder (or a qualified representative of the stockholder) does not appear at the annual or special meeting of stockholders of the Corporation to present a nomination or proposed business, such nomination shall be disregarded and such proposed business shall not be transacted, notwithstanding that proxies in respect of such vote may have been received by the Corporation. For purposes of this Section 1.8, to be considered a qualified representative of the stockholder, a person must be a duly authorized officer, manager or partner of such stockholder or must be authorized by a writing executed by such stockholder or an electronic transmission delivered by such stockholder to act for such stockholder as proxy at the meeting of stockholders and such person must produce such writing or electronic transmission, or a reliable reproduction of the writing or electronic transmission, at the meeting of stockholders.

(ii)           For purposes of this Section 1.8, “public announcement” shall include disclosure in a press release reported by the Dow Jones News Service, Associated Press or comparable national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act.

(iii)          Notwithstanding the foregoing provisions of this Section 1.8, a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth in this Section 1.8. Nothing in this Section 1.8 shall be deemed to affect any rights (a) of stockholders to request inclusion of proposals or nominations in the Corporation’s proxy statement pursuant to applicable rules and regulations promulgated under the Exchange Act or (b) of the holders of any

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series of Preferred Stock to elect directors pursuant to any applicable provisions of the Certificate.

Section 1.9. Voting.

Unless otherwise provided by law or the Certificate, at each meeting of the stockholders each stockholder entitled to vote at such meeting may vote either in person or by proxy. Unless demanded by a stockholder present in person or represented by proxy at any meeting of the stockholders and entitled to vote thereon or so directed by the chairman of the meeting, the vote on any matter need not be by ballot. On a vote by ballot, each ballot shall be signed by the stockholder voting or his proxy, and it shall show the number of shares voted.

Section 1.10. Written Authorization.

A stockholder or a stockholder’s duly authorized attorney-in-fact may execute a writing authorizing another person or persons to act for him as proxy. Execution may be accomplished by the stockholder or such stockholder’s duly authorized attorney-in-fact or authorized officer, director, employee or agent signing such writing or causing such stockholder’s signature to be affixed to such writing by any reasonable means including, but not limited to, by facsimile signature.

Section 1.11. Electronic Authorization.

The Secretary may approve procedures to enable a stockholder or a stockholder’s duly authorized attorney-in-fact to authorize another person or persons to act for him as proxy by transmitting or authorizing the transmission of a telegram, cablegram, internet transmission, telephone transmission or other means of electronic transmission to the person who will be the holder of the proxy or to a proxy solicitation firm, proxy support service organization or like agent duly authorized by the person who will be the holder of the proxy to receive such transmission, provided that any such transmission must either set forth or be submitted with information from which the inspectors of election can determine that the transmission was authorized by the stockholder or the stockholder’s duly authorized attorney-in-fact. If it is determined that such transmissions are valid, the inspectors shall specify the information upon which they relied. Any copy, facsimile telecommunication or other reliable reproduction of the writing or transmission created pursuant to this Section 1.11 may be substituted or used in lieu of the original writing or transmission for any and all purposes for which the original writing or transmission could be used, provided that such copy, facsimile telecommunication or other reproduction shall be a complete reproduction of the entire original writing or transmission.

Section 1.12. Inspectors.

One or more inspectors of election for any meeting of stockholders may be appointed by the chairman of such meeting, for the purpose of receiving and taking charge of proxies and ballots and deciding all questions as to the qualification of voters, the validity of proxies and ballots and the number of votes properly cast.

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ARTICLE II
BOARD

Section 2.1. General Powers

The property, business and affairs of the Corporation shall be managed by or under the direction of the Board as from time to time constituted. No director need be a stockholder.

Section 2.2. Compensation.

Each director, in consideration of such director’s serving as such, shall be entitled to receive from the Corporation such amount per annum or such fees for attendance at Board and Committee meetings, or both, in cash or other property, including securities of the Corporation, as the Board shall from time to time determine, together with reimbursements for the reasonable expenses incurred by such director in connection with the performance of such director’s duties. Nothing contained herein shall preclude any director from serving the Corporation, or any subsidiary or affiliated corporation, in any other capacity and receiving proper compensation therefor. If the Board adopts a resolution to that effect, any director may elect to defer all or any part of the annual and other fees hereinabove referred to for such period and on such terms and conditions as shall be permitted by such resolution.

Section 2.3. Place of Meetings.

The Board may hold its meetings at such place or places within or without the State of Delaware as it may from time to time by resolution determine or as shall be specified or fixed in the respective notices or waivers of notice thereof.

Section 2.4. Organizational Meeting.

As soon as practicable after each annual election of directors, the newly constituted Board shall meet for the purposes of organization. At such organizational meeting, the newly constituted Board shall elect officers of the Corporation and transact such other business as shall come before the meeting. Any organizational meeting may be held at any time or place designated by the Board from time to time.

Section 2.5. Regular Meetings.

Regular meetings of the Board may be held at such time and place as may from time to time be specified in a resolution adopted by the Board then in effect, and, unless otherwise required by such resolution, or by law, notice of any such regular meeting need not be given.

Section 2.6. Special Meetings.

Special meetings of the Board shall be held whenever called by the Chairman of the Board or by the Secretary of the Corporation at the request of any two or more of the directors then in office. Notice of a special meeting shall be mailed to each director, addressed

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to him at his residence or usual place of business, not later than the third day before the day on which such meeting is to be held, or shall be sent addressed to him at such place by facsimile, telegraph, cable, wireless or other electronic transmission, or be delivered personally or by telephone, not later than the day before the day on which such meeting is to be held. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Board need be specified in the notice of such meeting, unless required by the Certificate.

Section 2.7. Quorums/Required Vote.

At each meeting of the Board the presence of a majority of the total authorized number of directors shall be necessary to constitute a quorum. The act of a majority of the directors present at a meeting at which a quorum shall be present shall be the act of the Board, except as may be otherwise provided by law, the Certificate or by these Bylaws. Any meeting of the Board may be adjourned by a majority vote of the directors present at such meeting. Notice of any adjourned meeting need not be given.

Section 2.8. Waivers of Notice and Meetings.

Notwithstanding anything in these Bylaws or in any resolution adopted by the Board to the contrary, notice of any meeting of the Board need not be given to any director if such notice shall be waived in writing signed by such director or in an electronic transmission before, at or after the meeting, or if such director shall be present at the meeting, except when the director attends the meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Any meeting of the Board shall be a legal meeting without any notice having been given or regardless of the giving of any notice or the adoption of any resolution in reference thereto, if every member of the Board shall have waived notice of the meeting in accordance with the Bylaws and applicable law. Except as otherwise provided by law or these Bylaws, waivers of notice of any meeting of the Board need not contain any statement of the purpose of the meeting.

Section 2.9. Telephone Meetings.

Members of the Board or any committee may participate in a meeting of the Board or such committee by means of a conference telephone or other means of communication whereby all directors participating may simultaneously hear each other during the meeting, and participation by such means shall constitute presence in person at such meeting.

Section 2.10. Actions Without Meetings.

Any action that may be taken at a meeting of the Board or of a committee may be taken without a meeting by a consent in writing or by electronic transmission, setting forth the action, by all of the directors or all of the members of the committee, as the case may be. Such consent shall have the same force and effect as a unanimous vote.

Section 2.11. Creation of Committees.

In addition to the executive committee authorized by Article III of these Bylaws, to the extent permitted by law, the Board may designate one or more committees, each

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committee to consist of one or more of the directors of the Corporation. The Board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of the committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he, she or they constitute a quorum, may unanimously appoint another member of the Board to act at the meeting in place of any such absent or disqualified member. Any such committee, to the extent permitted by law and to the extent provided in the resolution of the Board, shall have and may exercise all the powers and authority of the Board in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it.

Section 2.12. Director Removal.

Subject to the rights of the holders of any series of Preferred Stock then outstanding, for so long as Veritas Capital Management II, L.L.C. beneficially owns at least 50 percent of the then outstanding Voting Shares, directors may be removed, with or without cause, by the affirmative vote of a majority of the then outstanding Voting Shares. Subject to the rights of the holders of any series of Preferred Stock then outstanding, at any time Veritas Capital Management II, L.L.C. does not beneficially own at least 50 percent of the then outstanding Voting Shares, directors may be removed, only with cause, by the affirmative vote of a majority of the then outstanding Voting Shares.

ARTICLE III
EXECUTIVE COMMITTEE

Section 3.1. How Constituted and Powers.

The Board, by resolution adopted pursuant to Article II, Section 2.11 hereof, may designate one or more directors to constitute an executive committee, who shall serve at the pleasure of the Board. The executive committee, to the extent provided in such resolution and permitted by law, shall have and may exercise all of the authority of the Board.

Section 3.2. Organization, Etc.

The executive committee may choose a chairman and secretary. The executive committee shall keep a record of its acts and proceedings and report the same from time to time to the Board.

Section 3.3. Meetings.

Meetings of the executive committee may be called by any member of the committee. Notice of each such meeting, which need not specify the business to be transacted thereat, shall be mailed to each member of the committee, addressed to his residence or usual place of business, not later than the third day before the day on which such meeting is to be held, or shall be sent addressed to him or her at such place by facsimile, telegraph, cable, wireless or other electronic transmission or be delivered personally or by telephone, not later than the day before the day on which the meeting is to be held.

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Section 3.4. Quorum and Manner of Action.

A majority of the members of the executive committee shall constitute a quorum for transaction of business, and the act of a majority of those present at a meeting at which a quorum is present shall be the act of the executive committee. The members of the executive committee shall act only as a committee, and the individual members shall have no powers as such.

Section 3.5. Removal.

Any member of the executive committee may be removed, with or without cause, at any time, by the Board.

Section 3.6. Vacancies.

Any vacancy in the executive committee shall be filled by the Board.

ARTICLE IV
OFFICERS

Section 4.1. Number, Term, Election.

The officers of the Corporation shall be a Chairman of the Board, a President, a Chief Executive Officer, a Chief Financial Officer and a Secretary. The Board may appoint such other officers and such assistant officers and agents with such powers and duties as the Board may find necessary or convenient to carry on the business of the Corporation. Such officers and assistant officers shall serve until their successors shall be elected and qualify, or as otherwise provided in these Bylaws. Any two or more offices may be held by the same person.

Section 4.2. Chairman of the Board.

The Chairman of the Board shall, subject to the control of the Board, have full authority and responsibility for directing the conduct of the business, affairs and operations of the Corporation and shall preside at all meetings of the Board and of the stockholders. The Chairman of the Board shall perform such other duties and exercise such other powers as may from time to time be prescribed by the Board.

Section 4.3. Chief Executive Officer.

The Chief Executive Officer shall be the principal executive officer of the Corporation. The Chief Executive Officer, except where by law the signature of the President is required, shall possess the same power as the President to sign all deeds, bonds, contracts, certificates and other instruments of the Corporation which may be authorized by the Board. During the absence or disability of the President and the Chairman of the Board, if there be one, the Chief Executive Officer shall exercise all the powers and discharge all the duties of the President. The Chief Executive Officer shall also perform such other duties and may exercise such other powers as from time to time may be assigned to him by these Bylaws or by the Board.

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Section 4.4.President.

The President shall, subject to the control of the Board, the Chairman of the Board, and the Chief Executive Officer, if a person other than the President, have general supervision of the business of the Corporation and shall see that all orders and resolutions of the Board are carried into effect. The President shall execute all deeds, bonds, contracts, certificates and other instruments of the Corporation, except where required or permitted by law to be otherwise signed and executed and except that the other officers of the Corporation may sign and execute documents when so authorized by these Bylaws, the Board or the President. In the absence or disability of the Chairman of the Board, if there be one, and the Chief Executive Officer, if a person other than the President, the President shall preside at all meetings of the stockholders and the Board. If there be no Chairman of the Board or Chief Executive Officer, the President shall be the Chief Executive Officer of the Corporation. The President shall also perform such other duties and may exercise such other powers as from time to time may be assigned to him by these Bylaws or by the Board.

Section 4.5.Vice Presidents.

Each Vice President, if any, shall have such powers and perform such duties as may from time to time be prescribed by the Board, the Chairman of the Board, the Chief Executive Officer, the President or any officer to whom the Chairman of the Board or the President may have delegated such authority. Any Vice President of the Corporation may sign and execute in the name of the Corporation deeds, bonds, contacts, certificates and other instruments, except in cases where the signing and execution thereof shall be expressly delegated by the Board or by these Bylaws to some other officer or agent of the Corporation or shall be required by law otherwise to be signed or executed.

Section 4.6. Assistant Vice Presidents.

The Assistant Vice President, or if there be more than one, the Assistant Vice Presidents in the order determined by the Board, shall, in the absence or disability of any Vice President, perform the duties and exercise the powers of each Vice President and shall perform such other duties and have such other powers as the Board may from time to time prescribe.

Section 4.7. Chief Financial Officer.

The Chief Financial Officer shall have such powers and perform such duties as may from time to time be prescribed by the Board, the Chairman of the Board, the Chief Executive Officer, the President or any officer to whom the Chairman of the Board or the President may have delegated such authority. If the Board shall so determine, the Chief Financial Officer shall give a bond for the faithful performance of the duties of the office of the Chief Financial Officer, in such sum as the Board may determine to be proper, the expense of which shall be borne by the Corporation. To such extent as the Board shall deem proper, the duties of the Chief Financial Officer may be performed by one or more assistants, to be appointed by the Board.

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Section 4.8. Secretary.

The Secretary shall keep the minutes of meetings of stockholders, of the Board, and, when requested, of committees of the Board, and shall attend to the giving and serving of notices of all meetings thereof. The Secretary shall keep or cause to be kept such stock transfer and other books, showing the names of the stockholders of the Corporation, and all other particulars regarding them, as may be required by law. The Secretary shall also perform such other duties and exercise such other powers as may from time to time be prescribed by the Board, the Chairman of the Board, the Chief Executive Officer, the President or any officer to whom the Chairman of the Board or the President may have delegated such authority. To such extent as the Board shall deem proper, the duties of the Secretary may be performed by one or more assistants, to be appointed by the Board.

Section 4.9. Assistant Secretary.

The Assistant Secretary, or if there be more than one, the Assistant Secretaries in the order determined by the Board, shall, in the absence or disability of the Secretary, perform the duties and exercise the powers of the Secretary and shall perform such other duties and have such other powers as the Board, or the Secretary may from time to time prescribe.

Section 4.10. Compensation.

The compensation of the officers of the Corporation shall be fixed from time to time by the Board (or any duly authorized committee thereof or officer to which such responsibility has been delegated), subject to any employment agreements that may then be in effect between the Corporation and the relevant officer. None of the officers of the Corporation shall be prevented from receiving such compensation by reason of the fact that he or she is also a director of the Corporation. Nothing contained herein shall preclude any officer from serving the Corporation, or any subsidiary thereof, in any other capacity and receiving such compensation by reason of the fact that he or she is also a director of the Corporation.

ARTICLE V
REMOVALS AND RESIGNATIONS

Section 5.1. Removal of Officers.

Any officer, assistant officer or agent of the Corporation may be removed at any time, either with or without cause, by the Board in its absolute discretion. Any officer or agent appointed otherwise than by the Board may be removed at any time, either with or without cause, by any officer having authority to appoint such an officer or agent, except as may be otherwise provided in these Bylaws. Any such removal shall be without prejudice to the recovery of damages for breach of the contract rights, if any, of the officer, assistant officer or agent removed. Election or appointment of an officer, assistant officer or agent shall not of itself create contract rights.

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Section 5.2. Resignation.

Any director, officer or assistant officer of the Corporation may resign as such at any time by giving written notice or notice by electronic transmission of his resignation to the Board, the Chairman of the Board or the Secretary of the Corporation. Such resignation shall take effect at the time specified therein or, if no time is specified therein, at the time of delivery thereof, and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

Section 5.3. Vacancies.

Any vacancy in the office of any officer or assistant officer caused by death, resignation, removal or any other cause, may be filled by the Board for the unexpired portion of the term.

ARTICLE VI
CONTRACTS, LOANS, CHECKS, DRAFTS, DEPOSITS, ETC.

Section 6.1. Execution of Contracts.

Except as otherwise provided by law or by these Bylaws, the Board (i) may authorize any officer, employee or agent of the Corporation to execute and deliver any deed, bond, contract, agreement or other instrument in writing in the name and on behalf of the Corporation, and (ii) may authorize any officer, employee or agent of the Corporation so authorized by the Board to delegate such authority by written instrument to other officers, employees or agents of the Corporation. Any such authorization by the Board may be general or specific and shall be subject to such limitations and restrictions as may be imposed by the Board. Any such delegation of authority by an officer, employee or agent may be general or specific, may authorize re-delegation, and shall be subject to such limitations and restrictions as may be imposed in the written instrument of delegation by the person making such delegation.

Section 6.2. Loans.

No loans shall be contracted on behalf of the Corporation and no negotiable paper shall be issued in its name unless authorized by the Board. When authorized by the Board, any officer, employee or agent of the Corporation may effect loans and advances at any time for the Corporation from any bank, trust company or other institution, or from any firm, corporation or individual, and for such loans and advances may make, execute and deliver promissory notes, bonds or other certificates or evidences of indebtedness of the Corporation and when so authorized may pledge, hypothecate or transfer any securities or other property of the Corporation as security for any such loans or advances. Such authority may be general or confined to specific instances.

Section 6.3. Checks, Drafts, Etc.

All checks, drafts and other orders for the payment of money out of the funds of the Corporation and all notes or other evidences of indebtedness of the Corporation shall be

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signed on behalf of the Corporation in such manner as shall from time to time be determined by the Board.

Section 6.4. Deposits.

All funds of the Corporation not otherwise employed shall be deposited from time to time to the credit of the Corporation in such banks, trust companies or other depositories as the Board may select or as may be selected by the Chief Financial Officer or any other officer, employee or agent of the Corporation to whom such power may from time to time be delegated by the Board.

Section 6.5. Voting of Securities.

Unless otherwise provided by the Board, the Chief Executive Officer or President may from time to time appoint an attorney or attorneys, or agent or agents of the Corporation, in the name and on behalf of the Corporation, to cast the votes that the Corporation may be entitled to cast as the holder of stock or other securities in any other corporation or other entity, any of whose stock or other securities may be held by the Corporation, at meetings of the holders of the stock or other securities of such other corporation or other entity, or to consent in writing, in the name of the Corporation as such holder, to any action by such other corporation or other entity, and may instruct the person or persons so appointed as to the manner of casting such votes or giving such consent, and may execute or cause to be executed in the name and on behalf of the Corporation and under its corporate seal, or otherwise, all such written proxies or other instruments as such officer may deem necessary or proper in the premises.

ARTICLE VII
CAPITAL STOCK

Section 7.1. Shares.

Shares of the Corporation may but need not be represented by certificates.

When shares are represented by certificates, the Corporation shall issue such certificates in such form as shall be required by the General Corporation Law of the State of Delaware (the “DGCL”) and as determined by the Board, to every stockholder for the fully paid shares owned by such stockholder. Each certificate shall be signed by, or shall bear the facsimile signature of, the Chairman of the Board or the President and the Secretary or an Assistant Secretary of the Corporation and may bear the corporate seal of the Corporation or its facsimile. All certificates for the Corporation’s shares shall be consecutively numbered or otherwise identified.

The name and address of the person to whom shares (whether or not represented by a certificate) are issued, with the number of shares and date of issue, shall be entered on the share transfer books of the Corporation. Such information may be stored or retained on discs, tapes, cards or any other approved storage device relating to data processing equipment; provided that such device is capable of reproducing all information contained therein in legible and understandable form, for inspection by stockholders or for any other corporate purpose.

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When shares are not represented by certificates, then within a reasonable time after the issuance or transfer of such shares, the Corporation shall send the stockholder to whom such shares have been issued or transferred a written statement of the information required by the DGCL to be included on certificates.

Section 7.2. Stock Transfer Books and Transfer of Shares.

The Corporation, or its designated transfer agent or other agent, shall keep a book or set of books to be known as the stock transfer books of the Corporation, containing the name of each stockholder of record, together with such stockholder’s address and the number and class or series of shares held by such stockholder. Shares of stock of the Corporation shall be transferable on the stock books of the Corporation by the holder in person or by his attorney thereunto authorized by power of attorney duly executed and filed with the Secretary or the transfer agent, but, except as hereinafter provided in the case of loss, destruction or mutilation of certificates, no transfer of stock shall be entered until the previous certificate, if any, given for the same shall have been surrendered and canceled. Transfer of shares of the Corporation represented by certificates shall be made on the stock transfer books of the Corporation only upon surrender of the certificates for the shares sought to be transferred by the holder of record thereof or by such holder’s duly authorized agent, transferee or legal representative, who shall furnish proper evidence of authority to transfer with the Secretary of the Corporation or its designated transfer agent or other agent. All certificates surrendered for transfer shall be canceled before new certificates for the transferred shares shall be issued. Except as otherwise provided by law, no transfer of shares shall be valid as against the Corporation, its stockholders or creditors, for any purpose, until it shall have been entered in the stock records of the Corporation by an entry showing from and to whom transferred.

Section 7.3. Holder of Record.

Except as otherwise required by the DGCL, the Corporation may treat the person in whose name shares of stock of the Corporation (whether or not represented by a certificate) stand of record on its books or the books of any transfer agent or other agent designated by the Board as the absolute owner of the shares and the person exclusively entitled to receive notification and distributions, to vote, and to otherwise exercise the rights, powers and privileges of ownership of such shares.

Section 7.4. Record Date.

In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board, and which record date: (1) in the case of determination of stockholders entitled to vote at any meeting of stockholders or adjournment thereof, shall, unless otherwise required by law, not be more than sixty (60) nor less than ten (10) days before the date of such meeting; (2) in the case of determination of stockholders entitled to

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express consent to corporate action in writing without a meeting, shall not be more than ten (10) days from the date upon which the resolution fixing the record date is adopted by the Board; and (3) in the case of any other action, shall not be more than sixty (60) days prior to such other action. If no record date is fixed:  (1) the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held; (2) the record date for determining stockholders entitled to express consent to corporate action in writing without a meeting, when no prior action of the Board is required by law, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation in accordance with applicable law, or, if prior action by the Board is required by law, shall be at the close of business on the day on which the Board adopts the resolution taking such prior action; and (3) the record date for determining stockholders for any other purpose shall be at the close of business on the day on which the Board adopts the resolution relating thereto. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.

Section 7.5. Lost, Destroyed or Mutilated Certificates.

In case of loss, destruction or mutilation of any certificate of stock, another may be issued in its place upon proof of such loss, destruction or mutilation and upon the giving of a bond of indemnity to the Corporation in such form and in such sum as the Board may direct; provided that a new certificate may be issued without requiring any bond when, in the judgment of the Board, it is proper so to do.

Section 7.6. Transfer Agent and Registrar; Regulations.

The Corporation may, if and whenever the Board so determines, maintain in the State of Delaware or any other state of the United States, one or more transfer offices or agencies and also one or more registry offices which offices and agencies may establish rules and regulations for the issue, transfer and registration of certificates. No certificates for shares of stock of the Corporation in respect of which a transfer agent and registrar shall have been designated shall be valid unless countersigned by such transfer agent and registered by such registrar. The Board may also make such additional rules and regulations as it may deem expedient concerning the issue, transfer and registration of shares represented by certificates and shares without certificates.

Section 7.7. Dividends.

Subject to any applicable limitations set forth in the DGCL, the Certificate or these Bylaws, the Board may declare and pay dividends upon the outstanding shares of the stock of the Corporation, which dividends may be paid either in cash, in property or in shares of the stock of the Corporation.

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ARTICLE VIII
SEAL

The Board may, by resolution, adopt a corporate seal. The corporate seal shall be a die and have inscribed thereon the name of the Corporation, the year of its organization and the word “Delaware.”  The seal may be used by causing it or a facsimile thereof to be affixed or reproduced or otherwise. The seal may be altered from time to time by the Board.

ARTICLE IX
GENERAL PROVISIONS

Section 9.1. Fiscal Year.

The fiscal year of the Corporation ends on the Friday closest to March 31 of such year, subject to change by the Board.

Section 9.2. Section Headings.

Section headings in these Bylaws are for convenience of reference only shall not be given any substantive effect in limiting or construing any provision herein.

Section 9.3. Inconsistent Provisions.

In the event that any provision of these Bylaws is or becomes inconsistent with any provision of the Certificate, the DGCL or any other applicable law, the provisions of these Bylaws shall not be given any effect to the extent of such inconsistency but shall otherwise be given full force and effect.

ARTICLE X
AMENDMENTS

In furtherance of, and not in limitation of, the powers conferred by the DGCL and subject to the provisions of the Certificate, the Board of Directors is expressly authorized and empowered to adopt, amend or repeal these Bylaws of the Corporation. These Bylaws may also be altered, amended or repealed by the stockholders having the requisite voting power with respect thereto, provided that, in the case of any such action by stockholders, the affirmative vote of at least 50 percent of the votes entitled to be cast by the then outstanding Voting Shares, voting together as a single class, until such time as Veritas Capital Management II, L.L.C. beneficially owns less than 50 percent of the outstanding Voting Shares, and thereafter, at least 80 percent of the votes entitled to be cast by the then outstanding Voting Shares, voting together as a single voting class, shall be required in order for the stockholders to amend, alter, change or repeal any provision of these Bylaws or to adopt any additional Bylaw.

ARTICLE XI
EFFECTIVE DATE

These Bylaws shall become effective concurrently with the effectiveness of the Certificate approved by the Board and stockholders of the Corporation.

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TABLE OF CONTENTS

ARTICLE I MEETINGS OF STOCKHOLDERS		1
Section 1.1.	Place of Meetings	1
Section 1.2.	Annual Meetings	1
Section 1.3.	Special Meetings	1
Section 1.4.	Notice of Meetings	1
Section 1.5.	Waiver of Notice	2
Section 1.6.	Quorum	2
Section 1.7.	Organization and Order of Business	2
Section 1.8.	Notice of Stockholder Business and Nominations	2
Section 1.9.	Voting	6
Section 1.10.	Written Authorization	6
Section 1.11.	Electronic Authorization	6
Section 1.12.	Inspectors	6
ARTICLE II BOARD		7
Section 2.1.	General Powers	7
Section 2.2.	Compensation	7
Section 2.3.	Place of Meetings	7
Section 2.4.	Organizational Meeting	7
Section 2.5.	Regular Meetings	7
Section 2.6.	Special Meetings	7
Section 2.7.	Quorums/Required Vote	8
Section 2.8.	Waivers of Notice and Meetings	8
Section 2.9.	Telephone Meetings	8
Section 2.10.	Actions Without Meetings	8
Section 2.11.	Creation of Committees	8
Section 2.12.	Director Removal	9
ARTICLE III EXECUTIVE COMMITTEE		9
Section 3.1.	How Constituted and Powers	9
Section 3.2.	Organization, Etc.	9
Section 3.3.	Meetings	9
Section 3.4.	Quorum and Manner of Action	10
Section 3.5.	Removal	10
Section 3.6.	Vacancies	10
ARTICLE IV OFFICERS		10
Section 4.1.	Number, Term, Election	10

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Section 4.2.	Chairman of the Board	10
Section 4.3.	Chief Executive Officer	10
Section 4.4.	President	11
Section 4.5.	Vice Presidents	11
Section 4.6.	Assistant Vice Presidents	11
Section 4.7.	Chief Financial Officer	11
Section 4.8.	Secretary	12
Section 4.9.	Assistant Secretary	12
Section 4.10.	Compensation	12
ARTICLE V REMOVALS AND RESIGNATIONS		12
Secon 5.1.	Removal of Officers	12
Section 5.2.	Resignation	13
Section 5.3.	Vacancies	13
ARTICLE VI CONTRACTS, LOANS, CHECKS, DRAFTS, DEPOSITS, ETC.		13
Section 6.1.	Execution of Contracts	13
Section 6.2.	Loans	13
Section 6.3.	Checks, Drafts, Etc.	13
Section 6.4.	Deposits	14
Section 6.5.	Voting of Securities	14
ARTICLE VII CAPITAL STOCK		14
Section 7.1.	Shares	14
Section 7.2.	Stock Transfer Books and Transfer of Shares	15
Section 7.3.	Holder of Record	15
Section 7.4.	Record Date	15
Section 7.5.	Lost, Destroyed or Mutilated Certificates	16
Section 7.6.	Transfer Agent and Registrar; Regulations	16
Section 7.7.	Dividends	16
ARTICLE VIII SEAL		17
ARTICLE IX GENERAL PROVISIONS		17
Section 9.1.	Fiscal Year	17
Section 9.2.	Section Headings	17
Section 9.3.	Inconsistent Provisions	17
ARTICLE X AMENDMENTS		17
ARTICLE XI EFFECTIVE DATE		17

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EX-3.10

Exhibit 3.10

Amendment No. 3 to the
Amended and Restated Limited Liability Company
Operating Agreement of DIV Holding LLC

This Amendment No. 3 (this “Amendment”) to the Amended and Restated Limited Liability Company Operating Agreement of DIV Holding LLC, a Delaware limited liability company (the “Company”), is entered into as of June 2, 2006 by and between The Veritas Capital Fund II, L.P., a Delaware limited partnership (“Veritas”) and the Person listed as an Additional Class B Member on the signature page hereof (the “Newly Admitted Member”).

WHEREAS, the Company was formed pursuant to that certain Limited Liability Company Operating Agreement dated as of February 11, 2005 among Veritas and the other Persons listed as Class A Members named therein, as amended by that certain Amended and Restated Limited Liability Company Operating Agreement dated as of April 28, 2005 among Veritas and the other Persons listed as Class A Members named therein, as further amended by that certain Amendment No. 1 to the Amended and Restated Limited Liability Company Operating Agreement dated as of November 22, 2005 among Veritas and the other Persons listed as Class A Members and Class B Members named therein, and as further amended by that certain Amendment No. 2 to the Amended and Restated Limited Liability Company Operating Agreement dated as of March 14, 2006 among Veritas and the Persons listed as Additional Class B Members named therein (collectively, the “Operating Agreement”); and

WHEREAS, Veritas desires to admit the Newly Admitted Member to the Company as an Additional Class B Member;

NOW, THEREFORE, in consideration of the mutual agreements made herein, Veritas and the Newly Admitted Member hereby agree to amend the Operating Agreement as follows:

1.             Unless otherwise defined herein, capitalized terms shall have the meanings ascribed to them in the Operating Agreement.

2.             Effective as of the date hereof, the Newly Admitted Member is hereby admitted to the Company as an Additional Class B Member.

3.             Schedule B to the Operating Agreement is hereby amended in the form annexed hereto to reflect the names, addresses, Capital Contributions and Class B Percentage Interests of the Class B Members after the admission of the Newly Admitted Member to the Company and the reduction of the Class B Percentage Interest of a Class B Member.

4.             All other terms of the Operating Agreement shall remain in full force and effect and by his execution of this Amendment, the Newly Admitted Member makes the representations and warranties set forth in Section 5.2 of the Operating Agreement and agrees to be bound by all of the terms and conditions of the Operating Agreement applicable to the Members.

5.             This Amendment may be executed in several counterparts, and all counterparts so executed shall constitute one agreement, binding on all of the parties hereto, notwithstanding that all of the parties are not signatory to the original or the same counterpart.

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IN WITNESS WHEREOF, the parties have duly executed this Amendment as of the date first above written.

THE VERITAS CAPITAL FUND II, L.P.
By:	/s/ Robert B. McKeon
	Authorized Signatory

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EX-4.6

Exhibit 4.6

REGISTRATION RIGHTS AGREEMENT

REGISTRATION RIGHTS AGREEMENT, dated as of May 3, 2006 (this “Agreement”), by and between DYNCORP INTERNATIONAL INC., a Delaware corporation (the “Company”), and DIV HOLDING LLC (“Holding”).

W I T N E S S E T H:

WHEREAS, the Company and Holding desire to provide for the circumstances under which the Company will register securities of the Company on behalf of Holding.

NOW, THEREFORE, in consideration of the premises and of the mutual covenants and obligations hereinafter set forth, the Company hereby covenants and agrees with Holding and with each subsequent holder of Restricted Stock (as such term is defined herein), as follows:

SECTION 1            Definitions. As used herein, the following terms shall have the following respective meanings:

“Affiliate” shall mean (i) in the case of an entity, any Person who or which, directly or indirectly, through one or more intermediaries, controls or is controlled by, or is under common control with, any specified Person or (ii) in the case of an individual, such individual’s spouse, children, grandchildren or parents or a trust primarily for the benefit of any of the foregoing. For purposes of this definition, “control” (including with correlative meanings, the terms “controlling”, “controlled by” and under “common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

“Certificate of Incorporation” shall mean the Certificate of Incorporation of the Company, as amended and restated, in effect on the date hereof.

“Commission” shall mean the Securities and Exchange Commission, or any other Federal agency at the time administering the Securities Act.

“Registration Expenses” shall mean the expenses so described in Section 7 hereof.

“Restricted Stock” shall mean shares of Class A Common Stock of the Company, the certificates for which are required to bear the legend set forth in Section 2 hereof.

“Securities Act” shall mean the Securities Act of 1933, as amended, or any similar Federal statute, and the rules and regulations of the Commission thereunder, all as the same shall be in effect at the time.

“Selling Expenses” shall mean the expenses so described in Section 7 hereof.

SECTION 2            Restrictive Legend. Each certificate representing the Restricted Stock and, except as otherwise provided in Section 3 hereof, each certificate issued upon

exchange or transfer of any such securities shall be stamped or otherwise imprinted with a legend substantially in the following form:

“THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 NOR UNDER APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS IT HAS BEEN REGISTERED UNDER SUCH LAWS OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE.”

SECTION 3            Notice of Proposed Transfer. Prior to any proposed transfer of any Restricted Stock (other than under the circumstances described in Section 4 or 5 hereof), the holder thereof shall give written notice to the Company of its intention to effect such transfer. Each such notice shall describe the manner of the proposed transfer and, if requested by the Company, shall be accompanied by an opinion of counsel satisfactory to the Company to the effect that the proposed transfer may be effected without registration under the Securities Act, whereupon such holder shall be entitled to transfer such securities in accordance with the terms of its notice; provided, however, that no such opinion of counsel shall be required for a transfer by a holder of Restricted Stock (x) to an Affiliate of such holder or (y) in the case of a holder that is a partnership, to a partner or employee of such holder or a retired partner or retired employee of such holder who retires after the date hereof, or to the estate of any such partner, retired partner, employee or retired employee, or a transfer by gift, will or intestate succession from any holder of Restricted Stock to his or her spouse or members of his or her or his or her spouse’s family or a trust for the benefit of any of the foregoing persons, in any such case set forth in clauses (x) and (y), only if the transferee agrees in writing to be subject to the terms hereof to the same extent as if such transferee were an original holder of Restricted Stock hereunder. All Restricted Stock transferred as above provided shall bear the legend set forth in Section 2, except that such securities shall not bear such legend if (i) such transfer is in accordance with the provisions of Rule 144 (or any other rule permitting public sale without registration under the Securities Act) or (ii) the opinion of counsel referred to above is to the further effect that the transferee and any subsequent transferee (other than an affiliate of the Company) would be entitled to transfer such securities in a public sale without registration under the Securities Act.

SECTION 4            Required Registration.

(a)           At any time following the consummation of an initial public offering by the Company of its securities, Holding may, by written notice, request on not more than five occasions that the Company register under the Securities Act all or any portion of the shares of Restricted Stock held by such requesting holders for sale in the manner specified in such notice. Notwithstanding anything to the contrary contained herein, no request may be made under this Section 4 within 360 days after the effective date of a registration statement filed by the Company covering a firm commitment underwritten public offering in which the holders of Restricted Stock shall have been entitled to join pursuant to this Section 4 or Section 5 hereof and in which there shall have been effectively registered all shares of Restricted Stock as to which registration shall have been so requested (and which requests shall total at least fifty percent of the shares of Restricted Stock originally purchased by Holding).

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(b)           Promptly following receipt of any notice under this Section 4 the Company shall file and use its best efforts to have declared effective a registration statement under the Securities Act for the public sale, in accordance with the method of disposition specified in such notice from requesting holders, of the number of shares of Restricted Stock specified in such notice (and in any notices received from other holders of Restricted Stock within 20 days after the date of such notice from the Company). If such method of disposition shall be an underwritten public offering, the Company may designate the managing underwriter of such offering, subject to the approval of a majority in interest of the selling holders of Restricted Stock, which approval shall not be unreasonably withheld. The number of shares of Restricted Stock to be included in such an underwriting may be reduced if and to the extent that the managing underwriter shall be of the opinion that such inclusion would adversely affect the marketing of the securities to be sold therein. The Company shall be obligated to register Restricted Stock pursuant to requests made by Holding under this Section 4 on two occasions only; provided, however, that as to such occasion such obligation shall be deemed satisfied only when a registration statement covering all shares of Restricted Stock specified in notices received as aforesaid, for sale in accordance with the method of disposition specified by the requesting holders, shall have become effective and, if such method of disposition is a firm commitment underwritten public offering, all such shares shall have been sold pursuant thereto.

(c)           The Company shall be entitled to include in any registration statement referred to in this Section 4 for which the method of distribution is an underwritten public offering, for sale in accordance with the method of disposition specified by Holding shares of Class A Common Stock to be sold by the Company for its own account, except as and to the extent that, in the opinion of the managing underwriter (if such method of disposition shall be an underwritten public offering), such inclusion would adversely affect the marketing of the Restricted Stock to be sold. Except with respect to registration statements on Form S-3 or Form S-8, or as otherwise provided in this paragraph 4(c), the Company will not file with the Commission any other registration statement with respect to its Class A Common Stock, whether for its own account or that of other stockholders, from the date of receipt of a notice from requesting holders pursuant to this Section 4 until the completion of the period of distribution of the registration contemplated thereby.

SECTION 5            Incidental Registration; Form S-3 Registration.

(a)           If the Company at any time (other than pursuant to Section 4 hereof) proposes to register any of its securities under the Securities Act for sale to the public, whether for its own account or for the account of other security holders or both (except with respect to registration statements on Form S-4 or S-8 or another form not available for registering Restricted Stock for sale to the public), each such time it will give written notice to all holders of Restricted Stock of its intention so to do. Upon the written request of any such holder, given within 20 days after the date of receipt of any such notice, to register any of its Restricted Stock (which request shall state the intended method of disposition thereof), the Company will use its best efforts to cause the Restricted Stock as to which registration shall have been so requested to be included in the securities to be covered by the registration statement proposed to be filed by the Company, all to the extent requisite to permit the sale or other disposition by the holder (in accordance with its written request) of such Restricted Stock so registered. The Company may withdraw any such registration statement before it becomes effective or postpone the offering of

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securities contemplated by such registration statement without any obligation to the holders of any Restricted Stock. In the event that any registration pursuant to this Section 5 shall be, in whole or in part, an underwritten public offering of Class A Common Stock, any request by a holder pursuant to this Section 5 to register Restricted Stock shall specify that either (i) such Restricted Stock is to be included in the underwriting on the same terms and conditions as the shares of Class A Common Stock otherwise being sold through underwriters under such registration or (ii) such Restricted Stock is to be sold in the open market without any underwriting, on terms and conditions comparable to those normally applicable to offerings of Class A Common Stock in reasonably similar circumstances. The number of shares of Restricted Stock to be included in such an underwriting may be reduced (in accordance with Section 11 hereof) if and to the extent that the managing underwriter shall be of the opinion that such inclusion would adversely affect the marketing of the securities to be sold by the Company therein; provided, however, that if any shares are to be included in such underwriting for the account of any person other than the Company, the number of shares to be included by any such person shall be reduced first; and provided further, however, that the number of any such shares held by any person other than the holders of Restricted Stock hereunder shall be reduced before the number of any such shares held by the holders of Restricted Stock hereunder is reduced. Notwithstanding anything to the contrary contained in this Section 5, in the event that there is an underwritten offering of securities of the Company pursuant to a registration covering Restricted Stock and a selling holder of Restricted Stock does not elect to sell his, her or its Restricted Stock to the underwriters of the Company’s securities in connection with such offering, such holder shall refrain from selling such Restricted Stock not registered pursuant to this Section 5 during the period of distribution of the Company’s securities by such underwriters and the period in which the underwriting syndicate participates in the after market; provided, however, that such holder shall, in any event, be entitled to sell its Restricted Stock in connection with such registration commencing on the 120th day after the effective date of such registration statement.

(b)           If, at a time when Form S-3 is available for such registration, the Company shall receive from Holding a written request or requests that the Company effect a registration on Form S-3 of any of such holder’s Restricted Stock, the Company will promptly give written notice of the proposed registration to all other holders of Restricted Stock and, as soon as practicable, effect such registration and all such related qualifications and compliances as may be requested and as would permit or facilitate the sale and distribution of all Restricted Stock as are specified in such request and any written requests of other holders given within 20 days after receipt of such notice. The Company shall not be required to file a registration statement under Form S-3 if it would not be required to file a registration statement under Section 4 hereof pursuant to Section 4(a)(iv). The Company shall have no obligation to effect a registration under this Section 5(b) unless either (i) all the outstanding shares of Restricted Stock are requested to be sold pursuant to such registration or (ii) the aggregate offering price of the securities requested to be sold pursuant to such registration is, in the good faith judgment of the Company, expected to be equal to or greater than $1,000,000. Any registration under this Section 5(b) will not be counted as a registration under Section 4 above.

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SECTION 6            Registration Procedures. If and whenever the Company is required by the provisions of Section 4 or 5 hereof to use its best efforts to effect the registration of any shares of Restricted Stock under the Securities Act, the Company will, as expeditiously as possible:

(a)           prepare and file with the Commission a registration statement (which, in the case of an underwritten public offering pursuant to Section 4 hereof, shall be on Form S-l or other form of general applicability satisfactory to the managing underwriter selected as therein provided) with respect to such securities and use its best efforts to cause such registration statement to become and remain effective for the period of the distribution contemplated thereby (determined as hereinafter provided);

(b)           prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective for the period specified in paragraph 6(a) above and as to comply with the provisions of the Securities Act with respect to the disposition of all Restricted Stock covered by such registration statement in accordance with the sellers’ intended method of disposition set forth in such registration statement for such period;

(c)           furnish to Holding and to each underwriter such number of copies of the registration statement and the prospectus included therein (including each preliminary prospectus) as such persons may reasonably request in order to facilitate the public sale or other disposition of the Restricted Stock covered by such registration statement;

(d)           use its best efforts to register or qualify the Restricted Stock covered by such registration statement under the securities or blue sky laws of such jurisdictions as Holding or, in the case of an underwritten public offering, the managing underwriter shall reasonably request;

(e)           immediately notify Holding under such registration statement and each underwriter, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, of the happening of any event as a result of which the prospectus contained in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state any material fact required to be stated therein not misleading in the light of the circumstances then existing;

(f)            use its best efforts to furnish, at the request of Holding, on the date that Restricted Stock is delivered to the underwriters for sale pursuant to such registration: (i) an opinion dated such date of counsel representing the Company for the purposes of such registration, addressed to the underwriters and to Holding, stating (A) that such registration statement has become effective under the Securities Act, (B) that, to the best knowledge of such counsel, no stop order suspending the effectiveness thereof has been issued and no proceedings for that purpose have been instituted or are pending or contemplated under the Securities Act and (C) that the registration statement and the related prospectus, and each amendment or supplement thereof, comply as to form in all material respects with the requirements of the Securities Act and the applicable rules and regulations of the Commission thereunder (except that such counsel need not express any opinion as to financial statements contained therein), and to such other

5

effects as may reasonably be requested by counsel for the underwriters or by Holding or its counsel, and (ii) a letter dated such date from the independent public accountants retained by the Company, addressed to the underwriters and to Holding, stating that they are independent public accountants within the meaning of the Securities Act and that, in the opinion of such accountants, the financial statements of the Company included in the registration statement or the prospectus, or any amendment or supplement thereof, comply as to form in all material respects with the applicable accounting requirements of the Securities Act, and such letter shall additionally cover such other financial matters (including information as to the period ending no more than five business days prior to the date of such letter) with respect to the registration in respect of which such letter is being given as such underwriters or Holding may reasonably request; and

(g)           make available for inspection by Holding, any underwriter participating in any distribution pursuant to such registration statement, and any attorney, accountant or other agent retained by Holding or underwriter, all financial and other records, pertinent corporate documents and properties of the Company, and cause the Company’s officers, directors and employees to supply all information reasonably requested by any Holding, underwriter, attorney, accountant or agent in connection with such registration statement.

For purposes of paragraphs 6(a) and (b) above and of Section 4(c) hereof, the period of distribution of Restricted Stock in a firm commitment underwritten public offering shall be deemed to extend until each underwriter has completed the distribution of all securities purchased by it, and the period of distribution of Restricted Stock in any other registration shall be deemed to extend until the earlier of the sale of all Restricted Stock covered thereby or nine months after the effective date thereof

In connection with each registration hereunder, the selling holders of Restricted Stock will furnish to the Company in writing such information with respect to themselves and the proposed distribution by them as shall be necessary in order to assure compliance with Federal and applicable state securities laws.

In connection with each registration pursuant to Sections 4 and 5, hereof covering an underwritten public offering, the Company agrees to enter into a written agreement with the managing underwriter selected in the manner herein provided in such form and containing such provisions as are customary in the securities business for such an arrangement between major underwriters and companies of the Company’s size and investment stature, provided that such agreement shall not contain any such provision applicable to the Company which is inconsistent with the provisions hereof and provided, further, that the time and place of the closing under said agreement shall be as mutually agreed upon between the Company and such managing underwriter.

SECTION 7            Expenses. All expenses incurred by the Company in complying with Sections 4 and 5 hereof, including, without limitation, all registration and filing fees, printing expenses, fees and disbursements of counsel and independent public accountants for the Company, fees of the National Association of Securities Dealers, Inc., transfer taxes, fees of transfer agents and registrars and costs of insurance and fees and expenses of counsel for Holding, but excluding any Selling Expenses, are herein called “Registration Expenses.” All

6

underwriting discounts and selling commissions applicable to the sale of Restricted Stock are herein called “Selling Expenses.” The Company will pay all Registration Expenses in connection with each registration statement filed pursuant to Section 4 or Section 5 hereof. All Selling Expenses incurred in connection with any sale of Restricted Stock by Holding shall be borne by Holding, provided, however, if the Company withdraws any registration statement before it becomes effective with respect to which Holding shall have exercised incidental registration rights as contemplated by Section 5(a), the Company shall reimburse Holding for all Selling Expenses incurred in connection with such registration.

SECTION 8            Indemnification. In the event of a registration of any of the Restricted Stock under the Securities Act pursuant to Section 4 or 5 hereof, the Company will indemnify and hold harmless Holding and each underwriter of such Restricted Stock thereunder and each other person, if any, who controls Holding or underwriter within the meaning of the Securities Act, against any and all losses, claims, damages, expenses or liabilities, joint or several, to which Holding or underwriter or controlling person may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in any registration statement under which such Restricted Stock was registered under the Securities Act pursuant to Section 4 or 5, any preliminary prospectus or final prospectus contained therein, or any amendment or supplement thereof, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse each Holding, each such underwriter and each such controlling person for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability, expense or action; provided, however, that the Company will not be liable in any such case if and to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission so made in conformity with information furnished by Holding such underwriter or such controlling person in writing specifically for use in such registration statement or prospectus.

In the event of a registration of any of the Restricted Stock under the Securities Act pursuant to Section 4 or 5, hereof, each seller of such Restricted Stock thereunder, severally and not jointly, will indemnify and hold harmless the Company and each person, if any, who controls the Company within the meaning of the Securities Act, each officer of the Company who signs the registration statement, each director of the Company, each underwriter and each person who controls any underwriter within the meaning of the Securities Act, against all losses, claims, damages, expenses or liabilities, joint or several, to which the Company or such officer or director or underwriter or controlling person may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages, expenses or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the registration statement under which such Restricted Stock was registered under the Securities Act pursuant to Section 4 or 5, any preliminary prospectus or final prospectus contained therein, or any amendment or supplement thereof, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse the Company and each such officer, director, underwriter and controlling person for any legal or other expenses reasonably incurred by them in connection with investigating or defending any

7

such loss, claim, damage, liability or action, and provided, however, that Holding will be liable hereunder in any such case if and only to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in reliance upon and in conformity with information pertaining to Holding, as such, furnished in writing to the Company by Holding specifically for use in such registration statement or prospectus; provided, further, however, that the liability of Holding hereunder shall be limited to the proportion of any such loss, claim, damage, liability or expense which is equal to the proportion that the public offering price of the shares sold by Holding under such registration statement bears to the total public offering price of all securities sold thereunder, but not to exceed the proceeds received by Holding from the sale of Restricted Stock covered by such registration statement. Promptly after receipt by an indemnified party hereunder of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party hereunder, notify the indemnifying party in writing thereof, but the omission so to notify the indemnifying party shall not relieve it from any liability which it may have to any indemnified party under this Section 8. In case any such action shall be brought against any indemnified party and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate in and, to the extent it shall wish, to assume and undertake the defense thereof with counsel reasonably satisfactory to such indemnified party, and, after notice from the indemnifying party to such indemnified party of its election to assume and undertake the defense thereof, the indemnifying party shall not be liable to such indemnified party under this Section 8 for any legal expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation and of liaison with counsel so selected; provided, however, that, if the defendants in any such action include both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded that there may be reasonable defenses available to it which are different from or additional to those available to the indemnifying party or if the interests of the indemnified party reasonably may be deemed to conflict with the interests of the indemnifying party, the indemnified party shall have the right to select a separate counsel and to assume such legal defenses and otherwise to participate in the defense of such action, with the expenses and fees of such separate counsel and other expenses related to such participation to be reimbursed by the indemnifying party as incurred.

Notwithstanding the foregoing, any indemnified party shall have the right to retain its own counsel in any such action, but the fees and disbursements of such counsel shall be at the expense of such indemnified party unless (i) the indemnifying party shall have failed to retain counsel for the indemnified person as aforesaid or (ii) the indemnifying party and such indemnified party shall have mutually agreed to the retention of such counsel. It is understood that the indemnifying party shall not, in connection with any action or related actions in the same jurisdiction, be liable for the fees and disbursements of more than one separate firm qualified in such jurisdiction to act as counsel for the indemnified party. The indemnifying party shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party from and against any loss or liability by reason of such settlement or judgment. If the indemnification provided for in the first two paragraphs of this Section 8 is unavailable to or insufficient to hold harmless an indemnified party under such paragraphs in respect of any losses, claims, damages or liabilities or actions in respect thereof referred to therein, then each indemnifying party shall in lieu of indemnifying such indemnified

8

party contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages, liabilities or actions in such proportion as appropriate to reflect the relative fault of the Company, on the one hand, and Holding, on the other, in connection with the statement or omissions which resulted in such losses, claims, damages, liabilities or actions, as well as any other relevant equitable considerations including the failure to give any notice under the third paragraph of this Section 8. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company, on the one hand, or by Holding, on the other, and to the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.

The Company and Holding agree that it would not be just and equitable if contribution pursuant to this Section 8 were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in the immediately preceding paragraph. The amount paid or payable by an indemnified party as a result of the losses, claims, damages, liabilities or action in respect thereof, referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this and the immediately preceding paragraph, Holding shall not be required to contribute any amount in excess of the amount, if any, by which the total price at which the Class A Common Stock sold by it was offered to the public exceeds the amount of any damages which it would have otherwise been required to pay by reason of such untrue or alleged untrue statement of omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who is not guilty of such fraudulent misrepresentation. The indemnification of underwriters provided for in this Section 8 shall be on such other terms and conditions as are at the time customary and reasonably required by such underwriters. In that event the indemnification of Holding in such underwriting shall at Holding’s request be modified to conform to such terms and conditions.

SECTION 9            Changes in Class A Common Stock. If, and as often as, there are any changes in the Class A Common Stock by way of stock split, stock dividend, combination or reclassification, or through merger, consolidation, reorganization or recapitalization or by any other means, appropriate adjustment shall be made in the provisions hereof, as may be required, so that the rights and privileges granted hereby shall continue with respect to the Class A Common Stock as so changed.

SECTION 10          Representations and Warranties of the Company. The Company represents and warrants to Holding as follows (which representations and warranties shall survive the execution and delivery of this Agreement):

(a)           The execution, delivery and performance of this Agreement by the Company have been duly authorized by all requisite corporate action and will not violate any provision of law, any order of any court or other agency of government the Certificate of Incorporation or By-laws of the Company, or any provision of any indenture, agreement or other instrument to which it or any of its properties or assets is bound, or conflict with, result in a

9

breach of or constitute (with due notice or lapse of time or both) a default under any such indenture, agreement or other instrument, result in the creation or imposition of any lien, charge or encumbrance of any nature whatsoever upon any of the properties or assets of the Company.

(b)           This Agreement has been duly executed and delivered by the Company and constitutes the legal, valid and binding obligation of the Company, enforceable in accordance with its terms.

SECTION 11          Priority on Registration. If the managing underwriter or underwriters advise the Company and the holders of the Restricted Stock to be registered in writing that in its or their opinion the number of shares of Restricted Stock proposed to be sold in any registration and any other securities of the Company requested or proposed to be included in such registration exceeds the number that can be sold in such offering without (A) creating a substantial risk that the proceeds or price per share that will be derived from such registration will be materially reduced or that the number of Restricted Stock to be registered is too large a number to be reasonably sold, or (B) materially and adversely affecting such registration in any other respect, the Company will (x) include in such registration the aggregate number of Restricted Stock to be registered for each stockholder to be reduced firstly, against the other stockholders, secondly, against Holding; (in each case pro rata based on the amount of Restricted Stock of the stockholders in the applicable class requested to be included in such registration), and (y) not allow any securities other than Restricted Stock to be included in such registration unless all Restricted Stock request to be included shall have been included therein, and then only to the extent recommended by the managing underwriter or determined by the Company after consultation with an investment banker of national recognized standing (notification of which number shall be given by the Company to the holders of Restricted Stock).

SECTION 12          Rule 144 Reporting. The Company agrees as follows:

(a)           The Company shall make and keep public information available as those terms are understood and defined in Rule 144 under the Securities Act, at all times from and after 90 days following the effective date of the first registration of the Company under the Securities Act of an offering of its securities to the general public.

(b)           The Company shall file with the Commission in a timely manner all reports and other documents as the Commission may prescribe under Section 13(a) or 15(d) of the Exchange Act at any time after the Company has become subject to such reporting requirements of the Exchange Act.

(c)           The Company shall furnish to Holding forthwith upon request (i) a written statement by the Company as to its compliance with the reporting requirements of Rule 144 (at any time from and after 90 days following the effective date of the first registration statement of the Company for an offering of its securities to the general public), and of the Securities Act and the Exchange Act (at any time after it has become subject to such reporting requirements), (ii) a copy of the most recent annual or quarterly report of the Company, and (iii) such other reports and documents so filed as Holding may reasonably request to avail itself of any rule or regulation of the Commission allowing Holding to sell any such securities without registration.

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SECTION 13          Miscellaneous.

(a)           The rights arising under Sections 4 and 5 shall terminate when (i) Holding is no longer an “affiliate” as used in Rule 144 and (ii) Holding is permitted to sell all Restricted Stock then held by them pursuant to Rule 144(k).

(b)           All covenants and agreements contained in this Agreement by or on behalf of any of the parties hereto shall bind and inure to the benefit of the respective successors and assigns of the parties hereto whether so expressed or not. Without limiting the generality of the foregoing, the registration rights conferred herein on Holding shall inure to the benefit of any and all subsequent holders from time to time of its Restricted Stock for so long as the certificates representing the Restricted Stock shall be required to bear the legend specified in Section 2 hereof.

(c)           All notices, requests and other communications to be given or otherwise made to any Stockholder or other party hereto shall be deemed to be sufficient if contained in a written instrument duly transmitted by telecopy or telex or duly sent by overnight courier service or first class registered or certified mail, postage prepaid, addressed to such party at the address set forth below or at such other address as may hereafter be designated in writing by the addressee to the address or listing all parties:

(a)	if to Holding:
	DIV Holding L.L.C.
	c/o The Veritas Capital Fund II, L.P.
	660 Madison Avenue
	New York, New York 10021
	Facsimile No.:  (212) 688-0020
	Attention:	Mr. Robert B. McKeon and
		Arvind M. R. Krishnamurthy
	with a copy to:
	Schulte Roth & Zabel LLP
	919 Third Avenue
	New York, New York  10022
	Facsimile:  (212) 756-2072
	Attention:	Benjamin M. Polk, Esq.
(b)	if to the Company:
	DynCorp International Inc.
	8445 Freeport Parkway
	Suite 400
	Irving, Texas  75063
	Facsimile No:  (972) 929-2853
	Attention:	Michael J. Thorne

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with a copy to:

DynCorp International LLC

3190 Fairview Park Drive

Suite 350

Falls Church, Virginia 22042

Attention:  R.Y. Morrel

Fax No.:  (571) 722-0252

All notices hereunder shall be effective on the date of transmission if transmitted by telex or telecopy, on the first day after delivery to an overnight national courier service if sent by such service and on the date of receipt if sent by mail.

(d)           This Agreement shall be governed by and construed in accordance with the laws of the State of New York.

(e)           (i) EACH PARTY TO THIS AGREEMENT HEREBY IRREVOCABLY AGREES THAT ANY LEGAL ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR TRANSACTIONS CONTEMPLATED HEREBY MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK AND HEREBY EXPRESSLY SUBMITS TO THE PERSONAL JURISDICTION AND VENUE OF SUCH COURTS FOR THE PURPOSES THEREOF AND EXPRESSLY WAIVES ANY CLAIM OF IMPROPER VENUE AND ANY CLAIM THAT THE SUCH COURTS ARE AN INCONVENIENT FORUM. EACH PARTY HEREBY IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH SUIT, ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL. POSTAGE PREPAID, TO ITS ADDRESS SET FORTH IN SECTION 12(C) SUCH SERVICE TO BECOME EFFECTIVE 10 DAYS AFTER SUCH MAILING.

(ii)           THE COMPANY WAIVES ITS RIGHT TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS. EXCEPT AS PROHIBITED BY LAW, THE COMPANY HEREBY WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY LITIGATION REFERRED TO IN THE PRECEDING SENTENCE ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES. THE COMPANY (X) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF HOLDING HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT HOLDING WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS AND (Y) ACKNOWLEDGES THAT HOLDING HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE WAIVERS AND CERTIFICATIONS CONTAINED HEREIN.

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(f)            This Agreement constitutes the entire agreement of the parties with respect to the subject matter hereof and may not be modified or amended except in writing signed by the Company and Holding.

(g)           Holding may assign and transfer its rights and obligations hereunder, provided that any such assignee or transferee shall have assumed in writing all the obligations of Holding hereunder.

(h)           Telefacsimile transmissions of any executed original document and/or retransmission of any executed telefacsimile transmission shall be deemed to be the same as the delivery of an executed original. At the request of any party hereto Holding shall confirm telefacsimile transmissions by executing duplicate original documents and delivering the same to the requesting party or parties. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date first above written.

DYNCORP INTERNATIONAL INC.
By:	/s/ Stephen J. Cannon
	Name:	Stephen J. Cannon
	Title:	President and Chief Executive Officer
DIV HOLDING LLC
By:	The Veritas Capital Fund II, L.P., as Manager
By:	/s/ Robert B. McKeon
	Name:	Robert B. McKeon, a Managing
		Member of Veritas Capital
		Management, L.L.C., General Partner

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EX-4.7

Exhibit 4.7

DYNCORP INTERNATIONAL INC.

and

The Bank of New York,

as Rights Agent

Rights Agreement

Dated as of May 3, 2006

TABLE OF CONTENTS

		Page
Section 1.	Certain Definitions	1
Section 2.	Appointment of Rights Agent	6
Section 3.	Issuance of Rights Certificates	6
Section 4.	Form of Rights Certificates	8
Section 5.	Countersignature and Registration	9
Section 6.	Transfer, Split-Up, Combination and Exchange of Rights Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates	10
Section 7.	Exercise of Rights; Purchase Price; Expiration Date of Rights	10
Section 8.	Cancellation of Rights Certificates	12
Section 9.	Reservation and Availability of Capital Stock	13
Section 10.	Preferred Stock Record Date	14
Section 11.	Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights	14
Section 12.	Certificate of Adjusted Purchase Price or Number of Shares	21
Section 13.	Consolidation, Merger or Sale or Transfer of Assets, Cash Flow Or Earning Power	22
Section 14.	Fractional Rights and Fractional Shares	24
Section 15.	Rights of Action	26
Section 16.	Agreement of Rights Holders	26
Section 17.	Rights Certificate Holder Not Deemed a Stockholder	27
Section 18.	Concerning the Rights Agent	27
Section 19.	Merger or Consolidation or Change of Name of Rights Agent	28
Section 20.	Duties of Rights Agent	28
Section 21.	Change of Rights Agent	31
Section 22.	Issuance of New Rights Certificates	31
Section 23.	Redemption and Termination	32
Section 24.	Exchange	32
Section 25.	Notice of Certain Events	34
Section 26.	Notices	35
Section 27.	Supplements and Amendments	36
Section 28.	Successors	36
Section 29.	Determinations and Actions by the Board, Etc	36
Section 30.	No Third Party Beneficiaries	37
Section 31.	Severability	37
Section 32.	Governing Law; Jurisdiction; Waiver of Jury Trial	37
Section 33.	Counterparts	37
Section 34.	Descriptive Headings	37

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RIGHTS AGREEMENT

RIGHTS AGREEMENT, dated as of May 3, 2006 (the “Agreement”), between DynCorp International Inc., a Delaware corporation (the “Company”), and The Bank of New York, a New York trust company (the “Rights Agent”).

WHEREAS, on  May 3, 2006, the Board of Directors of the Company (the “Board”) authorized and declared as a dividend of one Right (as hereinafter defined) for each share of Class A Common Stock, par value $.01, of the Company (the “Class A Common Stock”) outstanding at the close of business on May 9, 2006 (the “Record Date”), and has authorized the issuance of one Right (as such number may hereinafter be adjusted pursuant to the provisions of Section 11(p) hereof) for each share of Class A Common Stock of the Company issued between the Record Date (whether originally issued or delivered from the Company’s treasury) and the earliest of the Close of Business on the Distribution Date, the Redemption Date and the Close of Business on the Final Expiration Date (as such terms are hereinafter defined) each Right initially representing the right to purchase one one-thousandth of a share of Series B Junior Participating Preferred Stock of the Company (the “Preferred Stock”) having the rights, powers and preferences set forth in the form of Certificate of Designation, Preferences and Rights attached hereto as Exhibit A, upon the terms and subject to the conditions hereinafter set forth (each a “Right” and collectively the “Rights”); provided, however, that Rights may be issued with respect to shares of Class A Common Stock that shall become outstanding after the Distribution Date and prior to the earlier of the Redemption Date and the Close of Business on the Final Expiration Date in accordance with the provisions of Section 22 of the Agreement;

NOW, THEREFORE, in consideration of the premises and the mutual agreements herein set forth, the parties hereby agree as follows:

Section 1.               Certain Definitions. For purposes of this Agreement, the following terms have the meanings indicated:

(a)           “Acquiring Person” shall mean any Person who or which, together with all Associates and Affiliates of such Person, shall be the Beneficial Owner of 15% or more of shares of Class A Common Stock then outstanding, but shall not include (i) any Exempted Entity, (ii) the Company, (iii) any Subsidiary of the Company, (iv) any employee benefit plan of the Company, or of any Subsidiary of the Company, or any Person or entity organized, appointed or established by the Company for or pursuant to the terms of any such plan or (v) any Person who becomes the Beneficial Owner of 15% or more of the shares of Class A Common Stock then outstanding as a result of a reduction in the number of shares of Class A Common Stock outstanding due to the repurchase of shares of Class A Common Stock by the Company unless and until such Person, after becoming aware that such Person has become the Beneficial Owner of 15% or more of the then outstanding shares of Class A Common Stock, acquires beneficial ownership of additional shares of Class A Common Stock representing 1% or more of the shares of Class A Common Stock then outstanding. Notwithstanding the foregoing, (i) if the Board determines in good faith that a Person who would otherwise be an “Acquiring Person” became the Beneficial Owner of a number of shares of Class A Common Stock such that the Person would otherwise qualify as an “Acquiring Person” inadvertently (including, without limitation,

because (A) such Person was unaware that it beneficially owned a percentage of Class A Common Stock that would otherwise cause such Person to be an “Acquiring Person” or (B) such Person was aware of the extent of its Beneficial Ownership of Class A Common stock but had no actual knowledge of the consequences of such Beneficial Ownership under this Agreement) and without any intention of changing or influencing control of the Company, then such Person shall not be deemed to be or to have become an “Acquiring Person” for any purposes of this Agreement unless and until such Person shall have failed to divest itself, as soon as practicable (as determined, in good faith, by the Board), of Beneficial Ownership of a sufficient number of shares of Class A Common Stock so that such Person would no longer otherwise qualify as an “Acquiring Person”and (ii) if as of the date hereof or prior to the first public announcement of the adoption of this Agreement, any Person is or becomes the Beneficial Owner of 15% or more of the shares of Class A Common Stock outstanding, such Person shall not be deemed to be or to become an “Acquiring Person” unless and until such time as such Person shall, after the first public announcement of the adoption of this Agreement, become the Beneficial Owner of additional shares of Class A Common Stock (other than pursuant to a dividend or distribution paid or made by the Company on the outstanding Class A Common Stock or pursuant to a split or subdivision of the outstanding Class A Common Stock), unless, upon becoming the Beneficial Owner of such additional shares of Class A Common Stock, such Person is not then the Beneficial Owner of 15% or more of the shares of Common Stock then outstanding.

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

(c)           “Adjustment Shares” shall have the meaning set forth in Section 11(a)(ii) hereof.

(d)           “Affiliate” and “Associate” shall have the respective meanings ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under the Exchange Act.

(e)           A Person shall be deemed the “Beneficial Owner” of, and shall be deemed to “beneficially own,” any securities:

(i)            which such Person or any of such Person’s Affiliates or Associates, directly or indirectly, has the right to acquire (whether such right is exercisable immediately or only after the passage of time) pursuant to any agreement, arrangement or understanding (whether or not in writing) or upon the exercise of conversion rights, exchange rights, rights, warrants or options, or otherwise; provided, however, that a Person shall not be deemed the “Beneficial Owner” of, or to “beneficially own,” (A) securities tendered pursuant to a tender or exchange offer made by or on behalf of such Person or any of such Person’s Affiliates or Associates until such tendered securities are accepted for purchase or exchange, (B) securities issuable upon exercise of Rights at any time prior to the occurrence of a Triggering Event (as hereinafter defined) or (C) securities issuable upon exercise of Rights from and after the occurrence of a Triggering Event, which Rights were acquired by such Person or any of such Person’s Affiliates or Associates prior to the Distribution Date (as hereinafter defined) or pursuant to Section 3(a) or Section 22 hereof (the “Original Rights”) or pursuant to Section 11(i) hereof in connection with an adjustment made with respect to any Original Rights;

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(ii)           which such Person or any of such Person’s Affiliates or Associates, directly or indirectly, has the right to vote or dispose of or has “beneficial ownership” of (as determined pursuant to Rule 13d-3 of the General Rules and Regulations under the Exchange Act), including pursuant to any agreement, arrangement or understanding, whether or not in writing; provided, however, that a Person shall not be deemed the “Beneficial Owner” of, or to beneficially own, any security under this subparagraph (ii) as a result of an agreement, arrangement or understanding to vote such security if such agreement, arrangement or understanding:  (A) arises solely from a revocable proxy given in response to a public proxy or consent solicitation made pursuant to, and in accordance with, the applicable provisions of the General Rules and Regulations under the Exchange Act and (B) is not reportable by such Person on Schedule 13D under the Exchange Act (or any comparable or successor report); or

(iii)          which are beneficially owned, directly or indirectly, by any other Person (or any Affiliate or Associate thereof) with which such Person (or any of such Person’s Affiliates or Associates) has any agreement, arrangement or understanding (whether or not in writing), for the purpose of acquiring, holding, voting (except pursuant to a revocable proxy as described in the proviso to subparagraph (ii) of this paragraph (e)) or disposing of any voting securities of the Company; provided, however, that nothing in this paragraph (e) shall cause a Person engaged in business as an underwriter of securities to be the “Beneficial Owner” of, or to “beneficially own,” any securities acquired through such Person’s participation in good faith in a firm commitment underwriting until the expiration of forty days after the date of such acquisition and then only if such securities continue to be owned by such Person at such expiration of forty days. Notwithstanding anything in this definition of Beneficial Ownership to the contrary, the phrase “then outstanding,” when used with reference to a Person’s Beneficial Ownership of the securities of the Company, shall mean the number of such securities then issued and outstanding together with the number of such securities not then actually issued and outstanding which such Person would be deemed to own beneficially hereunder.

(f)            “Certificate of Incorporation” shall mean the Amended and Restated Certificate of Incorporation of the Company as it in turn may be amended, restated or otherwise modified from time to time.

(g)           “Board” shall have the meaning set forth in the preamble of this Agreement.

(h)           “Business Day” shall mean any day other than a Saturday, Sunday or a day on which banking institutions in the State of New York are authorized or obligated by law or executive order to close.

(i)            “Class A Common Stock” shall mean the Class A Common Stock, $0.01 par value, of the Company, except that “Class A Common Stock” when used with reference to any Person other than the Company shall mean the capital stock with the greatest voting power of such Person, or the equity securities or other equity interest having power to control or direct the management, of such Person.

(j)            “Class A Common Stock Equivalents” shall have the meaning set forth in Section 11(a)(iii) hereof.

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(k)           “Close of Business” on any given date shall mean 5:00 P.M., New York City time, on such date; provided, however, that if such date is not a Business Day, it shall mean 5:00 P.M., New York City time, on the next succeeding Business Day.

(l)            “Company” shall have the meaning set forth in the preamble of this Agreement, as it may be modified by Section 13(a) hereof.

(m)          “Current Market Price” shall have the meaning and be computed as set forth in Section 11(d)(i) hereof.

(n)           “Current Value” shall have the meaning set forth in Section 11(a)(iii) hereof.

(o)           “Distribution Date” shall have the meaning set forth in Section 3(a) hereof.

(p)           “Equivalent Preferred Stock” shall have the meaning set forth in Section 11(b) hereof.

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

(r)            “Exchange Ratio” shall have the meaning set forth in Section 24(a) hereof.

(s)           “Exempted Entity” shall mean:  (1) any Veritas Entity, (2) any transferee of any Veritas Entity that acquires directly from any such Veritas Entity 15% or more of the then outstanding Class A Common Stock (a “Non-Veritas Exempted Entity”), (3) any transferee of any Non-Veritas Exempted Entity that acquires directly from any Non-Veritas Exempted Entity 15% or more of the then outstanding Class A Common Stock (a “Non-Veritas Exempted Entity Transferee”) and (4) any Person who or which is the Beneficial Owner of Class A Common Stock beneficially owned by an Exempted Entity; provided, however, that any Non-Veritas Entity, any Non-Veritas Exempted Entity and any Non-Veritas Exempted Entity Transferee shall cease to be an Exempted Entity as of the date that such Non-Veritas Entity, Non-Veritas Exempted Entity or Non-Veritas Exempted Entity Transferee ceases to beneficially own 15% or more of the shares of the then outstanding Class A Common Stock.

(t)            “Expiration Date” shall have the meaning set forth in Section 7(a) hereof.

(u)           “Final Expiration Date” shall have the meaning set forth in Section 7(a) hereof.

(v)           “NYSE” shall mean the New York Stock Exchange.

(w)          “NASDAQ” shall mean the National Association of Securities Dealers Automated Quotation System.

(x)            “Person” shall mean any individual, firm, corporation, partnership, limited liability company or other entity.

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(y)           “Preferred Stock” shall mean shares of Series B Junior Participating Preferred Stock, par value $0.01 per share, of the Company.

(z)            “Principal Party” shall have the meaning set forth in Section 13(b) hereof.

(aa)         “Purchase Price” shall have the meaning set forth in Sections 4(a) and 11(a)(ii) hereof.

(bb)         “Record Date” shall have the meaning set forth in the preamble of this Agreement.

(cc)         “Redemption Date” shall have the meaning set forth in Section 23(b) hereof.

(dd)         “Redemption Price” shall have the meaning set forth in Section 23(a) hereof.

(ee)         “Rights” shall have the meaning set forth in the preamble of this Agreement.

(ff)           “Rights Agent” shall have the meaning set forth in the preamble of this Agreement.

(gg)         “Rights Certificates” shall have the meaning set forth in Section 3(a) hereof

(hh)         “Section 11(a)(ii) Event” shall mean any event described in Section 11(a)(ii) hereof.

(ii)           “Section 1l(a)(ii) Trigger Date” shall have the meaning set forth in Section 11(a)(iii) hereof.

(jj)           “Section 13 Event” shall mean any event described in clauses (x), (y) or (z) of Section 13(a) hereof.

(kk)         “Spread” shall have the meaning set forth in Section 11(a)(iii) hereof.

(ll)           “Stock Acquisition Date” shall mean the earlier of the date of (i) the first date of public announcement (which, for purposes of this definition, shall include, without limitation, a report filed or amended pursuant to Section 13(d) under the Exchange Act) by the Company or an Acquiring Person that an Acquiring Person has become such or (ii) the public disclosure of facts by the Company or an Acquiring Person indicating that a Person has become such.

(mm)       “Subsidiary” of any Person shall mean any corporation or other Person in which such Person beneficially owns, directly or indirectly, an amount of voting securities sufficient to elect at least a majority of the directors or otherwise control, directly or indirectly, the management of such corporation or Person.

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(nn)         “Substitution Period” shall have the meaning set forth in Section 11(a)(iii) hereof.

(oo)         “Summary of Rights” shall have the meaning set forth in Section 3(b) hereof.

(pp)         “Trading Day” shall have the meaning set forth in Section 11(d)(l) hereof.

(qq)         “Triggering Event” shall mean any Section 11(a)(ii) Event or any Section 13 Event.

(rr)           “Veritas Entity” shall mean any of Veritas Capital Management, L.P., The Veritas Capital Fund, L.P., Veritas Capital Management II, L.L.C. or any Affiliate of any thereof, except for the Company and its Subsidiaries.

Section 2.               Appointment of Rights Agent. The Company hereby appoints the Rights Agent to act as agent for the Company in accordance with the terms and conditions hereof, and the Rights Agent hereby accepts such appointment. The Company may from time to time appoint such co-rights agents as it may deem necessary or desirable upon ten days written notice to the Rights Agent. The Rights Agent shall have no duty to supervise and shall in no event be liable for the acts or omissions of, any such co-rights agent.

Section 3.               Issuance of Rights Certificates.

(a)           Until the earlier of (i) the Close of Business on the 10th Business Day after the Stock Acquisition Date or (ii) the Close of Business on the 10th Business Day (or such later date as may be determined by action of the Board prior to such time as any Person becomes an Acquiring Person) after the date that a tender or exchange offer by any Person (other than any Exempted Entity, the Company, any Subsidiary of the Company, any employee benefit plan of the Company or of any Subsidiary of the Company, or any Person or entity organized, appointed or established by the Company for or pursuant to the terms of any such plan) is first published or sent or given within the meaning of Rule l4d-2(a) of the General Rules and Regulations under the Exchange Act, if upon consummation thereof, such Person would become an Acquiring Person (the earlier of (i) and (ii) being herein referred to as the “Distribution Date”), (x) the Rights will be evidenced (subject to the provisions of paragraph (b) of this Section 3) by the certificates for the Class A Common Stock registered in the names of the holders of the Class A Common Stock (which certificates for Class A Common Stock shall be deemed also to be certificates for Rights) and not by separate certificates and (y) the Rights will be transferable only in connection with the transfer of the underlying shares of Class A Common Stock (including a transfer to the Company). The Company shall promptly notify the Rights Agent of the occurrence of a Distribution Date and request its transfer agent to provide to the Rights Agent a stockholder list together with all other relevant information. As soon as practicable after the Rights Agent is notified of the Distribution Date and receives such notice, list and information from the Company, the Rights Agent will, at the Company’s expense, send by first-class, insured, postage-prepaid mail, to each record holder of the Class A Common Stock as of the close of business on the Distribution Date, at the address of such holder shown on the records of the Company, one or more rights certificates, in substantially the form of Exhibit B hereto (the

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“Rights Certificates”), evidencing one Right for each share of Class A Common Stock so held, subject to adjustment as provided herein. In the event that an adjustment in the number of Rights per share of Class A Common Stock has been made pursuant to Section 11(p) hereof, at the time of distribution of the Rights Certificates, the Company shall make the necessary and appropriate rounding adjustments (in accordance with Section 14(a) hereof) so that Rights Certificates representing only whole numbers of Rights are distributed and cash is paid in lieu of any fractional Rights. As of and after the Distribution Date, the Rights will be evidenced solely by such Rights Certificates. The failure to mail a Rights Certificate shall not affect the legality or validity of the Rights.

(b)           The Company will send, as promptly as practicable following the Record Date, a copy of a Summary of Rights, in the form attached hereto as Exhibit C (the “Summary of Rights”) by first-class, postage-prepaid mail, to each record holder of Class A Common Stock as of the Close of Business on the Record Date (other than any Acquiring Person or any Associate or Affiliate of any Acquiring Person), at the address of such holder shown on the records of the Company. With respect to certificates for the Class A Common Stock outstanding as of the Record Date, until the Distribution Date, the Rights will be evidenced by such certificates registered in the names of the holders thereof together with the Summary of Rights and the registered holders of the Class A Common Stock shall also be the registered holders of the associated Rights. Until the Close of Business on the Distribution Date (or the earlier of the Redemption Date or the Close of Business on the Final Expiration Date), the surrender for transfer of any certificates representing shares of Class A Common Stock outstanding on the Record Date, with or without a copy of the Summary of Rights attached thereto, shall also constitute the transfer of the Rights associated with such shares of Class A Common Stock.

(c)           Rights shall be issued in respect of all shares of Class A Common Stock which are issued (whether originally issued, from the Company’s treasury or upon the conversion of the Class B Common Stock, $0.01 par value, of the Company) on or after the Record Date but prior to the earliest of the Close of Business on the Distribution Date, the Redemption Date or the Close of Business on the Final Expiration Date. Certificates representing such shares of Class A Common Stock shall also be deemed to be certificates for Rights, and shall bear the following legend:

This certificate also evidences and entitles the holder hereof to certain Rights as set forth in the Rights Agreement between DynCorp International Inc. (the “Company”) and the Rights Agent hereunder, as it may from time to time be amended or supplemented in accordance with its terms (the “Rights Agreement”), the terms of which are hereby incorporated herein by reference and a copy of which is on file at the principal offices of the Company. Under certain circumstances, as set forth in the Rights Agreement, such Rights will be evidenced by separate certificates and will no longer be evidenced by this certificate. The Company will mail to the holder of this certificate a copy of the Rights Agreement, as in effect on the date of mailing, without charge, promptly after receipt of a written request therefor. Under certain circumstances set forth in the Rights Agreement, Rights

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issued to, or held by, any Person who is, was or becomes an Acquiring Person or any Affiliate or Associate thereof (as such terms are defined in the Rights Agreement), whether currently held by or on behalf of such Person or by any subsequent holder, may become null and void.

With respect to such certificates containing the foregoing legend, until the earlier of (i) the Distribution Date or (ii) the Expiration Date, the Rights associated with the Class A Common Stock represented by such certificates shall be evidenced by such certificates alone and registered holders of Class A Common Stock shall also be the registered holders of the associated Rights, and the transfer of any of such certificates shall also constitute the transfer of the Rights associated with the Class A Common Stock represented by such certificates.

In the event that the Company purchases or otherwise acquires any Class A Common Stock after the Record Date but prior to the Distribution Date, any Rights associated with such Class A Common Stock shall be deemed canceled and retired so that the Company shall not be entitled to exercise any Rights associated with the Class A Common Stock which are no longer outstanding.

Notwithstanding this paragraph (c), the omission of a legend shall not affect the enforceability of any part of this Agreement or the rights of any holder of the Rights.

Section 4.               Form of Rights Certificates.

(a)           The Rights Certificates (and the forms of election to purchase and of assignment to be printed on the reverse thereof) shall each be substantially in the form set forth in Exhibit B hereto and may have such marks of identification or designation and such legends, summaries or endorsements printed thereon as the Company may deem appropriate (but which do not affect the rights, duties or responsibilities of the Rights Agent) and as are not inconsistent with the provisions of this Agreement, or as may be required to comply with any applicable law or with any rule or regulation made pursuant thereto or with any rule or regulation of any stock exchange on which the Rights may from time to time be listed, or to conform to usage. The Rights Certificates shall be in machine printable format and in a form reasonably satisfactory to the Rights Agent. Subject to the provisions of Section 11 and Section 22 hereof, the Rights Certificates, whenever distributed, shall show the date of countersignature, and on their face shall entitle the holders thereof to purchase such number of one one-thousandth of a share of Preferred Stock as shall be set forth therein at the price set forth therein (such exercise price per one one-thousandth of a share, the “Purchase Price”), but the amount and type of securities purchasable upon the exercise of each Right and the Purchase Price thereof shall be subject to adjustment as provided herein.

(b)           Any Rights Certificate issued pursuant to Section 3(a), Section 11(i) or Section 22 hereof that represents Rights beneficially owned by:  (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such

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Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Person or to any Person with whom such Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights or (B) a transfer which the Board has determined is part of a plan, continuing agreement, arrangement or understanding which has as a primary purpose or effect avoidance of Section 7(e) hereof, or any transferee of such persons, and provided that the Company shall have notified the Rights Agent that this Section 4(b) applies, any Rights Certificate issued pursuant to Section 6 or Section 11 hereof upon transfer, exchange, replacement or adjustment of any other Rights Certificate referred to in this sentence, shall contain (to the extent feasible) the following legend:

The Rights represented by this Rights Certificate are or were beneficially owned by a Person who was or became an Acquiring Person or an Affiliate or Associate of an Acquiring Person (as such terms are defined in the Rights Agreement). Accordingly, this Rights Certificate and the Rights represented hereby may become null and void in the circumstances specified in Section 7(e) of the Rights Agreement.

The Company shall supply the Rights Agent with such legended Rights Certificates.

Section 5.               Countersignature and Registration.

(a)           The Rights Certificates shall be executed on behalf of the Company by its Chairman of the Board, its President, its Chief Executive Officer or any Vice President, either manually or by facsimile signature, and shall have affixed thereto the Company’s seal or a facsimile thereof which shall be attested by the Secretary or an Assistant Secretary of the Company, either manually or by facsimile signature. The Rights Certificates shall be countersigned by the Rights Agent, either manually or by facsimile signature, and shall not be valid for any purpose unless so countersigned. In case any officer of the Company who shall have signed any of the Rights Certificates shall cease to be such officer of the Company before countersignature by the Rights Agent and issuance and delivery by the Company, such Rights Certificates, nevertheless, may be countersigned by the Rights Agent and issued and delivered by the Company with the same force and effect as though the person who signed such Rights Certificates had not ceased to be such officer of the Company; and any Rights Certificates may be signed on behalf of the Company by any person who, at the actual date of the execution of such Rights Certificate, shall be a proper officer of the Company to sign such Rights Certificate, although at the date of the execution of this Rights Agreement any such person was not such an officer.

(b)           Following the Distribution Date and receipt by the Rights Agent of all reasonably necessary information, the Rights Agent will keep, or cause to be kept, at its principal office or offices designated as the appropriate place for surrender of Rights Certificates upon exercise or transfer, books for registration and transfer of the Rights Certificates issued hereunder. Such books shall show the names and addresses of the respective holders of the

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Rights Certificates, the number of Rights evidenced on its face by each of the Rights Certificates and the date of each of the Rights Certificates.

Section 6.               Transfer, Split-Up, Combination and Exchange of Rights Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates.

(a)           Subject to the provisions of this Agreement, at any time after the Close of Business on the Distribution Date, and at or prior to the Close of Business on the Expiration Date, any Rights Certificate or Certificates (other than Rights Certificates representing Rights that may have been exchanged pursuant to Section 24 hereof) may be transferred, split up, combined or exchanged for another Rights Certificate or Certificates, entitling the registered holder to purchase a like number of one one-thousandth of a share of Preferred Stock (or, following a Triggering Event, Class A Common Stock, other securities, cash or other assets, as the case may be) as the Rights Certificate or Certificates surrendered then entitles such holder (or former holder in the case of a transfer) to purchase. Any registered holder desiring to transfer, split up, combine or exchange any Rights Certificate or Certificates shall make such request in writing delivered to the Rights Agent, and shall surrender the Rights Certificate or Certificates to be transferred, split up, combined or exchanged at the office of the Rights Agent designated for such purpose. Neither the Rights Agent nor the Company shall be obligated to take any action whatsoever with respect to the transfer of any such surrendered Rights Certificate until the registered holder shall have properly completed and signed the certificate contained in the form of assignment on the reverse side of such Rights Certificate and shall have provided such additional evidence of the identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates thereof as the Company or the Rights Agent shall reasonably request. Thereupon the Rights Agent shall, subject to the provisions of this Agreement, countersign and deliver to the Person entitled thereto a Rights Certificate or Rights Certificates, as the case may be, as so requested. The Company may require payment by the holders of Rights of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any transfer, split up, combination or exchange of Rights Certificates. The Rights Agent shall have no duty or obligation to take any action under any Section of this Agreement which requires the payment by a holder of Rights of applicable taxes and governmental charges unless and until the Rights Agent is satisfied that all such taxes and/or charges have been paid.

(b)           Upon receipt by the Company and the Rights Agent of evidence reasonably satisfactory to them of the loss, theft, destruction or mutilation of a Rights Certificate, and, in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to them, and, at the Company’s or the Rights Agent’s request, reimbursement to the Company and the Rights Agent of all reasonable expenses incidental thereto, and, upon surrender to the Rights Agent and cancellation of the Rights Certificate, if mutilated, the Company will execute and deliver a new Rights Certificate of like tenor to the Rights Agent for countersignature and delivery to the registered owner in lieu of the Rights Certificate so lost, stolen, destroyed or mutilated.

Section 7.               Exercise of Rights; Purchase Price; Expiration Date of Rights.

(a)           Except as otherwise provided herein, at any time after the Distribution Date the registered holder of any Rights Certificate may exercise the Rights evidenced thereby

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(except as otherwise provided herein including, without limitation, the restrictions on exercisability set forth in Section 9(c), Section 11(a)(ii) and Section 23(a) hereof) in whole or in part upon surrender of the Rights Certificate, with the form of election to purchase and the certificate on the reverse side thereof duly executed, to the Rights Agent at the principal office or offices of the Rights Agent designated for such purpose, together with payment of the aggregate Purchase Price with respect to the total number of one one-thousandth of a share (or other securities, cash or other assets, as the case may be) as to which such surrendered Rights are then exercisable, at or prior to the earlier of (i) 5:00 P.M., New York City time, on May 3, 2015 (such date, the “Final Expiration Date”); (ii) the time at which the right to exercise the Rights terminates pursuant to Section 23 hereof; or (iii) the time at which the right to exercise the Rights terminates pursuant to Section 24 hereof (the earliest of (i), (ii) and (iii) being herein referred to as the “Expiration Date”).

(b)           The Purchase Price for each one one-thousandth of a share of Preferred Stock pursuant to the exercise of a Right shall initially be $75.00 and shall be subject to adjustment from time to time as provided in Section 11 and Section 13 hereof and shall be payable in accordance with paragraph (c) below.

(c)           Except as otherwise provided herein, upon receipt of a Rights Certificate representing exercisable Rights, with the form of election to purchase and the certificate duly executed, accompanied by payment, with respect to each Right so exercised, of the Purchase Price per one one-thousandth of a share of Preferred Stock (or other shares, securities, cash or other assets, as the case may be) to be purchased as set forth below and an amount equal to any applicable tax or charge, the Rights Agent shall, subject to Section 20(k) hereof, thereupon promptly (i) (A) requisition from any transfer agent of the shares of Preferred Stock (or make available, if the Rights Agent is the transfer agent for such shares) certificates for the total number of one one-thousandth of a share of Preferred Stock to be purchased and the Company hereby irrevocably authorizes its transfer agent to comply with all such requests or (B) if the Company shall have elected to deposit the total number of shares of Preferred Stock issuable upon exercise of the Rights hereunder with a depositary agent, requisition from the depositary agent depositary receipts representing such number of one one-thousandth of a share of Preferred Stock as are to be purchased (in which case certificates for the shares of Preferred Stock represented by such receipts shall be deposited by the transfer agent with the depositary agent) and the Company will direct the depositary agent to comply with such request, (ii) requisition from the Company the amount of cash, if any, to be paid in lieu of fractional shares in accordance with Section 14 hereof, (iii) after receipt of such certificates or depositary receipts, cause the same to be delivered to or, upon the order of the registered holder of such Rights Certificate, registered in such name or names as may be designated by such holder and (iv) after receipt thereof, deliver such cash, if any, to or upon the order of the registered holder of such Rights Certificate. The payment of the Purchase Price (as such amount may be reduced pursuant to Section 11(a)(iii) hereof) shall be made in cash or by certified bank check or bank draft payable to the order of the Company. In the event that the Company is obligated to issue other securities (including Class A Common Stock) of the Company, pay cash and/or distribute other property pursuant to Section 11(a) hereof, the Company will make all arrangements necessary so that such other securities, cash and/or other property are available for distribution by the Rights Agent, if and when necessary to comply with this Agreement. The Company reserves the right

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to require, prior to the occurrence of a Triggering Event, that, upon any exercise of Rights, a number of Rights be exercised so that only whole shares of Preferred Stock would be issued.

(d)           Except as otherwise provided for herein, in case the registered holder of any Rights Certificate shall exercise less than all the Rights evidenced thereby, a new Rights Certificate evidencing Rights equivalent to the Rights remaining unexercised shall be issued by the Rights Agent and delivered to, or upon the order of, the registered holder of such Rights Certificate, registered in such name or names as may be designated by such holder, subject to the provisions of Section 14 hereof.

(e)           Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or an Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights or (B) a transfer which the Board has determined is part of a plan, continuing agreement, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 7(e), and subsequent transferees of such persons, shall be null and void without any further action and no holder of such Rights shall have any rights whatsoever with respect to such Rights, whether under any provision of this Agreement or otherwise. The Company shall notify the Rights Agent when this Section 7(e) applies and should use all reasonable efforts to ensure that the provisions of this Section 7(e) and Section 4(b) hereof are complied with, but neither the Company nor the Rights Agent shall have any liability to any holder of Rights Certificates or any other Person as a result of the Company’s failure to make any determinations with respect to an Acquiring Person or its Affiliates, Associates or transferees hereunder. The Rights Agent will endeavor to comply with the provisions hereof to the extent it has received instructions from the Company concerning such matters.

(f)            Notwithstanding anything in this Agreement to the contrary, neither the Rights Agent nor the Company shall be obligated to undertake any action with respect to a registered holder upon the occurrence of any purported exercise as set forth in this Section 7 unless such registered holder shall have (i) properly completed and signed the certificate contained in the form of election to purchase set forth on the reverse side of the Rights Certificate surrendered for such exercise and (ii) provided such additional evidence of the identity of the Beneficial Owner (or former Beneficial Owner) or Associates or Affiliates thereof as the Company or the Rights Agent shall reasonably request.

Section 8.               Cancellation of Rights Certificates. All Rights Certificates surrendered for the purpose of exercise, transfer, split-up, combination or exchange shall, if surrendered to the Company or any of its agents, be delivered to the Rights Agent for cancellation or in cancelled form, or, if surrendered to the Rights Agent, shall be cancelled by it, and no Rights Certificates shall be issued in lieu thereof except as expressly permitted by any of

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the provisions of this Agreement. The Company shall deliver to the Rights Agent for cancellation and retirement, and the Rights Agent shall so cancel and retire, any other Rights Certificate purchased or acquired by the Company otherwise than upon the exercise thereof. The Rights Agent shall deliver all cancelled Rights Certificates to the Company.

Section 9.               Reservation and Availability of Capital Stock.

(a)           The Company covenants and agrees that it will cause to be reserved and kept available out of its authorized and unissued shares of Preferred Stock (and, following the occurrence of a Triggering Event, out of its authorized and unissued shares of Class A Common Stock and/or other securities or out of its authorized and issued shares held in its treasury), the number of shares of Preferred Stock (and, following the occurrence of a Triggering Event, Class A Common Stock and/or other securities) that, as provided in this Agreement including Section 11(a)(iii) hereof, will be sufficient to permit the exercise in full of all outstanding Rights.

(b)           So long as the shares of Preferred Stock (and, following the occurrence of a Triggering Event, Class A Common Stock and/or other securities) issuable and deliverable upon the exercise of the Rights may be listed on any national securities exchange or quoted on NASDAQ, the Company shall use its reasonable best efforts to cause, from and after such time as the Rights become exercisable, all shares reserved for such issuance to be listed on such exchange upon official notice of issuance upon such exercise.

(c)           The Company shall use its reasonable best efforts to (i) file, as soon as practicable following the earliest date after the first occurrence of a Section 11(a)(ii) Event on which the consideration to be delivered by the Company upon exercise of the Rights has been determined in accordance with Section 11(a)(iii) hereof, a registration statement under the Act, with respect to the securities purchasable upon exercise of the Rights on an appropriate form, (ii) cause such registration statement to become effective as soon as practicable after such filing and (iii) cause such registration statement to remain effective (with a prospectus at all times meeting the requirements of the Act) until the earlier of (A) the date as of which the Rights are no longer exercisable for such securities and (B) the date of the expiration of the Rights. The Company will also take such action as may be appropriate under, or to ensure compliance with, the securities or “blue sky” laws of the various states in connection with the exercisability of the Rights. The Company may temporarily suspend, for a period of time not to exceed 90 days after the date set forth in clause (i) of the first sentence of this Section 9(c), the exercisability of the Rights in order to prepare and file such registration statement and permit it to become effective. Upon any such suspension, the Company shall issue a public announcement and shall give simultaneous written notice to the Rights Agent stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension has been rescinded. In addition, if the Company shall determine that a registration statement is required following the Distribution Date, the Company may by issuing a public announcement temporarily suspend the exercisability of the Rights until such time as a registration statement has been declared effective. The Company shall promptly provide the Rights Agent with copies of such announcements. Notwithstanding any provision of this Agreement to the contrary, the Rights shall not be exercisable in any jurisdiction if the requisite qualification in such jurisdiction shall not have been obtained, the exercise thereof shall not be permitted under applicable law, or a registration statement shall not have been declared effective. The Rights Agent may assume

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that any Right exercised is permitted to be exercised under applicable law and shall have no liability for acting in reliance upon such assumption.

(d)           The Company covenants and agrees that it will take all such action as may be necessary to ensure that all one one-thousandth of a share of Preferred Stock (and, following the occurrence of a Triggering Event, Class A Common Stock and/or other securities) delivered upon exercise of Rights shall, at the time of delivery of the certificates for such shares (subject to payment of the Purchase Price), be duly and validly authorized and issued and fully paid and nonassessable.

(e)           The Company further covenants and agrees that it will pay when due and payable any and all taxes and governmental charges which may be payable in respect of the issuance or delivery of the Rights Certificates and of any certificates for a number of one one-thousandth of a share of Preferred Stock (or Class A Common Stock and/or other securities, as the case may be) upon the exercise of Rights. The Company shall not, however, be required to pay any tax or charge which may be payable in respect of any transfer or delivery of Rights Certificates to a Person other than, or the issuance or delivery of a number of one one-thousandth of a share of Preferred Stock (or Class A Common Stock and/or other securities, as the case may be) in respect of a name other than that of the registered holder of the Rights Certificates evidencing Rights surrendered for exercise or to issue or deliver any certificates for a number of one one-thousandth of a share of Preferred Stock (or Class A Common Stock and/or other securities, as the case may be) in a name other than that of the registered holder upon the exercise of any Rights until such tax or charge shall have been paid (any such tax being payable by the holder of such Rights Certificate at the time of surrender) or until it has been established to the Company’s satisfaction that no such tax or charge is due.

Section 10.             Preferred Stock Record Date. Each Person in whose name any certificate for a number of one one-thousandth of a share of Preferred Stock (or Class A Common Stock and/or other securities, as the case may be) is issued upon the exercise of Rights shall for all purposes be deemed to have become the holder of record of such shares of Preferred Stock (or Class A Common Stock and/or other securities, as the case may be) represented thereby on, and such certificate shall be dated, the date upon which the Rights Certificate evidencing such Rights was duly surrendered and payment of the Purchase Price (and all applicable taxes and charges) was made; provided, however, that if the date of such surrender and payment is a date upon which the Preferred Stock (or Class A Common Stock and/or other securities, as the case may be) transfer books of the Company are closed, such Person shall be deemed to have become the record holder of such shares (fractional or otherwise) on, and such certificate shall be dated, the next succeeding Business Day on which the Preferred Stock (or Class A Common Stock and/or other securities, as the case may be) transfer books of the Company are open. Prior to the exercise of the Rights evidenced thereby, the holder of a Rights Certificate shall not be entitled to any rights of a stockholder of the Company with respect to shares for which the Rights shall be exercisable, including, without limitation, the right to vote, to receive dividends or other distributions or to exercise any preemptive rights, and shall not be entitled to receive any notice of any proceedings of the Company, except as provided herein.

Section 11.             Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares covered by each Right

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and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.

(a)           (i)  In the event the Company shall at any time after the date of this Agreement (A) declare and pay a dividend on the Preferred Stock payable in shares of Preferred Stock, (B) subdivide the outstanding Preferred Stock, (C) combine the outstanding Preferred Stock into a smaller number of shares or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section 11(a) and Section 7(e) hereof, the number and kind of shares of Preferred Stock or capital stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of Preferred Stock or capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock transfer books of the Company were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification. If an event occurs which would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 1l(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof

(ii)           Subject to Section 24 hereof, in the event any Person shall become an Acquiring Person, then each holder of a Right (except as provided below and in Section 7(e) hereof) shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price in accordance with the terms of this Agreement, in lieu of a number of one one-thousandth of a share of Preferred Stock, such number of shares of Class A Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-thousandth of a share of Preferred Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event and (y) dividing that product (which, following such first occurrence shall thereafter be referred to as the “Purchase Price” for each Right and for all purposes of this Agreement) by 50% of the Current Market Price (determined pursuant to Section 11(d) hereof) per share of Class A Common Stock on the date of such first occurrence (such number of shares, the “Adjustment Shares”).

(iii)          In the event that the number of shares of Class A Common Stock which are authorized by the Company’s Certificate of Incorporation, but which are not outstanding or reserved for issuance for purposes other than upon exercise of the Rights, are not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a), the Company shall (A) determine the value of the Adjustment Shares issuable upon the exercise of a Right (the “Current Value”) and (B) with respect to each Right (subject to Section 7(e) hereof), make adequate provision to substitute for the Adjustment Shares, upon the exercise of a Right and payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Class A Common Stock or other equity securities of the Company (including, without limitation, shares, or fractions of shares, of preferred stock, such as the Preferred Stock, which the Board has deemed to have essentially the same value or economic rights as shares of Class A Common Stock (such shares of preferred stock being referred to as “Class A Common Stock Equivalents”)), (4) debt securities of the

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Company, (5) other assets or (6) any combination of the foregoing, having an aggregate value equal to the Current Value (less the amount of any reduction in the Purchase Price), where such aggregate value has been determined by the Board based upon the advice of a nationally recognized investment banking firm selected by the Board; provided, however, that if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 days following the first occurrence of a Section 11(a)(ii) Event (being referred to herein as the “Section 11(a)(ii) Trigger Date”), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Class A Common Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. For purposes of the preceding sentence, the term “Spread” shall mean the excess of (i) the Current Value over (ii) the Purchase Price. If the Board determines in good faith that it is likely that sufficient additional shares of Class A Common Stock could be authorized for issuance upon exercise in full of the Rights, the 30-day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such 30-day period, as it may be extended, is herein called the “Substitution Period”). To the extent that action is to be taken pursuant to the first and/or third sentences of this Section 11(a)(iii), the Company (1) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights and (2) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek such stockholder approval for such authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect, in each case with simultaneous written notice to the Rights Agent. For purposes of this Section 11(a)(iii), the value of each Adjustment Share shall be the Current Market Price per share of the Class A Common Stock on the Section 11(a)(ii) Trigger Date and the per share or fractional value of any Class A Common Stock Equivalent shall be deemed to equal the Current Market Price per share of the Class A Common Stock on such date.

(b)           In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock entitling them to subscribe for or purchase (for a period expiring within forty-five (45) calendar days after such record date) Preferred Stock (or shares having the same rights, privileges and preferences as the shares of Preferred Stock (“Equivalent Preferred Stock”)) or securities convertible into Preferred Stock or Equivalent Preferred Stock at a price per share of Preferred Stock or per share of Equivalent Preferred Stock (or having a conversion price per share, if a security convertible into Preferred Stock or Equivalent Preferred Stock) less than the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Preferred Stock outstanding on

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such record date, plus the number of shares of Preferred Stock which the aggregate offering price of the total number of shares of Preferred Stock and/or Equivalent Preferred Stock so to be offered (and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Price, and the denominator of which shall be the number of shares of Preferred Stock outstanding on such record date, plus the number of additional shares of Preferred Stock and/or Equivalent Preferred Stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible), provided, however, that in no event shall the consideration to be paid upon exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of one Right. In case such subscription price may be paid by delivery of consideration, part or all of which may be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board, whose determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and the holders of the Rights. Shares of Preferred Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustment shall be made successively whenever such a record date is fixed, and in the event that such rights or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.

(c)           In case the Company shall fix a record date for a distribution to all holders of Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the surviving corporation), of evidences of indebtedness cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Preferred Stock, but including any dividend payable in stock other than Preferred Stock) or evidences of indebtedness, or of subscription rights or warrants (excluding those referred to in Section 11(b) hereof), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock on such record date, less the fair market value (as determined in good faith by the Board, whose determination shall be described in a statement filed with the Rights Agent) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to a share of Preferred Stock, and the denominator of which shall be such Current Market Price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock, provided, however, that in no event shall the consideration to be paid upon exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of one Right. Such adjustments shall be made successively whenever such a record date is fixed, and in the event that such distribution is not so made, the Purchase Price shall be adjusted to be the Purchase Price which would have been in effect if such record date had not been fixed.

(d)           (i)  For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the Current Market Price per share of Class A Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Class A Common Stock for the 30 consecutive Trading Days immediately prior to and not including such date, and for purposes of computations made pursuant to Section 11(a)(iii) hereof, the Current Market Price per share of Class A Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Class A Common Stock for the 10 consecutive Trading Days immediately following and not including such date; provided, however, that in the event that the Current Market Price per share of the Class A Common Stock is determined during a period following the announcement by the issuer of such

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Class A Common Stock of (A) a dividend or distribution on such Class A Common Stock payable in shares of such Class A Common Stock or securities convertible into shares of such Class A Common Stock (other than the Rights) or (B) any subdivision, combination or reclassification of such Class A Common Stock, and the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification shall not have occurred prior to the commencement of the requisite 30-Trading-Day or 10-Trading-Day period, as set forth above, then, and in each such case, the Current Market Price shall be properly adjusted to take into account ex-dividend trading. The closing price for each day shall be the last quoted price or, if not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported by NASDAQ or such other system then in use, or, if the shares of Class A Common Stock are listed or admitted to trading on the New York Stock Exchange, the closing price for each day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system or, if the shares of Class A Common Stock are not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange, or quoted on NASDAQ on which the shares of Class A Common Stock are listed or admitted to trading, or, if on any such date the shares of Class A Common Stock are not quoted by any such organizations, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Class A Common Stock selected by the Board. If on any such date no market maker is making a market in the Class A Common Stock, the fair value of such shares on such date as determined in good faith by the Board shall be used. The term “Trading Day” shall mean a day on which the principal national securities exchange on which the shares of Class A Common Stock are listed or admitted to trading is open for the transaction of business or, if the shares of Class A Common Stock are not listed or admitted to trading on any national securities exchange, or quoted on NASDAQ, a Business Day. If the Class A Common Stock is not publicly held or not so listed or traded, Current Market Price per share shall mean the fair value per share as determined in good faith by the Board, whose determination shall be described in a statement filed with the Rights Agent and shall be conclusive for all purposes.

(ii)           For the purpose of any computation hereunder, the Current Market Price per share of Preferred Stock shall be determined in the same manner as set forth above for the Class A Common Stock in clause (i) of this Section 11(d) (other than the last sentence thereof). If the Current Market Price per share of Preferred Stock cannot be determined in the manner provided above or if the Preferred Stock is not publicly held or listed or traded in a manner described in clause (i) of this Section 11(d), the Current Market Price per share of Preferred Stock shall be conclusively deemed to be an amount equal to 100 (as such number may be appropriately adjusted for such events as stock splits, stock dividends and recapitalizations with respect to the Class A Common Stock occurring after the date of this Agreement) multiplied by the Current Market Price per share of the Class A Common Stock. If neither the Class A Common Stock nor the Preferred Stock is publicly held or so listed or traded, Current Market Price per share of the Preferred Stock shall mean the fair value per share as determined in good faith by the Board, whose determination shall be described in a statement filed with the Rights Agent and shall be conclusive for all purposes.

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(e)           Anything herein to the contrary notwithstanding, no adjustment in the Purchase Price shall be required unless such adjustment would require an increase or decrease of at least 1% in the Purchase Price; provided, however, that any adjustments which by reason of this Section 11(e) are not required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this Section 11 shall be made to the nearest cent or to the nearest ten-thousandth of a share of Class A Common Stock or other share or one-millionth of a share of Preferred Stock, as the case may be. Notwithstanding the first sentence of this Section 11(e), any adjustment required by this Section 11 shall be made no later than the earlier of (i) 3 years from the date of the transaction which mandates such adjustment or (ii) the Expiration Date.

(f)            If as a result of an adjustment made pursuant to Section 11(a)(ii) or Section 13(a) hereof, the holder of any Right thereafter exercised shall become entitled to receive any shares of capital stock other than Preferred Stock, thereafter the number of such other shares so receivable upon exercise of any Right and the Purchase Price thereof shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the Preferred Stock contained in Sections 11(a), (b), (c), (e), (g), (h), (i), (j), (k) and (m) and the provisions of Sections 7, 9, 10, 13 and 14 hereof with respect to the Preferred Stock shall apply on like terms to any such other shares.

(g)           All Rights originally issued by the Company subsequent to any adjustment made to the Purchase Price hereunder shall evidence the right to purchase, at the adjusted Purchase Price, the number of one one-thousandth of a share of Preferred Stock purchasable from time to time hereunder upon exercise of the Rights, all subject to further adjustment as provided herein.

(h)           Unless the Company shall have exercised its election as provided in Section 11(i), upon each adjustment of the Purchase Price as a result of the calculations made in Sections 11(b) and (c), each Right outstanding immediately prior to the making of such adjustment shall thereafter evidence the right to purchase, at the adjusted Purchase Price, that number of one one-thousandth of a share of Preferred Stock (calculated to the nearest one-millionth) obtained by (i) multiplying (x) the number of one one-thousandth of a share covered by a Right immediately prior to this adjustment, by (y) the Purchase Price in effect immediately prior to such adjustment of the Purchase Price and (ii) dividing the product so obtained by the Purchase Price in effect immediately after such adjustment of the Purchase Price.

(i)            The Company may elect on or after the date of any adjustment of the Purchase Price to adjust the number of Rights, in lieu of any adjustment in the number of one one-thousandth of a share of Preferred Stock purchasable upon the exercise of a Right. Each of the Rights outstanding after the adjustment in the number of Rights shall be exercisable for the number of one one-thousandth of a share of Preferred Stock for which a Right was exercisable immediately prior to such adjustment. Each Right held of record prior to such adjustment of the number of Rights shall become that number of Rights (calculated to the nearest one ten-thousandth) obtained by dividing the Purchase Price in effect immediately prior to adjustment of the Purchase Price by the Purchase Price in effect immediately after adjustment of the Purchase Price. The Company shall make a public announcement of its election to adjust the number of Rights, indicating the record date for the adjustment, and, if known at the time, the amount of the

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adjustment to be made. This record date may be the date on which the Purchase Price is adjusted or any day thereafter, but, if the Rights Certificates have been issued, shall be at least 10 days later than the date of the public announcement. If Rights Certificates have been issued, upon each adjustment of the number of Rights pursuant to this Section 11(i), the Company shall, as promptly as practicable, cause to be distributed to holders of record of Rights Certificates on such record date Rights Certificates evidencing, subject to Section 14 hereof, the additional Rights to which such holders shall be entitled as a result of such adjustment, or, at the option of the Company, shall cause to be distributed to such holders of record in substitution and replacement for the Rights Certificates held by such holders prior to the date of adjustment, and upon surrender thereof, if required by the Company, new Rights Certificates evidencing all the Rights to which such holders shall be entitled after such adjustment. Rights Certificates to be so distributed shall be issued, executed and countersigned in the manner provided for herein (and may bear, at the option of the Company, the adjusted Purchase Price) and shall be registered in the names of the holders of record of Rights Certificates on the record date specified in the public announcement.

(j)            Irrespective of any adjustment or change in the Purchase Price or the number of one one-thousandth of a share of Preferred Stock issuable upon the exercise of the Rights, the Rights Certificates theretofore and thereafter issued may continue to express the Purchase Price per one one-thousandth of a share and the number of one one-thousandth of a share which were expressed in the initial Rights Certificates issued hereunder.

(k)           Before taking any action that would cause an adjustment reducing the Purchase Price below the then par value, if any, of the number of one one-thousandth of a share of Preferred Stock issuable upon exercise of the Rights, the Company shall take any corporate action which may, in the opinion of its counsel, be necessary in order that the Company may validly and legally issue fully paid and nonassessable such number of one one-thousandth of a share of Preferred Stock at such adjusted Purchase Price.

(l)            In any case in which this Section 11 shall require that an adjustment in the Purchase Price be made effective as of a record date for a specified event, the Company may elect to defer until the occurrence of such event the issuance to the holder of any Right exercised after such record date the number of one one-thousandth of a share of Preferred Stock and other capital stock or securities of the Company, if any, issuable upon such exercise over and above the number of one one-thousandth of a share of Preferred Stock and other capital stock or securities of the Company, if any, issuable upon such exercise on the basis of the Purchase Price in effect prior to such adjustment; provided, however, that the Company shall deliver to such holder a due bill or other appropriate instrument evidencing such holder’s right to receive such additional shares (fractional or otherwise) or securities upon the occurrence of the event requiring such adjustment.

(m)          Anything in this Section 11 to the contrary notwithstanding, the Company shall be entitled to make such adjustments in the Purchase Price, in addition to those adjustments expressly required by this Section 11, as and to the extent that it in its sole discretion shall determine to be advisable in order that any (i) consolidation or subdivision of the Preferred Stock, (ii) issuance wholly for cash of any shares of Preferred Stock at less than the Current Market Price, (iii) issuance wholly for cash of shares of Preferred Stock or securities which by

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their terms are convertible into or exchangeable for shares of Preferred Stock, (iv) stock dividends or (v) issuance of rights, options or warrants referred to in this Section 11, hereafter made by the Company to holders of its Preferred Stock shall not be taxable to such stockholders.

(n)           The Company covenants and agrees that it shall not, at any time after the Distribution Date, (i) consolidate with any other Person (other than a Subsidiary of the Company in a transaction which complies with Section 11(o) hereof), (ii) merge with or into any other Person (other than a Subsidiary of the Company in a transaction which complies with Section 11(o) hereof) or (iii) sell or transfer (or permit any Subsidiary to sell or transfer), in one transaction, or a series of related transactions, assets, cash (cash flow or earning power aggregating more than 50% of the assets, cash flow or earning power of the Company and its Subsidiaries (taken as a whole)) to any other Person or Persons (other than the Company and/or any of its Subsidiaries in one or more transactions each of which complies with Section 11(o) hereof), if (x) at the time of or immediately after such consolidation, merger or sale there are any rights, warrants or other instruments or securities outstanding or agreements in effect which would substantially diminish or otherwise eliminate the benefits intended to be afforded by the Rights, (y) prior to, simultaneously with or immediately after such consolidation, merger or sale, the shareholders of the Person who constitutes, or would constitute, the “Principal Party” for purposes of Section 13 hereof shall have received a distribution of Rights previously owned by such Person or any of its Affiliates and Associates, or (z) the form or nature of organization of the Principal Party would preclude or limit the exercisability of the Rights.

(o)           The Company covenants and agrees that, after the Distribution Date, it will not, except as permitted by Section 23, Section 24 or Section 27 hereof, take (or permit any Subsidiary to take) any action if at the time such action is taken it is reasonably foreseeable that such action will diminish substantially or otherwise eliminate the benefits intended to be afforded by the Rights.

(p)           Anything in this Agreement to the contrary notwithstanding, in the event that the Company shall at any time after the Record Date and prior to the Distribution Date (i) declare and pay a dividend on the outstanding shares of Class A Common Stock payable in shares of Class A Common Stock, (ii) subdivide the outstanding shares of Class A Common Stock or (iii) combine the outstanding shares of Class A Common Stock into a smaller number of shares, the number of Rights associated with each share of Class A Common Stock then outstanding, or issued or delivered thereafter but prior to the Distribution Date, shall be proportionately adjusted so that the number of Rights thereafter associated with each share of Class A Common Stock following any such event shall equal the result obtained by multiplying the number of Rights associated with each share of Class A Common Stock immediately prior to such event by a fraction the numerator which shall be the total number of shares of Class A Common Stock outstanding immediately prior to the occurrence of the event and the denominator of which shall be the total number of shares of Class A Common Stock outstanding immediately following the occurrence of such event.

Section 12.             Certificate of Adjusted Purchase Price or Number of Shares. Whenever an adjustment is made as provided in Section 11 and Section 13 hereof, the Company shall (a) promptly prepare a certificate setting forth such adjustment and a brief statement of the facts and computations accounting for such adjustment, (b) promptly file with the Rights Agent,

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and with each transfer agent for the Preferred Stock and the Class A Common Stock, a copy of such certificate and (c) if a Distribution Date has occurred, mail a brief summary thereof to each holder of a Rights Certificate in accordance with Section 25 hereof. The Rights Agent shall be fully protected in relying on any such certificate and on any adjustment therein contained and shall have no duty with respect to and shall not be deemed to have knowledge of such adjustment unless and until it shall have received such certificate.

Section 13.             Consolidation, Merger or Sale or Transfer of Assets, Cash Flow Or Earning Power.

(a)           In the event that, at any time after a Person becomes an Acquiring Person, directly or indirectly, (x) the Company shall consolidate with, or merge with and into, any other Person (other than (i) an Exempted Entity or a (ii) Subsidiary of the Company in a transaction which complies with Section 11(n) hereof), and the Company shall not be the continuing or surviving corporation of such consolidation or merger, or (y) any Person (other than (i) an Exempted Entity or (ii) a Subsidiary of the Company in a transaction which complies with Section 11(n) hereof) shall consolidate with, or merge with or into, the Company, and the Company shall be the continuing or surviving corporation of such consolidation or merger and, in connection with such consolidation or merger, all or part of the outstanding shares of Class A Common Stock shall be changed into, or exchanged for, stock or other securities of any other Person or cash or any other property, or (z) the Company shall sell or otherwise transfer (or one or more of its Subsidiaries shall sell or otherwise transfer), in one or more transactions, assets or earning power aggregating 50% or more of the assets or earning power of the Company and its Subsidiaries (taken as a whole) to any other Person (other than the Company or one or more wholly-owned Subsidiaries of the Company), then, and in each such case (except as may be contemplated by Section 13(d) hereof), proper provision shall be made so that:  (i) each holder of a Right, except as provided in Section 7(e) hereof, shall thereafter have the right to receive, upon the exercise thereof at the then current Purchase Price in accordance with the terms of this Agreement, such number of validly authorized and issued, fully paid, non-assessable and freely tradeable shares of Class A Common Stock of the Principal Party (as such term is hereinafter defined), not subject to any liens, encumbrances, rights of first refusal or other adverse claims, as shall be equal to the result obtained by (1) multiplying the then current Purchase Price by the number of one one-thousandth of a share of Preferred Stock for which a Right is exercisable immediately prior to the first occurrence of a Section 13 Event (or, if a Section 11(a)(ii) Event has occurred prior to the first occurrence of a Section 13 Event, multiplying the number of such one one-thousandth of a share for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event by the Purchase Price in effect immediately prior to such first occurrence), and dividing that product (which, following the first occurrence of a Section 13 Event, shall be referred to as the “Purchase Price” for each Right and for all purposes of this Agreement) by (2) 50% of the Current Market Price (determined pursuant to Section 11(d)(i) hereof) per share of the Class A Common Stock of such Principal Party on the date of consummation of such Section 13 Event; (ii) such Principal Party shall thereafter be liable for, and shall assume, by virtue of such Section 13 Event, all the obligations and duties of the Company pursuant to this Agreement; (iii) the term “Company” shall thereafter be deemed to refer to such Principal Party, it being specifically intended that the provisions of Section 11 hereof shall apply only to such Principal Party following the first occurrence of a Section 13 Event; (iv) such Principal Party shall take such steps (including, but not limited to, the

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reservation of a sufficient number of shares of its Class A Common Stock) in connection with the consummation of any such transaction as may be necessary to assure that the provisions hereof shall thereafter be applicable, as nearly as reasonably may be, in relation to its shares of Class A Common Stock thereafter deliverable upon the exercise of the Rights; and (v) the provisions of Section 11(a)(ii) hereof shall be of no effect following the first occurrence of any Section 13 Event.

(b)           “Principal Party” shall mean:

(i)            in the case of any transaction described in clause (x) or (y) of the first sentence of Section 13(a), the Person that is the issuer of any securities into which shares of Class A Common Stock of the Company are converted in such merger or consolidation, and if no securities are so issued, the Person that is the other party to such merger or consolidation; and

(ii)           in the case of any transaction described in clause (z) of the first sentence of Section 13(a), the Person that is the party receiving the greatest portion of the assets, cash flow or earning power transferred pursuant to such transaction or transactions; provided, however, that in any such case described in the foregoing clause (i) or this Section 13(b) (ii) if the Class A Common Stock of such Person is not at such time and has not been continuously over the preceding 12-month period registered under Section 12 of the Exchange Act, and such Person is a direct or indirect Subsidiary of another Person the Class A Common Stock of which is and has been so registered, “Principal Party” shall refer to such other Person; and (2) in case such Person is a Subsidiary, directly or indirectly, of more than one Person, the Class A Common Stock of two or more of which are and have been so registered, “Principal Party” shall refer to whichever of such Persons is the issuer of the Class A Common Stock having the greatest aggregate market value.

(c)           The Company shall not consummate any such consolidation, merger, sale or transfer unless the Principal Party shall have a sufficient number of authorized shares of its Class A Common Stock which have not been issued or reserved for issuance to permit the exercise in full of the Rights in accordance with this Section 13 and unless prior thereto the Company and such Principal Party shall have executed and delivered to the Rights Agent a supplemental agreement providing for the terms set forth in paragraphs (a) and (b) of this Section 13 and further providing that, as soon as practicable after the date of any consolidation, merger or sale of assets mentioned in paragraph (a) of this Section 13, the Principal Party will

(i)            prepare and file a registration statement under the Act, with respect to the Rights and the securities purchasable upon exercise of the Rights on an appropriate form, and will use its reasonable best efforts to cause such registration statement to (A) become effective as soon as practicable after such filing and (B) remain effective (with a prospectus at all times meeting the requirements of the Act) until the Expiration Date; and

(ii)           take such all such other action as may be necessary to enable the Principal Party to issue the securities purchasable upon exercise of the Rights, including but not limited to the registration or qualification of such securities under all requisite securities laws of jurisdictions of the various states and the listing of such securities on such exchanges and trading markets as may be necessary or appropriate; and

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(iii)          will deliver to holders of the Rights historical financial statements for the Principal Party and each of its Affiliates which comply in all respects with the requirements for registration on Form 10 under the Exchange Act.

The provisions of this Section 13 shall similarly apply to successive mergers or consolidations or sales or other transfers. In the event that a Section 13 Event shall occur at any time after the occurrence of a Section 11(a)(ii) Event, the Rights which have not theretofore been exercised shall thereafter become exercisable in the manner described in Section 13(a).

(d)           The Rights Agent may rely and be fully protected in relying upon a certificate of the Company stating that the provisions of this Section 13 have been fulfilled. Notwithstanding anything in this Agreement to the contrary, the prior written consent of the Rights Agent must be obtained in connection with any supplemental agreement which alters the rights or duties of the Rights Agent, which consent shall not be unreasonably withheld.

In case the Principal Party has a provision in any of its authorized securities or in its certificate of incorporation or by-laws or other instrument governing its affairs, which provision would have the effect of (i) causing such Principal Party to issue (other than to holders of Rights pursuant to this Section 13), in connection with, or as a consequence of, the consummation of a transaction referred to in this Section 13, shares of Class A Common Stock or Class A Common Stock equivalents of such Principal Party at less than the then current market price per share thereof (determined pursuant to Section 11(d) hereof) or securities exercisable for, or convertible into, common stock or common stock equivalents of such Principal Party at less than such then current market price, or (ii) providing for any special payment, tax or similar provision in connection with the issuance of the common stock of such Principal Party pursuant to the provisions of Section 13, then, in such event, the Company hereby agrees with each holder of Rights that it shall not consummate any such transaction unless prior thereto the Company and such Principal Party shall have executed and delivered to the Rights Agent a supplemental agreement providing that the provision in question of such Principal Party shall have been canceled, waived or amended, or that the authorized securities shall be redeemed, so that the applicable provision will have no effect in connection with, or as a consequence of, the consummation of the proposed transaction.

Section 14.             Fractional Rights and Fractional Shares.

(a)           The Company shall not be required to issue fractions of Rights, except prior to the Distribution Date as provided in Section 11(p) hereof, or to distribute Rights Certificates which evidence fractional Rights. In lieu of such fractional Rights, the Company shall pay to the registered holders of the Rights Certificates with regard to which such fractional Rights would otherwise be issuable, an amount in cash equal to the same fraction of the current market value of a whole Right. For purposes of this Section 14(a), the current market value of a whole Right shall be the closing price of the Rights for the Trading Day immediately prior to the date on which such fractional Rights would have been otherwise issuable. The closing price of the Rights for any day shall be the last quoted price or, if not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported by NASDAQ or such other system then in use, or, if the Rights are listed or admitted to trading on the New York Stock Exchange, the closing price for each day shall be the last sale price, regular way, or, in case no

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such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system or, if the Rights are not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the Rights are listed or admitted to trading, or, if on any such date the Rights are not quoted on NASDAQ, or by any such organizations, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Rights selected by the Board. If on any such date no market maker is making a market in the Rights, the fair value of the Rights on such date as determined in good faith by the Board shall be used.

(b)           The Company shall not be required to issue fractions of shares of Preferred Stock (other than fractions which are integral multiples of one one-thousandth of a share of Preferred Stock) upon exercise of the Rights or to distribute certificates which evidence fractional shares of Preferred Stock (other than fractions which are integral multiples of one one-thousandth of a share of Preferred Stock). In lieu of fractional shares of Preferred Stock that are not integral multiples of one one-thousandth of a share of Preferred Stock, the Company may pay to the registered holders of Rights Certificates at the time such Rights are exercised as herein provided an amount in cash equal to the same fraction of the current market value of one one-thousandth of a share of Preferred Stock. For purposes of this Section 14(b), the current market value of one one-thousandth of a share of Preferred Stock shall be one one-thousandth of the closing price of a share of Preferred Stock (as determined pursuant to Section 11(d)(ii) hereof) for the Trading Day immediately prior to the date of such exercise.

(c)           Following the occurrence of a Triggering Event, the Company shall not be required to issue fractions of shares of Class A Common Stock upon exercise of the Rights or to distribute certificates which evidence fractional shares of Class A Common Stock. In lieu of fractional shares of Class A Common Stock, the Company shall pay to the registered holders of Rights Certificates at the time such Rights are exercised as herein provided an amount in cash equal to the same fraction of the current market value of one share of Class A Common Stock. For purposes of this Section 14(c), the current market value of one share of Class A Common Stock shall be the closing price of one share of Class A Common Stock (as determined pursuant to Section 11(d)(i) hereof) for the Trading Day immediately prior to the date of such exercise.

(d)           The holder of a Right by the acceptance of the Rights expressly waives his right to receive any fractional Rights or any fractional shares upon exercise of a Right, except as permitted by this Section 14.

(e)           Whenever a payment for fractional Rights or fractional shares is to be made by the Rights Agent, the Company shall (i) promptly prepare and deliver to the Rights Agent a certificate setting forth in reasonable detail the facts related to such payment and the prices and/or formulas utilized in calculating such payments and (ii) provide sufficient monies to the Rights Agent in the form of fully collected funds to make such payments. The Rights Agent shall be fully protected in relying upon such a certificate and shall have no duty with respect to, and shall not be deemed to have knowledge of any payment for fractional Rights or fractional shares under any Section of this Agreement relating to the payment of fractional Rights or

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fractional shares unless and until the Rights Agent shall have received such a certificate and sufficient monies.

Section 15.             Rights of Action. All rights of action in respect of this Agreement, excepting the rights of action given to the Rights Agent under Section 18 hereof, are vested in the respective registered holders of the Rights Certificates (and, prior to the Distribution Date, the registered holders of the Class A Common Stock); and any registered holder of any Rights Certificate (or, prior to the Distribution Date, of the Class A Common Stock), without the consent of the Rights Agent or of the holder of any other Rights Certificate (or, prior to the Distribution Date, of the Class A Common Stock), may, in his own behalf and for his own benefit, enforce, and may institute and maintain any suit, action or proceeding against the Company to enforce, or otherwise act in respect of, his right to exercise the Rights evidenced by such Rights Certificate (or, prior to the Distribution Date, the Class A Common Stock) in the manner provided in such Rights Certificate and in this Agreement. Without limiting the foregoing or any remedies available to the holders of Rights, it is specifically acknowledged that the holders of Rights would not have an adequate remedy at law for any breach of this Agreement and shall be entitled to specific performance of the obligations hereunder and injunctive relief against actual or threatened violations of the obligations hereunder of any Person subject to this Agreement.

Section 16.             Agreement of Rights Holders. Every holder of a Right, by accepting the same, consents and agrees with the Company and the Rights Agent and with every other holder of a Right that:

(a)           prior to the Distribution Date, the Rights will be transferable only in connection with the transfer of Class A Common Stock;

(b)           after the Distribution Date, the Rights Certificates are transferable only on the registry books of the Rights Agent if surrendered at the office of the Rights Agent designated for such purposes, duly endorsed or accompanied by a proper instrument of transfer and with the appropriate forms and certificates fully executed;

(c)           subject to Section 6(a) and Section 7(f) hereof, the Company and the Rights Agent may deem and treat the Person in whose name a Rights Certificate (or, prior to the Distribution Date, the associated Class A Common Stock certificate) is registered as the absolute owner thereof and of the Rights evidenced thereby (notwithstanding any notations of ownership or writing on the Rights Certificates or the associated Class A Common Stock certificate made by anyone other than the Company or the Rights Agent) for all purposes whatsoever, and neither the Company nor the Rights Agent, subject to Section 7 hereof, shall be required to be affected by any notice to the contrary; and

(d)           notwithstanding anything in this Agreement to the contrary, neither the Company nor the Rights Agent shall have any liability to any holder of a Right or other Person as a result of its inability to perform any of its obligations under this Agreement by reason of any preliminary or permanent injunction or other order, decree or ruling issued by a court of competent jurisdiction or by a governmental, regulatory or administrative agency or commission, or any statute, rule, regulation or executive order promulgated or enacted by any governmental

26

authority, prohibiting or otherwise restraining performance of such obligation; provided, however, the Company must use its reasonable best efforts to have any such order, decree, judgment or ruling (whether interlocutory or final) lifted or otherwise overturned as soon as possible.

Section 17.             Rights Certificate Holder Not Deemed a Stockholder. No holder, as such, of any Rights Certificate shall be entitled to vote, receive dividends or be deemed for any purpose the holder of the number of one one-thousandth of a share of Preferred Stock or any other securities of the Company which may at any time be issuable on the exercise of the Rights represented thereby, nor shall anything contained herein or in any Rights Certificate be construed to confer upon the holder of any Rights Certificate, as such, any of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any corporate action, or to receive notice of meetings or other actions affecting stockholders (except as provided in this Agreement), or to receive dividends or subscription rights, or otherwise, until the Right or Rights evidenced by such Rights Certificate shall have been exercised in accordance with the provisions hereof.

Section 18.             Concerning the Rights Agent.

(a)           The Company agrees to pay to the Rights Agent such compensation as shall be agreed in writing between the Company and the Rights Agent for all services rendered by it hereunder and, from time to time, on demand of the Rights Agent, its reasonable expenses and counsel fees and disbursements and other disbursements incurred in the preparation, delivery, execution, amendment and administration of this Agreement and the exercise and performance of its duties hereunder. The Company also agrees to indemnify the Rights Agent for, and to hold it harmless against, any loss, liability, damage, judgment, fine, penalty, claim, demand, settlement, cost or expense, incurred without gross negligence, or willful misconduct on the part of the Rights Agent (each as determined by a final, non-appealable order, judgment, decree or ruling of a court of competent jurisdiction) for any action taken, suffered or omitted by the Rights Agent in connection with the acceptance and administration of this Agreement, including, without limitation, the costs and expenses of defending against any claim (whether asserted by the Company or any holder of Rights) of liability in the premises. The provisions of this Section 18 and Section 20 below shall survive the termination of this Agreement, the exercise or expiration of the Rights and the resignation or removal of the Rights Agent.

(b)           The Rights Agent shall be authorized and protected and shall incur no liability for or in respect of any action taken, suffered or omitted by it in connection with its acceptance and administration of this Agreement in reliance upon any Rights Certificate or certificate for Class A Common Stock or for other securities of the Company, instrument of assignment or transfer, power of attorney, endorsement, affidavit, letter, notice, instruction, direction, consent, certificate, statement or other paper or document believed by it to be genuine and to be signed and executed by the proper Person or Persons. The Rights Agent shall not be deemed to have knowledge of any event of which it was supposed to receive notice thereof hereunder, and the Rights Agent shall be fully protected and shall incur no liability for failing to take any action in connection therewith unless and until it has received such notice.

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(c)           Notwithstanding anything in this Agreement to the contrary, in no event shall the Rights Agent be liable for special, indirect, incidental, punitive or consequential loss or damage of any kind whatsoever (including but not limited to lost profits), even if the Rights Agent has been advised of the likelihood of the loss or damage and regardless of the form of the action.

Section 19.             Merger or Consolidation or Change of Name of Rights Agent.

(a)           Any Person into which the Rights Agent or any successor Rights Agent may be merged or with which it may be consolidated, or any Person resulting from any merger or consolidation to which the Rights Agent or any successor Rights Agent shall be a party, or any Person succeeding to the business of the Rights Agent or any successor Rights Agent, shall be the successor to the Rights Agent under this Agreement without the execution or filing of any paper or any further act on the part of any of the parties hereto; but only if such Person would be eligible for appointment as a successor Rights Agent under the provisions of Section 21 hereof. In case at the time such successor Rights Agent shall succeed to the agency created by this Agreement, any of the Rights Certificates shall have been countersigned but not delivered, any such successor Rights Agent may adopt the countersignature of a predecessor Rights Agent and deliver such Rights Certificates so countersigned; and in case at that time any of the Rights Certificates shall not have been countersigned, any successor Rights Agent may countersign such Rights Certificates either in the name of the predecessor or in the name of the successor Rights Agent; and in all such cases such Rights Certificates shall have the full force provided in the Rights Certificates and in this Agreement.

(b)           In case at any time the name of the Rights Agent shall be changed and at such time any of the Rights Certificates shall have been countersigned but not delivered, the Rights Agent may adopt the countersignature under its prior name and deliver Rights Certificates so countersigned; and in case at that time any of the Rights Certificates shall not have been countersigned, the Rights Agent may countersign such Rights Certificates either in its prior name or in its changed name; and in all such cases such Rights Certificates shall have the full force provided in the Rights Certificates and in this Agreement.

Section 20.             Duties of Rights Agent. The Rights Agent undertakes only the duties and obligations expressly imposed by this Agreement, and no implied duties or obligations shall be read into this Agreement against the Rights Agent, upon the following terms and conditions, by all of which the Company and the holders of Rights Certificates, by their acceptance thereof, shall be bound:

(a)           The Rights Agent may consult with legal counsel of its selection (who may be legal counsel for the Company), and the opinion of such counsel shall be full and complete authorization and protection to the Rights Agent, and the Rights Agent shall incur no liability for or in respect of, any action taken, suffered or omitted by it in accordance with such opinion.

(b)           Whenever in the performance of its duties under this Agreement the Rights Agent shall deem it necessary or desirable that any fact or matter (including, without limitation, the identity of any Acquiring Person and the determination of Current Market Price)

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be proved or established by the Company prior to taking, suffering or omitting to take any action hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a certificate signed by the Chairman of the Board, the President, the Chief Executive Officer, any Vice President, the Secretary or any Assistant Secretary of the Company and delivered to the Rights Agent; and such certificate shall be full authorization to the Rights Agent for any action taken, suffered or omitted to be taken by it under the provisions of this Agreement in reliance upon such certificate.

(c)           The Rights Agent shall be liable hereunder only for its own gross negligence, or willful misconduct (each as determined by a final, non-appealable order, judgment, decree or ruling of a court of competent jurisdiction), provided, however, that in no event shall the Rights Agent be liable for indirect, special, consequential or punitive damages. Any liability of the Rights Agent under this Rights Agreement will be limited to the amount of fees paid by the Company to the Rights Agent.

(d)           The Rights Agent shall not be liable for or by reason of any of the statements of fact or recitals contained in this Agreement or in the Rights Certificates or be required to verify the same (except as to its countersignature on such Rights Certificates), but all such statements and recitals are and shall be deemed to have been made by the Company only.

(e)           The Rights Agent shall not be under any responsibility or have any liability in respect of the validity of this Agreement or the execution and delivery hereof (except the due execution hereof by the Rights Agent) or in respect of the validity or execution of any Rights Certificate (except its countersignature thereof; nor shall it be responsible for any breach by the Company of any covenant or condition contained in this Agreement or in any Rights Certificate; nor shall it be responsible for any change in the exercisability of the Rights (including the Rights becoming null and void pursuant to Section 7(e)) or any adjustment required under the provisions of Section 11, Section 13 or Section 24 hereof or responsible for the manner, method or amount of any such adjustment or the ascertaining of the existence of facts that would require any such adjustment (except with respect to the exercise of Rights evidenced by Rights Certificates after the Rights Agent’s actual notice of any such adjustment); nor shall it by any act hereunder be deemed to make any representation or warranty as to the authorization or reservation of any shares of Class A Common Stock or Preferred Stock to be issued pursuant to this Agreement or any Rights Certificate or as to whether any shares of Class A Common Stock or Preferred Stock will, when so issued, be validly authorized and issued, fully paid and nonassessable, nor shall the Rights Agent be responsible for the legality of the terms hereof in its capacity as an administrative agent.

(f)            The Company agrees that it will perform, execute, acknowledge and deliver or cause to be performed, executed, acknowledged and delivered all such further and other acts, instruments and assurances as may reasonably be required by the Rights Agent for the carrying out or performing by the Rights Agent of the provisions of this Agreement.

(g)           The Rights Agent is hereby authorized and directed to accept instructions with respect to the performance of its duties hereunder from the Chairman of the Board, the President, the Chief Executive Officer, any Vice President, the Secretary or any Assistant Secretary of the Company, and to apply to such officers for advice or instructions in connection

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with its duties, and such instruction shall be full authorization and protection to the Rights Agent and the Rights Agent shall incur no liability for or in respect of any action taken, suffered or omitted to be taken by it in accordance with instructions of any such officer or for any delay in acting while waiting for these instructions. Any application by the Rights Agent for written instructions from the Company may, at the option of the Rights Agent, set forth in writing any action proposed to be taken or omitted by the Rights Agent under this Agreement and the date on and/or after which such action shall be taken or such omission shall be effective. The Rights Agent shall not be liable for any action taken by, or omission of, the Rights Agent in accordance with a proposal included in such application on or after the date specified in such application (which date shall not be less than three (3) Business Days after the date any officer of the Company actually receives such application, unless such officer shall have consented in writing to any earlier date) unless prior to taking any such action (or the effective date in the case of an omission), the Rights Agent shall have received written instructions in response to such application specifying the action to be taken or omitted or unless the Rights Agent shall have acted with gross negligence or willful misconduct.

(h)           The Rights Agent and any stockholder, director, Affiliate, officer or employee of the Rights Agent may buy, sell or deal in any of the Rights or other securities of the Company or become pecuniarily interested in any transaction in which the Company may be interested, or contract with or lend money to the Company or otherwise act as fully and freely as though it were not Rights Agent under this Agreement. Nothing herein shall preclude the Rights Agent from acting in any other capacity for the Company or for any other Person.

(i)            The Rights Agent may execute and exercise any of the rights or powers hereby vested in it or perform any duty hereunder either itself or by or through its attorneys or agents, and the Rights Agent shall not be answerable or accountable for any act, default, neglect or misconduct of any such attorneys or agents or for any loss to the Company resulting from any such act, default, neglect or misconduct, absent gross negligence, bad faith or willful misconduct (each as determined by a final, non-appealable order, judgment, decree or ruling of a court of competent jurisdiction) in the selection and continued employment thereof.

(j)            No provision of this Agreement shall require the Rights Agent to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder or in the exercise of its rights if it reasonably believes that repayment of such funds or adequate indemnification against such risk or liability is not reasonably assured to it.

(k)           If, with respect to any Rights Certificate surrendered to the Rights Agent for exercise or transfer, the certificate attached to the form of assignment or form of election to purchase, as the case may be, has either not been completed or indicates an affirmative response to clause 1 and/or 2 thereof, the Rights Agent shall not take any further action with respect to such requested exercise or transfer without first consulting with the Company.

(l)            In addition to the foregoing, the Rights Agent shall be protected and shall incur no liability for, or in respect of, any action taken or omitted by it in connection with its administration of this Agreement if such acts or omissions are in reliance upon (i) the proper execution of the certification concerning beneficial ownership appended to the form of assignment and the form of election to purchase attached hereto unless the Rights Agent shall

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have actual knowledge that, as executed, such certification is untrue or (ii) the non-execution of such certification including, without limitation, any refusal to honor any otherwise permissible assignment or election by reason of such non-execution.

(m)          The Company agrees to give the Rights Agent prompt written notice of any event or ownership which would prohibit the exercise or transfer or the Rights Certificates.

Section 21.             Change of Rights Agent. The Rights Agent or any successor Rights Agent may resign and be discharged from its duties under this Agreement upon thirty (30) days’ notice in writing mailed to the Company, and to each transfer agent of the Class A Common Stock and Preferred Stock, by registered or certified mail. Any successor to the Rights Agent that so resigns will send notice to the registered holders of the Rights Certificates by first-class mail if such resignation occurs after the Distribution Date. The Company may remove the Rights Agent or any successor Rights Agent upon 30 days’ notice in writing, mailed to the Rights Agent or successor Rights Agent, as the case may be, and to each transfer agent of the Class A Common Stock and Preferred Stock, by registered or certified mail. Any successor to the Rights Agent so removed will send notice to the holders of Rights Certificates by registered or certified mail if such removal occurs after the Distribution Date. If the Rights Agent shall resign or be removed or shall otherwise become incapable of acting, the Company shall appoint a successor to the Rights Agent. If the Company shall fail to make such appointment within a period of 60 days after giving notice of such removal or after it has been notified in writing of such resignation or incapacity by the resigning or incapacitated Rights Agent or by the holder of a Rights Certificate (who shall, with such notice, submit his Rights Certificate for inspection by the Company, at the expense of the Company), then the Rights Agent or any registered holder of any Rights Certificate may apply to any court of competent jurisdiction for the appointment of a new Rights Agent. Any successor Rights Agent, whether appointed by the Company or by such a court, shall be a Person organized and doing business under the laws of the United States or of the State of New York or of any other state of the United States, in good standing, having an office in the State of New York, which is authorized under such laws to exercise corporate trust or stock transfer or stockholder services powers and which has at the time of its appointment as Rights Agent a combined capital and surplus of at least $50,000,000 or (b) an affiliate of a Person described in clause (a) of this sentence. After appointment, the successor Rights Agent shall be vested with the same powers, rights, duties and responsibilities as if it had been originally named as Rights Agent without further act or deed; but the predecessor Rights Agent shall deliver and transfer to the successor Rights Agent any property at the time held by it hereunder, and execute and deliver any further assurance, conveyance, act or deed necessary for the purpose. Not later than the effective date of any such appointment, the Company shall file notice thereof in writing with the predecessor Rights Agent and each transfer agent of the Class A Common Stock and the Preferred Stock, and, if such appointment occurs after the Distribution Date, mail a notice thereof in writing to the registered holders of the Rights Certificates. Failure to give any notice provided for in this Section 21, however, or any defect therein, shall not affect the legality or validity of the resignation or removal of the Rights Agent or the appointment of the successor Rights Agent, as the case may be.

Section 22.             Issuance of New Rights Certificates. Notwithstanding any of the provisions of this Agreement or of the Rights to the contrary, the Company may, at its option, issue new Rights Certificates evidencing Rights in such forms as may be approved by its Board

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to reflect any adjustment or change in the Purchase Price and the number or kind or class of shares or other securities or property purchasable under the Rights Certificates made in accordance with the provisions of this Agreement. In addition, in connection with the issuance or sale of Class A Common Stock following the Distribution Date and prior to the earlier of the Redemption Date and the Close of Business on the Final Expiration Date, the Company may, with respect to shares of Class A Common Stock so issued or sold (i) pursuant to the exercise of stock options, (ii) under any employee plan or arrangement, (iii) upon the exercise, conversion or exchange of securities, notes or debentures issued by the Company or (iv) a contractual obligation of the Company, in each case existing prior to the Distribution Date, issue Rights Certificates representing the appropriate number of Rights in connection with such issuance or sale.

Section 23.             Redemption and Termination.

(a)           The Board may, at its option, at any time prior to the earlier of (i) such time as any Person becomes an Acquiring Person or (ii) the Final Expiration Date, redeem all but not less than all of the then outstanding Rights at a redemption price of $0.01 per Right, as such amount may be appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring after the date hereof (such redemption price being hereinafter referred to as the “Redemption Price”). The Company may, at its option, pay the Redemption Price in cash, shares of Class A Common Stock (based on the Current Market Price, as defined in Section 11(d)(i) hereof, of the Class A Common Stock at the time of redemption) or any other form of consideration deemed appropriate by the Board.

(b)           Immediately upon the time of the effectiveness of the redemption of the Rights pursuant to paragraph (a) of this Section 23 or such earlier time as may be determined by the Board ordering the redemption of the Rights, although not earlier than the time of such action (such time the “Redemption Date”), evidence of which shall have been filed with the Rights Agent and without any further action and without any notice, the right to exercise the Rights will terminate and the only right thereafter of the holders of Rights shall be to receive the Redemption Price for each Right so held. Promptly after the action of the Board ordering the redemption of the Rights, the Company shall give notice of such redemption to the Rights Agent and the holders of the then outstanding Rights by mailing such notice to all such holders at each holder’s last address as it appears upon the registry books of the Rights Agent or, prior to the Distribution Date, on the registry books of the transfer agent for the Class A Common Stock; provided, however, that the failure to give or any defect in any such notice shall not affect the validity of such redemption. Any notice which is mailed in the manner herein provided shall be deemed given, whether or not the holder receives the notice. Each such notice of redemption will state the method by which the payment of the Redemption Price will be made.

Section 24.             Exchange.

(a)           The Board may, at its option, at any time after any Person becomes an Acquiring Person, exchange all or part of the then outstanding and exercisable Rights (which shall not include Rights that have become null and void pursuant to the provisions of Section 7(e) hereof) for Class A Common Stock at an exchange ratio of one share of Class A Common Stock per Right, appropriately adjusted to reflect any stock split, stock dividend or similar

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transaction occurring after the date hereof (such exchange ratio being hereinafter referred to as the “Exchange Ratio”). Notwithstanding the foregoing, the Board shall not be empowered to effect such exchange at any time after any Person (other than the Company, any Subsidiary of the Company, any employee benefit plan of the Company or any such Subsidiary, or any entity holding Class A Common Stock for or pursuant to the terms of any such plan), together with all Associates or Affiliates of such Person, becomes the Beneficial Owner of a majority of the Class A Common Stock then outstanding.

(b)           Immediately upon the action of the Board ordering the exchange of any Rights pursuant to subsection (a) of this Section 24 and without any further action and without any notice, the right to exercise such Rights shall terminate and the only right thereafter of the holders of such Rights shall be to receive that number of shares of Class A Common Stock equal to the number of such Rights held by such holder multiplied by the Exchange Ratio. The Company shall promptly give public notice (with prompt notice thereof to the Rights Agent) of any such exchange; provided, however, that the failure to give, or any defect in, such notice shall not affect the validity of such exchange. The Company promptly shall mail a notice of any such exchange to the Rights Agent and all of the holders of such Rights at their last addresses as they appear upon the registry books of the Rights Agent. Any notice which is mailed in the manner herein provided shall be deemed given, whether or not the holder receives the notice. Each such notice of exchange will state the method by which the exchange of the Class A Common Stock for Rights will be effected and, in the event of any partial exchange, the number of Rights which will be exchanged. Any partial exchange shall be effected pro rata  based on the number of Rights (other than Rights which have become void pursuant to the provisions of Section 7(e) hereof) held by each holder of Rights.

(c)           In any exchange pursuant to this Section 24, the Company, at its option, may substitute Preferred Stock (or Equivalent Preferred Stock, as such term is defined in Section 11(b) hereof) for Class A Common Stock exchangeable for Rights, at the initial rate of one one-thousandth of a share of Preferred Stock (or Equivalent Preferred Stock) for each share of Class A Common Stock, as appropriately adjusted to reflect stock splits, stock dividends and other similar transactions after the date hereof.

(d)           In the event that there shall not be sufficient shares of Class A Common Stock issued but not outstanding or authorized but unissued to permit any exchange of Rights as contemplated in accordance with this Section 24, the Company shall take all such action as may be necessary to authorize additional shares of Class A Common Stock for issuance upon exchange of the Rights.

(e)           The Company shall not be required to issue fractions of shares of Class A Common Stock or to distribute certificates which evidence fractional shares of Class A Common Stock. In lieu of such fractional shares of Class A Common Stock, there shall be paid to the registered holders of the Rights Certificates with regard to which such fractional shares of Class A Common Stock would otherwise be issuable, an amount in cash equal to the same fraction of the current market value of a whole share of Class A Common Stock. For the purposes of this subsection (e), the current market value of a whole share of Class A Common Stock shall be the closing price of a share of Class A Common Stock (as determined pursuant to the second

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sentence of Section 11(d)(i) hereof) for the Trading Day immediately prior to the date of exchange pursuant to this Section 24.

Section 25.             Notice of Certain Events.

(a)           In case the Company shall propose, at any time after the Distribution Date, (i) to pay any dividend payable in stock of any class to the holders of Preferred Stock or to make any other distribution to the holders of Preferred Stock (other than a regular quarterly cash dividend out of earnings or retained earnings of the Company), (ii) to offer to the holders of Preferred Stock rights or warrants to subscribe for or to purchase any additional shares of Preferred Stock or shares of stock of any class or any other securities, rights or options, (iii) to effect any reclassification of its Preferred Stock (other than a reclassification involving only the subdivision of outstanding shares of Preferred Stock), (iv) to effect any consolidation or merger into or with any other Person (other than a Subsidiary of the Company in a transaction which complies with Section 11(n) hereof), or to effect any sale or other transfer (or to permit one or more of its Subsidiaries to effect any sale or other transfer), in one transaction or a series of related transactions, of more than 50% of the assets, cash flow or earning power of the Company and its Subsidiaries (taken as a whole) to any other Person or Persons (other than the Company and/or any of its Subsidiaries in one or more transactions each of which complies with Section 11(n) hereof) or (v) to effect the liquidation, dissolution or winding up of the Company, then, in each such case, the Company shall give to the Rights Agent and to each holder of a Rights Certificate in accordance with Section 26 hereof, a notice of such proposed action, which shall specify the record date for the purposes of such stock dividend, distribution of rights or warrants, or the date on which such reclassification, consolidation, merger, sale, transfer, liquidation, dissolution or winding up is to take place and the date of participation therein by the holders of the shares of Preferred Stock, if any such date is to be fixed, and such notice shall be so given in the case of any action covered by clause (i) or (ii) above at least 20 days prior to the record date for determining holders of the shares of Preferred Stock for purposes of such action, and in the case of any such other action, at least 20 days prior to the date of the taking of such proposed action or the date of participation therein by the holders of the shares of Preferred Stock, whichever shall be the earlier.

(b)           In case any of the events set forth in Section 11(a)(ii) hereof shall occur, then, in any such case, (i) the Company shall as soon as practicable thereafter give to each holder of a Rights Certificate and to the Rights Agent, to the extent feasible and in accordance with Section 26 hereof, a notice of the occurrence of such event, which shall specify the event and the consequences of the event to holders of Rights under Section 11(a)(ii) hereof and (ii) all references in the preceding paragraph to Preferred Stock shall be deemed thereafter to refer to Class A Common Stock and/or, if appropriate, other securities.

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Section 26.             Notices. Notices or demands authorized by this Agreement to be given or made by the Rights Agent or by the holder of any Rights Certificate to or on the Company shall be sufficiently given or made if sent by first-class mail, postage prepaid, addressed (until another address is filed in writing by the Company with the Rights Agent) or by facsimile or other generally accepted means of electronic transmission as follows:

DynCorp International Inc.
8445 Freeport Parkway
Suite 400
Irving, Texas  75063
Attention:  Michael J. Thorne
Fax No.:  (972) 929-2853

with a copy to:

DynCorp International LLC
3190 Fairview Park Drive
Suite 350
Falls Church, Virginia 22042
Attention:  R.Y. Morrel
Fax No.:  (571) 722-0252

and a copy to:

Schulte Roth & Zabel LLP
919 Third Avenue
New York, New York 10022
Attention:  Benjamin M. Polk, Esq.
Fax No.:  (212) 593-5955

Subject to the provisions of Section 21, any notice or demand authorized by this Agreement to be given or made by the Company or by the holder of any Rights Certificate to or on the Rights Agent shall be sufficiently given or made if sent by first-class mail, postage prepaid, addressed (until another address is filed in writing by the Rights Agent with the Company) or by facsimile transmission as follows:

Bank of New York
The Bank of New York
101 Barclay St., (11 E)
New York, NY 10286
Attention: Stock Transfer Administration
Fax No.: (212) 815-7048

Notices or demands authorized by this Agreement to be given or made by the Company or the Rights Agent to the holder of any Rights Certificate (or, if prior to the Distribution Date, to the holder of certificates representing shares of Class A Common Stock) shall be sufficiently given or made if sent by first-class mail, postage prepaid, addressed to such holder at the address of such holder as shown on the registry books of the Company.

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Section 27.             Supplements and Amendments. Except as provided in the penultimate sentence of this Section 27, for so long as the Rights are then redeemable, the Company may in its sole and absolute discretion, and the Rights Agent shall if the Company so directs, supplement or amend any provision of this Agreement in any respect without the approval of any holders of the Rights. At any time when the Rights are no longer redeemable, except as provided in the penultimate sentence of this Section 27, the Company may, and the Rights Agent shall, if the Company so directs, supplement or amend this Agreement without the approval of any holders of Rights; provided that no such supplement or amendment may (a) adversely affect the interests of the holders of the Rights as such (other than an Acquiring Person and its Affiliates and Associates), (b) cause the Rights again to be redeemable or (c) cause the Agreement again to become amendable other than in accordance with this sentence. Notwithstanding anything contained in this Agreement to the contrary, (i) no supplement or amendment shall be made which changes the Redemption Price and (ii) no supplement or amendment that changes the rights of any Exempted Entity contained in this Agreement (other than the addition of other Persons as Exempted Entities) will be effective against such Exempted Entity without its prior written consent, so long as the consent is not unreasonably withheld in which case such written consent shall not be necessary. Upon the delivery of a certificate from an appropriate officer of the Company which states that the supplement or amendment is in compliance with the terms of this Section 27, and provided that such supplement or amendment does not change or affect the rights, duties, liabilities or obligations of the Rights Agent, the Rights Agent shall execute such supplement or amendment, provided that any supplement or amendment that does not change or affect the rights, duties, liabilities or obligations of the Rights Agent shall become effective immediately upon execution by the Company, whether or not also executed by the Rights Agent.

Section 28.             Successors. All the covenants and provisions of this Agreement by or for the benefit of the Company or the Rights Agent shall bind and inure to the benefit of their respective successors and assigns hereunder.

Section 29.             Determinations and Actions by the Board, Etc. For all purposes of this Agreement, any calculation of the number of shares of Class A Common Stock outstanding at any particular time, including for purposes of determining the particular percentage of such outstanding shares of Class A Common Stock of which any Person is the Beneficial Owner, shall be made in accordance with the last sentence of Rule 13d-3(d)(1)(i) of the General Rules and Regulations under the Exchange Act. The Board shall have the exclusive power and authority to administer this Agreement and to exercise all rights and powers specifically granted to the Board or to the Company, or as may be necessary or advisable in the administration of this Agreement, including, without limitation, the right and power to (i) interpret the provisions of this Agreement and (ii) make all determinations deemed necessary or advisable for the administration of this Agreement (including a determination to redeem or not redeem the Rights or to amend the Agreement). All such actions, calculations, interpretations and determinations (including, for purposes of clause (y) below, all omissions with respect to the foregoing) which are done or made by the Board in good faith, shall be final, conclusive and binding on the Company, the Rights Agent, the holders of the Rights and all other parties. The Rights Agent shall always be entitled to assume that the Company’s Board acted in good faith and shall be fully protected and incur no liability in reliance thereon.

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Section 30.             No Third Party Beneficiaries. Except for Section 27, this Agreement is not intended, and shall not be deemed, to confer any rights or remedies upon any Person other than the Company, the Rights Agent, and the registered holders of the Rights Certificates (and, prior to the Distribution Date, registered holders of Class A Common Stock) and their respective successors and permitted assigns, any legal or equitable right, remedy or claim under this Agreement or to otherwise create any third-party beneficiary hereto; but this Agreement shall be for the sole exclusive benefit of the Company, the Rights Agent and the registered holders of the Rights Certificates (and, prior to the Distribution Date, registered holders of the Class A Common Stock).

Section 31.             Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated.

Section 32.             Governing Law; Jurisdiction; Waiver of Jury Trial. This Agreement, each Right and each Rights Certificate issued hereunder shall be deemed to be a contract made under the laws of the State of Delaware and for all purposes shall be governed by, and construed in accordance with, the law of such State; provided, however that the rights, obligations and duties of the Rights Agent hereunder shall be governed by, and construed in accordance with the laws of the State of New York. The parties agree that, all actions and proceedings arising out of this Agreement or any of the transactions contemplated hereby, shall be brought in the United States District Court for the Southern District of New York or in a New York State court in the County of New York and that, in connection with any such action or proceeding, submit to the jurisdiction of, and venue in, such court. Each of the parties hereto also irrevocably waives all right to trial by jury in any action, proceeding or counterclaim arising out of this Agreement or the transactions contemplated hereby.

Section 33.             Counterparts. This Agreement may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.

Section 34.             Descriptive Headings. Descriptive headings of the several sections of this Agreement are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof.

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

DYNCORP INTERNATIONAL INC.
By:	/s/ Stephen J. Cannon
Name: Stephen J. Cannon
Title: President and Chief Executive Officer
THE BANK OF NEW YORK
By:	/s/ James F. Kiszka
Name: James F. Kiszka
Title: Vice President

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EXHIBIT A

[Form of Certificate of Designation]

FORM OF

CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS

OF SERIES B JUNIOR PARTICIPATING PREFERRED STOCK

OF

DYNCORP INTERNATIONAL INC.

Pursuant to Section 151 of the

General Corporation Law of the State of Delaware

DynCorp International Inc., a Delaware corporation (the “CORPORATION”), hereby certifies that by resolution of the Board of Directors of the Corporation a series of Preferred Stock designated as Series B Junior Participating Preferred Stock was created as follows:

RESOLVED, that, pursuant to the authority granted to and vested in the Board of Directors in accordance with the provisions of the Amended and Restated Certificate of Incorporation, a new series of shares of the Corporations’ Preferred Stock, be, and it hereby is, established, having the relative rights, preferences and limitations described below:

Section 1.               DESIGNATION AND AMOUNT. The shares of such series shall be designated as “SERIES B JUNIOR PARTICIPATING PREFERRED STOCK” and the number of shares constituting such series shall be 300,000. Such number of shares may be increased or decreased by resolution of the Board of Directors; provided, that no decrease shall reduce the number of shares of Series B Junior Participating Preferred Stock to less than the number of shares then outstanding plus the number of shares reserved for issuance upon the exercise of outstanding options, rights or warrants or upon the conversion of any outstanding securities issued by the Corporation convertible into Series B Junior Participating Preferred Stock.

Section 2.               DIVIDENDS AND DISTRIBUTIONS.

(a)           Subject to the prior and superior rights of the holders of any shares of any Preferred Stock with respect to dividends, the holders series of Series B Participating Preferred Stock ranking prior and superior to the shares of Series B Junior Participating Preferred Stock with respect to dividends, the holders of Series B Junior Participating Preferred Stock, including the Series A-1 Preferred Stock and Series A-2 Preferred Stock, shall be entitled to receive, when,

as and if declared by the Board of Directors out of funds legally available for the purpose, quarterly dividends payable in cash on the fifteenth day of March, June, September and December in each year (each such date being referred to herein as a “QUARTERLY DIVIDEND PAYMENT DATE”), commencing on the first Quarterly Dividend Payment Date after the first issuance of a share or fraction of a share of Series B Junior Participating Preferred Stock, in an amount per share (rounded to the nearest cent) equal to the greater of (a) $0.01 or (b) subject to the provision for adjustment hereinafter set forth, 100 times the aggregate per share amount of all cash dividends, and 100 times the aggregate per share amount (payable in kind) of all non-cash dividends or other distributions other than a dividend payable in shares of Class A Common Stock, par value $0.01 per share, of the Corporation (the “CLASS A COMMON STOCK”), or a subdivision of the outstanding shares of Class A Common Stock (by reclassification or otherwise), declared on the Class A Common Stock, since the immediately preceding Quarterly Dividend Payment Date, or, with respect to the first Quarterly Dividend Payment Date, since the first issuance of any share or fraction of a share of Series B Junior Participating Preferred Stock. In the event the Corporation shall at any time (i) declare and pay any dividend on Class A Common Stock payable in shares of Class A Common Stock, (ii) subdivide the outstanding Class A Common Stock, or (iii) combine the outstanding Class A Common Stock into a smaller number of shares, then in each such case the amount to which holders of shares of Series B Junior Participating Preferred Stock were entitled immediately prior to such event under clause (b) of the preceding sentence shall be adjusted by multiplying such amount by a fraction the numerator of which is the number of shares of Class A Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Class A Common Stock that were outstanding immediately prior to such event.

(b)           The Corporation shall declare a dividend or distribution on the Series B Junior Participating Preferred Stock as provided in Paragraph (a) above immediately after it declares a dividend or distribution on the Class A Common Stock (other than a dividend payable in shares of Class A Common Stock); provided that, in the event no dividend or distribution shall have been declared on the Class A Common Stock during the period between any Quarterly Dividend Payment Date and the next subsequent Quarterly Dividend Payment Date, a dividend of $0.01 per share on the Series B Junior Participating Preferred Stock shall nevertheless be payable on such subsequent Quarterly Dividend Payment Date.

(c)           Dividends shall begin to accrue and be cumulative on outstanding shares of Series B Junior Participating Preferred Stock from the Quarterly Dividend Payment Date preceding the date of issue of such shares of Series B Junior Participating Preferred Stock, unless the date of issue of such shares is prior to the record date for the first Quarterly Dividend Payment Date, in which case dividends on such shares shall begin to accrue from the date of issue of such shares, or unless the date of issue is a Quarterly Dividend Payment Date or is a date after the record date for the determination of holders of shares of Series B Junior Participating Preferred Stock entitled to receive a quarterly dividend and before such Quarterly Dividend Payment Date, in either of which events such dividends shall begin to accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends paid on the shares of Series B Junior Participating Preferred Stock in an amount less than the total amount of such dividends at the time accrued and payable on such shares shall be allocated pro rata on a share-by-share basis among all such shares at the time outstanding. The Board of Directors may fix a record date for the determination of holders of

2

shares of Series B Junior Participating Preferred Stock entitled to receive payment of a dividend or distribution declared thereon, which record date shall be no more than 60 days prior to the date fixed for the payment thereof.

Section 3.               VOTING RIGHTS. The holders of shares of Series B Junior Participating Preferred Stock shall have the following voting rights:

(a)           Subject to the provision for adjustment hereinafter set forth, each share of Series B Junior Participating Preferred Stock shall entitle the holder thereof to 100 votes on all matters submitted to a vote of the stockholders of the Corporation. In the event the Corporation shall at any time (i) declare any dividend on Class A Common Stock payable in shares of Class A Common Stock, (ii) subdivide the outstanding Class A Common Stock, or (iii) combine the outstanding Class A Common Stock into a smaller number of shares, then in each such case the number of votes per share to which holders of shares of Series B Junior Participating Preferred Stock were entitled immediately prior to such event shall be adjusted by multiplying such number by a fraction the numerator of which is the number of shares of Class A Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Class A Common Stock that were outstanding immediately prior to such event.

(b)           Except as otherwise provided herein or by law, the holders of shares of Series B Junior Participating Preferred Stock and the holders of shares of Class A Common Stock shall vote together as one class on all matters submitted to a vote of stockholders of the Corporation.

(c)           (i) If at any time dividends on any Series B Junior Participating Preferred Stock shall be in arrears in an amount equal to six (6) quarterly dividends thereon, the occurrence of such contingency shall mark the beginning of a period (herein called a “DEFAULT PERIOD”) which shall extend until such time when all accrued and unpaid dividends for all previous quarterly dividend periods and for the current quarterly dividend period on all shares of Series B Junior Participating Preferred Stock then outstanding shall have been declared and paid or set apart for payment. During each default period, in addition to voting together with the holders of Class A Common Stock for the election of other directors of the Corporation, all holders of Series B Junior Participating Preferred Stock with dividends in arrears in an amount equal to six (6) quarterly dividends thereon, voting as a single class, shall have the right to elect two (2) directors.

(ii)           The absence of a quorum of the holders of Class A Common Stock shall not affect the exercise by the holders of Preferred Stock of such voting rights. After the holders of Series B Junior Participating Preferred Stock shall have exercised their right to elect directors in any default period and during the continuance of such period, the number of directors shall not be increased or decreased without the approval of the holders of a majority of the outstanding shares of Series B Junior Participating Preferred Stock as herein provided or pursuant to the rights of any equity securities ranking senior to or pari passu with the Series B Junior Participating Preferred Stock.

(iii)          Unless the holders of Series B Junior Participating Preferred Stock shall, during an existing default period, have previously exercised their right to elect directors,

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the Board of Directors may order, or any stockholder or stockholders owning in the aggregate not less than fifteen percent (15%) of the total number of shares of Series B Junior Participating Preferred Stock outstanding, irrespective of series, may request, the calling of a special meeting of the holders of Series B Junior Participating Preferred Stock, which meeting shall thereupon be called by the President, a Vice-President or the Secretary of the Corporation. Notice of such meeting and of any annual meeting at which holders of Series B Junior Participating Preferred Stock are entitled to vote pursuant to this Paragraph (C)(iii) shall be given to each holder of record of Series B Junior Participating Preferred Stock by mailing a copy of such notice to him at his last address as the same appears on the books of the Corporation. Such meeting shall be called for a time not earlier than 20 days and not later than 60 days after such order or request or in default of the calling of such meeting within 60 days after such order or request, such meeting may be called on similar notice by any stockholder or stockholders owning in the aggregate not less than fifteen percent (15%) of the total number of shares of Series B Junior Participating Preferred Stock outstanding. Notwithstanding the provisions of this Paragraph (C)(iii), no such special meeting shall be called during the period within 60 days immediately preceding the date fixed for the next annual meeting of the stockholders.

(iv)          In any default period, the holders of Class A Common Stock, and other classes of stock (including the Series B Junior Participating Preferred Stock) of the Corporation shall continue to be entitled to elect the whole number of directors until the holders of Series B Junior Participating Preferred Stock shall have exercised their right to elect two (2) directors voting as a class, after the exercise of which right (x) the directors so elected by the holders of Series B Junior Participating Preferred Stock shall continue in office until their successors shall have been elected by such holders or until the expiration of the default period, and (y) any vacancy in the Board of Directors may (except as provided in Paragraph (C)(ii) of this SECTION 3) be filled by vote of a majority of the remaining directors theretofore elected by the holders of the class of stock which elected the director whose office shall have become vacant. References in this Paragraph (C) to directors elected by the holders of a particular class of stock shall include directors elected by such directors to fill vacancies as provided in clause (y) of the foregoing sentence. Immediately upon the expiration of a default period, (x) the right of the holders of Series B Junior Participating Preferred Stock as a class to elect directors shall cease, (y) the term of any directors elected by the holders of Series B Junior Participating Preferred Stock as a class shall terminate, and (z) the number of directors shall be such number as may be provided for in the amended and restated certificate of incorporation or by-laws irrespective of any increase made pursuant to the provisions of Paragraph (C)(ii) of this SECTION 3 (such number being subject, however, to change thereafter in any manner provided by law or in the amended and restated certificate of incorporation or by-laws). Any vacancies on the Board of Directors effected by the provisions of clauses (y) and (z) in the preceding sentence may be filled by a majority of the remaining directors.

(d)           Except as set forth herein, holders of Series B Junior Participating Preferred Stock shall have no special voting rights and their consent shall not be required (except to the extent they are entitled to vote with holders of Class A Common Stock as set forth herein) for taking any corporate action.

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Section 4.               CERTAIN RESTRICTIONS.

(a)           Whenever quarterly dividends or other dividends or distributions payable on the Series B Junior Participating Preferred Stock as provided in SECTION 2 are in arrears, thereafter and until all accrued and unpaid dividends and distributions, whether or not declared, on shares of Series B Junior Participating Preferred Stock outstanding shall have been paid in full, the Corporation shall not

(i)            declare or pay dividends on, make any other distributions on, or redeem or purchase or otherwise acquire for consideration any shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series B Junior Participating Preferred Stock;

(ii)           declare or pay dividends on or make any other distributions on any shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series B Junior Participating Preferred Stock, except dividends paid ratably on the Series B Junior Participating Preferred Stock and all such parity stock on which dividends are payable or in arrears in proportion to the total amounts to which the holders of all such shares are then entitled;

(iii)          redeem or purchase or otherwise acquire for consideration shares of any stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series B Junior Participating Preferred Stock, provided that the Corporation may at any time redeem, purchase or otherwise acquire shares of any such parity stock in exchange for shares of any stock of the Corporation ranking junior (either as to dividends or upon dissolution, liquidation or winding up) to the Series B Junior Participating Preferred Stock; or

(iv)          purchase or otherwise acquire for consideration any shares of Series B Junior Participating Preferred Stock, except in accordance with a purchase offer made in writing or by publication (as determined by the Board of Directors) to all holders of such shares upon such terms as the Board of Directors, after consideration of the respective annual dividend rates and other relative rights and preferences of the respective series classes, shall determine in good faith will result in fair and equitable treatment among the respective series or classes.

(b)           The Corporation shall not permit any subsidiary of the Corporation to purchase or otherwise acquire for consideration any shares of stock of the Corporation unless the Corporation could, under Paragraph (A) of this SECTION 4, purchase or otherwise acquire such shares at such time and in such manner.

Section 5.               REACQUIRED SHARES. Any shares of Series B Junior Participating Preferred Stock purchased or otherwise acquired by the Corporation in any manner whatsoever shall be retired and cancelled promptly after the acquisition thereof. All such shares shall upon their cancellation become authorized but unissued shares of Preferred Stock and may be reissued as part of a new series of Preferred Stock to be created by resolution or resolutions of the Board of Directors, subject to the conditions and restrictions on issuance set forth herein.

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Section 6.               LIQUIDATION, DISSOLUTION OR WINDING UP.

(a)           Upon any liquidation (voluntary or otherwise), dissolution or winding up of the Corporation, no distribution shall be made to the holders of shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series B Junior Participating Preferred Stock unless, prior thereto, the holders of shares of Series B Junior Participating Preferred Stock shall have received an amount equal to $1.00 per share of Series B Participating Preferred Stock, plus an amount equal to accrued and unpaid dividends and distributions thereon, whether or not declared, to the date of such payment (the “SERIES B LIQUIDATION PREFERENCE”). Following the payment of the full amount of the Series B Liquidation Preference, no additional distributions shall be made to the holders of shares of Series B Junior Participating Preferred Stock unless, prior thereto, the holders of shares of Class A Common Stock shall have received an amount per share (the “COMMON ADJUSTMENT”) equal to the quotient obtained by dividing (i) the Series B Liquidation Preference by (ii) 100 (as appropriately adjusted as set forth in subparagraph (C) below to reflect such events as stock splits, stock dividends and recapitalizations with respect to the Class A Common Stock) (such number in clause (ii), the “ADJUSTMENT NUMBER”). Following the payment of the full amount of the Series B Liquidation Preference and the Common Adjustment in respect of all outstanding shares of Series B Junior Participating Preferred Stock and Class A Common Stock, respectively, holders of Series B Junior Participating Preferred Stock and holders of shares of Class A Common Stock shall receive their ratable and proportionate share of the remaining assets to be distributed in the ratio of the Adjustment Number to 1 with respect to such Preferred Stock and Class A Common Stock, on a per share basis, respectively.

(b)           In the event, however, that there are not sufficient assets available to permit payment in full of the Series B Liquidation Preference and the liquidation preferences of all other series of preferred stock, if any, which rank on a parity with the Series B Junior Participating Preferred Stock, then such remaining assets shall be distributed ratably to the holders of such parity shares in proportion to their respective liquidation preferences. In the event, however, that there are not sufficient assets available to permit payment in full of the Common Adjustment, then such remaining assets shall be distributed ratably to the holders of Class A Common Stock.

(c)           In the event the Corporation shall at any time after the effectiveness of this Certificate of Designations (i) declare and pay any dividend on Class A Common Stock payable in shares of Class A Common Stock, (ii) subdivide the outstanding Class A Common Stock, or (iii) combine the outstanding Class A Common Stock into a smaller number of shares, then in each such case the Adjustment Number in effect immediately prior to such event shall be adjusted by multiplying such Adjustment Number by a fraction the numerator of which is the number of shares of Class A Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Class A Common Stock that were outstanding immediately prior to such event.

Section 7.               CONSOLIDATION, MERGER, ETC. In case the Corporation shall enter into any consolidation, merger, combination or other transaction in which the shares of Class A Common Stock are exchanged for or changed into other stock or securities, cash and/or any other property, then in any such case the shares of Series B Junior Participating

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Preferred Stock shall at the same time be similarly exchanged or changed in an amount per share (subject to the provision for adjustment hereinafter set forth) equal to 100 times the aggregate amount of stock, securities, cash and/or any other property (payable in kind), as the case may be, into which or for which each share of Class A Common Stock is changed or exchanged. In the event the Corporation shall at any time after the Record Date (i) declare and pay any dividend on Class A Common Stock payable in shares of Class A Common Stock, (ii) subdivide the outstanding Class A Common Stock, or (iii) combine the outstanding Class A Common Stock into a smaller number of shares, then in each such case the amount set forth in the preceding sentence with respect to the exchange or change of shares of Series B Junior Participating Preferred Stock shall be adjusted by multiplying such amount by a fraction the numerator of which is the number of shares of Class A Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Class A Common Stock that were outstanding immediately prior to such event.

Section 8.               NO REDEMPTION. The shares of Series B Junior Participating Preferred Stock shall not be redeemable.

Section 9.               RANKING. The Series B Junior Participating Preferred Stock shall rank junior to all other series of the Corporation’s Preferred Stock as to the payment of dividends and the distribution of assets, unless the terms of any such series shall provide other wise.

Section 10.             AMENDMENT. At any time when any shares of Series B Junior Participating Preferred Stock are outstanding, neither the Amended and Restated Certificate of Incorporation of the Corporation nor this Certificate of Designation shall be amended, by merger, consolidation or otherwise, in any manner which would materially alter or change the powers, preferences or special rights of the Series B Junior Participating Preferred Stock so as to affect them adversely without the affirmative vote of the holders of two-thirds or more of the outstanding shares of Series B Junior Participating Preferred Stock, voting separately as a class.

Section 11.             FRACTIONAL SHARES. Series B Junior Participating Preferred Stock may be issued in fractions of a share which shall entitle the holder, in proportion to such holder’s fractional shares, to exercise voting rights, receive dividends, participate in distributions and to have the benefit of all other rights of holders of Series B Junior Participating Preferred Stock.

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IN WITNESS WHEREOF, DynCorp International, Inc. has caused this Certificate to be signed by Stephen J. Cannon, its President and Chief Executive Officer, this day of May 3, 2006.

DYNCORP INTERNATIONAL INC.

By:

President and Chief Executive Officer

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EXHIBIT B

FORM OF RIGHTS CERTIFICATE

Certificate No. R-              Rights

NOT EXERCISABLE AFTER MAY 3RD 2015 OR EARLIER IF REDEEMED OR EXCHANGED BY DYNCORP INTERNATIONAL INC. (THE “COMPANY”). THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT $.01 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS SUCH TERM IS DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID.

[THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN ASSOCIATE OR AFFILIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED TN SECTION 7(e) OF SUCH AGREEMENT.] [Insert if Applicable]

Rights Certificate

DYNCORP INTERNATIONAL INC.

This certifies that,                      or registered assigns, is the registered owner of the number of Rights set forth above, each of which entitles the owner thereof, subject to the terms, provisions and conditions of the Rights Agreement, dated as of May 3, 2006 (the “Rights Agreement”), between DynCorp International Inc., a Delaware corporation (the “Company”), and The Bank Of New York (the “Rights Agent”), to purchase from the Company at any time after the Distribution Date (as such term is defined in the Rights Agreement) and prior to 5:00 P.M. (New York time) on May 3, 2015 (unless such date is extended prior thereto by the Board of Directors) at the office or offices of the Rights Agent designated for such purpose, or its successors as Rights Agent, one one-thousandth of a fully paid, non-assessable share of Series B Junior Participating Preferred Stock (the “Preferred Stock”) of the Company, at a purchase price of $ 75.00 per one one-thousandth of a share (the “Purchase Price”), upon presentation and surrender of this Rights Certificate with the Form of Election to Purchase and related Certificate duly executed. The number of Rights evidenced by this Rights Certificate (and the number of shares which may be purchased upon exercise thereof) set forth above, and the Purchase Price per share set forth above, are the number and Purchase Price as of May 3, 2006, based on the Preferred Stock as constituted at such date. The Company reserves the right to require prior to the occurrence of a Triggering Event (as such term is defined in the Rights Agreement) that a number of Rights be exercised so that only whole shares of Preferred Stock will be issued. Upon the occurrence of a Section 11(a)(ii) Event (as such term is defined in the Rights Agreement), if the Rights evidenced by this Rights Certificate are beneficially owned by (i) an Acquiring Person

or an Affiliate or Associate of any such Acquiring Person (as such terms are defined in the Rights Agreement), (ii) a transferee of any such Acquiring Person, Associate or Affiliate, or (iii) under circumstances specified in the Rights Agreement, a transferee of a person who, after such transfer, became an Acquiring Person, or an Affiliate or Associate of an Acquiring Person, such Rights shall become null and void and no holder hereof shall have any right with respect to such Rights from and after the occurrence of such Section 11(a)(ii) Event.

As provided in the Rights Agreement, the Purchase Price and the number and kind of shares of Preferred Stock or other securities, which may be purchased upon the exercise of the Rights evidenced by this Rights Certificate are subject to modification and adjustment upon the happening of certain events, including Triggering Events.

This Rights Certificate is subject to all of the terms, provisions and conditions of the Rights Agreement, which terms, provisions and conditions are hereby incorporated herein by reference and made a part hereof and to which Rights Agreement reference is hereby made for a full description of the rights, limitations of rights, obligations, duties and immunities hereunder of the Rights Agent, the Company and the holders of the Rights Certificates, which limitations of rights include the temporary suspension of the exercisability of such Rights under the specific circumstances set forth in the Rights Agreement. Copies of the Rights Agreement are on file at the principal office of the Rights Agent and are also available upon written request to the Company.

This Rights Certificate, with or without other Rights Certificates, upon surrender at the principal office or offices of the Rights Agent designated for such purpose, may be exchanged for another Rights Certificate or Rights Certificates of like tenor and date evidencing Rights entitling the holder to purchase a like aggregate number of one one-thousandth of a share of Preferred Stock as the Rights evidenced by the Rights Certificate or Rights Certificates surrendered shall have entitled such holder to purchase. If this Rights Certificate shall be exercised in part, the holder shall be entitled to receive upon surrender hereof another Rights Certificate or Rights Certificates for the number of whole Rights not exercised.

Subject to the provisions of the Rights Agreement, the Rights evidenced by this Certificate may be redeemed by the Company at its option at a redemption price of $.01 per Right or may be exchanged, in whole or in part, for shares of the Class A Common Stock, or shares of preferred stock of the Company having essentially the same value or economic rights as such shares. Immediately upon the action of the Board of Directors of the Company authorizing any such exchange, and without any further action or any notice, the Rights (other than Rights which are not subject to such exchange) will terminate and the Rights will only enable holders to receive the shares issuable upon such exchange.

No fractional shares of Preferred Stock will be issued upon the exercise of any Right or Rights evidenced hereby (other than fractions which are integral multiples of one one-thousandth of a share of Preferred Stock, which may, at the election of the Company, be evidenced by depositary receipts), but in lieu thereof a cash payment will be made, as provided in the Rights Agreement.

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No holder of this Rights Certificate, as such, shall be entitled to vote or receive dividends or be deemed for any purpose the holder of shares of Preferred Stock or of any other securities of the Company which may at any time be issuable on the exercise hereof, nor shall anything contained in the Rights Agreement or herein be construed to confer upon the holder hereof, as such, any of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give consent to or withhold consent from any corporate action, or, to receive notice of meetings or other actions affecting stockholders (except as provided in the Rights Agreement), or to receive dividends or subscription rights, or otherwise, until the Right or Rights evidenced by this Rights Certificate shall have been exercised as provided in the Rights Agreement.

This Rights Certificate shall not be valid or obligatory for any purpose until it shall have been countersigned by the Rights Agent.

WITNESS the facsimile signature of the proper officers of the Company and its corporate seal.

Dated as of                    ,         

ATTEST:	DYNCORP INTERNATIONAL INC.
	By:
	Name:
	Title
Countersigned:	THE BANK OF NEW YORK
	By:
	Name:
	Title

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FORM OF REVERSE SIDE OF RIGHTS CERTIFICATE

FORM OF ASSIGNMENT

(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate.)

FOR VALUE RECEIVED                                hereby sells, assigns and transfers unto                                                                                                                                                                   &n bsp;                      

(Please print name and address of transferee)

this Rights Certificate, together with all right, title and interest therein, and does hereby irrevocably constitute and appoint                                    Attorney, to transfer the within Rights Certificate on the books of the within named Company, with full power of substitution.

Dated:	,
Signature
Signature Guaranteed:

Certificate

The undersigned hereby certifies by checking the appropriate boxes that:

(1) the Rights evidenced by this Rights Certificate         is         is not being sold, assigned and transferred by or on behalf of a Person who is or was an Acquiring Person or an Affiliate or Associate of any such Acquiring Person (as such terms are defined pursuant to the Rights Agreement);

(2) after due inquiry and to the best knowledge of the undersigned, it       did       did not acquire the Rights evidenced by this Rights Certificate from any Person who is, was or subsequently became an Acquiring Person or an Affiliate or Associate of an Acquiring Person.

Dated:	,
Signature
Signature Guaranteed:

NOTICE

The signature to the foregoing Assignment and Certificate must correspond to the name as written upon the face of this Rights Certificate in every particular, without alteration or enlargement or any change whatsoever.

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FORM OF ELECTION TO PURCHASE

(To be executed if holder desires to exercise Rights
represented by the Rights Certificate.)

To:          DYNCORP INTERNATIONAL INC.

The undersigned hereby irrevocably elects to exercise __________ Rights represented by this Rights Certificate to purchase the shares of Preferred Stock issuable upon the exercise of the Rights (or such other securities of the Company or of any other person which may be issuable upon the exercise of the Rights) and requests that certificates for such shares be issued in the name of and delivered to:

(Please print name and address)

(Please insert social security

or other identifying number)

If such number of Rights shall not be all the Rights evidenced by this Rights Certificate, a new Rights Certificate for the balance of such Rights shall be registered in the name of and delivered to:

(Please print name and address)

(Please insert social security

or other identifying number)

Dated:	,
Signature
Signature Guaranteed:

Certificate

The undersigned hereby certifies by checking the appropriate boxes that:

(1) the Rights evidenced by this Rights Certificate       is          is not being sold, assigned and transferred by or on behalf of a Person who is or was an Acquiring Person or an Affiliate or Associate of any such Acquiring Person (as such terms are defined pursuant to the Rights Agreement);

(2) after due inquiry and to the best knowledge of the undersigned, it      did       did not acquire the Rights evidenced by this Rights Certificate from any Person who is, was or subsequently became an Acquiring Person or an Affiliate or Associate of an Acquiring Person.

Dated:	,
Signature
Signature Guaranteed:

NOTICE

The signature to the foregoing Election to Purchase and Certificate must correspond to the name as written upon the face of this Rights Certificate in every particular, without alteration or enlargement or any change whatsoever.

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EXHIBIT C

SUMMARY OF RIGHTS TO PURCHASE
PREFERRED STOCK

On May 3, 2006, the Board of Directors (the “Board”) of DynCorp International Inc. (the “Company”) declared as a dividend distribution of one Right for each outstanding share of Company Class A Common Stock to stockholders of record at the close of business on May 9, 2006, (the “Record Date”). Each Right entitles the registered holder to purchase from the Company one one-thousandth of a share (a “Unit”) of Series B Junior Participating Preferred Stock, no par value (the “Series B Preferred Stock”) at a Purchase Price of $75.00 per Unit, subject to adjustment. The description and terms of the Rights are set forth in a Rights Agreement (the “Rights Agreement”) between the Company and The Bank of New York, as Rights Agent.

Initially, the Rights will be attached to all Class A Common Stock certificates representing shares then outstanding, and no separate Rights Certificates will be distributed. Subject to certain exceptions specified in the Rights Agreement, the Rights will separate from the Class A Common Stock and a Distribution Date will occur upon the earlier of (i) 10 business days following a public announcement that a person or group of affiliated or associated persons (an “Acquiring Person”) has acquired beneficial ownership of 15% or more of the outstanding shares of Class A Common Stock other than as a result of repurchases of stock by the Company or certain inadvertent actions by institutional or certain other stockholders or (ii) 10 business days (or such later date as may be determined by action of the Board prior to such time as any Person becomes an Acquiring Person the Board shall determine) following the commencement of a tender offer or exchange offer that would result in a person or group becoming an Acquiring Person. Until the Distribution Date, (i) the Rights will be evidenced by the Class A Common Stock certificates together with this Summary of Rights and will be transferred with and only with such Class A Common Stock certificates, (ii) new Class A Common Stock certificates issued after the Record Date will contain a notation incorporating the Rights Agreement by reference and (iii) the surrender for transfer of any certificates for Class A Common Stock outstanding will also constitute the transfer of the Rights associated with the Class A Common Stock represented by such certificate. Pursuant to the Rights Agreement, the Company reserves the right to require prior to the occurrence of a Triggering Event (as defined below) that, upon any exercise of Rights, a number of Rights be exercised so that only whole shares of Preferred Stock will be issued. The rights agreement excludes Veritas Capital Management, L.L.C. (“Veritas”) from being considered an acquiring person until Veritas first ceases to beneficially own 15% or more of our Class A Common Stock then outstanding. The rights plan also generally exempts persons who may be deemed to beneficially own shares of the Company due to their ownership of shares of Veritas, as well as certain persons who may be deemed to beneficially own shares of the Company due to their ownership of shares of transferees of at least 15% of our then outstanding Class A Common Stock from Veritas.

The Rights are not exercisable until the Distribution Date and will expire at 5:00 P.M. (New York time) on May 3, 2015, unless the Rights are earlier redeemed or exchanged by the Company as described below.

As soon as practicable after the Distribution Date, Rights Certificates will be mailed to holders of record of the Class A Common Stock as of the close of business on the Distribution Date and, thereafter, the separate Rights Certificates alone will represent the Rights. Except as otherwise determined by the Board of Directors, only shares of Class A Common Stock issued prior to the Distribution Date will be issued with Rights.

In the event that a Person becomes an Acquiring Person, each holder of a Right will thereafter have the right to receive, upon exercise, Class A Common Stock (or, in certain circumstances, cash, property or other securities of the Company) having a value equal to two times the exercise price of the Right. Notwithstanding any of the foregoing, following the occurrence of the event set forth in this paragraph, all Rights that are, or (under certain circumstances specified in the Rights Agreement) were, beneficially owned by any Acquiring Person will be null and void.

For example, at an exercise price of $75.00 per Right, each Right not owned by an Acquiring Person (or by certain related parties) following an event set forth in the preceding paragraph would entitle its holder to purchase $150.00 worth of Class A Common Stock (or other consideration, as noted above) for $75.00. Assuming that the Class A Common Stock had a per share value of $75.00 at such time, the holder of each valid Right would be entitled to purchase 2 shares of Class A Common Stock (without taking into account payment of cash in lieu of fractional shares) for $75.00

In the event that, at any time following the time that a Person became an Acquiring Person, (i) the Company engages in a merger or other business combination transaction in which the Company is not the surviving corporation, (ii) the Company engages in a merger or other business combination transaction in which the Company is the surviving corporation and the Class A Common Stock of the Company is changed or exchanged, or (iii) 50% or more of the Company’s assets, cash flow or earning power is sold or transferred, each holder of a Right (other than any such transactions with certain exempt persons) (except Rights which have previously been voided as set forth above) shall thereafter have the right to receive, upon exercise, Class A Common Stock of the acquiring company having a value equal to two times the exercise price of the Right.

At any time after a person becomes an Acquiring Person and prior to the acquisition by a person or group of a majority of the outstanding Class A Common Stock, the Board may exchange the Rights (other than Rights owned by such person or group which have become void), in whole or in part, at an exchange ratio of one share of Class A Common Stock, or one one-thousandth of a share of Preferred Stock (or of a share of a class or series of the Company’s preferred stock having equivalent rights, preferences and privileges), per Right (subject to adjustment).

At any time until a Person becomes an Acquiring Person, the Company may redeem the Rights in whole, but not in part, at a price of $0.01 per Right (payable in cash, Class A Common Stock or other consideration deemed appropriate by the Board of Directors).

As long as the Rights are redeemable, the Company may in its sole and absolute discretion supplement or amend the Agreement without the approval of any holders of the Rights

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provided that the amendment or supplement does not (a) adversely affect the interests of holders of Rights (other than an Acquiring Person and its Affiliates and Associates), (b) cause the Rights again to be redeemable, or (c) cause the Agreement to become amendable. Further, no supplement or amendment can be made which changes the (i) the Redemption Price, (ii) the rights of any Exempted Entity (without its prior written consent, not to be unreasonably withheld), or (iii) changes or affects the rights, duties, liabilities, or obligations of the Rights Agent (without its prior written consent).

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EX-10.11

Exhibit 10.11

EMPLOYMENT AGREEMENT

This Employment Agreement (the “Agreement”) is hereby entered into effective as of April 12, 2006, between DynCorp International LLC, a Delaware limited liability company (the “Company”), and R. Y. Morrel (“Executive”).

In consideration of the mutual promises and covenants contained herein, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

1. Employment.

1.1. Position. During the Term (as hereinafter defined) of this Agreement, and subject to the terms and conditions set forth herein, the Company agrees to employ Executive as its Senior Vice President and General Counsel reporting to the President of the Company.

1.2. Fulfillment of Duties. During the Term of this Agreement, Executive shall (i) devote her full business time and best efforts to the performance of her services hereunder, excluding vacation periods and periods of illness or incapacity, and (ii) perform her services hereunder faithfully, diligently and to the best of her skill and ability.

1.3. Location. During the Term of this Agreement, Executive will perform her duties and services at the Company’s Falls Church, Virginia office or such location(s) as she shall deem appropriate, except that Executive agrees to make such business trips to the Company’s other locations as may be reasonable and necessary in the performance of her services hereunder.

2. Compensation and Benefits.

2.1. Salary. In consideration of and as compensation for the services agreed to be performed by Executive hereunder, the Company agrees to pay Executive during the Term of this Agreement a base annual salary (the “Base Salary”) of not less than $330,000 per year, less standard deductions  and withholdings, payable bi- monthly in accordance with the Company’s regular payroll practices. The Company will review Executive’s Base Salary and other compensation (including bonuses and incentive compensation) from time to time during the Term of this Agreement and, at the recommendation of the Compensation Committee (the “Committee”) of the Board, may increase his Base Salary or other compensation (including incentive compensation) from time to time. Any increase in Base Salary or other compensation (including incentive compensation) shall in no way limit or reduce any other obligation of the Company hereunder and, once established at an increased rate, Executive’s Base Salary hereunder shall not be reduced.

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2.2. Incentive Compensation. During the Term of this Agreement, in addition to the Base Salary provided in Section 2.1 above, Executive shall be eligible to receive additional incentive compensation in an amount not to exceed amounts prescribed in the Company’s Executive Incentive Compensation Plan (“Plan”) using a target incentive percentage of no less than 50% (“Incentive Compensation”); provided, however, that no portion of her Incentive Compensation shall be paid in shares of the Company unless the Executive requests the delivery of such shares. The Executive shall also be entitled to the benefits of any modifications or amendments to such Plan adopted after the effective date hereof that enhance benefits payable under the Plan.

2.3. Other Benefits. During the Term of this Agreement, Executive shall be entitled to the benefits listed on Exhibit A, and any other benefits adopted after the effective date of this Agreement for the benefit of senior executives of the Company; provided that such additional benefits shall not in any way limit or detract from the benefits described on Exhibit A.

3. Term.

3.1. Term. The term of employment under this Agreement means the period that commenced on April 1, 2006 and expiring at midnight on March 31, 2011; provided, that this Agreement will automatically renew for additional periods of one (1) year each commencing on April 1 of each successive year following the initial Term unless written notice of intent not to renew is delivered by the Company or the Executive to the other party at least 90 days prior to the effective date of any renewal hereof.

3.2. Termination of Employment

Executive’s employment with the Company may be terminated under the following conditions:

3.2.1. Retirement, Death or Disability. Executive’s employment with the Company shall terminate effective upon the date of Executive’s Retirement from the Company (as defined in Section 5.5), resignation from the Company, death or “Complete Disability” (as defined in Section 5.1).

3.2.2. For Cause. The Company may terminate Executive’s employment under this Agreement for Cause (as defined in Section 5.2) by delivery of written notice to Executive specifying the Cause or Causes relied upon for such termination. Any notice of termination given pursuant to this Section 3.2.2 shall effect termination as of the date specified in such notice or, in the event no such date is specified, on the last day of the month in which such notice is delivered or deemed delivered as provided in Section 7.3 below.

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3.2.3. Without Cause. The Company may terminate Executive’s employment under this Agreement at any time and for any reason by delivery of written notice of such termination to Executive. Any notice of termination given pursuant to this Section 3.2.3 shall take effect as of the date specified in such written notice.

3.2.2. Termination by Executive for  Good  Cause. Executive may terminate Executive’s employment with the Company for Good Cause (as defined in Section 5.3) upon thirty (30) days written notice to the Company.

3.2.3. Termination by Mutual Agreement of the Parties. Executive’s employment pursuant to this Agreement may be terminated at any time upon the mutual written agreement of the parties. Any such termination of employment shall have the consequences specified in such mutual agreement.

3.2.4. Board/Committee Resignation. Upon termination of Executive’s employment for any reason, Executive agrees to resign, as of the date of such termination and to the extent applicable, from the Board (and any committees thereof) and the Board of Directors (and any committees thereof) of any of the Company’s affiliates.

4. Compensation upon Termination.

4.1. Retirement, Death or Complete Disability. If Executive’s employment is terminated by her Retirement, death or Complete Disability, Executive (or her heirs or legal representative) shall be entitled to Executive’s Base Salary and accrued and unused vacation earned through the date of termination, subject to standard deductions and withholdings. In addition, upon Executive’s (or her heirs or legal representative) furnishing to the Company an executed waiver and release of claims (a form of which is attached hereto as Exhibit B, which will be revised for signature by Executive’s heirs or legal representative if applicable), Executive (or her heirs or legal representative) shall be entitled to:

4.1.1. a pro rated portion of her Incentive Compensation that would be payable to the Executive based on projected Company performance through the termination date, less standard deductions and withholdings; and

4.1.2. exercise any vested options to purchase stock (common or otherwise) in the Company granted to Executive pursuant to any plan, agreement or otherwise, or any  equivalent or similar vested rights which appreciate or tend to appreciate as the value of the Company’s stock appreciates, such options and rights to be in accordance with the terms of

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any applicable plan or agreement, it being understood that the provisions of this Section 4.1.2 shall have no applicability to the rights of Executive as a Class B Member of DIV Holding LLC and nothing contained in this Agreement shall operate to change, amend or vary any of the terms of the Amended and Restated Limited Liability Company Operating Agreement of DIV Holding LLC, as amended from time to time; provided, however, that Executive or her estate or legal representative shall have a period of 90 days following the date of termination within which to exercise or satisfy all such options or rights.

4.2. Termination for Cause by the Company or Resignation by Executive. If Executive’s employment is terminated by the Company for Cause or if Executive resigns (other than for Good Cause), the Company shall pay Executive’s accrued Base Salary and accrued and unused vacation benefits earned through the date of termination at the rate in effect at the time of the notice of termination to Executive or Executive’s notice of resignation to the Company.

4.3. Termination without Cause by the Company or Termination by the Executive for Good Cause. If the Company terminates Executive’s employment without Cause (except under any circumstance in which Section 4.1 is applicable to Executive, in which case this Section 4.3 shall  not  apply), or if the Executive terminates this Agreement for Good Cause, Executive shall be entitled to Executive’s Base Salary and a pro rated portion of her Incentive Compensation that would be payable to the Executive based on projected Company performance through the termination date, less standard deductions and withholdings, and accrued and unused vacation earned through the date of termination, subject to standard deductions and withholdings. In addition, upon Executive’s furnishing to the Company an executed copy of the waiver and release of claims (a form of which is attached hereto as Exhibit B), Executive (or her heirs or legal representative) shall be entitled to:

4.3.1. a payment equivalent to 2.0 times the Executive’s Annual Base Compensation in effect at the time of Termination, less standard deductions  and withholdings, payable in two equal lump sum payments  the first payment on the first payroll date that is six months following such termination, and the second payment on the first payroll date that is twelve months following such termination, in accordance with the Company’s regular payroll practices;

4.3.2. exercise any vested options to purchase stock (common or otherwise) in the Company granted to Executive pursuant to any plan, agreement or otherwise, or any equivalent or similar vested rights which appreciate or tend to appreciate as  the  value of the Company’s stock appreciates, such options and rights to be in accordance with the terms of any applicable plan or agreement, it being understood that the provisions of this Section 4.3.2 shall have no applicability to the rights of Executive as

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a Class B Member of DIV Holding LLC and nothing contained in this Agreement shall operate to change, amend or vary any of the terms of the Amended and Restated Limited Liability Company Operating Agreement of DIV Holding LLC, as amended from time to time; provided, however, that Executive or her estate or legal representative shall have a period of 90 days following the date of termination within which to exercise or satisfy all such options or rights; and

4.3.3. elect reimbursement to the Executive (or her heirs or legal representatives) for the same portion of Executive’s COBRA health insurance premium that it paid during Executive’s employment up until the earlier of either (i) the last day of Executive’s COBRA health insurance benefits or, ii) the date on which Executive becomes covered under any other group health plan (as an employee or otherwise).

5. Definitions. For purposes of this Agreement, the following terms shall have the following meanings:

5.1. Complete  Disability. “Complete  Disability” shall mean the inability of Executive to perform Executive’s duties under this Agreement because Executive has become permanently disabled within the meaning of any policy of disability income insurance covering employees of the Company then in force. In the event the Company has no policy of disability income insurance covering employees of the Company in force when Executive becomes disabled, the term “Complete Disability” shall mean the inability of Executive to perform Executive’s duties  under this Agreement by reason of any incapacity, physical or mental, which the Board, based upon medical advice or an opinion provided by a licensed  physician acceptable to the Board, determines to have incapacitated  Executive from satisfactorily performing all of Executive’s usual services for the Company for a period of at least one hundred twenty (120) days during any twelve (12) month period  (whether or not consecutive). Based upon such medical advice or opinion, the determination of the Board shall be final and binding and the date such determination is made shall be the date of such Complete Disability for purposes of this Agreement.

5.2. For Cause. For “Cause” shall mean:

5.2.1. the willful and continued failure by Executive to substantially perform her duties with the Company (other than any such failure resulting from his incapacity due to physical or mental illness, injury or disability), after a written demand for substantial performance is delivered to her by the Board that identifies, in reasonable detail, the manner in which the Board believes that Executive has not substantially performed her duties in good faith;

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5.2.2. the willful engaging by Executive in conduct that causes material harm to the Company, monetarily or otherwise;

5.2.3. Executive’s conviction of a felony arising from conduct during the Term of this Agreement;

5.2.4. Executive’s willful malfeasance or willful misconduct in connection with Executive’s duties hereunder; or

5.2.5. For purposes of this Subsection 5.2 no act, or failure to act, on Executive’s part shall be considered “willful” unless done, or omitted to be done, by him not in good faith and without reasonable belief that her action or omission was in the best interest of the Company or its shareholders.

5.3. Good  Cause. “Good Cause” shall mean any of the following actions taken by the Company or any subsidiary that employs the Executive: assignment of the Executive to duties that are materially inconsistent with her status as a senior executive or which represent a substantial diminution of her duties or responsibilities in the Company, a reduction in Executive’s Base Salary, except in connection with an across-the-board salary reduction for all executives, a failure by the Company to pay any of Executive’s compensation in accordance with Company policy, a substantial reduction in or elimination of any of the benefits described on Exhibit A, the relocation of the Executive to a location more than 35 miles from Washington, D.C. without Executive’s consent, change of Executive’s title, a failure to comply with the obligations of the Company under Sections 1.1 and 1.2 hereof, or the failure of a successor to the Company to confirm in writing within 5 business days of its succession its obligation to assume and perform all obligations of this Agreement, provided that any such events described in this Section 5.3 shall constitute Good Cause only if the Company fails to cure such event within 30 days after receipt from Executive of written notice of the event which constitutes Good Cause.

5.4. Annual Base Compensation. “Annual Base Compensation” shall mean the total of the Executive’s most recent annual salary and target incentive under the Company’s Executive Incentive Plan.

5.5. Retirement. “Retirement” shall mean the voluntary retirement of the Executive from the Company (a) at or after age 62 or (b) at any time after the combination of the Executive’s age and service with the company or any predecessor or subsidiary equals or exceeds 75 years.

6. Non-Solicitation and Confidentiality.

6.1.         Non-Solicitation. Executive hereby covenants and agrees that during the Term of this Agreement and for a period of one year following the termination

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of this Agreement, she will not directly or through a third party employ or solicit for employment any employees of the Company or any persons who were employees of the Company at any time during the twelve-month period immediately prior to any such solicitation or proposed solicitation or employment.

6.2.         Confidentiality.    Except as required by law or an order of a court or governmental agency with jurisdiction, the Executive shall not, during the period he is employed by the Company and for a period of one year thereafter, disclose Confidential Information (as defined below) to any person or entity for any reason or purpose whatsoever. Executive shall take all reasonable steps to safeguard the Confidential Information and to protect it against disclosure, misuse, espionage, loss and theft. All such Confidential Information shall remain the exclusive property of the Company.

6.3          Confidential Information.    For purposes of this Agreement and specifically Section 6.2 above, “Confidential Information” shall mean non-public information concerning the Company’s business or operations, plans, strategies, prospects or objectives; its sales, services, support and marketing plans, practices and operations; the prices, costs and details of its services or prospective services; the financial condition and results of its operations; information received from third parties under confidential conditions; the Company’s personnel and compensation policies; and means of gaining access to the Company’s computer data systems and related information. “Confidential Information” shall not include general knowledge based on Executive’s experience in the industry, information generally known in the industry, or information that is or becomes generally available to the public other than as a result of disclosure by the Executive.

7. Miscellaneous.

7.1. Indemnification. The Company agrees at all times during the term of this Agreement and thereafter, to indemnify, defend and hold the Executive, her heirs, estate and legal representatives harmless from, any and all claims, liabilities, demands, allegations, causes of action, or other threats, related to or in any way arising out of, the services provided by the Executive under this Agreement or at the request of the Company; provided, however, that this indemnification shall not apply to acts or omissions that are the result of conduct that would preclude the Executive from receiving indemnification under Section 145 of the Delaware General Corporation Law in effect from time to time. Upon receipt of notice of the assertion of any such claim, liability, demand, allegation, cause of action or other threat, the Company shall pay the Executive the cost of her defense by a counsel mutually acceptable to the Company and Executive, and shall be responsible for the full payment of any judgment including damages or penalties, including punitive damages or penalties, that may be assessed or payable as a result of a settlement to which the Company and the Executive consent, including the deductible portion of any loss covered by Director and

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Officer Liability Insurance. Nothing herein shall limit the rights of the Executive to the protections afforded by the Company’s Directors and Officers Liability Insurance as in effect from time to time.

7.2. Compliance with Company Policies. During the term of this Agreement, the Executive shall at all times comply with all applicable Company policies and procedures, including the Company’s Standards of Business Conduct.

7.3. Notices. Any written notice, required or permitted under this Agreement, shall be deemed sufficiently given if either hand delivered or if sent by fax or overnight courier. Written notices must be delivered to the receiving party at her or its address on the signature page of this Agreement. The parties may change the address at which written notices are to be received in accordance with this section.

7.4. Assignment. Executive may not assign, transfer, or delegate her rights or obligations hereunder and any attempt to do so shall be void. This Agreement shall be binding upon and shall inure to the benefit of the Company and its successors and assigns and the term “Company” as used herein shall include such successors and assigns to the extent applicable.

7.5. Entire Agreement. This Agreement, including Exhibits A and B, contains the entire agreement of the parties with respect to the subject matter hereof, and all  other prior agreements, written or oral, are hereby superseded and are of no further force or effect; provided, however, that any and all prior agreements covering the benefits described in Exhibit A shall continue in full force and effect in accordance with their terms. This Agreement may be modified or amended only by a written agreement that is signed by the Company and Executive. No waiver of any section or provision of this Agreement will be valid unless such waiver is in writing and signed by the party against whom enforcement of the waiver is sought. The waiver by the Company of any section or provision of this Agreement shall not apply to any subsequent breach of this Agreement. Captions to the various sections in this Agreement are for the convenience of  the parties only and shall not affect the meaning or interpretation of this Agreement. This Agreement may be executed in several counter-parts, each of which shall be deemed an original, but together they shall constitute one and the same instrument.

7.6. Severability. The provisions of this Agreement shall be deemed severable, and if any part of any provision is held illegal, void, or invalid under applicable law such provision may be changed to the extent reasonably necessary to make the provision, as so changed, legal, valid and binding. If any provision of this Agreement is held illegal, void, or invalid in its entirety, the remaining provisions of this Agreement shall not in any way be affected or impaired but shall remain binding in accordance with their terms.

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7.7  Withholding Taxes. The Company may withhold from any amounts payable under this Agreement such Federal, state and local taxes as may be required to be withheld pursuant to any applicable law or regulation.

7.8. Applicable Law. This Agreement and the rights and obligations of the Company and Executive thereunder shall be governed by and construed and enforced under the laws of the State of New York without regard to New York’s conflict of laws rules.

[The remainder of this page is intentionally left blank]

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In Witness Whereof, the parties have executed this Agreement effective as of the date first above written.

			DynCorp International LLC
	By:	/s/ Stephen J. Cannon
		DynCorp International
		Attn: President
		8445 Freeport Pkwy
		Irving, Texas 75063
with a copy to:		Schulte Roth & Zabel LLP
		Attn:  Benjamin M. Polk, Esq.
		919 Third Avenue
		New York, NY 10022
	Executive
	By:	/s/ R.Y. Morrel
		R.Y. Morrel
at:		DynCorp International
		3190 Fairview Park Drive
		Falls Church, VA 22042

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EXHIBIT A

Benefits for Executive’s Employment Agreement

1.Benefits, including Disability, Long Term, Life Insurance, and Salary Continuation, no less favorable to the Executive than that set forth in the  Enhanced Executive Benefit Program.

2.Equity in DIV Holding LLC in accordance with the terms set forth in the Amended and Restated Limited Liability Company Operating Agreement of DIV Holding LLC dated as of February 11, 2005 as amended by Amendment No. 1 dated as of November 22, 2005 and Amendment No. 2 dated as of March 14, 2006, and as hereinafter amended from time to time.

3.Specialty insurance (such as kidnap and ransom and company travel insurance) under which Executive was covered immediately preceding the commencement of the Term of this Agreement.

4.Standard medical plan options no less favorable to the Executive than that offered by the Company immediately preceding the commencement of the Term of this Agreement.

5.Automobile Allowance no less favorable to the Executive than that provided by the Company immediately preceding the commencement of the Term of this Agreement.

6.Vacation in accordance with the Company’s Personal Time Off Policy.

7.Standard Company holidays plus two floating holidays.

8.Executive Incentive Compensation plan with terms no less favorable to the Executive than the Plan or practice in effect immediately preceding the commencement of the Term of this Agreement.

9.Director & Officer Liability Insurance as maintained by the Company for the protection of the members of its Board of Directors.

10.Annual physical examination (to the extent not reimbursed by group health coverage.)

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EXHIBIT B

RELEASE AND WAIVER OF CLAIMS

In consideration of the payments and other benefits set forth in the Employment Agreement dated April __, 2006, to which this form is attached, I, R. Y. Morrel, hereby furnish DynCorp International Inc. (the “Company”), with the following release and waiver (“Release and Waiver”).

I hereby release, and forever discharge the Company, its officers, directors, agents, employees, stockholders, successors, assigns affiliates and benefit plans, all of their past and present officers, directors, agents, and insurers, in all capacities, including individually (all of which organizations and persons are hereinafter collectively identified as the “Company Parties”), from any and all claims, demands, actions, indemnities, liabilities, or obligations of whatever kind and nature, which I may have had, may now have, or may hereafter claim to have through the date this Release and Waiver is executed, whether known or unknown, contingent or otherwise, at law or in equity, including, without limitation, any claim arising at any time prior to and including my employment termination date with respect to any claims relating to my employment and the termination of my employment, all compensation and benefits relating to my employment (including but not limited to, claims for salary, bonuses, commissions, stock, stock options, vacation pay, fringe benefits, severance pay or any form of compensation); any claim of discrimination based on my race, color, religion, sex, national origin, or disability, if any;  any claim that the Company Parties have violated any federal, state or local statute, regulation, or ordinance with respect to my employment or the cessation thereof, including, without limitation, Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 1981,  the Employee Retirement Income Security Act of 1974, the Family and Medical Leave Act, and the ordinances of the County _______ and the City of _________; any claim that the Company Parties have wrongfully terminated my employment or breached any oral, written, express, or implied employment agreement;  any claim that the Company Parties have intentionally or negligently inflicted emotional distress, mental anguish or humiliation on me; any claim of the breach of any implied covenant of good faith and fair dealing; any claim of damages, monetary or other personal relief, and/or attorney’s fees in any administrative and/or judicial proceeding initiated by me, by any third party on my behalf, or by any governmental authority prior to or following my execution of this Release and Waiver;  any claim of libel, slander and/or defamation of character;  any retaliation, “whistleblower,” or public policy claim; and  any other claim of whatever kind not specifically identified in this Release and Waiver; provided, however, that this release does not extend to and will not release the Company from any of its obligations under the Employment Contract or Exhibit A thereof.

I acknowledge that, among other rights, I am waiving and releasing any rights I may have under ADEA, that this Release and Waiver is knowing and voluntary, and that the consideration given for this Release and Waiver is in addition to anything of value to which I was already entitled as an Executive of the

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Company. I further acknowledge that I have been advised, as required by the Older Workers Benefit Protection Act, that: (a) the Release and Waiver granted herein does not relate to claims which may arise after this Release and Waiver is executed; (b) I have the right to consult with an attorney, at my expense, prior to executing this Release and Waiver (although I may choose voluntarily not to do so); (c) I have twenty-one (21) days from the date of termination of my employment with the Company in which to consider  this Release and Waiver (although I may choose voluntarily to execute this Release and Waiver earlier); (d) I am entitled to revoke my consent to this Release and Waiver within seven (7) days following the execution of this Release by delivering written revocation notice to ___________ at [Address] and (e) this Release and Waiver shall not be effective until the seven (7) day revocation period has expired. If I timely revoke this Release and Waiver after signing it, this Release and Wavier will become null and void and the Company will have no obligation to provide me any of the consideration given for this Release and Waiver.

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EX-10.16

Exhibit 10.16

SECOND AMENDMENT

This SECOND AMENDMENT (this “Amendment”), is entered into as of June 28, 2006 (the “Second Amendment Effective Date”), by and among DYNCORP INTERNATIONAL LLC (successor by merger to DI FINANCE SUB LLC), a Delaware limited liability company (“Company”), DYNCORP INTERNATIONAL INC. (formerly known as DI ACQUISITION CORP.), a Delaware corporation (“Holdings”), and CERTAIN SUBSIDIARIES OF COMPANY (together with Holdings, the “Guarantors”), as guarantors, the lenders party hereto, GOLDMAN SACHS CREDIT PARTNERS L.P. (“GSCP”), as administrative agent (together with its permitted successors in such capacity, “Administrative Agent”), and BANK OF AMERICA, N.A., as issuing bank (together with its permitted successors in such capacity, “Issuing Bank”).

RECITALS

WHEREAS, Company, the Guarantors, the lenders from time to time party thereto (the “Lenders”), GSCP, as Administrative Agent, Collateral Agent, joint lead arranger and joint book runner, Bear Stearns Corporate Lending Inc., as Syndication Agent, Bear, Stearns & Co. Inc., as joint lead arranger and joint book runner, and Bank of America, N.A., as Issuing Bank and Documentation Agent, are parties to that certain $420,000,000 Credit and Guaranty Agreement dated as of February 11, 2005 (as amended pursuant to that certain First Amendment and Waiver dated as of January 9, 2006, and as further amended, restated supplemented or otherwise modified from time to time, the “Existing Credit Agreement”).

WHEREAS, Company has requested that the Existing Credit Agreement be amended to, among other things, provide for new term loans (the “New Term Loans”). The cash proceeds of any such New Term Loans will be used solely (a) to repay in full the outstanding principal amount of, and accrued interest on, all Existing Term Loans of Existing Term Loan Lenders as of the Second Amendment Effective Date and (b) for other general corporate purposes. Company has appointed GSCP to act as sole lead arranger, sole bookrunner and syndication agent for this Amendment.

WHEREAS, certain existing Lenders with outstanding Term Loans (each, an “Existing Term Loan Lender”) that execute and deliver a signature page to this Amendment specifically in the capacity of a “Continuing Lender” (a “Continuing Lender”) are willing to make New Term Loans in an aggregate principal amount up to, but not in excess of, the aggregate principal amount of such Existing Term Loan Lender’s outstanding Term Loans immediately prior to the Second Amendment Effective Date (“Existing Term Loans”) subject to the terms and conditions of the Amended Credit Agreement (as defined below).

WHEREAS, the Requisite Lenders are willing to effect such amendment (and the other amendments set forth herein), and the Continuing Lenders are willing to make New Term Loans as contemplated hereby, in each case on the terms and subject to the conditions as more particularly set forth in the Amended Credit Agreement.

WHEREAS, Company has requested that the Administrative Agent be given the authority by the Lenders holding Revolving Commitments to make such modifications to the Amended Credit Agreement at any time prior to the Revolving Commitment Termination Date, so as to increase the Revolving Commitments by up to $30,000,000.

WHEREAS, attached hereto as Exhibit A is a conformed copy of the Existing Credit Agreement which contains all of the specific modifications, amendments and supplements necessary or desirable in connection with the New Term Loans and certain other amendments requested by Company (including the schedules and exhibits thereto, the “Amended Credit Agreement”).

NOW, THEREFORE, in consideration of the premises made hereunder, and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:

Section 1.               Definitions. Unless otherwise expressly defined herein, all capitalized terms used herein and defined in the Amended Credit Agreement shall be used herein as so defined.

Section 2.               Amendments to the Existing Credit Agreement. The Existing Credit Agreement is hereby amended and modified in its entirety from and after the Second Amendment Effective Date as reflected in the Amended Credit Agreement. Any provision of the Existing Credit Agreement which is different from that set forth in the Amended Credit Agreement shall be superseded in all respects by the provisions of the Amended Credit Agreement.

Section 3.               Waiver of Obligation to Obtain Certain Landlord Personal Property Collateral Access Agreements and Foreign Pledges. Subject to the satisfaction of the conditions set forth in Section 4, Administrative Agent and the Requisite Lenders hereby permanently waive the obligation of the Credit Parties to (a) use their best efforts to obtain Landlord Personal Property Collateral Access Agreements with respect to the Leasehold Properties located at 8445 Freeport Parkway, Irving, Texas 75063 and 6500 West Freeway Fort Worth, Texas 76116 and (b) (i) deliver all documentation necessary to perfect the Collateral Agent’s security interest in 65% of the voting stock of DynCorp (Australia) Pty Ltd. and DynCorp International FZ-LLC (collectively, the “Excluded Subsidiaries”) and (ii) complete all actions necessary to perfect such security interest in the Excluded Subsidiaries in Australia and the United Arab Emirates.

Section 4.               Conditions Precedent. This Amendment shall become effective on the Second Amendment Effective Date upon satisfaction of each of the conditions precedent set forth in Sections 3.2 and 3.3 of the Amended Credit Agreement.

Section 5.               Designated Senior Debt. Each of the Company and the Guarantors party hereto that are “Guarantors” as such term is defined in the Senior Subordinated Note Agreement hereby specifically designate the “Senior Debt” (as defined in the Senior Subordinated Note Agreement) incurred under the Existing Credit Agreement, this Amendment and the Amended Credit Agreement as “Designated Senior Debt” for purposes of the Senior Subordinated Note Agreement.

Section 6.               Representations and Warranties; Lenders’ Acknowledgment.

(a)           Each Credit Party hereby represents and warrants to the Agents and the Lenders that, as of the date hereof and after giving effect to this Amendment, (i) all representations and warranties set forth in the Amended Credit Agreement and in any other Credit Document are true and correct in all material respects as if made again on and as of such date (except those, if any, which by their terms specifically relate only to an earlier date, in which case such representations and warranties shall have been true and correct in all material respects as of such earlier date), (ii) no event shall have occurred and be continuing or would result from the making of the New Term Loans that would constitute a Default or Event of Default, and (iii) the Amended Credit Agreement and all other Credit Documents are and remain legal, valid, binding and enforceable obligations of the Credit Parties in accordance with the terms thereof

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except as may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors’ rights generally or by equitable principles (regardless of whether enforcement is sought in equity or at law).

(b)           Each Lender, by delivering its signature page to this Amendment and, if applicable, funding its New Term Loan on the Second Amendment Effective Date, shall be deemed to have acknowledged receipt of, and consented to and approved, each Credit Document and each other document required to be approved by any Agent, Requisite Lenders or Lenders, as applicable, on the Second Amendment Effective Date.

(c)           Each Continuing Lender hereby commits to make New Term Loans on the Second Amendment Effective Date in the manner contemplated by Section 2.1(a) of the Amended Credit Agreement.

(d)           Each Existing Term Loan Lender executing this Amendment that is not a Continuing Lender hereby agrees to the making of the New Term Loans but does not hereby undertake any commitment to make New Term Loans.

Section 7.               Survival of Representations and Warranties. All representations and warranties made in this Amendment, the Amended Credit Agreement or any other Credit Document shall survive the execution and delivery of this Amendment, and no investigation by Agents or Lenders shall affect the representations and warranties or the right of Agents and Lenders to rely upon them. If any representation or warranty made in this Amendment or the Amended Credit Agreement is false in any material respect as of the date made or deemed made, then such shall constitute an Event of Default under the Amended Credit Agreement. The agreements of the Lenders set forth in Sections 2.17, 9.3(b) and 9.6 of the Amended Credit Agreement shall survive the payment of the Loans, the cancellation or expiration of the Letters of Credit and the reimbursement of any amounts drawn thereunder, and the termination thereof.

Section 8.               Reference to Agreement. Each of the Credit Documents and any and all other agreements, documents or instruments previously executed and/or delivered pursuant to the terms of the Existing Credit Agreement are hereby amended so that any reference in such Credit Documents to the Credit Agreement, whether direct or indirect, shall mean a reference to the Amended Credit Agreement. This Amendment shall constitute a Credit Document under the Amended Credit Agreement.

Section 9.               Governing Law. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF.

Section 10.             Execution. This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Amendment by telecopier  or electronic mail shall be effective as delivery of a manually executed counterpart of this Amendment. This Amendment shall be binding upon each signatory hereto, its successors and assigns.

Section 11.             Limited Effect. This Amendment relates only to the specific matters expressly covered herein, shall not be considered to be a waiver of any rights or remedies any Lender may have under the Amended Credit Agreement or under any other Credit Document, except as expressly

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provided herein, and shall not be considered to create a course of dealing or to otherwise obligate in any respect any Lender to execute similar or other amendments or grant any waivers under the same or similar or other circumstances in the future.

Section 12.             Headings. Sections headings in the Amendment are included for convenience of reference only and shall not constitute a part of this Amendment for any other purposes.

[signature pages follow]

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

DYNCORP INTERNATIONAL LLC
By:		/s/ H. Montgomery Hougen
Name:						H. Montgomery Hougen
Title:						Vice President, Secretary
						and Deputy General Counsel
DYNCORP INTERNATIONAL INC.
By:	/s/ H. Montgomery Hougen
Name:					H. Montgomery Hougen
Title:					Secretary
DIV CAPITAL CORPORATION
By:	/s/ H. Montgomery Hougen
Name:				H. Montgomery Hougen
Title:				Vice President, Secretary
				and Deputy General Counsel
DTS AVIATION SERVICES LLC
DYNCORP AEROSPACE OPERATIONS LLC
DYNCORP INTERNATIONAL SERVICES LLC
DYN MARINE SERVICES LLC
DYN MARINE SERVICES OF VIRGINIA LLC
SERVICES INTERNATIONAL LLC
WORLDWIDE HUMANITARIAN SERVICES LLC
WORLDWIDE RECRUITING AND STAFFING SERVICES LLC
By:			DYNCORP INTERNATIONAL LLC
			its sole Member and Manager
			By:				/s/ H. Montgomery Hougen
							Name:	H. Montgomery Hougen
							Title:	Vice President, Secretary and Deputy General Counsel

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ADMINISTRATIVE AGENT:
GOLDMAN SACHS CREDIT PARTNERS L.P.,
as Administrative Agent and a Lender
By:	/s/ Robert Schatzman
	Authorized Signatory

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BANK OF AMERICA, N.A.,
as Issuing Bank
By:	/s/ Michael J. Landini
Name:	Michael J. Landini
Title:	Senior Vice President

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EXHIBIT A TO SECOND AMENDMENT
TO CREDIT AND GUARANTY AGREEMENT

CREDIT AND GUARANTY AGREEMENT

dated as of February 11, 2005

as amended as of January 9, 2006,
as further amended as of June 28, 2006

among

DYNCORP INTERNATIONAL LLC,
as Borrower

DYNCORP INTERNATIONAL INC. and THE OTHER GUARANTORS PARTY HERETO,
as Guarantors,

VARIOUS LENDERS Party Hereto,

GOLDMAN SACHS CREDIT PARTNERS L.P.,
as Administrative Agent, Collateral Agent, Syndication Agent, Lead Arranger and Book Runner,

and

BANK OF AMERICA, N.A.,
as Issuing Bank and Documentation Agent

$431,550,000 Senior Secured Credit Facilities

TABLE OF CONTENTS

	Page
SECTION 1. DEFINITIONS AND INTERPRETATION	2
1.1. Definitions	2
1.2. Accounting Terms	35
1.3. Interpretation, etc.	36
1.4. Interrelationship with the Existing Credit Agreement	36
SECTION 2. LOANS AND LETTERS OF CREDIT	37
2.1. Term Loans	37
2.2. Revolving Loans	38
2.3. Swing Line Loans	39
2.4. Issuance of Letters of Credit and Purchase of Participations Therein	42
2.5. Pro Rata Shares; Availability of Funds	46
2.6. Use of Proceeds	47
2.7. Evidence of Debt; Register; Lenders’ Books and Records; Notes	47
2.8. Interest on Loans	48
2.9. Conversion/Continuation	51
2.10. Default Interest	51
2.11. Fees	52
2.12. Scheduled Payments	52
2.13. Voluntary Prepayments/Commitment Reductions/Call Protection	54
2.14. Mandatory Prepayments/Commitment Reductions	56
2.15. Application of Prepayments/Reductions	58
2.16. General Provisions Regarding Payments	60
2.17. Ratable Sharing	61
2.18. Making or Maintaining Eurodollar Rate Loans	62
2.19. Increased Costs; Capital Adequacy	64
2.20. Taxes; Withholding, etc.	65
2.21. Obligation to Mitigate	67
2.22. Defaulting Lenders	68
2.23. Removal or Replacement of a Lender	69
2.24. Increase in Revolving Commitments	70
SECTION 3. CONDITIONS PRECEDENT	71
3.1. Closing Date	71
3.2. Conditions to Each Credit Extension	76
3.3. Conditions to Obligation to Fund the New Term Loan Commitments on the Second Amendment Effective Date	77
3.4. Effect of Agreement on Other Credit Documents	80
SECTION 4. REPRESENTATIONS AND WARRANTIES	80

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4.1. Organization; Requisite Power and Authority; Qualification	80
4.2. Capital Stock and Ownership	81
4.3. Due Authorization	81
4.4. No Conflict	81
4.5. Governmental Consents	81
4.6. Binding Obligation	82
4.7. Historical Financial Statements	82
4.8. Projections	82
4.9. No Material Adverse Change	82
4.10. Intentionally Omitted	82
4.11. Adverse Proceedings, etc.	82
4.12. Payment of Taxes	83
4.13. Properties	83
4.14. Environmental Matters	84
4.15. No Defaults	84
4.16. Material Contracts	85
4.17. Governmental Regulation	85
4.18. Margin Stock	85
4.19. Employee Matters	85
4.20. Employee Benefit Plans	85
4.21. Certain Fees	86
4.22. Solvency	86
4.23. Related Agreements	86
4.24. Compliance with Statutes, etc	87
4.25. Disclosure	87
4.26. Patriot Act	88
SECTION 5. AFFIRMATIVE COVENANTS	88
5.1. Financial Statements and Other Reports	88
5.2. Existence	93
5.3. Payment of Taxes and Claims	93
5.4. Maintenance of Properties	93
5.5. Insurance	94
5.6. Inspections	94
5.7. Lenders Meetings	94
5.8. Compliance with Laws	94
5.9. Environmental	95
5.10. Subsidiaries	96
5.11. Additional Material Real Estate Assets	96
5.12. Interest Rate Protection	97

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5.13. Further Assurances	97
5.14. Non-Consolidation	97
SECTION 6. NEGATIVE COVENANTS	98
6.1. Indebtedness	98
6.2. Liens	100
6.3. Equitable Lien	103
6.4. No Further Negative Pledges	103
6.5. Restricted Junior Payments	103
6.6. Restrictions on Subsidiary Distributions	106
6.7. Investments	106
6.8. Financial Covenants	108
6.9. Fundamental Changes; Disposition of Assets; Acquisitions	111
6.10. Disposal of Subsidiary Interests	112
6.11. Sales and Lease Backs	113
6.12. Transactions with Shareholders and Affiliates.	113
6.13. Conduct of Business	113
6.14. Permitted Activities of Holdings	113
6.15. Amendments or Waivers of Purchase Agreement and Organizational Documents	114
6.16. Amendments or Waivers with respect to Subordinated Indebtedness	114
6.17. Fiscal Year	114
6.18. Designated Senior Debt	114
SECTION 7. GUARANTY	115
7.1. Guaranty of the Obligations	115
7.2. Contribution by Guarantors	115
7.3. Payment by Guarantors	116
7.4. Liability of Guarantors Absolute	116
7.5. Waivers by Guarantors	118
7.6. Guarantors’ Rights of Subrogation, Contribution, etc.	119
7.7. Subordination of Other Obligations	120
7.8. Continuing Guaranty	120
7.9. Authority of Guarantors or Company	120
7.10. Financial Condition of Company	120
7.11. Bankruptcy, etc.	121
7.12. Discharge of Guaranty Upon Sale of Guarantor	121
SECTION 8. EVENTS OF DEFAULT	122
8.1. Events of Default	122
SECTION 9. AGENTS	125
9.1. Appointment of Agents	125

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9.2. Powers and Duties	125
9.3. General Immunity	126
9.4. Agents Entitled to Act as Lender	127
9.5. Lenders’ Representations, Warranties and Acknowledgment	128
9.6. Right to Indemnity	128
9.7. Successor Administrative Agent and Swing Line Lender	129
9.8. Collateral Documents and Guaranty	129
SECTION 10. MISCELLANEOUS	131
10.1. Notices	131
10.2. Expenses	131
10.3. Indemnity	132
10.4. Set Off	133
10.5. Amendments and Waivers	133
10.6. Successors and Assigns; Participations	135
10.7. Independence of Covenants	140
10.8. Survival of Representations, Warranties and Agreements	140
10.9. No Waiver; Remedies Cumulative	140
10.10. Marshalling; Payments Set Aside	140
10.11. Severability	141
10.12. Obligations Several; Independent Nature of Lenders’ Rights	141
10.13. Headings	141
10.14. APPLICABLE LAW	141
10.15. CONSENT TO JURISDICTION	141
10.16. WAIVER OF JURY TRIAL	142
10.17. Confidentiality	143
10.18. Usury Savings Clause	143
10.19. Counterparts	144
10.20. Effectiveness	144
10.21. Patriot Act	144
10.22. Electronic Execution of Assignments	144

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APPENDICES:	A	Revolving Commitments
	B	Notice Addresses
SCHEDULES:	4.1	Jurisdictions of Organization and Qualification
	4.2	Capital Stock and Ownership
	4.13	Real Estate Assets
	4.14	Environmental Matters
	4.16	Material Contracts
	4.20	ERISA Matters
	4.23	Governmental Approvals
	6.1	Certain Indebtedness
	6.2	Certain Liens
	6.6	Restrictions on Subsidiary Distributions
	6.7	Certain Investments
	6.12	Certain Affiliate Transactions
	A-1	Funding Notice
EXHIBITS:	A-2	Conversion/Continuation Notice
	A-3	Issuance Notice
	B-1	New Term Loan Note
	B-2	Revolving Loan Note
	B-3	Swing Line Note
	C	Compliance Certificate
	D	Opinions of Counsel
	E	Assignment Agreement
	F	Certificate Re Non-bank Status
	G-1	Second Amendment Effective Date Certificate
	G-2	Second Amendment Effective Date Solvency Certificate
	H	Counterpart Agreement
	I	Pledge and Security Agreement
	J	Mortgage
	K	Landlord Waiver and Consent Agreement
	L	Reaffirmation Agreement
	M	Joinder Agreement

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CREDIT AND GUARANTY AGREEMENT

This CREDIT AND GUARANTY AGREEMENT, dated as of February 11, 2005, as amended by the First Amendment dated as of January 9, 2006 (the Credit and Guaranty Agreement, as amended by the First Amendment, the “Existing Credit Agreement”) and as further amended by the Second Amendment dated as of June 28, 2006 (the “Amended Credit Agreement” or this “Agreement”) is entered into by and among DYNCORP INTERNATIONAL LLC (successor by merger to DI FINANCE SUB LLC), a Delaware limited liability company (“Company”), DYNCORP INTERNATIONAL INC. (formerly known as DI ACQUISITION CORP.), a Delaware corporation (“Holdings”), and CERTAIN SUBSIDIARIES OF COMPANY, as Guarantors, the Lenders party hereto from time to time, GOLDMAN SACHS CREDIT PARTNERS L.P. (“GSCP”), as Lead Arranger and Book Runner, as Administrative Agent (together with its permitted successors in such capacity, “Administrative Agent”), as Collateral Agent (together with its permitted successor in such capacity, “Collateral Agent”), andas Syndication Agent (together with its permitted successors in such capacity, “Syndication Agent”), and BANK OF AMERICA, N.A., as Issuing Bank (together with its permitted successors in such capacity, “Issuing Bank”) and as Documentation Agent (together with its permitted successors in such capacity, “Documentation Agent”).

RECITALS:

WHEREAS, capitalized terms used in these Recitals shall have the respective meanings set forth for such terms in Section 1.1 hereof;

WHEREAS, Company is the borrower under the Existing Credit Agreement by and among Company, Holdings, certain Subsidiaries of Company as Guarantors, GSCP and Bear, Stearns & Co. Inc., as Lead Arrangers, Bear Stearns Corporate Lending Inc., as Syndication Agent, GSCP, as Administrative Agent and Collateral Agent, Bank of America, N.A., as Issuing Bank and Documentation Agent, and the Lenders party thereto;

WHEREAS, Company has requested to borrow, and certain Lenders party to the Amended Credit Agreement have agreed to lend, New Term Loans in an aggregate principal amount equal to $341,550,000. The proceeds of the New Term Loans will be used solely to repay in full the outstanding principal amount of all Existing Term Loans of Existing Term Loan Lenders as of the Second Amendment Effective Date;

WHEREAS, Company has requested, and the Requisite Lenders have agreed, to permit Company to increase the Revolving Commitments by up to $30,000,000, which increases would be allocated to additional Lenders or to existing Lenders that had agreed to provide such additional Revolving Commitments; and

WHEREAS, Company has requested, and Requisite Lenders have agreed, to enter into this Agreement, to amend the Existing Agreement in accordance with Section 10.5 thereof, effective as of the Second Amendment Effective Date upon satisfaction or waiver of the conditions precedent set forth in Sections 3.2 and 3.3.

NOW, THEREFORE, in consideration of the premises and the agreements, provisions and covenants herein contained, the parties hereto agree as follows:

SECTION 1.   DEFINITIONS AND INTERPRETATION

1.1   Definitions. The following terms used herein, including in the preamble, recitals, exhibits and schedules hereto, shall have the following meanings:

“Accounting Change” means, with respect to any Person, any change in accounting principles applicable to such Person and required by the promulgation of any rule, regulation, pronouncement or opinion by the Financial Accounting Standards Board of the American Institute of Certified Public Accountants, or, if applicable, the Securities and Exchange Commission (or its successor agency).

“Acquisition” means the acquisition by DI Acquisition Corp. of DynCorp International LLC pursuant to the Purchase Agreement and the Merger.

“Act” as defined in Section 4.26.

“Adjusted Eurodollar Rate” means, for any Interest Rate Determination Date with respect to an Interest Period for a Eurodollar Rate Loan, the rate per annum obtained by dividing (and rounding upward to the next whole multiple of 1/16 of 1%) (i) (a) the rate per annum (rounded to the nearest 1/100 of 1%) equal to the rate determined by Administrative Agent to be the offered rate which appears on the page of the Telerate Screen which displays an average British Bankers Association Interest Settlement Rate (such page currently being page number 3740 or 3750, as applicable) for deposits (for delivery on the first day of such period) with a term equivalent to such period in Dollars, determined as of approximately 11:00 a.m. (London, England time) on such Interest Rate Determination Date, or (b) in the event the rate referenced in the preceding clause (a) does not appear on such page or service or if such page or service shall cease to be available, the rate per annum (rounded to the nearest 1/100 of 1%) equal to the rate determined by Administrative Agent to be the offered rate on such other page or other service which displays an average British Bankers Association Interest Settlement Rate for deposits (for delivery on the first day of such period) with a term equivalent to such period in Dollars, determined as of approximately 11:00 a.m. (London, England time) on such Interest Rate Determination Date, or (c) in the event the rates referenced in the preceding clauses (a) and

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(b) are not available, the rate per annum (rounded to the nearest 1/100 of 1%) equal to the offered quotation rate to first class banks in the London interbank market by GSCP for deposits (for delivery on the first day of the relevant period) in Dollars of amounts in same day funds comparable to the principal amount of the applicable Loan of Administrative Agent, in its capacity as a Lender, for which the Adjusted Eurodollar Rate is then being determined with maturities comparable to such period as of approximately 11:00 a.m. (London, England time) on such Interest Rate Determination Date, by (ii) an amount equal to (a) one minus (b) the Applicable Reserve Requirement.

“Administrative Agent” as defined in the preamble hereto.

“Adverse Proceeding” means any action, suit, proceeding (whether administrative, judicial or otherwise), governmental investigation or arbitration (whether or not purportedly on behalf of Holdings or any of its Subsidiaries) at law or in equity, or before or by any Governmental Authority, domestic or foreign (including any Environmental Claims), whether pending or, to the knowledge of Holdings or any of its Subsidiaries, threatened in writing against or affecting Holdings or any of its Subsidiaries or any property of Holdings or any of its Subsidiaries.

“Affected Lender” as defined in Section 2.18(b).

“Affected Loans” as defined in Section 2.18(b).

“Affiliate” means, as applied to any Person, any other Person directly or indirectly controlling, controlled by, or under common control with, that Person. For the purposes of this definition, “control” (including, with correlative meanings, the terms “controlling”, “controlled by” and “under common control with”), as applied to any Person, means the possession, directly or indirectly, of the power (i) to vote 10% or more of the Securities having ordinary voting power for the election of directors of such Person or (ii) to direct or cause the direction of the management and policies of that Person, whether through the ownership of voting securities or by contract or otherwise.

“Agent” means each of Syndication Agent, Administrative Agent, Collateral Agent and Documentation Agent.

“Aggregate Amounts Due” as defined in Section 2.17.

“Aggregate Payments” as defined in Section 7.2.

“Agreement” means this Credit and Guaranty Agreement, dated as of February 11, 2005, as it may be amended, supplemented or otherwise modified from time to time.

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“Applicable Margin’’ and “Applicable Revolving Commitment Fee Percentage’’ mean (i) with respect to Revolving Loans that are Eurodollar Rate Loans and the Applicable Revolving Commitment Fee Percentage, (a) from the Closing Date until the date of delivery of the Compliance Certificate and the financial statements for the first full Fiscal Quarter following the Closing Date, a percentage, per annum, determined by reference to the following table as if the Leverage Ratio then in effect were 5.00:1.00; and (b) thereafter, a percentage, per annum, determined by reference to the Leverage Ratio in effect from time to time as set forth below:

Leverage Ratio	Applicable Margin for Revolving Loans		Applicable Revolving Commitment Fee Percentage
> 5.00:1.00	2.50	%	0.50	%
< 5.00:1.00	2.25	%	0.50	%
> 4.00:1.00
< 4.00:1.00	2.00	%	0.50	%

and (ii) with respect to Swing Line Loans and Revolving Loans that are Base Rate Loans, an amount equal to (a) the Applicable Margin for Eurodollar Rate Loans as set forth in clause (i)(a) or (i)(b) above, as applicable, minus (b) 1.00% per annum. Each change in the Applicable Margin or the Applicable Revolving Commitment Fee Percentage shall become effective three Business Days after the date on which Administrative Agent shall have received the applicable financial statements and a Compliance Certificate pursuant to Section 5.1(d) calculating the Leverage Ratio as at the end of the Fiscal Quarter to which such Compliance Certificate relates. At any time Company has not submitted to Administrative Agent the applicable information as and when required under Section 5.1(d), the Applicable Margin and the Applicable Revolving Commitment Fee Percentage shall be determined for the period from the date such information was required to have been delivered under Section 5.1(d) until three Business Days after the actual delivery thereof as if the Leverage Ratio were in excess of 5.00:1.00 for such period. Within one Business Day of receipt of the applicable information under Section 5.1(d), Administrative Agent shall give each Lender telefacsimile or telephonic notice (confirmed in writing) of the Applicable Margin and the Applicable Revolving Commitment Fee Percentage in effect from such date.

“Applicable Reserve Requirement” means, at any time, for any Eurodollar Rate Loan, the maximum rate, expressed as a decimal, at which reserves (including, without limitation, any basic marginal, special, supplemental, emergency or other reserves) are required to be maintained with respect thereto against “Eurocurrency liabilities” (as such term is defined

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in Regulation D) under regulations issued from time to time by the Board of Governors of the Federal Reserve System or other applicable banking regulator. Without limiting the effect of the foregoing, the Applicable Reserve Requirement shall reflect any reserves required to be maintained by such member banks with respect to (i) any category of liabilities which includes deposits by reference to which the applicable Adjusted Eurodollar Rate of a Loan is to be determined, or (ii) any category of extensions of credit or other assets which include Eurodollar Rate Loans. A Eurodollar Rate Loan shall be deemed to constitute Eurocurrency liabilities and as such shall be deemed subject to reserve requirements without benefits of credit for proration, exceptions or offsets that may be available from time to time to the applicable Lender. The rate of interest on Eurodollar Rate Loans shall be adjusted automatically on and as of the effective date of any change in the Applicable Reserve Requirement.

“Asset Sale” means a sale, lease or sub-lease (as lessor or sublessor), sale and leaseback, assignment, conveyance, transfer or other disposition to, or any exchange of property with, any Person (other than Company or any Subsidiary), in one transaction or a series of transactions, of all or any part of Holdings’ or any of its Subsidiaries’ businesses, assets or properties of any kind, whether real, personal, or mixed and whether tangible or intangible, whether now owned or hereafter acquired, including, without limitation, the Capital Stock of any of Holdings’ Subsidiaries, other than (i) inventory (or other assets) sold, leased, subleased, licensed, sublicensed or consigned in the ordinary course of business (excluding any such sales by operations or divisions discontinued or to be discontinued), (ii) equipment or other assets (including leases of real property) sold, replaced, abandoned, leased or otherwise disposed of that is obsolete, worn-out, condemned or no longer used or useful in the business of Holdings, Company or any of its Subsidiaries, (iii) dispositions, by means of trade-in, of equipment used in the ordinary course of business, so long as such equipment is replaced, substantially concurrently, by like-kind equipment, (iv) the use or transfer of Cash and Cash Equivalents in a manner that is not prohibited by the terms of this Agreement or the other Credit Documents, (v) the licensing, on a non-exclusive basis, of patents, trademarks, copyrights and other intellectual property rights in the ordinary course of business, (vi) the creation of a Permitted Lien under Section 6.2, (vii) the compromise or settlement of any dispute, claim or legal proceeding with respect to any receivable or other claim under a Contractual Obligation for less than the total unpaid balance thereof in the ordinary course of business, (viii) to the extent allowable under Section 1031 of the Internal Revenue Code, any exchange of like property for use in a business of Company or any of its Subsidiaries permitted by Section 6.13 and (ix) sales of other assets for aggregate consideration of less than $500,000 with respect to any transaction or series of related transactions and less than $1,000,000 in the aggregate during any Fiscal Year.

“Assignment Agreement” means an Assignment and Assumption Agreement substantially in the form of Exhibit E, with such amendments or modifications as may be approved by Administrative Agent.

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“Assignment Effective Date” as defined in Section 10.6(b).

“Authorized Officer” means, as applied to any Person, any individual holding the position of chairman of the board (if an officer), chief executive officer, president or one of its vice presidents (or the equivalent thereof), and such Person’s chief financial officer or treasurer.

“Bankruptcy Code” means Title 11 of the United States Code entitled “Bank­ruptcy,” as now and hereafter in effect, or any successor statute.

“Base Rate” means, for any day, a rate per annum equal to the greater of (i) the Prime Rate in effect on such day and (ii) the Federal Funds Effective Rate in effect on such day plus ½ of 1%. Any change in the Base Rate due to a change in the Prime Rate or the Federal Funds Effective Rate shall be effective on the effective day of such change in the Prime Rate or the Federal Funds Effective Rate, respectively.

“Base Rate Loan” means a Loan bearing interest at a rate determined by reference to the Base Rate.

“Beneficiary” means each Agent, Issuing Bank, Lender and Lender Counterparty.

“Board of Directors” means, with respect to any Person, (i) in the case of any corporation, the board of directors of such Person, (ii) in the case of any limited liability company, the board of managers of such Person, (iii) in the case of any limited partnership, the Board of Directors of the general partner of such Person and (iv) in any other case, the functional equivalent of the foregoing.

“Business Day” means (i) any day excluding Saturday, Sunday and any day which is a legal holiday under the laws of the State of New York or is a day on which banking institutions located in such state are authorized or required by law or other governmental action to close and (ii) with respect to all notices, determinations, fundings and payments in connection with the Adjusted Eurodollar Rate or any Eurodollar Rate Loans, the term “Business Day” shall mean any day which is a Business Day described in clause (i) and which is also a day for trading by and between banks in Dollar deposits in the London interbank market.

“Capital Lease” means, as applied to any Person, any lease of any property (whether real, personal or mixed) by that Person as lessee that, in conformity with GAAP, is or should be accounted for as a capital lease on the balance sheet of that Person.

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“Capital Stock” means any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interests in a Person (other than a corporation), including, without limitation, partnership interests and membership interests, and any and all warrants, rights or options to purchase or other arrangements or rights to acquire any of the foregoing.

“Cash” means money, currency or an unencumbered credit balance in any demand or Deposit Account.

“Cash Equivalents” means, as at any date of determination, (i) marketable securities (a) issued or directly and unconditionally guaranteed as to interest and principal by the United States Government or (b) issued by any agency of the United States the obligations of which are backed by the full faith and credit of the United States, in each case maturing within one year after such date; (ii) marketable direct obligations issued by any state of the United States of America or any political subdivision of any such state or any public instrumentality thereof, in each case maturing within one year after such date and having, at the time of the acquisition thereof, one of the two highest ratings obtainable from S&P or Moody’s; (iii) commercial paper maturing no more than one year from the date of creation thereof and having, at the time of the acquisition thereof, one of the two highest ratings obtainable from S&P or Moody’s; (iv) certificates of deposit or bankers’ acceptances maturing within one year after such date and issued or accepted by any Lender or by any commercial bank organized under the laws of the United States of America or any state thereof or the District of Columbia that (a) is at least “adequately capitalized” (as defined in the regulations of its primary Federal banking regulator) and (b) has Tier 1 capital (as defined in such regulations) of not less than $100,000,000; (v) shares of any money market mutual fund that (a) has substantially all of its assets invested continuously in the types of investments referred to in clauses (i) through (iv) above, (b) has net assets of not less than $250,000,000, and (c) has one of the two highest ratings obtainable from S&P or Moody’s when acquired; and (vi) repurchase obligations with a term of not more than 90 days for underlying securities of the types described in clause (i) above entered into with any bank meeting the qualifications specified in clause (iv) above.

“Certificate re Non-Bank Status” means a certificate substantially in the form of Exhibit F.

“Change of Control” means, (i) the Permitted Holders shall fail to own, or to have the power to vote or direct the voting of, Voting Stock of Holdings representing more than 35% of the voting power of the total outstanding Voting Stock of Holdings; (ii) any person or “group” (within the meaning of Rules 13d-3 and 13d-5 under the Exchange Act) other than the Permitted Holders (A) shall beneficially own a percentage of the economic interests in the Voting Stock of Holdings on a fully-diluted basis that is greater than the percentage of the economic interests in the Voting Stock of Holdings on a fully-diluted basis then held by the

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Permitted Holders, taken together, or (B) shall have obtained the power (whether or not exercised) to elect a majority of the members of the board of directors (or similar governing body) of Holdings; (iii) the majority of the seats (other than vacant seats) on the board of directors (or similar governing body) of Holdings cease to be occupied by Persons who either (a) were members of the board of directors of Holdings on the Second Amendment Effective Date or (b) were either (x) nominated for election by the board of directors of Holdings, a majority of whom were directors on the Second Amendment Effective Date or whose election or nomination for election was previously approved by a majority of such directors or (y) designated or appointed by the Permitted Holders; or (iv) any “change of control” or similar event under the Senior Subordinated Note Documents or any other documents governing Indebtedness of Holdings or any of its Subsidiaries shall occur.

“Class” means (i) with respect to Lenders, each of the following classes of Lenders: (a) Lenders having Term Loan Exposure and (b) Lenders having Revolving Exposure (including Swing Line Lender) and (ii) with respect to Loans, each of the following classes of Loans: (a) Term Loans and (b) Revolving Loans (including Swing Line Loans).

“Closing Date” means February 11, 2005.

“Collateral” means, collectively, all of the real, personal and mixed property (including Capital Stock) in which Liens are purported to be granted pursuant to the Collateral Documents as security for the Obligations.

“Collateral Agent” as defined in the preamble hereto.

“Collateral Documents” means the Pledge and Security Agreement, the Reaffirmation Agreement, the Mortgages, the Landlord Personal Property Collateral Access Agreements, if any, and all other instruments, documents and agreements delivered by any Credit Party pursuant to this Agreement or any of the other Credit Documents in order to grant to Collateral Agent, for the benefit of Lenders, a Lien on any real, personal or mixed property of that Credit Party as security for the Obligations.

“Collateral Questionnaire” means a certificate in form satisfactory to Collateral Agent that provides information with respect to the personal or mixed property of each Credit Party.

“Commitment” means any Revolving Commitment or Term Loan Commitment.

“Company” means initially, Finance Sub, and upon consummation of the Acquisition and the Merger, DynCorp International LLC.

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“Compliance Certificate” means a Compliance Certificate substantially in the form of Exhibit C.

“Consolidated Adjusted EBITDA” means, for any period, the Consolidated Net Income of Company and its Subsidiaries for such period plus (i) the sum, without duplication, of the following amounts to the extent deducted in computing such Consolidated Net Income: (a) Consolidated Interest Expense, (b) federal, state and local franchise taxes and other taxes based on income or profits, (c) total depreciation expense, (d) total amortization expense, (e) other non-Cash items (excluding any such non-Cash item to the extent that it represents an accrual or reserve for potential Cash items in any future period or amortization of a prepaid Cash item that was paid in a prior period), (f) management fees paid by Company in accordance with Section 6.12, (g) restructuring charges in an amount not to exceed $10,000,000 incurred in connection with the transactions contemplated by this Agreement and the Related Agreements, (h) transition expenses in an amount not to exceed $5,000,000 incurred in connection with the transactions contemplated by this Agreement and the Related Agreements, (i) any goodwill impairment charges and (j) write-off of deferred financing costs in an amount not to exceed $3,000,000 per Fiscal Year minus (ii) other non-Cash items increasing Consolidated Net Income for such period (excluding any such non-Cash item to the extent it represents the reversal of an accrual or reserve for potential Cash item in any prior period or the accrual of revenue in the ordinary course of business); provided, that Consolidated Adjusted EBITDA for each of the Fiscal Quarters ended at July 2, 2004, October 1, 2004 and December 31, 2004 shall be deemed to equal $25,255,000, $33,340,000 and $29,846,000, respectively.

“Consolidated Capital Expenditures” means, for any period, the aggregate of all expenditures of Company and its Subsidiaries during such period determined on a consolidated basis that, in accordance with GAAP, are or should be included in “purchase of property and equipment;” provided that “Consolidated Capital Expenditures” shall not include any expenditures (i) for replacements and substitutions for capital assets, to the extent made with the proceeds of insurance in accordance with Section 2.14(b), (ii) made as part of a Permitted Acquisition, (iii) for replacements and substitutions for capital assets, to the extent made with the proceeds of assets sold, exchanged or otherwise disposed in accordance with, and permitted by, Section 6.9(b) and (c) or (iv) paid for with the proceeds from the issuance or sale of Capital Stock of Holdings and the corresponding equity investment by Holdings in Company reflected in the consolidated statement of cash flows of Company and its Subsidiaries.

“Consolidated Cash Interest Expense” means, for any period, Consolidated Interest Expense for such period, excluding any amount not payable in Cash.

“Consolidated Current Assets” means, as at any date of determination, the total assets of Company and its Subsidiaries on a consolidated basis that may properly be classified as current assets in conformity with GAAP, excluding Cash and Cash Equivalents.

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“Consolidated Current Liabilities” means, as at any date of determination, the total liabilities of Company and its Subsidiaries on a consolidated basis that may properly be classified as current liabilities in conformity with GAAP, excluding the current portion of long term debt and short term debt.

“Consolidated Excess Cash Flow” means, for any period, an amount (if positive) equal to: (i) the sum, without duplication, of the amounts for such period of (a) Consolidated Adjusted EBITDA, plus (b) the Consolidated Working Capital Adjustment, except to the extent attributable to an Asset Sale in respect of which Company has made a mandatory prepayment of the Loans in accordance with Section 2.14(a), minus (ii) the sum, without duplication, of the amounts for such period of (a) voluntary and scheduled repayments of Indebtedness of Company and its Subsidiaries (excluding (x) repayments of Revolving Loans or Swing Line Loans except to the extent the Revolving Commitments are permanently reduced in connection with such repayments), (b) Consolidated Capital Expenditures (net of any proceeds of any related financings with respect to such expenditures), (c) Consolidated Cash Interest Expense, (d) provisions for current taxes based on income of Company and its Subsidiaries and payable in cash with respect to such period, and (e) management fees permitted under Section 6.12.

“Consolidated Interest Expense” means, for any period, total interest expense (including that portion attributable to Capital Leases in accordance with GAAP and capitalized interest) of Company and its Subsidiaries on a consolidated basis with respect to all outstanding Indebtedness of Company and its Subsidiaries (after taking into account the effect of any Interest Rate Agreements), including all amortization of debt issuance costs and original issue discount, non-cash interest payments, the interest component of any deferred payment obligations, the interest component of all payments associated with Capital Leases, imputed interest with respect to commissions, discounts and other fees and charges incurred in respect of letter of credit or bankers’ acceptance financings, commissions, discounts and other fees and charges owed with respect to letters of credit and net payments made under Interest Rate Agreements, but excluding, however, any amounts referred to in Section 2.11(d) payable on or before the Closing Date.

“Consolidated Net Income” means, for any period, (i) the net income (or loss) of Company and its Subsidiaries on a consolidated basis for such period taken as a single accounting period determined in conformity with GAAP, minus (ii) (a) the income (or loss) of any Person (other than a Subsidiary of Company) in which any other Person (other than Company or any of its Subsidiaries) has a joint interest, except to the extent of the amount of cash dividends or other cash distributions actually paid to Company or any of its Subsidiaries by such Person during such period, (b) the income (or loss) of any Person accrued prior to the date it becomes a Subsidiary of Company or is merged into or consolidated with Company or any of its Subsidiaries or that Person’s assets are acquired by Company or any of its Subsidiaries, (c) the income of any Subsidiary of Company to the extent that the declaration or payment of dividends

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or similar distributions by that Subsidiary of that income is not at the time permitted by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Subsidiary, (d) any after-tax gains or losses attributable to Asset Sales (or transactions that are excluded from Asset Sales by clause (ix) of the definition thereof) or returned surplus assets of any Pension Plan, (e) (to the extent not included in clauses (a) through (d) above) any net extraordinary or nonrecurring gains or net extraordinary or nonrecurring losses, (f) the cumulative effect of a change in accounting principles and (g) any net loss resulting from Currency Agreements entered into in the ordinary course of business and not for speculative purposes.

“Consolidated Total Debt” means, as at any date of determination, the aggregate stated balance sheet amount of all Indebtedness of Company and its Subsidiaries determined on a consolidated basis in accordance with GAAP.

“Consolidated Working Capital” means, as at any date of determination, the excess of Consolidated Current Assets over Consolidated Current Liabilities.

“Consolidated Working Capital Adjustment” means, for any period on a consolidated basis, the amount (which may be a negative number) by which Consolidated Working Capital as of the beginning of such period exceeds (or is less than) Consolidated Working Capital as of the end of such period.

“Continuing Lenders” means those Lenders under the Existing Credit Agreement immediately prior to the Second Amendment Effective Date that execute and deliver a signature page to the Second Amendment specifically in the capacity of a “Continuing Lender”.

“Contractual Obligation” means, as applied to any Person, any provision of any Security issued by that Person or of any indenture, mortgage, deed of trust, contract, undertaking, agreement or other instrument to which that Person is a party or by which it or any of its properties is bound or to which it or any of its properties is subject.

“Contributing Guarantors” as defined in Section 7.2.

“Conversion/Continuation Date” means the effective date of a continuation or conversion, as the case may be, as set forth in the applicable Conversion/Continuation Notice.

“Conversion/Continuation Notice” means a Conversion/Continuation Notice substantially in the form of Exhibit A-2.

“Counterpart Agreement” means a Counterpart Agreement substantially in the form of Exhibit H delivered by a Credit Party pursuant to Section 5.10.

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“Credit Date” means the date of a Credit Extension.

“Credit Document” means any of this Agreement, the Notes, if any, the Collateral Documents, any documents or certificates executed by Company in favor of Issuing Bank relating to Letters of Credit, and all other documents, instruments or agreements executed and delivered by a Credit Party for the benefit of any Agent, Issuing Bank or any Lender in connection herewith.

“Credit Extension” means the making of a Loan or the issuance of a Letter of Credit.

“Credit Party” means each Person (other than any Agent, Issuing Bank or any Lender or any other representative thereof) from time to time party to a Credit Document.

“Currency Agreement” means any foreign exchange contract, currency swap agreement, futures contract, option contract, synthetic cap or other similar agreement or arrangement, each of which is for the purpose of hedging the foreign currency risk associated with Holdings’ and its Subsidiaries’ operations and not for speculative purposes.

“Default” means a condition or event that, after notice or lapse of time or both, would constitute an Event of Default.

“Default Excess” means, with respect to any Defaulting Lender, the excess, if any, of such Defaulting Lender’s Pro Rata Share of the aggregate outstanding principal amount of Loans of all Lenders (calculated as if all Defaulting Lenders (other than such Defaulting Lender) had funded all of their respective Defaulted Loans) over the aggregate outstanding principal amount of all Loans of such Defaulting Lender.

“Default Period” means, with respect to any Defaulting Lender, the period commencing on the date of the applicable Funding Default and ending on the earliest of the following dates:  (i) the date on which all Commitments are cancelled or terminated and/or the Obligations are declared or become immediately due and payable, (ii) the date on which (a) the Default Excess with respect to such Defaulting Lender shall have been reduced to zero (whether by the funding by such Defaulting Lender of any Defaulted Loans of such Defaulting Lender or by the non-pro rata application of any voluntary or mandatory prepayments of the Loans in accordance with the terms of Section 2.13 or Section 2.14 or by a combination thereof) and (b) such Defaulting Lender shall have delivered to Company and Administrative Agent a written reaffirmation of its intention to honor its obligations hereunder with respect to its Commitments, and (iii) the date on which Company, Administrative Agent and Requisite Lenders waive all Funding Defaults of such Defaulting Lender in writing.

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“Defaulted Loan” as defined in Section 2.22.

“Defaulting Lender” as defined in Section 2.22.

“Deposit Account” means a demand, time, savings, passbook or like account with a bank, savings and loan association, credit union or like organization, other than an account evidenced by a negotiable certificate of deposit.

“Documentation Agent” as defined in the preamble hereto.

“Dollars” and the sign “$” mean the lawful money of the United States of America.

“Domestic Subsidiary” means any Subsidiary organized under the laws of the United States of America, any State thereof or the District of Columbia.

“Eligible Assignee” means (i) any Lender, any Affiliate of any Lender and any Related Fund (any two or more Related Funds being treated as a single Eligible Assignee for all purposes hereof), and (ii) any commercial bank, insurance company, investment or mutual fund or other entity that is an “accredited investor” (as defined in Regulation D under the Securities Act) and which extends credit or buys loans as one of its businesses; provided, no Affiliate of Holdings or Sponsor shall be an Eligible Assignee.

“Employee Benefit Plan” means any “employee benefit plan” as defined in Section 3(3) of ERISA which is (or, if such plan were terminated at such time, would under Section 4069 of ERISA be deemed to be) sponsored, maintained or contributed to by, or required to be contributed by, Holdings, any of its Subsidiaries or any of their respective ERISA Affiliates.

“Environmental Claim” means any written: notice, notice of violation, claim, action, suit, proceeding, demand, abatement order or other order or directive (conditional or otherwise), by any Governmental Authority or any other Person, arising (i) pursuant to or in connection with any actual or alleged violation of any Environmental Law; (ii) in connection with any Hazardous Material or any actual or alleged Hazardous Materials Activity; or (iii) in connection with any actual or alleged damage, injury, threat or harm to health, safety, natural resources or the environment.

“Environmental Laws” means any and all foreign or domestic, federal or state (or any subdivision of either of them), statutes, ordinances, orders, rules, regulations, judgments, Governmental Authorizations, or any other requirements of Governmental Authorities relating to (i) any Hazardous Materials Activity; (ii) the generation, use, storage, transportation or disposal

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of Hazardous Materials; or (iii) occupational safety and health, industrial hygiene, or the protection of human, plant or animal health or welfare, in any manner applicable to Holdings or any of its Subsidiaries or any Facility.

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

“ERISA Affiliate” means, as applied to any Person, (i) any corporation which is a member of a controlled group of corporations within the meaning of Section 414(b) of the Internal Revenue Code of which that Person is a member; (ii) any trade or business (whether or not incorporated) which is a member of a group of trades or businesses under common control within the meaning of Section 414(c) of the Internal Revenue Code of which that Person is a member; and (iii) any member of an affiliated service group within the meaning of Section 414(m) or (o) of the Internal Revenue Code of which that Person, any corporation described in clause (i) above or any trade or business described in clause (ii) above is a member. Any former ERISA Affiliate of Holdings or any of its Subsidiaries shall continue to be considered an ERISA Affiliate of Holdings or any such Subsidiary within the meaning of this definition with respect to the period such entity was an ERISA Affiliate of Holdings or such Subsidiary and with respect to liabilities arising after such period for which Holdings or such Subsidiary could be liable under the Internal Revenue Code or ERISA.

“ERISA Event” means (i) a “reportable event” within the meaning of Section 4043 of ERISA and the regulations issued thereunder with respect to any Pension Plan (excluding those for which the provision for 30-day notice to the PBGC has been waived by regulation); (ii) the failure to meet the minimum funding standard of Section 412 of the Internal Revenue Code with respect to any Pension Plan (whether or not waived in accordance with Section 412(d) of the Internal Revenue Code) or the failure to make by its due date a required installment under Section 412(m) of the Internal Revenue Code with respect to any Pension Plan or the failure to make any required contribution to a Multiemployer Plan; (iii) the provision by the administrator of any Pension Plan pursuant to Section 4041(a)(2) of ERISA of a notice of intent to terminate such plan in a distress termination described in Section 4041(c) of ERISA; (iv) the withdrawal by Holdings, any of its Subsidiaries or any of their respective ERISA Affiliates from any Pension Plan with two or more contributing sponsors or the termination of any such Pension Plan resulting in liability to Holdings, any of its Subsidiaries or any of their respective ERISA Affiliates pursuant to Section 4063 or 4064 of ERISA; (v) the institution by the PBGC of proceedings to terminate any Pension Plan, or the occurrence of any event or condition which might constitute grounds under ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan; (vi) the imposition of liability on Holdings, any of its Subsidiaries or any of their respective ERISA Affiliates pursuant to Section 4062(e) or 4069 of ERISA or by reason of the application of Section 4212(c) of ERISA; (vii) the withdrawal of Holdings, any of its Subsidiaries or any of their respective ERISA Affiliates in a

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complete or partial withdrawal (within the meaning of Sections 4203 and 4205 of ERISA) from any Multiemployer Plan if there is any potential liability therefor, or the receipt by Holdings, any of its Subsidiaries or any of their respective ERISA Affiliates of notice from any Multiemployer Plan that it is in reorganization or insolvency pursuant to Section 4241 or 4245 of ERISA, or that it intends to terminate or has terminated under Section 4041A or 4042 of ERISA; (viii) the occurrence of an act or omission which could give rise to the imposition on Holdings, any of its Subsidiaries or any of their respective ERISA Affiliates of fines, penalties, taxes or related charges under Chapter 43 of the Internal Revenue Code or under Section 409, Section 502(c), (i) or (l), or Section 4071 of ERISA in respect of any Employee Benefit Plan; (ix) the assertion of a material claim (other than routine claims for benefits) against any Employee Benefit Plan other than a Multiemployer Plan or the assets thereof, or against Holdings, any of its Subsidiaries or any of their respective ERISA Affiliates in connection with any Employee Benefit Plan; (x) receipt from the Internal Revenue Service of notice of the failure of any Pension Plan (or any other Employee Benefit Plan intended to be qualified under Section 401(a) of the Internal Revenue Code) to qualify under Section 401(a) of the Internal Revenue Code, or the failure of any trust forming part of any Pension Plan to qualify for exemption from taxation under Section 501(a) of the Internal Revenue Code; or (xi) the imposition of a Lien pursuant to Section 401(a)(29) or 412(n) of the Internal Revenue Code or pursuant to ERISA with respect to any Pension Plan.

“Eurodollar Rate Loan” means a Loan bearing interest at a rate determined by reference to the Adjusted Eurodollar Rate.

“Event of Default” means each of the conditions or events set forth in Section 8.1.

“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, and any successor statute.

“Existing Indebtedness” means Indebtedness described in Schedule 6.1.

“Existing Term Loan” means a term loan made to Company pursuant to this Agreement in existence immediately prior to the Second Amendment Effective Date.

“Existing Term Loan Commitment” means the commitment of an Existing Term Loan Lender to make or otherwise fund an Existing Term Loan pursuant to Section 2.1(a) of the Existing Credit Agreement on the Closing Date, and “Existing Term Loan Commitments” means such commitments of all such Lenders in the aggregate.

“Existing Term Loan Lender” means a Lender who funded or made an Existing Term Loan.

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“Facility” means any real property (including all buildings, fixtures or other improvements located thereon) now, hereafter or heretofore owned, leased, operated or used by Holdings or any of its Subsidiaries or any of their respective predecessors or Affiliates.

“Fair Share” as defined in Section 7.2.

“Fair Share Contribution Amount” as defined in Section 7.2.

“Federal Funds Effective Rate” means for any day, the rate per annum (expressed, as a decimal, rounded upwards, if necessary, to the next higher 1/100 of 1%) equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided, (i) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (ii) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate charged to Administrative Agent, in its capacity as a Lender, on such day on such transactions as determined by Administrative Agent.

“Finance Sub” means DI Finance Sub LLC, a Delaware limited liability company.

“Financial Officer Certification” means, with respect to the financial statements for which such certification is required, the certification of the chief financial officer of Holdings that such financial statements fairly present, in all material respects, the financial condition of Holdings and its Subsidiaries as at the dates indicated and the results of their operations and their cash flows for the periods indicated, subject to changes resulting from audit and normal year-end adjustments and the absence of footnotes.

“Financial Plan” as defined in Section 5.1(i).

“First Priority” means, with respect to any Lien purported to be created in any Collateral pursuant to any Collateral Document, that such Lien is the only Lien to which such Collateral is subject, other than any Permitted Lien.

“Fiscal Quarter” means a fiscal quarter of any Fiscal Year.

“Fiscal Year” means the fiscal year of Company and its Subsidiaries ending on the Friday closest to March 31 of each calendar year.

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“Flood Hazard Property” means any Real Estate Asset subject to a mortgage in favor of Collateral Agent, for the benefit of the Lenders, and located in an area designated by the Federal Emergency Management Agency as having special flood or mud slide hazards.

“Foreign Subsidiary” means any Subsidiary that is not a Domestic Subsidiary.

“Funding Default” as defined in Section 2.22.

“Funding Guarantors” as defined in Section 7.2.

“Funding Notice” means a notice substantially in the form of Exhibit A-1.

“GAAP” means, subject to the limitations on the application thereof set forth in Section 1.2, United States generally accepted accounting principles in effect as of the date of determination thereof.

“Governmental Acts” means any act or omission, whether rightful or wrongful, of any present or future de jure or de facto Governmental Authority.

“Governmental Authority” means any federal, state, municipal, national or other government, governmental department, commission, board, bureau, court, agency or instrumentality or political subdivision thereof or any entity or officer exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to any government or any court, in each case whether associated with a state of the United States, the United States, or a foreign entity or government.

“Governmental Authorization” means any permit, license, authorization, plan, directive, consent order or consent decree of or from any Governmental Authority.

“Grantor” as defined in the Pledge and Security Agreement.

“GSCP” as defined in the preamble hereto.

“Guaranteed Obligations” as defined in Section 7.1.

“Guarantor” means each of Holdings and each Domestic Subsidiary of Holdings (other than Company).

“Guarantor Subsidiary” means each Guarantor other than Holdings.

“Guaranty” means the guaranty of each Guarantor set forth in Section 7.

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“Hazardous Materials” means any chemical, material or substance under any Environmental Law.

“Hazardous Materials Activity” means any activity, event or occurrence involving any Hazardous Materials, including the use, manufacture, possession, storage, holding, presence, existence, location, Release, threatened Release, discharge, placement, generation, transportation, processing, construction, treatment, abatement, removal, remediation, disposal, disposition or handling of any Hazardous Materials, and any corrective action or response action with respect to any of the foregoing.

“Hedge Agreement” means an Interest Rate Agreement or a Currency Agreement entered into with a Lender Counterparty in order to satisfy the requirements of this Agreement.

“Highest Lawful Rate” means the maximum lawful interest rate, if any, that at any time or from time to time may be contracted for, charged, or received under the laws applicable to any Lender from time to time in effect.

“Historical Financial Statements” means as of the Closing Date, (i) the audited financial statements of Holdings and its Subsidiaries, for the immediately preceding two Fiscal Years, consisting of balance sheets and the related consolidated statements of income, stockholders’ equity and cash flows for such Fiscal Years, and (ii) the unaudited financial statements of Holdings and its Subsidiaries as at the most recently ended Fiscal Quarter, consisting of a balance sheet and the related consolidated statements of income, stockholders’ equity and cash flows for the three-, six-or nine-month period, as applicable, ending on such date, and, in the case of clauses (i) and (ii), certified by the chief financial officer of Company that they fairly present, in all material respects, the financial condition of Holdings and its Subsidiaries as at the dates indicated and the results of their operations and their cash flows for the periods indicated, subject, in the case of clause (ii), to changes resulting from audit and normal year-end adjustments and the absence of footnotes.

“Holdings” as defined in the preamble hereto.

“Increased Amount Date” as defined in Section 2.24.

“Increased-Cost Lenders” as defined in Section 2.23.

“Indebtedness”, as applied to any Person, means, without duplication, (i) all indebtedness for borrowed money; (ii) that portion of obligations with respect to Capital Leases that is properly classified as a liability on a balance sheet in conformity with GAAP; (iii) notes payable and drafts accepted representing extensions of credit whether or not representing

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obligations for borrowed money (excluding accounts payable which are classified as current liabilities in accordance with GAAP and which are not more than 90 days past due); (iv) any obligation owed for all or any part of the deferred purchase price of property or services (excluding any such obligations incurred under ERISA), which purchase price is (a) due more than six months from the date of incurrence of the obligation in respect thereof or (b) evidenced by a note or similar written instrument; (v) all indebtedness secured by any Lien on any property or asset owned or held by that Person regardless of whether the indebtedness secured thereby shall have been assumed by that Person or is nonrecourse to the credit of that Person; (vi) the face amount of any letter of credit issued for the account of that Person or as to which that Person is otherwise liable for reimbursement of drawings; (vii) the direct or indirect guaranty, endorsement (otherwise than for collection or deposit in the ordinary course of business), co-making, discounting with recourse or sale with recourse by such Person of the obligation of another; (viii) any obligation of such Person the primary purpose or intent of which is to provide assurance to an obligee that the obligation of the obligor thereof will be paid or discharged, or any agreement relating thereto will be complied with, or the holders thereof will be protected (in whole or in part) against loss in respect thereof; (ix) any liability of such Person for an obligation of another through any agreement (contingent or otherwise) (a) to purchase, repurchase or otherwise acquire such obligation or any security therefor, or to provide funds for the payment or discharge of such obligation (whether in the form of loans, advances, stock purchases, capital contributions or otherwise) or (b) to maintain the solvency or any balance sheet item, level of income or financial condition of another if, in the case of any agreement described under subclauses (a) or (b) of this clause (ix), the primary purpose or intent thereof is as described in clause (viii) above; and (x) all obligations of such Person in respect of any exchange traded or over the counter derivative transaction, including, without limitation, any Interest Rate Agreement and Currency Agreement, whether entered into for hedging or speculative purposes; provided, in no event shall obligations under any Interest Rate Agreement and any Currency Agreement be deemed “Indebtedness” for any purpose under Section 6.8. For purposes of this definition, (A) the amount of any Indebtedness represented by a guaranty or other similar instrument shall be the lesser of the principal amount of the obligations guaranteed and still outstanding and the maximum amount for which the guaranteeing Person may be liable pursuant to the terms of the instrument embodying such Indebtedness, (B) the amount of any Indebtedness described in clause (v) above for which recourse is limited to certain property of such Person shall be the lower of the amount of the obligation and the fair market value of the property securing such obligation, and (C) the principal amount of the Indebtedness under any Interest Rate Agreement or Currency Agreement at any time shall be equal to the amount payable as a result of the termination of such Interest Rate Agreement or Currency Agreement at such time.

“Indemnified Liabilities” means, collectively, any and all liabilities, obligations, losses, damages (including natural resource damages), penalties, claims (including Environmental Claims), costs (including the costs of any investigation, study, sampling, testing,

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abatement, cleanup, removal, remediation or other response action necessary to remove, remediate, clean up or abate any Hazardous Materials Activity), expenses and disbursements of any kind or nature whatsoever (including the reasonable fees and disbursements of counsel for Indemnitees in connection with any investigative, administrative or judicial proceeding commenced or threatened by any Person, whether or not any such Indemnitee shall be designated as a party or a potential party thereto, and any fees or expenses incurred by Indemnitees in enforcing this indemnity), whether direct, indirect or consequential and whether based on any federal, state or foreign laws, statutes, rules or regulations (including securities and commercial laws, statutes, rules or regulations and Environmental Laws), on common law or equitable cause or on contract or otherwise, that may be imposed on, incurred by, or asserted against any such Indemnitee, in any manner relating to or arising out of (i) this Agreement or the other Credit Documents or the transactions contemplated hereby or thereby (including the Lenders’ agreement to make Credit Extensions or the use or intended use of the proceeds thereof, or any enforcement of any of the Credit Documents (including any sale of, collection from, or other realization upon any of the Collateral or the enforcement of the Guaranty)); or (ii) any Environmental Claim or any Hazardous Materials Activity relating to or arising from, directly or indirectly, any past or present activity, operation, land ownership, or practice of Holdings or any of its Subsidiaries.

“Indemnitee” as defined in Section 10.3.

“Installment” as defined in Section 2.12.

“Installment Date” as defined in Section 2.12.

“Interest Coverage Ratio” means the ratio as of the last day of any Fiscal Quarter of (i) Consolidated Adjusted EBITDA for the four-Fiscal Quarter period then ended, to (ii) Consolidated Cash Interest Expense for such four-Fiscal Quarter period.

“Interest Payment Date” means with respect to (i) any Revolving Loan that is a Base Rate Loan, each March 31, June 30, September 30 and December 31 of each year, commencing on the first such date to occur after the Closing Date and the final maturity date of such Loan; (ii) any Revolving Loan that is a Eurodollar Rate Loan, the last day of each Interest Period applicable to such Loan; provided, in the case of each Interest Period of longer than three months “Interest Payment Date” shall also include each date that is three months, or an integral multiple thereof, after the commencement of such Interest Period; and (iii) Term Loans, each April 1, July 1, October 1 and January 1 of each year, commencing on July 1, 2005 through the final maturity date of such Loan.

“Interest Period” means, in connection with a Eurodollar Rate Loan, an interest period of one-, two-, three- or six-months (or nine- or twelve-months, if available to all Lenders), as selected by Company in the applicable Funding Notice or Conversion/Continuation Notice, (i) 

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initially, commencing on the Credit Date or Conver­sion/Continuation Date thereof, as the case may be; and (ii) thereafter, commencing on the day on which the immediately preceding Interest Period expires; provided, (a) if an Interest Period would otherwise expire on a day that is not a Business Day, such Interest Period shall expire on the next succeeding Business Day unless no further Business Day occurs in such month, in which case such Interest Period shall expire on the immediately preceding Business Day; (b) any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall, subject to clauses (c) and (d), of this definition, end on the last Business Day of a calendar month; (c) no Interest Period with respect to any portion of the Term Loans shall extend beyond the Term Loan Maturity Date; and (d) no Interest Period with respect to any portion of the Revolving Loans shall extend beyond the Revolving Commitment Termination Date.

“Interest Rate Agreement” means any interest rate swap agreement (whether from fixed to floating or from floating to fixed), interest rate cap agreement, interest rate collar agreement, interest rate hedging agreement  or other similar agreement or arrangement, each of which is for the purpose of hedging the interest rate exposure associated with Holdings’ and its Subsidiaries’ operations and not for speculative purposes.

“Interest Rate Determination Date” means, with respect to any Interest Period, the date that is two Business Days prior to the first day of such Interest Period.

“Internal Revenue Code” means the Internal Revenue Code of 1986, as amended to the Closing Date and from time to time hereafter, and any successor statute.

“Investment” means (i) any direct or indirect purchase or other acquisition by Holdings or any of its Subsidiaries of, or of a beneficial interest in, any of the Securities of any other Person (other than a Guarantor Subsidiary); (ii) any direct or indirect purchase or other acquisition for value, by any Subsidiary of Holdings from any Person (other than Holdings or any Guarantor Subsidiary), of any Capital Stock of such Person; and (iii) any direct or indirect loan, advance (other than advances to officers and employees for moving, entertainment and travel expenses, drawing accounts and similar expenditures in the ordinary course of business) or capital contribution by Holdings or any of its Subsidiaries to any other Person (other than Holdings or any Guarantor Subsidiary), including all indebtedness and accounts receivable from that other Person that are not current assets or did not arise from sales to that other Person in the ordinary course of business. The amount of any Investment shall be the original cost of such Investment plus the cost of all additions thereto, without any adjustments for increases or decreases in value, or write-ups, write-downs or write-offs with respect to such Investment, minus the amount received upon the sale, liquidation, repayment or return of such Investment.

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“Issuance Notice” means an Issuance Notice substantially in the form of Exhibit A-3.

“Issuing Bank” means Bank of America, N.A., as Issuing Bank hereunder, together with its permitted successors and assigns in such capacity.

“Joinder Agreement” means a Joinder Agreement substantially in the form of Exhibit M.

“Joint Venture” means a joint venture, partnership or other similar arrangement, whether in corporate, partnership or other legal form; provided, in no event shall any corporate Subsidiary of any Person be considered to be a Joint Venture to which such Person is a party.

“Landlord Personal Property Collateral Access Agreement” means a Landlord Waiver and Consent Agreement substantially in the form of Exhibit K with such amendments or modifications as may be approved by Collateral Agent (such approval not to be unreasonably withheld, conditioned or delayed).

“Lead Arranger” means GSCP.

“Leasehold Property” means any leasehold interest of any Credit Party as lessee under any lease of real property, other than any such leasehold interest designated from time to time by Collateral Agent in its sole discretion as not being required to be included in the Collateral.

“Lender” and “Lenders” means (a) prior to the Second Amendment Effective Date, each financial institution listed on the signature pages hereto as a Lender, (b) effective as of the Second Amendment Effective Date, the Persons signing the Second Amendment as either a Continuing Lender or a Revolving Lender and (c) any other Person that becomes a party hereto pursuant to an Assignment Agreement or a Joinder Agreement; provided that the term “Lenders”, when used in the context of a particular Commitment shall mean the Lenders having that Commitment.

“Lender Counterparty” means each Lender or any Affiliate of a Lender counterparty to a Hedge Agreement (including any Person who is a Lender (or any Affiliate thereof) as of the date of such Hedge Agreement but subsequently ceases to be a Lender) including, without limitation, each such Affiliate that enters into a joinder agreement with Collateral Agent.

“Letter of Credit” means a commercial or standby letter of credit issued or to be issued by Issuing Bank pursuant to this Agreement.

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“Letter of Credit Sublimit” means the lesser of (i) $60,000,000 and (ii) the aggregate unused amount of the Revolving Commitments then in effect.

“Letter of Credit Usage” means, as at any date of determination, the sum (without duplication) of (i) the maximum aggregate amount which is, or at any time thereafter may become, available for drawing under all Letters of Credit then outstanding, and (ii) the aggregate amount of all drawings under Letters of Credit honored by Issuing Bank and not theretofore reimbursed by or on behalf of Company.

“Leverage Ratio” means the ratio as of the last day of any Fiscal Quarter of (i) Consolidated Total Debt as of such day to (ii) Consolidated Adjusted EBITDA for the four-Fiscal Quarter period ending on such date.

“Lien” means (i) any lien, mortgage, pledge, assignment, security interest, charge or encumbrance of any kind (including any agreement to give any of the foregoing, any conditional sale or other title retention agreement, and any lease in the nature thereof) and any option, trust or other preferential arrangement having the practical effect of any of the foregoing and (ii) in the case of Securities constituting Collateral, any purchase option, call or similar right of a third party with respect to such Securities.

“Loan” means a Term Loan, a Revolving Loan and a Swing Line Loan.

“Margin Stock” as defined in Regulation U of the Board of Governors of the Federal Reserve System as in effect from time to time.

“Material Adverse Effect” means a material adverse effect on and/or material adverse developments with respect to (i) the business, operations, properties, assets or financial condition of Holdings and its Subsidiaries taken as a whole; (ii) the ability of the Company or the Credit Parties, taken as a whole, to fully and timely perform its or their Obligations; (iii) the legality, validity, binding effect or enforceability against a Credit Party of a material Credit Document to which it is a party; or (iv) the rights, remedies and benefits available to, or conferred upon, any Agent and any Lender or any Secured Party under any material Credit Document.

“Material Contract” means any contract or other written agreement to which Holdings or any of its Subsidiaries is a party (other than the Credit Documents) for which breach, nonperformance, cancellation or failure to renew could reasonably be expected to have a Material Adverse Effect.

“Material Real Estate Asset’’ means (i) (a) any fee-owned Real Estate Asset having a fair market value in excess of $1,000,000 as of the date of the acquisition thereof and

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(b) all Leasehold Properties other than those with respect to which the aggregate payments under the term of the lease are less than $1,000,000 per annum or (ii) any Real Estate Asset that the Requisite Lenders have determined in their reasonable discretion is material to the business, operations, properties, assets, financial condition or prospects of Holdings and its Subsidiaries, taken as a whole.

“Merger” means the merger of DI Finance Sub LLC with and into DynCorp International LLC, with DynCorp International LLC as the survivor.

“Moody’s” means Moody’s Investors Service, Inc.

“Mortgage” means a mortgage or deed of trust substantially in the form of Exhibit J, as it may be amended, supplemented or otherwise modified from time to time.

“Multiemployer Plan” means any Employee Benefit Plan which is a “multiemployer plan” as defined in Section 3(37) of ERISA.

“NAIC” means The National Association of Insurance Commissioners, and any successor thereto.

“Narrative Report” means, with respect to the financial statements for which such narrative report is required, a narrative report describing the operations of Company and its Subsidiaries in the form prepared for presentation to senior management thereof for the applicable month, Fiscal Quarter or Fiscal Year and for the period from the beginning of the then current Fiscal Year to the end of such period to which such financial statements relate; provided, that such narrative report may be in the form of a management’s discussion and analysis of financial condition and results of operations customarily included in filings made with the Securities and Exchange Commission.

“Net Asset Sale Proceeds” means, with respect to any Asset Sale, an amount equal to:  (i) Cash payments (including any Cash received by way of deferred payment pursuant to, or by monetization of, a note receivable or otherwise, but only as and when so received) received by Holdings or any of its Subsidiaries from such Asset Sale (net of purchase price adjustments reasonably expected to be payable in connection therewith; provided that to the extent such purchase price adjustment is determined to be not payable or is otherwise not paid within 180 days of such Asset Sale (other than as a result of a dispute with respect to such purchase price adjustment which is subject to a resolution procedure set forth in the applicable transaction documents), such proceeds shall constitute Net Asset Sale Proceeds), minus (ii) any bona fide costs incurred in connection with such Asset Sale, including (a) income or gains taxes payable by the seller as a result of any gain recognized in connection with such Asset Sale and any transfer, documentary or other taxes payable in connection therewith, (b) payment of the

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outstanding principal amount of, premium or penalty, if any, and interest on any Indebtedness (other than the Loans) that is secured by a Lien on the stock or assets in question and that is required to be repaid under the terms thereof as a result of such Asset Sale, (c) a reasonable reserve for any indemnification payments (fixed or contingent) attributable to seller’s indemnities and representa­tions and warranties to purchaser in respect of such Asset Sale undertaken by Holdings or any of its Subsidiaries in connection with such Asset Sale including, without limitation, pension and other post-employment benefit liabilities and liabilities related to environmental matters associated with such Asset Sale, and (d) brokerage fees, accountants’ fees, investment banking fees, legal fees, costs and expenses, survey costs, title insurance premiums and other customary fees, costs and expenses actually incurred in connection with such Asset Sale.

“Net Insurance/Condemnation Proceeds” means an amount equal to:  (i) any Cash payments or proceeds received by Holdings or any of its Subsidiaries (a) under any casualty insurance policy in respect of a covered loss thereunder or (b) as a result of the taking of any assets of Holdings or any of its Subsidiaries by any Person pursuant to the power of eminent domain, condemnation or otherwise, or pursuant to a sale of any such assets to a purchaser with such power under threat of such a taking, minus (ii) (a) any actual and reasonable costs incurred by Holdings or any of its Subsidiaries in connection with the adjustment or settlement of any claims of Holdings or such Subsidiary in respect of such loss, eminent domain, condemnation or otherwise or such sale, including, without limitation, payment of the outstanding principal amount of, premium or penalty, if any, and interest on any Indebtedness (other than the Loans) that is secured by a Lien on the assets in question and that is required to be repaid under the terms thereof as a result of such loss, eminent domain, condemnation or otherwise or such sale, and (b) any bona fide costs incurred in connection with any sale of such assets as referred to in clause (i)(b) of this definition, including income taxes payable as a result of any gain recognized in connection therewith and any transfer, documentary or other taxes payable in connection therewith.

“New Revolving Commitments” as defined in Section 2.24.

“New Revolving Lender” as defined in Section 2.24.

“New Revolving Loan” as defined in Section 2.24.

“New Term Loan” means a term loan made to Company on the Second Amendment Effective Date pursuant to Section 2.1(a) of this Agreement, as amended by the Second Amendment.

“New Term Loan Commitment” means the commitment of a Lender, if any, to make or otherwise fund a New Term Loan hereunder pursuant to Section 2.1(a) of this

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Agreement, as amended by the Second Amendment, on the Second Amendment Effective Date; and “New Term Loan Commitments” means such commitments of all such Lenders in the aggregate. The amount of each Lender’s New Term Loan Commitment, if any, is on file with the Administrative Agent or contained in the applicable Assignment Agreement, subject to any adjustment or reduction pursuant to the terms and conditions hereof. The aggregate amount of the New Term Loan Commitments as of the Second Amendment Effective Date is $341,550,000.

“New Term Loan Lender” means each Lender with a New Term Loan Commitment or with outstanding New Term Loans.

“New Term Loan Note” means a promissory note in the form Exhibit B-1, as it may be amended, supplemented or otherwise modified from time to time.

“Non-Consenting Lender” as defined in Section 2.23.

“Non-US Lender” as defined in Section 2.20(c).

“Note” means a New Term Loan Note, a Revolving Loan Note or a Swing Line Note.

“Notice” means a Funding Notice, an Issuance Notice, or a Conversion/Continuation Notice.

“Obligations” means all obligations of every nature of each Credit Party from time to time owed to the Agents (including former Agents), the Lenders or any of them and Lender Counterparties, under any Credit Document or Hedge Agreement, whether for principal, interest (including interest which, but for the filing of a petition in bankruptcy with respect to such Credit Party, would have accrued on any Obligation, whether or not a claim is allowed against such Credit Party for such interest in the related bankruptcy proceeding), reimbursement of amounts drawn under Letters of Credit, payments for early termination of Hedge Agreements, fees, expenses, indemnification or otherwise.

“Obligee Guarantor” as defined in Section 7.7.

“Organizational Documents” means (i) with respect to any corporation, its certificate or articles of incorporation or organization, as amended, and its by-laws, as amended, or, as the case may be, its memorandum and articles, as amended, (ii) with respect to any limited partnership, its certificate of limited partnership, as amended, and its partnership agreement, as amended, (iii) with respect to any general partnership, its partnership agreement, as amended, (iv) with respect to any limited liability company, its articles of organization, as amended, and its operating agreement, as amended, and (v) with respect to any other Person, comparable

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instruments and documents, as amended. In the event any term or condition of this Agreement or any other Credit Document requires any Organizational Document to be certified by a secretary of state or similar governmental official, the reference to any such “Organizational Document” shall only be to a document of a type customarily certified by such governmental official.

“PBGC” means the Pension Benefit Guaranty Corporation or any successor thereto.

“Pension Plan” means any Employee Benefit Plan, other than a Multiemployer Plan, which is subject to Section 412 of the Internal Revenue Code or Section 302 of ERISA.

“Permitted Acquisition” means any acquisition by Company or any of its wholly-owned Subsidiaries, whether by purchase, merger or otherwise, of all or substantially all of the assets of, all of the Capital Stock of, or a business line or unit or a division of, any Person; provided,

(i)            immediately prior to, and after giving effect thereto, no Default or Event of Default shall have occurred and be continuing or would result therefrom;

(ii)           all transactions in connection therewith shall be consummated, in all material respects, in accordance with all applicable laws and in conformity with all applicable Governmental Authorizations;

(iii)          in the case of the acquisition of Capital Stock, all of the Capital Stock (except for any such Securities in the nature of directors’ qualifying shares required pursuant to applicable law) acquired or otherwise issued by such Person or any newly formed Subsidiary of Company in connection with such acquisition shall be owned 100% by Company or a Guarantor Subsidiary thereof, and Company shall have taken, or caused to be taken, as of the date such Person becomes a Subsidiary of Company, each of the actions set forth in Sections 5.10 and/or 5.11, as applicable;

(iv)          Company and its Subsidiaries shall be in compliance with the financial covenants set forth in Section 6.8 on a pro forma basis after giving effect to such acquisition as of the last day of the Fiscal Quarter most recently ended (as determined in accordance with Section 6.8(d));

(v)           Company shall have delivered to Administrative Agent (A) at least 10 Business Days prior to such proposed acquisition, a Compliance Certificate evidencing compliance with Section 6.8 as required under clause (iv) above, together with all relevant financial information with respect to such acquired assets, including,

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without limitation, the aggregate consideration for such acquisition and any other information required to demonstrate compliance with Section 6.8; and

(vi)          any Person or assets or division as acquired in accordance herewith shall be in same business or lines of business in which Company and/or its Subsidiaries are engaged as of the Closing Date or any business reasonably related thereto.

“Permitted Holders” means (a) Sponsor and its Affiliates and (b) any Person whose voting rights with respect to Holdings’ Voting Stock are controlled by Sponsor and its Affiliates.

“Permitted Liens” means each of the Liens permitted pursuant to Section 6.2.

“Person” means and includes natural persons, corporations, limited partnerships, general partnerships, limited liability companies, limited liability partnerships, joint stock companies, Joint Ventures, associations, companies, trusts, banks, trust companies, land trusts, business trusts or other organizations, whether or not legal entities, and Governmental Authorities.

“Pledge and Security Agreement” means the Pledge and Security Agreement to be executed by Company and each Guarantor substantially in the form of Exhibit I, as it may be amended, supplemented or otherwise modified from time to time.

“Prime Rate” means the rate of interest quoted in The Wall Street Journal, Money Rates Section as the Prime Rate (currently defined as the base rate on corporate loans posted by at least 75% of the nation’s thirty (30) largest banks), as in effect from time to time. The Prime Rate is a reference rate and does not necessarily represent the lowest or best rate actually charged to any customer. Administrative Agent or any other Lender may make commercial loans or other loans at rates of interest at, above or below the Prime Rate.

“Principal Office” means, for each of Administrative Agent, Swing Line Lender and Issuing Bank, such Person’s “Principal Office” as set forth on Appendix B, or such other office or office of a third party or sub-agent, as appropriate, as such Person may from time to time designate in writing to Company, Administrative Agent and each  Lender.

“Projections” as defined in Section 4.8.

“Pro Rata Share” means (i) with respect to all payments, computations and other matters relating to the Term Loan of any Lender, the percentage obtained by dividing (a) the Term Loan Exposure of that Lender by (b) the aggregate Term Loan Exposure of all Lenders; and (ii) with respect to all payments, computations and other matters relating to the

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Revolving Commitment or Revolving Loans of any Lender or any Letters of Credit issued or participations purchased therein by any Lender or any participations in any Swing Line Loans purchased by any Lender, the percentage obtained by dividing (a) the Revolving Exposure of that Lender by (b) the aggregate Revolving Exposure of all Lenders. For all other purposes with respect to each Lender, “Pro Rata Share” means the percentage obtained by dividing (A) an amount equal to the sum of the Term Loan Exposure and the Revolving Exposure of that Lender, by (B) an amount equal to the sum of the aggregate Term Loan Exposure and the aggregate Revolving Exposure of all Lenders.

“Purchase Agreement” means that certain Purchase Agreement, dated as of December 12, 2004 (as amended, supplemented or otherwise modified through the Closing Date, among Computer Sciences Corporation, Seller, The Veritas Capital Fund II, L.P. and Holdings.

“Real Estate Asset” means, at any time of determination, any interest (fee, leasehold or otherwise) then owned by any Credit Party in any real property.

“Reaffirmation Agreement” means a Reaffirmation Agreement substantially in the form of Exhibit L to be executed by Company and each Guarantor on the Second Amendment Effective Date, as it may be amended, supplemented or otherwise modified from time to time.

“Refunded Swing Line Loans” as defined in Section 2.3(b)(iv).

“Register” as defined in Section 2.7(b).

“Regulation D” means Regulation D of the Board of Governors of the Federal Reserve System, as in effect from time to time.

“Reimbursement Date” as defined in Section 2.4(d).

“Related Agreements” means, collectively, the Purchase Agreement and the Senior Subordinated Note Documents.

“Related Fund” means, with respect to any Lender that is an investment fund, any other investment fund that invests in commercial loans and that is managed or advised by the same investment advisor as such Lender or by an Affiliate of such investment advisor.

“Release” means any release, spill, emission, leaking, pumping, pouring, injection, escaping, deposit, disposal, discharge, dispersal, dumping, leaching or migration of any Hazardous Material into the indoor or outdoor environment (including the abandonment or

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disposal of any barrels, containers or other closed receptacles containing any Hazardous Material).

“Release Documents” as defined in Section 9.8(a).

“Replacement Lender” as defined in Section 2.23.

“Repricing Prepayment” as defined in Section 2.13(c).

“Requisite Class Lenders” means, at any time of determination, (i) for the Class of Lenders having Term Loan Exposure, Lenders holding more than 50% of the aggregate Term Loan Exposure of all Lenders; and (ii) for the Class of Lenders having Revolving Exposure, Lenders holding more than 50% of the aggregate Revolving Exposure of all Lenders.

“Requisite Lenders” means one or more Lenders having or holding Term Loan Exposure and/or Revolving Exposure and representing more than 50% of the sum of (i) the aggregate Term Loan Exposure of all Lenders and (ii) the aggregate Revolving Exposure of all Lenders.

“Restricted Junior Payment” means (i) any dividend or other distribution, direct or indirect, on account of any shares of any class of stock of Holdings or Company now or hereafter outstanding, except a dividend payable solely in shares of that class of stock to the holders of that class; (ii) any redemption, retirement, sinking fund or similar payment, purchase or other acquisition for value, direct or indirect, of any shares of any class of stock of Holdings or Company now or hereafter outstanding; (iii) any payment made to retire, or to obtain the surrender of, any outstanding warrants, options or other rights to acquire shares of any class of stock of Holdings or Company now or hereafter outstanding; and (iv) any payment or prepayment of principal of, premium, if any, or interest on, or redemption, purchase, retirement, defeasance (including in-substance or legal defeasance), sinking fund or similar payment with respect to, any Subordinated Indebtedness.

“Revolving Commitment” means the commitment of a Lender to make or otherwise fund any Revolving Loan and to acquire participations in Letters of Credit and Swing Line Loans hereunder and “Revolving Commitments” means such commitments of all Lenders in the aggregate.  The amount of each Lender’s Revolving Commitment, if any, is set forth on Appendix A-2 or in the applicable Assignment Agreement, subject to any adjustment or reduction pursuant to the terms and conditions hereof. The aggregate amount of the Revolving Commitments as of the Second Amendment Effective Date is $90,000,000.

“Revolving Commitment Period” means the period from the Closing Date to but excluding the Revolving Commitment Termination Date.

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“Revolving Commitment Termination Date” means the earliest to occur of (i) the fifth anniversary of the Closing Date, (ii) the date the Revolving Commitments are permanently reduced to zero pursuant to Section 2.13(b) or 2.14, and (iii) the date of the termination of the Revolving Commitments pursuant to Section 8.1.

“Revolving Exposure” means, with respect to any Lender as of any date of determination, (i) prior to the termination of the Revolving Commitments, that Lender’s Revolving Commitment; and (ii) after the termination of the Revolving Commitments, the sum of (a) the aggregate outstanding principal amount of the Revolving Loans of that Lender, (b) in the case of Issuing Bank, the aggregate Letter of Credit Usage in respect of all Letters of Credit issued by that Lender (net of any participations by Lenders in such Letters of Credit),  (c) the aggregate amount of all participations by that Lender in any outstanding Letters of Credit or any unreimbursed drawing under any Letter of Credit, (d) in the case of Swing Line Lender, the aggregate outstanding principal amount of all Swing Line Loans (net of any participations therein by other Lenders), and (e) the aggregate amount of all participations therein by that Lender in any outstanding Swing Line Loans.

“Revolving Loan” means a Loan made by a Lender to Company pursuant to Section 2.2(a) and/or 2.22.

“Revolving Loan Note” means a promissory note in the form of Exhibit B-2, as it may be amended, supplemented or otherwise modified from time to time.

“S&P” means Standard & Poor’s Ratings Group, a division of The McGraw Hill Corporation.

“Second Amendment” means the Second Amendment dated as of June 28, 2006.

“Second Amendment Effective Date” means June 28, 2006.

“Second Amendment Effective Date Certificate” means a Second Amendment Effective Date Certificate substantially in the form of Exhibit G-1.

“Second Amendment Effective Date Solvency Certificate” means a Second Amendment Effective Date Solvency Certificate substantially in the form of Exhibit G-2.

“Secured Parties” has the meaning assigned to that term in the Pledge and Security Agreement.

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“Securities” means any stock, shares, partnership interests, voting trust certificates, certificates of interest or participation in any profit-sharing agreement or arrangement, options, warrants, bonds, debentures, notes, or other evidences of indebtedness, secured or unsecured, convertible, subordinated or otherwise, or in general any instruments commonly known as “securities” or any certificates of interest, shares or participations in temporary or interim certificates for the purchase or acquisition of, or any right to subscribe to, purchase or acquire, any of the foregoing.

“Securities Act” means the Securities Act of 1933, as amended from time to time, and any successor statute.

“Seller” means DynCorp.

“Senior Subordinated Note Agreement” means any indenture, note purchase agreement or other agreement pursuant to which the Senior Subordinated Notes are issued as in effect on the Closing Date and thereafter amended from time to time subject to the requirements of this Agreement.

“Senior Subordinated Note Documents” means the Senior Subordinated Notes, the Senior Subordinated Note Agreement, the Senior Subordinated Note Guarantees and all other documents executed and delivered with respect to the Senior Subordinated Notes or the Senior Subordinated Note Agreement.

“Senior Subordinated Note Guarantees” shall mean the guarantees of the Guarantor Subsidiaries pursuant to the Senior Subordinated Note Agreement.

“Senior Subordinated Notes” means the 9.5% Senior Subordinated Notes due 2013 issued by Company and DIV Capital Corporation and any registered notes issued by Company and DIV Capital Corporation in exchange for, and as contemplated by, such notes with substantially identical terms as such notes.

“Settlement Confirmation” as defined in Section 10.6(b).

“Settlement Service” as defined in Section 10.6(d).

“Significant Subsidiary” means any Subsidiary that would be a “significant subsidiary” as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act, as such Regulation is in effect on the Closing Date.

“Solvency Certificate” means a Solvency Certificate of the chief financial officer of Holdings substantially in the form of Exhibit G-2.

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“Solvent” means, with respect to any Credit Party, that as of the date of determination, both (i) (a) the sum of such Credit Party’s debt (including contingent liabilities) does not exceed the present fair saleable value of such Credit Party’s present assets; (b) such Credit Party’s capital is not unreasonably small in relation to its business as contemplated on the Closing Date and reflected in the Projections or with respect to any transaction contemplated or undertaken after the Closing Date; and (c) such Person has not incurred and does not intend to incur, or believe (nor should it reasonably believe) that it will incur, debts beyond its ability to pay such debts as they become due (whether at maturity or otherwise); and (ii) to the extent different from the standard set forth in clause (i), such Person is “solvent” within the meaning given that term and similar terms under the Bankruptcy Code and applicable laws in the states of California, Delaware, Nevada, Texas and Virginia relating to fraudulent transfers and conveyances. For purposes of this definition, the amount of any contingent liability at any time shall be computed as the amount that, in light of all of the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability (irrespective of whether such contingent liabilities meet the criteria for accrual under Statement of Financial Accounting Standard No.5).

“Sponsor” means Veritas Capital Management II, L.L.C.

“Subject Transaction” as defined in Section 6.8(d).

“Subordinated Indebtedness” means (i) all obligations under the Senior Subordinated Note Documents and (ii) Indebtedness that is subordinated in right of payment to the Obligations on terms substantially the same as the subordination provisions contained in the Senior Subordinated Note Documents or otherwise reasonably satisfactory to the Administrative Agent.

“Subsidiary” means, with respect to any Person, any corporation, partnership, limited liability company, association, joint venture or other business entity of which more than 50% of the Voting Stock of such entity is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof; provided, in determining the percentage of ownership interests of any Person controlled by another Person, no ownership interest in the nature of a “qualifying share” of the former Person shall be deemed to be outstanding.

“Swing Line Lender” means GSCP in its capacity as Swing Line Lender hereunder, together with its permitted successors and assigns in such capacity.

“Swing Line Loan” means a Loan made by Swing Line Lender to Company pursuant to Section 2.3.

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“Swing Line Note” means a promissory note in the form of Exhibit B-3, as it may be amended, supplemented or otherwise modified from time to time.

“Swing Line Sublimit” means the lesser of (i) $5,000,000, and (ii) the aggregate unused amount of Revolving Commitments then in effect.

“Syndication Agent” as defined in the preamble hereto.

“Tax” means any present or future tax, levy, impost, duty, assessment, charge, fee, deduction or withholding of any nature and whatever called, by whomsoever, on whomsoever and wherever imposed, levied, collected, withheld or assessed; provided, “Tax on the overall net income” of a Person shall be construed as a reference to a tax imposed by the jurisdiction in which that Person is organized or in which that Person’s applicable principal office (and/or, in the case of a Lender, its lending office) is located or in which that Person (and/or, in the case of a Lender, its lending office) is deemed to be doing business on all or part of the net income, profits or gains (whether worldwide, or only insofar as such income, profits or gains are considered to arise in or to relate to a particular jurisdiction, or otherwise) of that Person (and/or, in the case of a Lender, its applicable lending office).

“Term Loan” means a New Term Loan.

“Term Loan Commitment” means the New Term Loan Commitment of a Lender and “Term Loan Commitments” means such commitments of all Lenders in the aggregate.

“Term Loan Exposure” means, with respect to any Lender, as of any date of determination, the outstanding principal amount of the Term Loans of such Lender; provided, at any time prior to the making of the Term Loans, the Term Loan Exposure of any Lender shall be equal to such Lender’s Term Loan Commitment.

“Term Loan Maturity Date” means the earlier of (i) the sixth anniversary of the Closing Date, and (ii) the date that all Term Loans shall become due and payable in full hereunder, whether by acceleration or otherwise.

“Terminated Lender” as defined in Section 2.23.

“Total Utilization of Revolving Commitments” means, as at any date of determination, the sum of (i) the aggregate principal amount of all outstanding Revolving Loans (other than Revolving Loans made for the purpose of repaying any Refunded Swing Line Loans or reimbursing Issuing Bank for any amount drawn under any Letter of Credit, but not yet so

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applied), (ii) the aggregate principal amount of all outstanding Swing Line Loans, and (iii) the Letter of Credit Usage.

“Transaction Costs” means the fees, costs and expenses payable by Holdings, Company or any of Company’s Subsidiaries on or before the Closing Date or within a reasonable period of time thereafter in connection with the transactions contemplated by the Credit Documents and the Related Agreements, which Transaction Costs shall not exceed $40,000,000.

“Type of Loan” means (i) with respect to either Term Loans or Revolving Loans, a Base Rate Loan or a Eurodollar Rate Loan, and (ii) with respect to Swing Line Loans, a Base Rate Loan.

“UCC” means the Uniform Commercial Code (or any similar or equivalent legislation) as in effect in any applicable jurisdiction.

“Unadjusted Eurodollar Rate Component” means that component of the interest costs to Company in respect of a Eurodollar Rate Loan that is based upon the rate obtained pursuant to clause (i) of the definition of Adjusted Eurodollar Rate.

“Voting Stock” of any Person as of any date means the Capital Stock of such Person (for the purposes of this definition, the “issuer”) that is at that time entitled (without regard to the occurrence of any contingency) to vote in the election of the Person or Persons (whether directors, managers, trustees, or other Persons performing similar functions) having the power to direct or cause the direction of the management and policies of the issuer.

1.2.   Accounting Terms. Except as otherwise expressly provided herein, all accounting terms not otherwise defined herein shall have the meanings assigned to them in conformity with GAAP. Financial statements and other information required to be delivered by Holdings to Lenders pursuant to Section 5.1(a), 5.1(b) and 5.1(c) shall be prepared in accordance with GAAP as in effect at the time of such preparation (and delivered together with the reconciliation statements provided for in Section 5.1(e), if applicable). Notwithstanding the foregoing, calculations in connection with the definitions, covenants and other provisions hereof shall utilize accounting principles and policies in conformity with those used to prepare the Historical Financial Statements. In the event that any Accounting Change shall occur and such change results in a change in the method of calculation of financial covenants, standards or terms in this Agreement, then Company and Administrative Agent agree to enter into negotiations to amend such provisions of this Agreement so as to equitably reflect such Accounting Change with the desired result that the criteria for evaluating Company’s financial condition shall be the same after such Accounting Change as if such Accounting Change had not been made. Until such time as such an amendment shall have been executed and delivered by Company and the

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Requisite Lenders, all financial covenants, standards and terms in this Agreement shall continue to be calculated or construed as if such Accounting Change had not occurred.

1.3.   Interpretation, etc. Any of the terms defined herein may, unless the context otherwise requires, be used in the singular or the plural, depending on the reference. References herein to any Section, Appendix, Schedule or Exhibit shall be to a Section, an Appendix, a Schedule or an Exhibit, as the case may be, hereof unless otherwise specifically provided. The use herein of the word “include” or “including”, when following any general statement, term or matter, shall not be construed to limit such statement, term or matter to the specific items or matters set forth immediately following such word or to similar items or matters, whether or not no limiting language (such as “without limitation” or “but not limited to” or words of similar import) is used with reference thereto, but rather shall be deemed to refer to all other items or matters that fall within the broadest possible scope of such general statement, term or matter.

1.4.   Interrelationship with the Existing Credit Agreement.

(a)           This Agreement is intended to incorporate certain amendments to the provisions of the Existing Credit Agreement and, except as expressly modified herein, (x) all of the terms and provisions of the Existing Credit Agreement apply for the period prior to the Second Amendment Effective Date, including any determinations of payment dates, interest rates, compliance with covenants and other obligations, accuracy of representations and warranties, Events of Default or any amount that may be payable to the Administrative Agent or the Lenders (or their assignees or replacements hereunder), and (y) the obligations under the Existing Credit Agreement that became due and payable prior to the Second Amendment Effective Date shall, from and after the Second Amendment Effective Date, continue to be owing and be subject to the terms of this Agreement. All references in the Notes and the other Credit Documents to (i) the “Credit Agreement” shall be deemed to refer to this Agreement and (ii) the “Lenders” or a “Lender” or to the “Administrative Agent” shall mean such terms as defined in this Agreement. As to all periods occurring on or after the Second Amendment Effective Date, all of the covenants set forth in the Existing Credit Agreement shall be of no further force and effect (with respect to such periods), it being understood that (x) all obligations of Holdings, Company and their Subsidiaries under the Existing Credit Agreement shall be governed by this Agreement from and after the Second Amendment Effective Date and (y) the terms, provisions and covenants contained in the Existing Credit Agreement shall continue to apply for all periods prior to the Second Amendment Effective Date, and the effectiveness of this Agreement shall not excuse or waive any failure to comply with any of the terms, provisions or covenants contained in the Existing Credit Agreement for any period prior to the Second Amendment Effective Date, except as otherwise provided in the Second Amendment.

(b)           Company, Holdings, the Agents and the Lenders acknowledge and agree that all principal, interest, fees, costs, reimbursable expenses and indemnification obligations

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accruing or arising under or in connection with the Existing Credit Agreement which remain unpaid and outstanding as of the Second Amendment Effective Date shall be and remain outstanding and payable as an obligation under this Agreement and the other Credit Documents.

SECTION 2.  LOANS AND LETTERS OF CREDIT

2.1.   Term Loans.

(a)   Loan Commitments. Subject to the terms and conditions hereof, each of the New Term Loan Lenders severally agrees, pursuant to the Second Amendment, to make on the Second Amendment Effective Date a New Term Loan to Company in an amount equal to its New Term Loan Commitment; provided that each Continuing Lender having a New Term Loan Commitment shall make New Term Loans on the Second Amendment Effective Date by exchanging its Existing Term Loans for New Term Loans in the manner contemplated by this Section 2.1 and by the Second Amendment. If any Continuing Lender’s New Term Loan Commitment is greater than the amount of its Existing Term Loans, such Continuing Lender shall comply with Section 2.1(b)(ii). Company may make only one borrowing under the New Term Loan Commitments which shall be made on the Second Amendment Effective Date. Any amount borrowed under this Section 2.1(a) and subsequently repaid or prepaid may not be reborrowed. Subject to Sections 2.12, 2.13(a) and 2.14, all amounts owed hereunder with respect to the New Term Loans shall be paid in full no later than the Term Loan Maturity Date. Each Lender’s New Term Loan Commitment shall terminate immediately and without further action on the Second Amendment Effective Date after giving effect to the funding of such Lender’s New Term Loan Commitment on such date.

(b)   Borrowing Mechanics for Term Loans.

(i)   Company shall deliver to Administrative Agent a fully executed Funding Notice for the New Term Loans no later than one (1) Business Day prior to the Second Amendment Effective Date. Promptly upon receipt by Administrative Agent of such Funding Notice, Administrative Agent shall notify each Lender of the proposed borrowing.

(ii)   Each Lender with a New Term Loan Commitment (other than a Continuing Lender that is exchanging its Existing Term Loans for New Term Loans in accordance with Section 2.1(a)) shall make its New Term Loan available to Administrative Agent not later than 12:00 p.m. (New York City time) on the Second Amendment Effective Date, by wire transfer of same day funds in Dollars, at the Principal Office designated by Administra­tive Agent. Upon satisfaction or waiver of the conditions precedent specified in Section 3.3, Administrative Agent shall make the

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proceeds of the New Term Loans available to Company on the Second Amendment Effective Date by causing an amount of same day funds in Dollars equal to the proceeds of all such Term Loans received by Administrative Agent from Lenders to be credited to the account of Company at the Principal Office designated by Administrative Agent or to such other account as may be designated in writing to Administrative Agent by Company.

(iii)   The Interest Period (and the respective Adjusted Eurodollar Rate) in effect on the Second Amendment Effective Date in respect of the Existing Term Loans that are being exchanged for New Term Loans on the Second Amendment Effective Date (the “Current Interest Period”) will continue to be in effect for such New Term Loans following the Second Amendment Effective Date and will end on the last day of the Current Interest Period, and for any New Term Loans funded on the Second Amendment Effective Date the initial Interest Period will end on the last day of the Current Interest Period and the Adjusted Eurodollar Rate during such initial Interest Period will equal the Adjusted Eurodollar Rate applicable to the New Term Loans exchanged for Existing Term Loans during the Current Interest Period.

2.2.   Revolving Loans.

(a)   Revolving Commitments. During the Revolving Commitment Period, subject to the terms and conditions hereof, each Lender severally agrees to make Revolving Loans to Company in an aggregate amount up to but not exceeding such Lender’s Revolving Commitment; provided, that after giving effect to the making of any Revolving Loans in no event shall the Total Utilization of Revolving Commitments exceed the Revolving Commitments then in effect. Amounts borrowed pursuant to this Section 2.2(a) may be repaid and reborrowed during the Revolving Commitment Period. Each Lender’s Revolving Commitment shall expire on the Revolving Commitment Termination Date and all Revolving Loans and all other amounts owed hereunder with respect to the Revolving Loans and the Revolving Commitments shall be paid in full no later than such date.

(b)   Borrowing Mechanics for Revolving Loans.

(i)   Except pursuant to Section 2.4(d) and Section 2.3(b)(iv), Revolving Loans that are Base Rate Loans shall be made in an aggregate minimum amount of $1,000,000 and integral multiples of $500,000 in excess of that amount, and Revolving Loans that are Eurodollar Rate Loans shall be in an aggregate minimum amount of $1,000,000 and integral multiples of $500,000 in excess of that amount.

(ii)   Whenever Company desires that Lenders make Revolving Loans, Company shall deliver to Administrative Agent a fully executed Funding Notice no later

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than 10:00 a.m. (New York City time) at least three Business Days in advance of the proposed Credit Date in the case of a Eurodollar Rate Loan, and at least one Business Day in advance of the proposed Credit Date in the case of a Revolving Loan that is a Base Rate Loan.

(iii)   Notice of receipt of each Funding Notice in respect of Revolving Loans, together with the amount of each Lender’s Pro Rata Share thereof, if any, together with the applicable interest rate, shall be provided by Administrative Agent to each applicable Lender by telefacsimile with reasonable promptness, but (provided Administrative Agent shall have received such notice by 10:00 a.m. (New York City time)) not later than 2:00 p.m. (New York City time) on the same day as Administrative Agent’s receipt of such Notice from Company.

(iv)   Each Lender shall make the amount of its Revolving Loan available to Administrative Agent not later than 2:00 p.m. (New York City time) on the applicable Credit Date by wire transfer of same day funds in Dollars, at the Principal Office designated by Administrative Agent. Except as provided herein, upon satisfaction or waiver of the conditions precedent specified herein, Administrative Agent shall make the proceeds of such Revolving Loans available to Company on the applicable Credit Date by causing an amount of same day funds in Dollars equal to the proceeds of all such Revolving Loans received by Administrative Agent from Lenders to be credited to the account of Company at the Principal Office designated by Administrative Agent or such other account as may be designated in writing to Administrative Agent by Company.

2.3.   Swing Line Loans.

(a)   Swing Line Loan Commitment. During the Revolving Commitment Period, subject to the terms and conditions hereof, Swing Line Lender hereby agrees to make Swing Line Loans to Company in the aggregate amount up to but not exceeding the Swing Line Sublimit; provided, that after giving effect to the making of any Swing Line Loan, in no event shall the Total Utilization of Revolving Commitments exceed the Revolving Commitments then in effect. Amounts borrowed pursuant to this Section 2.3 may be repaid and reborrowed during the Revolving Commitment Period. Swing Line Lender’s Revolving Commitment shall expire on the Revolving Commitment Termination Date and all Swing Line Loans and all other amounts owed hereunder with respect to the Swing Line Loans and the Revolving Commitments shall be paid in full no later than such date.

(b)   Borrowing Mechanics for Swing Line Loans.

(i)   Swing Line Loans shall be made in an aggregate minimum amount of $500,000 and integral multiples of $100,000 in excess of that amount.

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(ii)   Whenever Company desires that Swing Line Lender make a Swing Line Loan, Company shall deliver to Administrative Agent a Funding Notice no later than 12:00 p.m. (New York City time) on the proposed Credit Date.

(iii)   Swing Line Lender shall make the amount of its Swing Line Loan available to Administrative Agent not later than 2:00 p.m. (New York City time) on the applicable Credit Date by wire transfer of same day funds in Dollars, at Administrative Agent’s Principal Office. Except as provided herein, upon satisfaction or waiver of the conditions precedent specified herein, Administrative Agent shall make the proceeds of such Swing Line Loans available to Company on the applicable Credit Date by causing an amount of same day funds in Dollars equal to the proceeds of all such Swing Line Loans received by Administrative Agent from Swing Line Lender to be credited to the account of Company at Administrative Agent’s Principal Office, or to such other account as may be designated in writing to Administrative Agent by Company.

(iv)   With respect to any Swing Line Loans which have not been voluntarily prepaid by Company pursuant to Section 2.13, Swing Line Lender may at any time in its sole and absolute discretion, deliver to Administrative Agent (with a copy to Company), no later than 11:00 a.m. (New York City time) at least one Business Day in advance of the proposed Credit Date, a notice (which shall be deemed to be a Funding Notice given by Company) requesting that each Lender holding a Revolving Commitment make Revolving Loans that are Base Rate Loans to Company on such Credit Date in an amount equal to the amount of such Swing Line Loans (the “Refunded Swing Line Loans”) outstanding on the date such notice is given which Swing Line Lender requests Lenders to prepay. Anything contained in this Agreement to the contrary notwithstanding, (1) the proceeds of such Revolving Loans made by the Lenders other than Swing Line Lender shall be immediately delivered by Administrative Agent to Swing Line Lender (and not to Company) and applied to repay a corresponding portion of the Refunded Swing Line Loans and (2) on the day such Revolving Loans are made, Swing Line Lender’s Pro Rata Share of the Refunded Swing Line Loans shall be deemed to be paid with the proceeds of a Revolving Loan made by Swing Line Lender to Company, and such portion of the Swing Line Loans deemed to be so paid shall no longer be outstanding as Swing Line Loans and shall no longer be due under the Swing Line Note of Swing Line Lender but shall instead constitute part of Swing Line Lender’s outstanding Revolving Loans to Company and shall be due under the Revolving Loan Note issued by Company to Swing Line Lender. Company hereby authorizes Administrative Agent and Swing Line Lender to charge Company’s accounts with Administrative Agent and Swing Line Lender (up to the amount available in each such account) in order to immediately pay Swing Line Lender the amount of the Refunded Swing Line Loans to the extent of the proceeds of such Revolving Loans made by

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Lenders, including the Revolving Loans deemed to be made by Swing Line Lender, are not sufficient to repay in full the Refunded Swing Line Loans. If any portion of any such amount paid (or deemed to be paid) to Swing Line Lender should be recovered by or on behalf of Company from Swing Line Lender in bankruptcy, by assignment for the benefit of creditors or otherwise, the loss of the amount so recovered shall be ratably shared among all Lenders in the manner contemplated by Section 2.17.

(v)   If for any reason Revolving Loans are not made pursuant to Section 2.3(b)(iv) in an amount sufficient to repay any amounts owed to Swing Line Lender in respect of any outstanding Swing Line Loans on or before the third Business Day after demand for payment thereof by Swing Line Lender, each Lender holding a Revolving Commitment shall be deemed to, and hereby agrees to, have purchased a participation in such outstanding Swing Line Loans, and in an amount equal to its Pro Rata Share of the applicable unpaid amount together with accrued interest thereon. Upon one Business Day’s notice from Swing Line Lender, each Lender holding a Revolving Commitment shall deliver to Swing Line Lender an amount equal to its respective participation in the applicable unpaid amount in same day funds at the Principal Office of Swing Line Lender. In order to evidence such participation each Lender holding a Revolving Commitment agrees to enter into a participation agreement at the request of Swing Line Lender in form and substance reasonably satisfactory to Swing Line Lender. In the event any Lender holding a Revolving Commitment fails to make available to Swing Line Lender the amount of such Lender’s participation as provided in this paragraph, Swing Line Lender shall be entitled to recover such amount on demand from such Lender together with interest thereon for three Business Days at the rate customarily used by Swing Line Lender for the correction of errors among banks and thereafter at the Base Rate, as applicable.

(vi)   Notwithstanding anything contained herein to the contrary, (1) each Lender’s obligation to make Revolving Loans for the purpose of repaying any Refunded Swing Line Loans pursuant to the second preceding paragraph and each Lender’s obligation to purchase a participation in any unpaid Swing Line Loans pursuant to the immediately preceding paragraph shall be absolute and unconditional and shall not be affected by any circumstance, including without limitation (A) any set-off, counterclaim, recoupment, defense or other right which such Lender may have against Swing Line Lender, any Credit Party or any other Person for any reason whatsoever; (B) the occurrence or continuation of a Default or Event of Default; (C) any adverse change in the business, operations, properties, assets, condition (financial or otherwise) or prospects of any Credit Party; (D) any breach of this Agreement or any other Credit Document by any party thereto; or (E) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing; provided that such obligations of each Lender are

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subject to the condition that Swing Line Lender believed in good faith that all conditions under Section 3.2 to the making of the applicable Refunded Swing Line Loans or other unpaid Swing Line Loans, were satisfied at the time such Refunded Swing Line Loans or unpaid Swing Line Loans were made, or the satisfaction of any such condition not satisfied had been waived by the Requisite Lenders prior to or at the time such Refunded Swing Line Loans or other unpaid Swing Line Loans were made; and (2) Swing Line Lender shall not be obligated to make any Swing Line Loans (A) if it has elected not to do so after the occurrence and during the continuation of a Default or Event of Default or (B) at a time when a Funding Default exists unless Swing Line Lender has entered into arrangements satisfactory to it and Company to eliminate Swing Line Lender’s risk with respect to the Defaulting Lender’s participation in such Swing Ling Loan, including by cash collateralizing such Defaulting Lender’s Pro Rata Share of the outstanding Swing Line Loans.

2.4.   Issuance of Letters of Credit and Purchase of Participations Therein.

(a)   Letters of Credit. During the Revolving Commitment Period, subject to the terms and conditions hereof, Issuing Bank agrees to issue Letters of Credit for the account of Company in the aggregate amount up to but not exceeding the Letter of Credit Sublimit; provided, (i) each Letter of Credit shall be denominated in Dollars; (ii) the stated amount of each Letter of Credit shall not be less than $250,000 or such lesser amount as is acceptable to Issuing Bank; (iii) after giving effect to such issuance, in no event shall the Total Utilization of Revolving Commit­ments exceed the Revolving Commitments then in effect; (iv) after giving effect to such issuance, in no event shall the Letter of Credit Usage exceed the Letter of Credit Sublimit then in effect; (v) in no event shall any standby Letter of Credit have an expiration date later than the earlier of (1) the Revolving Commitment Termination Date and (2) the date which is one year from the date of issuance of such standby Letter of Credit; and (vi) in no event shall any commercial Letter of Credit (x) have an expiration date later than the earlier of (1) the Revolving Commitment Termination Date and (2) the date which is 180 days from the date of issuance of such commercial Letter of Credit or (y) be issued if such commercial Letter of Credit is otherwise unacceptable to Issuing Bank in its reasonable discretion. Subject to the foregoing, Issuing Bank may agree that a standby Letter of Credit will automatically be extended for one or more successive periods not to exceed one year each, unless Issuing Bank elects not to extend for any such additional period; provided, Issuing Bank shall not extend any such Letter of Credit if it has received written notice that an Event of Default has occurred and is continuing at the time Issuing Bank must elect to allow such extension; provided, further, in the event a Funding Default exists, Issuing Bank shall not be required to issue any Letter of Credit unless Issuing Bank has entered into arrangements satisfactory to it and Company to eliminate Issuing Bank’s risk with respect to the participation in Letters of Credit of the Defaulting Lender, including by cash collateralizing such Defaulting Lender’s Pro Rata Share of the Letter of Credit Usage.

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(b)   Notice of Issuance. Whenever Company desires the issuance of a Letter of Credit, it shall deliver to Administrative Agent an Issuance Notice no later than 12:00 p.m. (New York City time) at least three Business Days (in the case of standby letters of credit) or five Business Days (in the case of commercial letters of credit), or in each case such shorter period as may be agreed to by Issuing Bank in any particular instance, in advance of the proposed date of issuance. Upon satisfaction or waiver of the conditions set forth in Section 3.2, Issuing Bank shall issue the requested Letter of Credit only in accordance with Issuing Bank’s standard operating procedures. Upon the issuance of any Letter of Credit or amendment or modification to a Letter of Credit, Issuing Bank shall promptly notify each Lender of such issuance, which notice shall be accompanied by a copy of such Letter of Credit or amendment or modification to a Letter of Credit and the amount of such Lender’s respective participation in such Letter of Credit pursuant to Section 2.4(e).

(c)   Responsibility of Issuing Bank With Respect to Requests for Drawings and Payments. In determining whether to honor any drawing under any Letter of Credit by the beneficiary thereof, Issuing Bank shall be responsible only to examine the documents delivered under such Letter of Credit with reasonable care so as to ascertain whether they appear on their face to be in accordance with the terms and conditions of such Letter of Credit. As between Company and Issuing Bank, Company assumes all risks of the acts and omissions of, or misuse of the Letters of Credit issued by Issuing Bank, by the respective beneficiaries of such Letters of Credit. In furtherance and not in limitation of the foregoing, Issuing Bank shall not be responsible for: (i) the form, validity, sufficiency, accuracy, genuineness or legal effect of any document submitted by any party in connection with the application for and issuance of any such Letter of Credit, even if it should in fact prove to be in any or all respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign any such Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason; (iii) failure of the beneficiary of any such Letter of Credit to comply fully (so long as such beneficiary has complied substantially) with any conditions required in order to draw upon such Letter of Credit; (iv) errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, cable, telegraph, telex or otherwise, whether or not they be in cipher; (v) errors in interpretation of technical terms; (vi) any loss or delay in the transmission or otherwise of any document required in order to make a drawing under any such Letter of Credit or of the proceeds thereof; (vii) the misapplication by the beneficiary of any such Letter of Credit of the proceeds of any drawing under such Letter of Credit; or (viii) any consequences arising from causes beyond the control of Issuing Bank, including any Governmental Acts; none of the above shall affect or impair, or prevent the vesting of, any of Issuing Bank’s rights or powers hereunder. Without limiting the foregoing and in furtherance thereof, any action taken or omitted by Issuing Bank under or in connection with the Letters of Credit or any documents and certificates delivered thereunder, if taken or omitted in good faith, shall not give rise to any

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liability on the part of Issuing Bank to Company. Notwithstanding anything to the contrary contained in this Section 2.4(c), Company shall retain any and all rights it may have against Issuing Bank for any liability arising solely out of the gross negligence, willful misconduct or bad faith of Issuing Bank.

(d)   Reimbursement by Company of Amounts Drawn or Paid Under Letters of Credit. In the event Issuing Bank has determined to honor a drawing under a Letter of Credit, it shall immediately notify Company and Administrative Agent, and Company shall reimburse Issuing Bank on or before the Business Day immediately following the date on which such drawing is honored (the “Reimbursement Date”) in an amount in Dollars and in same day funds equal to the amount of such honored drawing; provided, anything contained herein to the contrary notwithstanding, (i) unless Company shall have notified Administrative Agent and Issuing Bank prior to 10:00 a.m. (New York City time) on the date such drawing is honored that Company intends to reimburse Issuing Bank for the amount of such honored drawing with funds other than the proceeds of Revolving Loans, Company shall be deemed to have given a timely Funding Notice to Administrative Agent requesting Lenders to make Revolving Loans that are Base Rate Loans on the Reimbursement Date in an amount in Dollars equal to the amount of such honored drawing, and (ii) subject to satisfaction or waiver of the conditions specified in Section 3.2, Lenders shall, on the Reimbursement Date, make Revolving Loans that are Base Rate Loans in the amount of such honored drawing, the proceeds of which shall be applied directly by Administrative Agent to reimburse Issuing Bank for the amount of such honored drawing; and provided further, if for any reason proceeds of Revolving Loans are not received by Issuing Bank on the Reimbursement Date in an amount equal to the amount of such honored drawing, Company shall reimburse Issuing Bank, on demand, in an amount in same day funds equal to the excess of the amount of such honored drawing over the aggregate amount of such Revolving Loans, if any, which are so received. Nothing in this Section 2.4(d) shall be deemed to relieve any Lender from its obligation to make Revolving Loans on the terms and conditions set forth herein, and Company shall retain any and all rights it may have against any Lender resulting from the failure of such Lender to make such Revolving Loans under this Section 2.4(d).

(e)   Lenders’ Purchase of Participations in Letters of Credit. Immediately upon the issuance of each Letter of Credit, each Lender having a Revolving Commitment shall be deemed to have purchased, and hereby agrees to irrevocably purchase, from Issuing Bank a participation in such Letter of Credit and any drawings honored thereunder in an amount equal to such Lender’s Pro Rata Share (with respect to the Revolving Commitments) of the maximum amount which is or at any time may become available to be drawn thereunder. In the event that Company shall fail for any reason to reimburse Issuing Bank as provided in Section 2.4(d), Issuing Bank shall promptly notify each Lender of the unreimbursed amount of such honored drawing and of such Lender’s respective participation therein based on such Lender’s Pro Rata

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Share of the Revolving Commitments. Each Lender shall make available to Issuing Bank an amount equal to its respective participation, in Dollars and in same day funds, at the office of Issuing Bank specified in such notice, not later than 12:00 p.m. (New York City time) on the first business day (under the laws of the jurisdiction in which such office of Issuing Bank is located) after the date notified by Issuing Bank. In the event that any Lender fails to make available to Issuing Bank on such business day the amount of such Lender’s participation in such Letter of Credit as provided in this Section 2.4(e), Issuing Bank shall be entitled to recover such amount on demand from such Lender together with interest thereon for three Business Days at the rate customarily used by Issuing Bank for the correction of errors among banks and thereafter at the Base Rate. Nothing in this Section 2.4(e) shall be deemed to prejudice the right of any Lender to recover from Issuing Bank any amounts made available by such Lender to Issuing Bank pursuant to this Section in the event that it is determined that the payment with respect to a Letter of Credit in respect of which payment was made by such Lender constituted gross negligence, willful misconduct or bad faith on the part of Issuing Bank. In the event Issuing Bank shall have been reimbursed by other Lenders pursuant to this Section 2.4(e) for all or any portion of any drawing honored by Issuing Bank under a Letter of Credit, such Issuing Bank shall distribute to each Lender which has paid all amounts payable by it under this Section 2.4(e) with respect to such honored drawing such Lender’s Pro Rata Share of all payments subsequently received by Issuing Bank from Company in reimbursement of such honored drawing when such payments are received. Any such distribution shall be made to a Lender at its primary address set forth below its name on Appendix B or at such other address as such Lender may request.

(f)   Obligations Absolute. The obligation of Company to reimburse Issuing Bank for drawings honored under the Letters of Credit issued by it and to repay any Revolving Loans made by Lenders pursuant to Section 2.4(d) and the obligations of Lenders under Section 2.4(e) shall be unconditional and irrevocable and shall be paid strictly in accordance with the terms hereof under all circumstances including any of the following circumstances: (i) any lack of validity or enforceability of any Letter of Credit; (ii) the existence of any claim, set-off, defense or other right which Company or any Lender may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons for whom any such transferee may be acting), Issuing Bank, Lender or any other Person or, in the case of a Lender, against Company, whether in connection herewith, the transactions contemplated herein or any unrelated transaction (including any underlying transaction between Company or one of its Subsidiaries and the beneficiary for which any Letter of Credit was procured); (iii) any draft or other document presented under any Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; (iv) payment by Issuing Bank under any Letter of Credit against presentation of a draft or other document which does not substantially comply with the terms of such Letter of Credit; (v) any adverse change in the business, operations, properties, assets, condition (financial or otherwise) or prospects of Holdings or any of its Subsidiaries; (vi) any breach hereof or of any other Credit Document by

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any party thereto; (vii) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing; or (viii) the fact that an Event of Default or a Default shall have occurred and be continuing; provided, in each case, that payment by Issuing Bank under the applicable Letter of Credit shall not have constituted gross negligence, willful misconduct or bad faith of Issuing Bank under the circumstances in question.

(g)   Indemnification. Without duplication of any obligation of Company under Section 10.2 or 10.3, in addition to amounts payable as provided herein, Company hereby agrees to protect, indemnify, pay and save harmless Issuing Bank from and against any and all claims, demands, liabilities, damages, losses, costs, charges and expenses (including reasonable fees, expenses and disbursements of counsel and allocated costs of internal counsel) which Issuing Bank may incur or be subject to as a consequence, direct or indirect, of (i) the issuance of any Letter of Credit by Issuing Bank, other than as a result of (1) the gross negligence, willful misconduct or bad faith of Issuing Bank or (2) the wrongful dishonor by Issuing Bank of a proper demand for payment made under any Letter of Credit issued by it, or (ii) the failure of Issuing Bank to honor a drawing under any such Letter of Credit as a result of any Governmental Act.

2.5.   Pro Rata Shares; Availability of Funds.

(a)   Pro Rata Shares. All Loans shall be made, and all participations purchased, by Lenders simultaneously and proportionately to their respective Pro Rata Shares, it being understood that no Lender shall be responsible for any default by any other Lender in such other Lender’s obligation to make a Loan requested hereunder or purchase a participation required hereby nor shall any Term Loan Commitment or any Revolving Commitment of any Lender be increased or decreased as a result of a default by any other Lender in such other Lender’s obligation to make a Loan requested hereunder or purchase a participation required hereby.

(b)   Availability of Funds. Unless Administrative Agent shall have been notified by any Lender prior to the applicable Credit Date that such Lender does not intend to make available to Administrative Agent the amount of such Lender’s Loan requested on such Credit Date, Administrative Agent may assume that such Lender has made such amount available to Administra­tive Agent on such Credit Date and Administrative Agent may, in its sole discretion, but shall not be obligated to, make available to Company a corresponding amount on such Credit Date. If such corresponding amount is not in fact made available to Administrative Agent by such Lender, Administrative Agent shall be entitled to recover such corresponding amount on demand from such Lender together with interest thereon, for each day from such Credit Date until the date such amount is paid to Administrative Agent, at the customary rate set by Administrative Agent for the correction of errors among banks for three Business Days and thereafter at the Base Rate. If such Lender does not pay such corresponding amount forthwith upon Administrative Agent’s demand therefor, Administrative Agent shall promptly notify

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Company and Company shall immediately pay such corresponding amount to Administrative Agent together with interest thereon, for each day from such Credit Date until the date such amount is paid to Administrative Agent, at the rate payable hereunder for Base Rate Loans for such Class of Loans. Nothing in this Section 2.5(b) shall be deemed to relieve any Lender from its obligation to fulfill its Term Loan Commitments and Revolving Commitments hereunder or to prejudice any rights that Company may have against any Lender as a result of any default by such Lender hereunder.

2.6.   Use of Proceeds. The proceeds of the New Term Loans made on the Second Amendment Effective Date shall be applied by Company to repay in full the outstanding principal amount of, and accrued interest on, all Existing Term Loans of Existing Term Loan Lenders as of the Second Amendment Effective Date. The proceeds of the Revolving Loans, Swing Line Loans and Letters of Credit made after the Closing Date shall be applied by Company for working capital and general corporate purposes of Holdings and its Subsidiaries, including Permitted Acquisitions. No portion of the proceeds of any Credit Extension shall be used in any manner that causes or might cause such Credit Extension or the application of such proceeds to violate Regulation T, Regulation U or Regulation X of the Board of Governors of the Federal Reserve System or any other regulation thereof or to violate the Exchange Act.

2.7.   Evidence of Debt; Register; Lenders’ Books and Records; Notes.

(a)   Lenders’ Evidence of Debt. Each Lender shall maintain on its internal records an account or accounts evidencing the Obligations of Company to such Lender, including the amounts of the Loans made by it and each repayment and prepayment in respect thereof. Any such recordation shall be conclusive and binding on Company, absent manifest error; provided, that the failure to make any such recordation, or any error in such recordation, shall not affect any Lender’s Revolving Commitments or Company’s Obligations in respect of any applicable Loans; and provided further, in the event of any inconsistency between the Register and any Lender’s records, the recordation in the Register shall govern.

(b)   Register. Administrative Agent (or its agent or sub-agent appointed by it) shall maintain at the Principal Office a register for the recordation of the names and addresses of Lenders and the Revolving Commitments and Loans of each Lender from time to time (the “Register”). The Register, as in effect at the close of business on the preceding Business Day, shall be available for inspection by Company or any Lender at any reasonable time and from time to time upon reasonable prior notice. Administrative Agent shall record, or shall cause to be recorded, in the Register the Revolving Commitments and the Loans in accordance with the provisions of Section 10.6, and each repayment or prepayment in respect of the principal amount of the Loans, and any such recordation shall be conclusive and binding on Company and each Lender, absent manifest error; provided, failure to make any such recordation, or any error in such recordation, shall not affect any Lender’s Revolving Commitments or Company’s

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Obligations in respect of any Loan. Company hereby designates GSCP to serve as Company’s agent solely for purposes of maintaining the Register as provided in this Section 2.7, and Company hereby agrees that, to the extent GSCP serves in such capacity, GSCP and its officers, directors, employees, agents, sub-agents and affiliates shall constitute “Indemnitees.”

(c)   Notes. If so requested by any Lender by written notice to Company (with a copy to Administrative Agent) at least two Business Days prior to the Second Amendment Effective Date, or at any time thereafter, Company shall execute and deliver to such Lender (and/or, if applicable and if so specified in such notice, to any Person who is an assignee of such Lender pursuant to Section 10.6) on the Second Amendment Effective Date (or, if such notice is delivered after the Second Amendment Effective Date, promptly after Company’s receipt of such notice) a Note or Notes to evidence such Lender’s New Term Loan, Revolving Loan or Swing Line Loan, as the case may be.

2.8.   Interest on Loans.

(a)   Except as otherwise set forth herein, each Class of Loan shall bear interest on the unpaid principal amount thereof from the date made through repayment (whether by acceleration or otherwise) thereof as follows:

(i)   in the case of Revolving Loans:

(1) if a Base Rate Loan, at the Base Rate plus the Applicable Margin; or

(2) if a Eurodollar Rate Loan, at the Adjusted Eurodollar Rate plus the Applicable Margin;

(ii)   in the case of Swing Line Loans, at the Base Rate plus the Applicable Margin; and

(iii)   in the case of Term Loans:

(1) if a Base Rate Loan, at the Base Rate plus 1.25% per annum (provided however that at such time on or after March 31, 2007 that the Leverage Ratio is less than 3.5.0:1.0, such Loans shall thereafter bear interest at the Base Rate plus 1.00% per annum); or

(2) if a Eurodollar Rate Loan, at the Adjusted Eurodollar Rate plus 2.25% per annum (provided

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however that at such time on or after March 31, 2007 that the Leverage Ratio is less than 3.5:1.0, such Loans shall thereafter bear interest at the Adjusted Eurodollar Rate plus 2.00% per annum).

(b)   The basis for determining the rate of interest with respect to any Loan (except a Swing Line Loan which can be made and maintained as Base Rate Loans only), and the Interest Period with respect to any Eurodollar Rate Loan, shall be selected by Company and notified to Administrative Agent and Lenders pursuant to the applicable Funding Notice or Conver­sion/Continuation Notice, as the case may be. If on any day a Loan is outstanding with respect to which a Funding Notice or Conversion/Continuation Notice has not been delivered to Administrative Agent in accordance with the terms hereof specifying the applicable basis for determining the rate of interest, then for that day such Loan shall be a Base Rate Loan.

(c)   In connection with Eurodollar Rate Loans there shall be no more than ten (10) Interest Periods outstanding at any time. In the event Company fails to specify between a Base Rate Loan or a Eurodollar Rate Loan in the applicable Funding Notice or Conversion/Continuation Notice, such Loan (if outstanding as a Eurodollar Rate Loan) will be automatically converted into a Base Rate Loan on the last day of the then-current Interest Period for such Loan (or if outstanding as a Base Rate Loan will remain as, or (if not then outstanding) will be made as, a Base Rate Loan). In the event Company fails to specify an Interest Period for any Eurodollar Rate Loan in the applicable Funding Notice or Conversion/Continuation Notice, Company shall be deemed to have selected an Interest Period of one month. As soon as practicable after 10:00 a.m. (New York City time) on each Interest Rate Determination Date, Administrative Agent shall determine (which determination shall, absent manifest error, be final, conclusive and binding upon all parties) the interest rate that shall apply to the Eurodollar Rate Loans for which an interest rate is then being determined for the applicable Interest Period and shall promptly give notice thereof (in writing or by telephone confirmed in writing) to Company and each Lender.

(d)   Interest payable pursuant to Section 2.8(a) shall be computed (i) in the case of Base Rate Loans on the basis of a 365-day or 366-day year, as the case may be, and (ii) in the case of Eurodollar Rate Loans, on the basis of a 360-day year, in each case for the actual number of days elapsed in the period during which it accrues. In computing interest on any Loan, the date of the making of such Loan or the first day of an Interest Period applicable to such Loan or, with respect to a Term Loan, the last Interest Payment Date with respect to such Term Loan or, with respect to a Base Rate Loan being converted from a Eurodollar Rate Loan, the date of conversion of such Eurodollar Rate Loan to such Base Rate Loan, as the case may be, shall be included, and the date of payment of such Loan or the expiration date of an Interest Period applicable to such Loan or, with respect to a Base Rate Loan being converted to a Eurodollar Rate Loan, the date of conversion of such Base Rate Loan to such Eurodollar Rate Loan, as the

49

case may be, shall be excluded; provided, if a Loan is repaid on the same day on which it is made, one day’s interest shall be paid on that Loan.

(e)   Except as otherwise set forth herein, interest on each Loan (i) with respect to Revolving Loans, shall accrue on a daily basis and shall be payable in arrears on each Interest Payment Date with respect to interest accrued on and to each such payment date; (ii) with respect to Term Loans, shall accrue on a daily basis on and to the March 31st, June 30th, September 30th and December 31st most recently ended prior to such payment date and shall be payable in arrears on each Interest Payment Date; (iii) shall accrue on a daily basis and shall be payable in arrears upon any prepayment of that Loan, whether voluntary or mandatory, to the extent accrued on the amount being prepaid; and (iv) shall accrue on a daily basis and shall be payable in arrears at maturity of the Loans, including final maturity of the Loans; provided, however, with respect to any voluntary prepayment of a Base Rate Loan, accrued interest shall instead be payable on the applicable Interest Payment Date.

(f)   Company agrees to pay to Issuing Bank, with respect to drawings honored under any Letter of Credit, interest on the amount paid by Issuing Bank in respect of each such honored drawing from the date such drawing is honored to but excluding the date such amount is reimbursed by or on behalf of Company at a rate equal to (i) for the period from the date such drawing is honored to but excluding the applicable Reimbursement Date, the rate of interest otherwise payable hereunder with respect to Revolving Loans that are Base Rate Loans, and (ii) thereafter, a rate which is 2% per annum in excess of the rate of interest otherwise payable hereunder with respect to Revolving Loans that are Base Rate Loans.

(g)   Interest payable pursuant to Section 2.8(f) shall be computed on the basis of a 365/366-day year for the actual number of days elapsed in the period during which it accrues, and shall be payable on demand or, if no demand is made, on the date on which the related drawing under a Letter of Credit is reimbursed in full. Promptly upon receipt by Issuing Bank of any payment of interest pursuant to Section 2.8(f), Issuing Bank shall distribute to each Lender, out of the interest received by Issuing Bank in respect of the period from the date such drawing is honored to but excluding the date on which Issuing Bank is reimbursed for the amount of such drawing (including any such reimbursement out of the proceeds of any Revolving Loans), the amount that such Lender would have been entitled to receive in respect of the letter of credit fee that would have been payable in respect of such Letter of Credit for such period if no drawing had been honored under such Letter of Credit. In the event Issuing Bank shall have been reimbursed by Lenders for all or any portion of such honored drawing, Issuing Bank shall distribute to each Lender which has paid all amounts payable by it under Section 2.4(e) with respect to such honored drawing such Lender’s Pro Rata Share of any interest received by Issuing Bank in respect of that portion of such honored drawing so reimbursed by Lenders for the period from the date on which Issuing Bank was so reimbursed by Lenders to but excluding the date on which such portion of such honored drawing is reimbursed by Company.

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2.9.   Conversion/Continuation.

(a)   Subject to Section 2.18 and so long as no Default or Event of Default shall have occurred and then be continuing, Company shall have the option:

(i)   to convert at any time all or any part of any Term Loan or Revolving Loan equal to $1,000,000 and integral multiples of $500,000 in excess of that amount from one Type of Loan to another Type of Loan; provided, a Eurodollar Rate Loan may only be converted on the expiration of the Interest Period applicable to such Eurodollar Rate Loan unless Company shall pay all amounts due under Section 2.18 in connection with any such conversion; or

(ii)   upon the expiration of any Interest Period applicable to any Eurodollar Rate Loan, to continue all or any portion of such Loan equal to $1,000,000 and integral multiples of $500,000 in excess of that amount as a Eurodollar Rate Loan.

(b)   Company shall deliver a Conversion/Continuation Notice to Administra­tive Agent no later than 10:00 a.m. (New York City time) at least one Business Day in advance of the proposed conversion date (in the case of a conversion to a Base Rate Loan) and at least three Business Days in advance of the proposed conversion/continuation date (in the case of a conversion to, or a continuation of, a Eurodollar Rate Loan). Except as otherwise provided herein, a Conversion/Continuation Notice for conversion to, or continuation of, any Eurodollar Rate Loans (or telephonic notice in lieu thereof) shall be irrevocable on and after the related Interest Rate Determination Date, and Company shall be bound to effect a conversion or continuation in accordance therewith.

2.10.   Default Interest. Upon the occurrence and during the continuance of an Event of Default, the principal amount of all Loans outstanding and, to the extent permitted by applicable law, any interest payments on the Loans or any fees or other amounts owed hereunder, shall thereafter bear interest (including post-petition interest in any proceeding under the Bankruptcy Code or other applicable bankruptcy laws) payable on demand at a rate that is 2% per annum in excess of the interest rate otherwise payable hereunder with respect to the applicable Loans (or, in the case of any such fees and other amounts, at a rate which is 2% per annum in excess of the interest rate otherwise payable hereunder for Base Rate Loans); provided, in the case of Eurodollar Rate Loans, upon the expiration of the Interest Period in effect at the time any such increase in interest rate is effective such Eurodollar Rate Loans shall thereupon become Base Rate Loans and shall thereafter bear interest payable upon demand at a rate which is 2% per annum in excess of the interest rate otherwise payable hereunder for Base Rate Loans. Payment or acceptance of the increased rates of interest provided for in this Section 2.10 is not a permitted alternative to timely payment and shall not constitute a waiver of any Event of Default or otherwise prejudice or limit any rights or remedies of Administrative Agent or any Lender.

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2.11.   Fees.

(a)   Company agrees to pay to Lenders having Revolving Exposure:

(i)   commitment fees equal to (1) the average of the daily difference between (a) the Revolving Commitments, and (b) the Total Utilization of Revolving Commitments, times (2) the Applicable Revolving Commitment Fee Percentage; and

(ii)   letter of credit fees equal to (1) the Applicable Margin for Revolving Loans that are Eurodollar Rate Loans, times (2) the average aggregate daily maximum amount available to be drawn under all such Letters of Credit (regardless of whether any conditions for drawing could then be met and determined as of the close of business on any date of determination).

All fees referred to in this Section 2.11(a) shall be paid to Administrative Agent at its Principal Office and upon receipt, Administrative Agent shall promptly distribute to each Lender its Pro Rata Share thereof.

(b)   Company agrees to pay directly to Issuing Bank, for its own account, the following fees:

(i)   a fronting fee equal to 0.125%, per annum, times the average aggregate daily maximum amount available to be drawn under all Letters of Credit (determined as of the close of business on any date of determination); and

(ii)   such documentary and processing charges for any issuance, amendment, transfer or payment of a Letter of Credit as are in accordance with Issuing Bank’s standard schedule for such charges provided to the Company and as in effect at the time of such issuance, amendment, transfer or payment, as the case may be.

(c)   All fees referred to in Section 2.11(a) and 2.11(b)(i) shall be calculated on the basis of a 360-day year and the actual number of days elapsed and shall be payable quarterly in arrears on April 1, July 1, October 1 and January 1 of each year during the Revolving Commitment Period, commencing on the first such date to occur after the Closing Date, and on the Revolving Commitment Termination Date.

(d)   In addition to any of the foregoing fees, Company agrees to pay to Agents such other fees in the amounts and at the times separately agreed upon.

2.12.   Scheduled Payments. The principal amounts of the New Term Loans shall be repaid in consecutive quarterly installments (each, an “Installment”) in the aggregate amounts

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set forth below on the dates set forth below (each, an “Installment Date”), commencing July 1, 2006:

Installment Date	New Term Loan Installments
July 1, 2006	$	862,500
October 1, 2006	$	862,500
January 1, 2007	$	862,500
April 1, 2007	$	862,500
July 1, 2007	$	862,500
October 1, 2007	$	862,500
January 1, 2008	$	862,500
April 1, 2008	$	862,500
July 1, 2008	$	862,500
October 1, 2008	$	862,500
January 1, 2009	$	862,500
April 1, 2009	$	862,500
July 1, 2009	$	862,500
October 1, 2009	$	862,500
January 1, 2010	$	862,500
April 1, 2010	$	862,500
July 1, 2010	$	81,937,500
October 1, 2010	$	81,937,500
January 1, 2011	$	81,937,500
Term Loan Maturity Date	$	81,937,500

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Notwithstanding the foregoing, (x) such Installments shall be reduced in connection with any voluntary or mandatory prepayments of the New Term Loans in accordance with Sections 2.13, 2.14 and 2.15, as applicable; and (y) the New Term Loans, together with all other amounts owed hereunder with respect thereto, shall, in any event, be paid in full no later than the Term Loan Maturity Date.

2.13.   Voluntary Prepayments/Commitment Reductions/Call Protection.

(a)   Voluntary Prepayments.

(i)   Any time and from time to time:

(1)        with respect to Base Rate Loans, Company may prepay any such Loans without penalty or premium on any Business Day in whole or in part, in an aggregate minimum amount of $1,000,000 and integral multiples of $500,000 in excess of that amount;

(2)        with respect to Eurodollar Rate Loans, subject to Section 2.18(c), Company may prepay any such Loans without penalty or premium on any Business Day in whole or in part in an aggregate minimum amount of $1,000,000 and integral multiples of $500,000 in excess of that amount; and

(3)        with respect to Swing Line Loans, Company may prepay any such Loans without penalty or premium on any Business Day in whole or in part in an aggregate minimum amount of $500,000, and in integral multiples of $100,000 in excess of that amount.

(ii)   All such prepayments shall be made:

(1)        upon not less than one Business Day’s prior written or telephonic notice in the case of Base Rate Loans;

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(2)        upon not less than three Business Days’ prior written or telephonic notice in the case of Eurodollar Rate Loans; and

(3)        upon written or telephonic notice on the date of prepayment, in the case of Swing Line Loans;

in each case given to Administrative Agent or Swing Line Lender, as the case may be, by 12:00 noon (New York City time) on the date required and, if given by telephone, promptly confirmed in writing to Administrative Agent (and Administrative Agent will promptly transmit such telephonic or original notice for Term Loans or Revolving Loans, as the case may be, by telefacsimile or telephone to each Lender) or Swing Line Lender, as the case may be. Upon the giving of any such notice, the principal amount of the Loans specified in such notice shall become due and payable on the prepayment date specified therein. Any such voluntary prepayment shall be applied as specified in Section 2.15(a).

(b)   Voluntary Commitment Reductions.

(i)   Company may, upon not less than three Business Days’ prior written or telephonic notice confirmed in writing to Administrative Agent (which original written or telephonic notice Administrative Agent will promptly transmit by telefacsimile or telephone to each applicable Lender), at any time and from time to time terminate in whole or permanently reduce in part, without premium or penalty, the Revolving Commitments in an amount up to the amount by which the Revolving Commitments exceed the Total Utilization of Revolving Commitments at the time of such proposed termination or reduction; provided, any such partial reduction of the Revolving Commitments shall be in an aggregate minimum amount of $1,000,000 and integral multiples of $500,000 in excess of that amount.

(ii)   Company’s notice to Administrative Agent shall designate the date (which shall be a Business Day) of such termination or reduction and the amount of any partial reduction, and such termination or reduction of the Revolving Commitments shall be effective on the date specified in Company’s notice and shall reduce the Revolving  Commitment of each Lender proportionately to its Pro Rata Share thereof.

(c)   New Term Loan Call Protection. In the event that, prior to the first anniversary of the Second Amendment Effective Date, any New Term Loan Lender receives a Repricing Prepayment (as defined below), then, at the time thereof, Company shall pay to such New Term Loan Lender a prepayment premium equal to 1.0% of the amount of such Repricing Prepayment. As used herein, with respect to any New Term Loan Lender, a “Repricing Prepayment” is the amount of principal of the New Term Loans of such New Term Loan

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Lender that is either (a) prepaid by Company substantially concurrently with the incurrence by Company or any of its Subsidiaries of new replacement term loans that have interest rate margins lower than the percentages then in effect under Section 2.8(a)(iii) for the New Term Loans so prepaid or (b) received by such New Term Loan Lender as a result of the mandatory assignment of such New Term Loans in the circumstances described in Section 2.23 following the failure of such New Term Loan Lender to consent to an amendment of this Agreement (other than the Second Amendment) that would have the effect of reducing the interest margins with respect to such New Term Loans.

2.14.   Mandatory Prepayments/Commitment Reductions.

(a)   Asset Sales. Except as provided below, no later than the second Business Day following the date of receipt by Holdings or any of its Subsidiaries of any Net Asset Sale Proceeds, Company shall prepay the Loans and/or the Revolving Commitments shall be permanently reduced as set forth in Section 2.15(b) in an aggregate amount equal to all Net Asset Sale Proceeds. So long as no Default or Event of Default shall have occurred and be continuing, and to the extent that aggregate Net Asset Sale Proceeds from the Closing Date through the applicable date of determination do not exceed $5,000,000, Company shall have the option, directly or through one or more of its Subsidiaries, to invest Net Asset Sale Proceeds within one hundred eighty (180) days after receipt thereof in other assets useful in the business of Company and its Subsidiaries; provided, however, that as to any Net Asset Sale Proceeds that have not been so invested, or applied to prepay Loans within one hundred eighty (180) days after such Net Asset Sale Proceeds were received, Company or one of its Subsidiaries shall either (i) prepay the Loans and/or permanently reduce the Revolving Commitments with such Net Asset Sale Proceeds or (ii) have entered into a binding commitment to invest such Net Asset Sale Proceeds in such assets within 360 days after receipt thereof.  Pending any such investment or prepayments, all such Net Asset Sale Proceeds shall be applied to prepay Revolving Loans to the extent outstanding (without a reduction in Revolving Commitments). Any Net Asset Sale Proceeds which have not been invested or applied to prepay Loans as required above within 180 or, if a binding commitment to invest such Net Asset Sale Proceeds was entered into as provided above, 360 days after receipt shall be applied to prepay Loans at such time.

(b)   Insurance/Condemnation Proceeds. Except as provided below, no later than the second Business Day following the date of receipt by Holdings or any of its Subsidiaries, or Administrative Agent as loss payee, of any Net Insurance/Condemnation Proceeds, Company shall prepay the Loans and/or the Revolving Commitments shall be permanently reduced as set forth in Section 2.15(b) in an aggregate amount equal to such Net Insurance/Condemnation Proceeds. So long as no Default or Event of Default shall have occurred and be continuing, and to the extent that aggregate Net Insurance/Condemnation Proceeds from the Closing Date through the applicable date of determination do not exceed $5,000,000, Company shall have the option, directly or through one or more of its Subsidiaries to invest such Net

56

Insurance/Condemnation Proceeds within one hundred eighty (180) days of receipt thereof in other assets useful in the business of Holdings and its Subsidiaries, which investment may include the repair, restoration or replacement of the applicable assets thereof; provided, however, that as to any Net Insurance/Condemnation Proceeds that have not been so invested, or applied to prepay Loans within one hundred eighty (180) days after such Net Insurance/Condemnation Proceeds were received, Company or one of its Subsidiaries shall either (i) prepay the Loans and/or permanently reduce the Revolving Commitments with such Net Insurance/Condemnation Proceeds or (ii) have entered into a binding commitment to invest such Net Insurance/Condemnation Proceeds in such assets within 360 days after receipt thereof.  Pending any such investment or prepayments, all such Net Insurance/Condemnation Proceeds shall be applied to prepay Revolving Loans to the extent outstanding (without a reduction in Revolving Commitments). Any Net Insurance/Condemnation Proceeds which have not been invested or applied to prepay Loans as required above within 180 or, if a binding commitment to invest such Net Insurance/Condemnation Proceeds was entered into as provided above, 360 days after receipt shall be applied to prepay Loans at such time.

(c)   Issuance of Equity Securities. No later than the second Business Day following the receipt by Holdings of any Cash proceeds from a capital contribution to, or the issuance of any Capital Stock of, Holdings or any of its Subsidiaries (other than pursuant to any employee stock or stock option compensation plan), Company shall prepay the Loans and/or the Revolving Commitments shall be permanently reduced as set forth in Section 2.15(b) in an aggregate amount equal to 50% of such proceeds, net of underwriting discounts and commissions and other reasonable costs and expenses associated therewith, including reasonable legal fees and expenses; provided, during any period in which the Leverage Ratio (determined for any such period by reference to the most recent Compliance Certificate delivered pursuant to Section 5.1(d) calculating the Leverage Ratio) shall be 5.00:1.00 or less, Company shall only be required to make the prepayments and/or reductions otherwise required hereby in an amount equal to 25% of such net proceeds.

(d)   Issuance of Debt. No later than the second Business Day following the receipt by Holdings or any of its Subsidiaries of any Cash proceeds from the incurrence of any Indebtedness of Holdings or any of its Subsidiaries (other than with respect to any Indebtedness permitted to be incurred pursuant to Section 6.1), Company shall prepay the Loans and/or the Revolving Commitments shall be permanently reduced as set forth in Section 2.15(b) in an aggregate amount equal to 100% of such proceeds, net of underwriting discounts and commissions and other reasonable costs and expenses associated therewith, including reasonable legal fees and expenses.

(e)   Consolidated Excess Cash Flow. In the event that there shall be Consolidated Excess Cash Flow for any Fiscal Year (commencing with the Fiscal Year ending in 2007, it being acknowledged that no prepayment from Consolidated Excess Cash Flow will be

57

required for the Fiscal Year ending in 2006), Company shall, no later than ninety days after the end of such Fiscal Year, prepay the Loans and/or the Revolving Commitments shall be permanently reduced as set forth in Section 2.15(b) in an aggregate amount equal to 75% of such Consolidated Excess Cash Flow; provided, (x) during any period in which the Leverage Ratio (determined for any such period by reference to the most recent Compliance Certificate delivered pursuant to Section 5.1(d) calculating the Leverage Ratio) shall be less than 5.00:1.00 and greater than or equal to 3.25:1.00, Company shall only be required to make the prepayments and/or reductions otherwise required hereby in an amount equal to 50% of such Consolidated Excess Cash Flow and (y) during any period in which the Leverage Ratio (determined for any such period by reference to the most recent Compliance Certificate delivered pursuant to Section 5.1(d) calculating the Leverage Ratio) shall be less than 3.25:1.00, Company shall only be required to make the prepayments and/or reductions otherwise required hereby in an amount equal to 25% of such Consolidated Excess Cash Flow.

(f)   Revolving Loans and Swing Loans. Company shall from time to time prepay first, the Swing Line Loans without reduction of Commitments, and second, the Revolving Loans without reduction of Commitments to the extent necessary so that the Total Utilization of Revolving Commitments shall not at any time exceed the Revolving Commitments then in effect.

(g)   Prepayment Certificate. Concurrently with any prepayment of the Loans and/or reduction of the Revolving Commitments pursuant to Sections 2.14(a) through 2.14(e), Company shall deliver to Administrative Agent a certificate of an Authorized Officer demonstrating the calculation of the amount of the applicable net proceeds or Consolidated Excess Cash Flow, as the case may be. In the event that Company shall subsequently determine that the actual amount received exceeded the amount set forth in such certificate, Company shall concurrently therewith deliver to Administrative Agent a certificate of an Authorized Officer demonstrating the derivation of such excess, and, if required by this Section 2.14, shall promptly make an additional prepayment of the Loans and/or the Revolving Commitments shall be permanently reduced in an amount equal to such excess.

2.15.   Application of Prepayments/Reductions.

(a)   Application of Voluntary Prepayments by Type of Loans. Any prepayment of any Loan pursuant to Section 2.13(a) shall be applied as specified by Company in the applicable notice of prepayment; provided, in the event Company fails to specify the Loans to which any such prepayment shall be applied, such prepayment shall be applied as follows:

first, to repay outstanding Swing Line Loans to the full extent thereof without reduction of Commitments;

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second, to repay outstanding Revolving Loans to the full extent thereof without reduction of Commitments; and

third, to prepay the Term Loans to the full extent thereof.

Any prepayment of any Term Loans pursuant to Section 2.13(a) shall be further applied, at the Company’s option, either (i) first, to such scheduled prepayments with respect thereto due on the Installment Dates occurring within the 12 months following such prepayment and, second, on a pro rata basis to reduce the scheduled remaining Installments of principal on such Term Loan or (ii) on a pro rata basis to reduce the scheduled remaining Installments of principal on such Term Loan.

(b)   Application of Mandatory Prepayments by Type of Loans. Any amount required to be paid pursuant to Sections 2.14(a) through 2.14(e) shall be applied as follows:

first, to prepay Term Loans on a pro rata basis to the remaining scheduled Installments of principal of the Term Loans;

second, to prepay the Swing Line Loans to the full extent thereof and to permanently reduce the Revolving Commitments by the amount of such prepayment;

third, to prepay the Revolving Loans to the full extent thereof and to further permanently reduce the Revolving Commitments by the amount of such prepayment;

fourth, to prepay outstanding reimbursement obligations with respect to Letters of Credit and to further permanently reduce the Revolving Loan Commitments by the amount of such prepayment;

fifth, to cash collateralize Letters of Credit and to further permanently reduce the Revolving Loan Commitments by the amount of such cash collateralization; and

sixth, to further permanently reduce the Revolving Commitments to the full extent thereof.

(c)   Application of Prepayments of Loans to Base Rate Loans and Eurodollar Rate Loans. Considering each Class of Loans being prepaid separately, any prepayment thereof shall be applied first to Base Rate Loans to the full extent thereof before application to Eurodollar Rate Loans, in each case in a manner which minimizes the amount of any payments required to be made by Company pursuant to Section 2.18(c).

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2.16.   General Provisions Regarding Payments.

(a)   All payments by Company of principal, interest, fees and other Obligations shall be made in Dollars in same day funds, without defense, setoff or counterclaim, free of any restriction or condition, and delivered to Administrative Agent not later than 12:00 noon (New York City time) on the date due at the Principal Office designated by Administrative Agent for the account of Lenders; for purposes of computing interest and fees, funds received by Administrative Agent after that time on such due date shall be deemed to have been paid by Company on the next succeeding Business Day.

(b)   All payments in respect of the principal amount of any Loan (other than voluntary prepayments of Revolving Loans) shall be accompanied by payment of accrued interest on the principal amount being repaid or prepaid.

(c)   Administrative Agent (or its agent or sub-agent appointed by it) shall promptly distribute to each Lender at such address as such Lender shall indicate in writing, such Lender’s applicable Pro Rata Share of all payments and prepayments of principal and interest due hereunder, together with all other amounts due thereto, including, without limitation, all fees payable with respect thereto, to the extent received by Administrative Agent.

(d)   Notwithstanding the foregoing provisions hereof, if any Conver­sion/Continuation Notice is withdrawn as to any Affected Lender or if any Affected Lender makes Base Rate Loans in lieu of its Pro Rata Share of any Eurodollar Rate Loans, Administrative Agent shall give effect thereto in apportioning payments received thereafter.

(e)   Subject to the provisos set forth in the definition of “Interest Period” as they may apply to Revolving Loans, whenever any payment to be made hereunder with respect to any Loan shall be stated to be due on a day that is not a Business Day, such payment shall be made on the next succeeding Business Day and, with respect to Revolving Loans only, such extension of time shall be included in the computation of the payment of interest hereunder or of the Revolving Commitment fees hereunder.

(f)   Company hereby authorizes Administrative Agent to charge Company’s accounts with Administrative Agent in order to cause timely payment to be made to Administrative Agent of all principal, interest, fees and expenses due hereunder (subject to sufficient funds being available in its accounts for that purpose).

(g)   Administrative Agent shall deem any payment by or on behalf of Company hereunder that is not made in same day funds prior to 12:00 p.m. (New York City time) to be a non-conforming payment. Any such payment shall not be deemed to have been received by Administra­tive Agent until the later of (i) the time such funds become available funds, and (ii) 

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the applicable next Business Day. Administrative Agent shall give prompt telephonic notice to Company and each applicable Lender (confirmed in writing) if any payment is non-conforming. Any non-conforming payment (other than voluntary payments) may constitute or become a Default or Event of Default in accordance with the terms of Section 8.1(a). Interest shall continue to accrue on any principal as to which a non-conforming payment is made until such funds become available funds (but in no event less than the period from the date of such payment to the next succeeding applicable Business Day) at the rate determined pursuant to Section 2.10 from the date such amount was due and payable until the date such amount is paid in full.

(h)   If an Event of Default shall have occurred and not otherwise been waived, and the maturity of the Obligations shall have been accelerated pursuant to Section 8.1, all payments or proceeds received by Agents hereunder in respect of any of the Obligations, shall be applied in accordance with the application arrangements described in Section 7.2 of the Pledge and Security Agreement.

2.17.   Ratable Sharing. Lenders hereby agree among themselves that, except as otherwise provided in the Collateral Documents with respect to amounts realized from the exercise of rights with respect to Liens on the Collateral, if any of them shall, whether by voluntary payment (other than a voluntary prepayment of Loans made and applied in accordance with the terms hereof), through the exercise of any right of set-off or banker’s lien, by counterclaim or cross action or by the enforcement of any right under the Credit Documents or otherwise, or as adequate protection of a deposit treated as cash collateral under the Bankruptcy Code, receive payment or reduction of a proportion of the aggregate amount of principal, interest, amounts payable in respect of Letters of Credit, fees and other amounts then due and owing to such Lender hereunder or under the other Credit Documents (collectively, the “Aggregate Amounts Due” to such Lender) which is greater than the proportion received by any other Lender in respect of the Aggregate Amounts Due to such other Lender, then the Lender receiving such proportionately greater payment shall (a) notify Administrative Agent and each other Lender of the receipt of such payment and (b) apply a portion of such payment to purchase participations (which it shall be deemed to have purchased from each seller of a participation simultaneously upon the receipt by such seller of its portion of such payment) in the Aggregate Amounts Due to the other Lenders so that all such recoveries of Aggregate Amounts Due shall be shared by all Lenders in proportion to the Aggregate Amounts Due to them; provided, if all or part of such proportionately greater payment received by such purchasing Lender is thereafter recovered from such Lender upon the bankruptcy or reorganization of Company or otherwise, those purchases shall be rescinded and the purchase prices paid for such participations shall be returned to such purchasing Lender ratably to the extent of such recovery, but without interest. Company expressly consents to the foregoing arrangement and agrees that to the extent permitted by law any holder of a participation so purchased may exercise any and all rights of banker’s lien, set-off or counterclaim with respect to any and all monies owing by

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Company to that holder with respect thereto as fully as if that holder were owed the amount of the participation held by that holder.

2.18.   Making or Maintaining Eurodollar Rate Loans.

(a)   Inability to Determine Applicable Interest Rate. In the event that Administrative Agent shall have determined (which determination shall, absent manifest error, be final and conclusive and binding upon all parties hereto), on any Interest Rate Determination Date with respect to any Eurodollar Rate Loans, that by reason of circumstances affecting the London interbank market adequate and fair means do not exist for ascertaining the interest rate applicable to such Loans on the basis provided for in the definition of Adjusted Eurodollar Rate, Administrative Agent shall on such date give notice (by telefacsimile or by telephone confirmed in writing) to Company and each Lender of such determination, whereupon (i) no Loans may be made as, or converted to, Eurodollar Rate Loans until such time as Administrative Agent notifies Company and Lenders that the circumstances giving rise to such notice no longer exist, and (ii) any Funding Notice or Conver­sion/Continuation Notice given by Company with respect to the Loans in respect of which such determination was made shall be deemed to be rescinded by Company.

(b)   Illegality or Impracticability of Eurodollar Rate Loans. In the event that on any date any Lender shall have determined (which determination shall, absent manifest error, be final and conclusive and binding upon all parties hereto but shall be made only after consultation with Company and Administrative Agent) that the making, maintaining or continuation of its Eurodollar Rate Loans (i) has become unlawful as a result of compliance by such Lender in good faith with any law, treaty, governmental rule, regulation, guideline or order (or would conflict with any such treaty, governmental rule, regulation, guideline or order not having the force of law even though the failure to comply therewith would not be unlawful), or (ii) has become impracticable, as a result of contingencies occurring after the Second Amendment Effective Date which materially and adversely affect the London interbank market or the position of such Lender in that market, then, and in any such event, such Lender shall be an “Affected Lender” and it shall on that day give notice (by telefacsimile or by telephone confirmed in writing) to Company and Administrative Agent of such determination (which notice Administrative Agent shall promptly transmit to each other Lender). Thereafter (1) the obligation of the Affected Lender to make Loans as, or to convert Loans to, Eurodollar Rate Loans shall be suspended until such notice shall be withdrawn by the Affected Lender, (2) to the extent such determination by the Affected Lender relates to a Eurodollar Rate Loan then being requested by Company pursuant to a Funding Notice or a Conversion/Continuation Notice, the Affected Lender shall make such Loan as (or continue such Loan as or convert such Loan to, as the case may be) a Base Rate Loan, (3) the Affected Lender’s obligation to maintain its outstanding Eurodollar Rate Loans (the “Affected Loans”) shall be terminated at the earlier to occur of the expiration of the Interest Period then in effect with respect to the Affected Loans or when required by law, and (4) 

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the Affected Loans shall automatically convert into Base Rate Loans on the date of such termination. Notwithstanding the foregoing, to the extent a determination by an Affected Lender as described above relates to a Eurodollar Rate Loan then being requested by Company pursuant to a Funding Notice or a Conversion/Continuation Notice, Company shall have the option, subject to the provisions of Section 2.18(c), to rescind such Funding Notice or Conversion/Continuation Notice as to all Lenders by giving notice (by telefacsimile or by telephone confirmed in writing) to Administrative Agent of such rescission on the date on which the Affected Lender gives notice of its determination as described above (which notice of rescission Administrative Agent shall promptly transmit to each other Lender). Except as provided in the immediately preceding sentence, nothing in this Section 2.18(b) shall affect the obligation of any Lender other than an Affected Lender to make or maintain Loans as, or to convert Loans to, Eurodollar Rate Loans in accordance with the terms hereof.

(c)   Compensation for Breakage or Non-Commencement of Interest Periods. Company shall compensate each Lender, upon written request by such Lender (which request shall set forth the basis for requesting such amounts), for all reasonable losses, expenses and liabilities (including any interest paid by such Lender to lenders of funds borrowed by it to make or carry its Eurodollar Rate Loans and any loss, expense or liability sustained by such Lender in connection with the liquidation or re-employment of such funds but excluding loss of anticipated profits) which such Lender may sustain: (i) if for any reason (other than a default by such Lender) a borrowing of any Eurodollar Rate Loan does not occur on a date specified therefor in a Funding Notice or a telephonic request for borrowing, or a conversion to or continuation of any Eurodollar Rate Loan does not occur on a date specified therefor in a Conversion/Continuation Notice or a telephonic request for conversion or continuation; (ii) if any prepayment or other principal payment of, or any conversion of, any of its Eurodollar Rate Loans occurs on a date prior to the last day of an Interest Period applicable to that Loan; or (iii) if any prepayment of any of its Eurodollar Rate Loans is not made on any date specified in a notice of prepayment given by Company.

(d)   Booking of Eurodollar Rate Loans. Subject to Section 2.21, any Lender may make, carry or transfer Eurodollar Rate Loans at, to, or for the account of any of its branch offices or the office of an Affiliate of such Lender.

(e)   Assumptions Concerning Funding of Eurodollar Rate Loans. Calculation of all amounts payable to a Lender under this Section 2.18 and under Section 2.19 shall be made as though such Lender had actually funded each of its relevant Eurodollar Rate Loans through the purchase of a Eurodollar deposit bearing interest at the rate obtained pursuant to clause (i) of the definition of Adjusted Eurodollar Rate in an amount equal to the amount of such Eurodollar Rate Loan and having a maturity comparable to the relevant Interest Period and through the transfer of such Eurodollar deposit from an offshore office of such Lender to a domestic office of such Lender in the United States of America; provided, however, each Lender may fund each of its

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Eurodollar Rate Loans in any manner it sees fit and the foregoing assumptions shall be utilized only for the purposes of calculating amounts payable under this Section 2.18 and under Section 2.19.

2.19.   Increased Costs; Capital Adequacy.

(a)   Compensation For Increased Costs. In the event that any Lender (which term shall include Issuing Bank for purposes of this Section 2.19(a)) shall determine (which determination shall, absent manifest error, be final and conclusive and binding upon all parties hereto) that any law, treaty or governmental rule, regulation or order, or any change therein or in the interpretation, administration or application thereof (including the introduction of any new law, treaty or governmental rule, regulation or order), or any determination of a court or governmental authority, in each case that becomes effective after the Second Amendment Effective Date, or compliance by such Lender with any guideline, request or directive issued or made after the Second Amendment Effective Date by any central bank or other governmental or quasi-governmental authority (whether or not having the force of law): (i) imposes, modifies or holds applicable any reserve (including any marginal, emergency, supplemental, special or other reserve), special deposit, compulsory loan, FDIC insurance or similar requirement against assets held by, or deposits or other liabilities in or for the account of, or advances or loans by, or other credit extended by, or any other acquisition of funds by, any office of such Lender (other than any such reserve or other requirements with respect to Eurodollar Rate Loans that are reflected in the definition of Adjusted Eurodollar Rate); or (ii) imposes any other condition (other than with respect to a Tax matter) on or affecting such Lender (or its applicable lending office) or its obligations hereunder or the London interbank market; and the result of any of the foregoing is to increase the cost to such Lender of agreeing to make, making or maintaining Loans hereunder or to reduce any amount received or receivable by such Lender (or its applicable lending office) with respect thereto; then, in any such case, Company shall promptly pay to such Lender, upon receipt of the statement referred to in the next sentence, such additional amount or amounts (in the form of an increased rate of, or a different method of calculating, interest or otherwise as such Lender in its sole discretion shall determine) as may be necessary to compensate such Lender for any such increased cost or reduction in amounts received or receivable hereunder. Such Lender shall deliver to Company (with a copy to Administrative Agent) a written statement, setting forth in reasonable detail the basis for calculating the additional amounts owed to such Lender under this Section 2.19(a), which statement shall be conclusive and binding upon all parties hereto absent manifest error.

(b)   Capital Adequacy Adjustment. In the event that any Lender (which term shall include Issuing Bank for purposes of this Section 2.19(b)) shall have determined that the adoption, effectiveness, phase-in or applicability after the Second Amendment Effective Date of any law, rule or regulation (or any provision thereof) regarding capital adequacy, or any change therein or in the interpretation or administration thereof by any Governmental Authority, central

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bank or comparable agency charged with the interpretation or administration thereof, or compliance by any Lender (or its applicable lending office) with any guideline, request or directive regarding capital adequacy (whether or not having the force of law) of any such Governmental Authority, central bank or comparable agency, has or would have the effect of reducing the rate of return on the capital of such Lender or any corporation controlling such Lender as a consequence of, or with reference to, such Lender’s Loans or Revolving Commitments or Letters of Credit, or participations therein or other obligations hereunder with respect to the Loans or the Letters of Credit to a level below that which such Lender or such controlling corporation could have achieved but for such adoption, effectiveness, phase-in, applicability, change or compliance (taking into consideration the policies of such Lender or such controlling corporation with regard to capital adequacy), then from time to time, within five Business Days after receipt by Company from such Lender of the statement referred to in the next sentence, Company shall pay to such Lender such additional amount or amounts as will compensate such Lender or such controlling corporation on an after-tax basis for such reduction. No Lender shall be entitled to request any payment pursuant to this Section 2.19(b) unless such Lender is generally demanding payment under comparable provisions of its agreements with similarly situated borrowers. Such Lender shall deliver to Company (with a copy to Administrative Agent) a written statement, setting forth in reasonable detail the basis for calculating the additional amounts owed to Lender under this Section 2.19(b), which statement shall be conclusive and binding upon all parties hereto absent manifest error.

2.20.   Taxes; Withholding, etc.

(a)   Payments to Be Free and Clear. All sums payable by any Credit Party hereunder and under the other Credit Documents shall (except to the extent required by law) be paid free and clear of, and without any deduction or withholding on account of, any Tax (other than a Tax on the overall net income of any Lender) imposed, levied, collected, withheld or assessed by or within the United States of America or any political subdivision in or of the United States of America or any other jurisdiction from or to which a payment is made by or on behalf of any Credit Party or by any federation or organization of which the United States of America or any such jurisdiction is a member at the time of payment.

(b)   Withholding of Taxes. If any Credit Party or any other Person is required by law to make any deduction or withholding on account of any such Tax from any sum paid or payable by any Credit Party to Administrative Agent or any Lender (which term shall include Issuing Bank for purposes of this Section 2.20(b)) under any of the Credit Documents: (i) Company shall notify Administrative Agent of any such requirement or any change in any such requirement as soon as Company becomes aware of it; (ii) Company shall pay any such Tax before the date on which penalties attach thereto, such payment to be made (if the liability to pay is imposed on any Credit Party) for its own account or (if that liability is imposed on Administrative Agent or such Lender, as the case may be) on behalf of and in the name of

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Administrative Agent or such Lender; (iii) the sum payable by such Credit Party in respect of which the relevant deduction, withholding or payment is required shall be increased to the extent necessary to ensure that, after the making of that deduction, withholding or payment, Administrative Agent or such Lender, as the case may be, receives on the due date a net sum equal to what it would have received had no such deduction, withholding or payment been required or made; and (iv) within thirty days after paying any sum from which it is required by law to make any deduction or withholding, and within thirty days after the due date of payment of any Tax which it is required by clause (ii) above to pay, Company shall deliver to Administrative Agent evidence satisfactory to the other affected parties of such deduction, withholding or payment and of the remittance thereof to the relevant taxing or other authority; provided, no such additional amount shall be required to be paid to any Lender under clause (iii) above except to the extent that any change after the Second Amendment Effective Date (in the case of each Lender listed on the signature pages of the Second Amendment on the Second Amendment Effective Date) or after the effective date of the Assignment Agreement pursuant to which such Lender became a Lender (in the case of each other Lender) in any such requirement for a deduction, withholding or payment as is mentioned therein shall result in an increase in the rate of such deduction, withholding or payment from that in effect at the Second Amendment Effective Date or at the date of such Assignment Agreement, as the case may be, in respect of payments to such Lender.

(c)   Evidence of Exemption From U.S. Withholding Tax. Each Lender that is not a United States Person (as such term is defined in Section 7701(a)(30) of the Internal Revenue Code) for U.S. federal income tax purposes (a “Non-US Lender”) shall deliver to Administrative Agent for transmission to Company, on or prior to the Second Amendment Effective Date (in the case of each Lender listed on the signature pages of the Second Amendment on the Second Amendment Effective Date) or on or prior to the date of the Assignment Agreement pursuant to which it becomes a Lender (in the case of each other Lender), and at such other times as may be necessary in the determination of Company or Administrative Agent (each in the reasonable exercise of its discretion), (i) two original copies of Internal Revenue Service Form W-8BEN or W-8ECI (or any successor forms), properly completed and duly executed by such Lender, and such other documentation required under the Internal Revenue Code or otherwise reasonably requested by Company to establish that such Lender is not subject to deduction or withholding of United States federal income tax with respect to any payments to such Lender of principal, interest, fees or other amounts payable under any of the Credit Documents, or (ii) if such Lender is not a “bank” or other Person described in Section 881(c)(3) of the Internal Revenue Code and cannot deliver documentation pursuant to clause (i) above, a Certificate re Non-Bank Status together with two original copies of Internal Revenue Service Form W-8BEN (or any successor form), properly completed and duly executed by such Lender, and such other documentation required under the Internal Revenue Code or otherwise reasonably requested by Company to establish that such Lender is

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not subject to deduction or withholding of United States federal income tax with respect to any payments to such Lender of interest payable under any of the Credit Documents. Each Lender required to deliver any forms, certificates or other evidence with respect to United States federal income tax withholding matters pursuant to this Section 2.20(c) hereby agrees, from time to time after the initial delivery by such Lender of such forms, certificates or other evidence, whenever a lapse in time or change in circumstances renders such forms, certificates or other evidence obsolete or inaccurate in any material respect, that such Lender shall promptly deliver to Administrative Agent for transmission to Company two new original copies of Internal Revenue Service Form W-8BEN or W-8ECI, or a Certificate re Non-Bank Status and two original copies of Internal Revenue Service Form W-8BEN (or any successor form), as the case may be, properly completed and duly executed by such Lender, and such other documentation required under the Internal Revenue Code or otherwise reasonably requested by Company to confirm or establish that such Lender is not subject to deduction or withholding of United States federal income tax with respect to payments to such Lender under the Credit Documents, or notify Administrative Agent and Company of its inability to deliver any such forms, certificates or other evidence. Company shall not be required to pay any additional amount to any Non-US Lender under Section 2.20(b)(iii) if such Lender shall have failed (1) to deliver the forms, certificates or other evidence referred to in the second sentence of this Section 2.20(c), or (2) to notify Administrative Agent and Company of its inability to deliver any such forms, certificates or other evidence, as the case may be; provided, if such Lender shall have satisfied the requirements of the first sentence of this Section 2.20(c) on the Second Amendment Effective Date or on the date of the Assignment Agreement pursuant to which it became a Lender, as applicable, nothing in this last sentence of Section 2.20(c) shall relieve Company of its obligation to pay any additional amounts pursuant this Section 2.20 in the event that, as a result of any change in any applicable law, treaty or governmental rule, regulation or order, or any change in the interpretation, administration or application thereof, such Lender is no longer properly entitled to deliver forms, certificates or other evidence at a subsequent date establishing the fact that such Lender is not subject to withholding as described herein.

2.21.   Obligation to Mitigate. Each Lender (which term shall include Issuing Bank for purposes of this Section 2.21) agrees that, as promptly as practicable after the officer of such Lender responsible for administering its Loans or Letters of Credit, as the case may be, becomes aware of the occurrence of an event or the existence of a condition that would cause such Lender to become an Affected Lender or that would entitle such Lender to receive payments under Section 2.18, 2.19 or 2.20, it will, to the extent not inconsistent with the internal policies of such Lender and any applicable legal or regulatory restrictions, use reasonable efforts to (a) make, issue, fund or maintain its Credit Extensions, including any Affected Loans, through another office of such Lender, or (b) take such other measures as such Lender may deem reasonable, if as a result thereof the circumstances which would cause such Lender to be an Affected Lender would cease to exist or the additional amounts which would otherwise be required to be paid to

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such Lender pursuant to Section 2.18, 2.19 or 2.20 would be materially reduced and if, as determined by such Lender in its sole discretion, the making, issuing, funding or maintaining of such Revolving Commitments, Loans or Letters of Credit through such other office or in accordance with such other measures, as the case may be, would not otherwise adversely affect such Revolving Commitments, Loans or Letters of Credit or the interests of such Lender in any material respect; provided, such Lender will not be obligated to utilize such other office pursuant to this Section 2.21 unless Company agrees to pay all incremental expenses incurred by such Lender as a result of utilizing such other office as described in clause (i) above. A certificate as to the amount of any such expenses payable by Company pursuant to this Section 2.21 (setting forth in reasonable detail the basis for requesting such amount) submitted by such Lender to Company (with a copy to Administrative Agent) shall be conclusive absent manifest error.

2.22.   Defaulting Lenders. Anything contained herein to the contrary notwithstanding, in the event that any Lender defaults (a “Defaulting Lender”) in its obligation to fund (a “Funding Default”) any Revolving Loan or its portion of any unreimbursed payment under Section 2.3(b)(iv) or 2.4(e) (in each case, a “Defaulted Loan”), then (a) during any Default Period with respect to such Defaulting Lender, such Defaulting Lender shall be deemed not to be a “Lender” for purposes of voting on any matters (including the granting of any consents or waivers) with respect to any of the Credit Documents; (b) to the extent permitted by applicable law, until such time as the Default Excess with respect to such Defaulting Lender shall have been reduced to zero, (i) any voluntary prepayment of the Revolving Loans shall, if Company so directs at the time of making such voluntary prepayment, be applied to the Revolving Loans of other Lenders as if such Defaulting Lender had no Revolving Loans outstanding and the Revolving Exposure of such Defaulting Lender were zero, and (ii) any mandatory prepayment of the Revolving Loans shall, if Company so directs at the time of making such mandatory prepayment, be applied to the Revolving Loans of other Lenders (but not to the Revolving Loans of such Defaulting Lender) as if such Defaulting Lender had funded all Defaulted Loans of such Defaulting Lender, it being understood and agreed that Company shall be entitled to retain any portion of any mandatory prepayment of the Revolving Loans that is not paid to such Defaulting Lender solely as a result of the operation of the provisions of this clause (b); (c) such Defaulting Lender’s Revolving Commitment and outstanding Revolving Loans and such Defaulting Lender’s Pro Rata Share of the Letter of Credit Usage shall be excluded for purposes of calculating the Revolving Commitment fee payable to Lenders in respect of any day during any Default Period with respect to such Defaulting Lender, and such Defaulting Lender shall not be entitled to receive any Revolving Commitment fee pursuant to Section 2.11 with respect to such Defaulting Lender’s Revolving Commitment in respect of any Default Period with respect to such Defaulting Lender; and (d) the Total Utilization of Revolving Commitments as at any date of determination shall be calculated as if such Defaulting Lender had funded all Defaulted Loans of such Defaulting Lender. No Revolving Commitment of any Lender shall be increased or otherwise affected, and, except as otherwise expressly provided in this Section 2.22, performance

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by Company of its obligations hereunder and the other Credit Documents shall not be excused or otherwise modified as a result of any Funding Default or the operation of this Section 2.22. The rights and remedies against a Defaulting Lender under this Section 2.22 are in addition to other rights and remedies which Company may have against such Defaulting Lender with respect to any Funding Default and which Administrative Agent or any Lender may have against such Defaulting Lender with respect to any Funding Default.

2.23.   Removal or Replacement of a Lender. Anything contained herein to the contrary notwithstanding, in the event that: (a) (i) any Lender (an “Increased-Cost Lender”) shall give notice to Company that such Lender is an Affected Lender or that such Lender is entitled to receive payments under Section  2.18, 2.19 or 2.20, (ii) the circumstances which have caused such Lender to be an Affected Lender or which entitle such Lender to receive such payments shall remain in effect, and (iii) such Lender shall fail to withdraw such notice within five Business Days after Company’s request for such withdrawal; or (b) (i) any Lender shall become a Defaulting Lender, (ii) the Default Period for such Defaulting Lender shall remain in effect, and (iii) such Defaulting Lender shall fail to cure the default as a result of which it has become a Defaulting Lender within five Business Days after Company’s request that it cure such default; or (c) in connection with any proposed amendment, modification, termination, waiver or consent with respect to any of the provisions hereof as contemplated by Section 10.5(b), the consent of Requisite Lenders shall have been obtained but the consent of one or more of such other Lenders (each a “Non-Consenting Lender”) whose consent is required shall not have been obtained; then, with respect to each such Increased-Cost Lender, Defaulting Lender or Non-Consenting Lender (the “Terminated Lender”), Company may, by giving written notice to Administrative Agent and any Terminated Lender of its election to do so, elect to cause such Terminated Lender (and such Terminated Lender hereby irrevocably agrees) to assign its outstanding Loans and its Revolving Commitments, if any, in full to one or more Eligible Assignees (each a “Replacement Lender”) in accordance with the provisions of Section 10.6; provided, (1) on the date of such assignment, the Replacement Lender shall pay to Terminated Lender an amount equal to the sum of (A) an amount equal to the principal of, and all accrued interest on, all outstanding Loans of the Terminated Lender, (B) an amount equal to all unreimbursed drawings that have been funded by such Terminated Lender, together with all then unpaid interest with respect thereto at such time and (C) an amount equal to all accrued, but theretofore unpaid fees owing to such Terminated Lender pursuant to Section 2.11; (2) on the date of such assignment, Company shall pay any amounts payable to such Terminated Lender pursuant to Section 2.18(c), 2.19 or 2.20; and (3) in the event such Terminated Lender is a Non-Consenting Lender, each Replacement Lender shall consent, at the time of such assignment, to each matter in respect of which such Terminated Lender was a Non-Consenting Lender; provided, Company may not make such election with respect to any Terminated Lender that is also an Issuing Bank unless, prior to or simultaneously with the effectiveness of such election, Company shall have caused each outstanding Letter of Credit issued thereby to be cancelled.

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Upon the prepayment of all amounts owing to any Terminated Lender and the termination of such Terminated Lender’s Revolving Commitments, if any, such Terminated Lender shall no longer constitute a “Lender” for purposes hereof; provided, any rights of such Terminated Lender to indemnification hereunder shall survive as to such Terminated Lender.

2.24.   Increase in Revolving Commitments. Company may by written notice to Administrative Agent elect to request on no more than five occasions prior to the Revolving Commitment Termination Date, an increase to the existing Revolving Loan Commitments (any such increase, the “New Revolving Commitments”), by an aggregate amount not in excess of $30,000,000 and not less than $1,000,000 individually. Each such notice shall specify (A) the date (each, an “Increased Amount Date”) on which Company proposes that the New Revolving Commitments shall be effective, which shall be a date not less than 10 Business Days after the date on which such notice is delivered to Administrative Agent; provided that only one Business Day’s notice shall be required in connection with any such increase on the Second Amendment Effective Date and (B) the identity of each Lender or other Person that is an Eligible Assignee (each, a “New Revolving Lender”) to whom Company proposes any portion of such New Revolving Commitments be allocated and the amounts of such allocations; provided that any Lender approached to provide all or a portion of the New Revolving Commitments may elect or decline, in its sole discretion, to provide a New Revolving Commitment. Such New Revolving Commitments shall become effective as of such Increased Amount Date; provided that (1) no Default or Event of Default shall exist on such Increased Amount Date before or after giving effect to such New Revolving Commitments; (2) Company and its Subsidiaries shall be in pro forma compliance with each of the covenants set forth in Section 6.8 as of the last day of the most recently ended Fiscal Quarter after giving effect to such New Revolving Commitments; (3) the New Revolving Commitments shall be effected pursuant to one or more Joinder Agreements executed and delivered by Company, the New Revolving Lender and Administrative Agent, and each of which shall be recorded in the Register and each New Revolving Lender shall be subject to the requirements set forth in Section 2.20(c); (4) Company shall make any payments required pursuant to Section 2.18(c) in connection with the New Revolving Commitments; and (5) Company shall deliver or cause to be delivered any documents reasonably requested by Administrative Agent in connection with any such transaction.

On any Increased Amount Date on which New Revolving Commitments are effected, subject to the satisfaction of the foregoing terms and conditions, (a) each of the Revolving Lenders shall assign to each of the New Revolving Lenders, and each of the New Revolving Lenders shall purchase from each of the Revolving Loan Lenders, at the principal amount thereof (together with accrued interest), such interests in the Revolving Loans outstanding on such Increased Amount Date as shall be necessary in order that, after giving effect to all such assignments and purchases, such Revolving Loans will be held by existing Revolving Loan Lenders and New Revolving Lenders ratably in accordance with their Revolving Loan Commitments after giving effect to the addition of such New Revolving Commitments to the

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Revolving Loan Commitments, (b) each New Revolving Commitment shall be deemed for all purposes a Revolving Loan Commitment and each Loan made thereunder (a “New Revolving Loan”) shall be deemed, for all purposes, a Revolving Loan and (c) each New Revolving Lender shall become a Lender with respect to the New Revolving Commitment and all matters relating thereto.

Administrative Agent shall notify Lenders promptly upon receipt of Company’s notice of each Increased Amount Date and in respect thereof the New Revolving Commitments and the New Revolving Lenders.

The terms and provisions of the New Revolving Loans shall be identical to the Revolving Loans. Each Joinder Agreement may, without the consent of any other Lenders, effect such amendments to this Agreement and the other Credit Documents as may be necessary or appropriate, in the opinion of the Administrative Agent, to effect the provisions of this Section 2.24.

SECTION 3.  CONDITIONS PRECEDENT

3.1.   Closing Date. The obligation of any Lender to make a Credit Extension under the Existing Credit Agreement on the Closing Date was subject to the satisfaction, or waiver in accordance with Section 10.5, of the following conditions on or before the Closing Date. Solely for purposes of the historical conditions set forth in this Section 3.1, capitalized terms used in this Section 3.1 and defined in the Existing Credit Agreement shall have the meanings specified in the Existing Credit Agreement as applicable as of the Closing Date.

(a)   Credit Documents. Administrative Agent shall have received sufficient copies of each Credit Document originally executed and delivered by each applicable Credit Party for each Lender.

(b)   Organizational Documents; Incumbency. Administrative Agent shall have received (i) sufficient copies of each Organizational Document executed and delivered by each Credit Party, as applicable, and, to the extent applicable, certified as of a recent date by the appropriate governmental official, for each Lender, each dated the Closing Date or a recent date prior thereto; (ii) signature and incumbency certificates of the officers of such Person executing the Credit Documents to which it is a party; (iii) resolutions of the Board of Directors or similar governing body of each Credit Party approving and authorizing the execution, delivery and performance of this Agreement and the other Credit Documents and the Related Agreements to which it is a party or by which it or its assets may be bound as of the Closing Date, certified as of the Closing Date by its secretary or an assistant secretary as being in full force and effect without modification or amendment; (iv) a good standing certificate (or the equivalent) from the

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applicable Governmental Authority of each Credit Party’s jurisdiction of incorporation, organization or formation and in each jurisdiction in which it is qualified as a foreign corporation or other entity to do business, each dated a recent date prior to the Closing Date; and (v) such other documents as Administrative Agent may reasonably request.

(c)   Organizational and Capital Structure. The organizational structure and capital structure of Holdings and its Subsidiaries, both before and after giving effect to the Acquisition, shall be as set forth on Schedule 4.1.

(d)   Capitalization of Holdings and Company. On or before the Closing Date, Holdings or its parent entity shall have issued (i) common equity in Holdings or such parent entity to Permitted Holders of not less than $100,000,000 and (ii) preferred equity in Holdings to the Seller and other investors reasonably acceptable to the Lenders of not less than $125,000,000, all on terms and conditions reasonably satisfactory to the Lenders (the “Equity Financing”) and the Company shall have received the proceeds thereof from Holdings and the gross proceeds of the Senior Subordinated Notes in an aggregate principal amount not less than $320,000,000 which, together with the proceeds from borrowings made on the Closing Date pursuant to this Agreement, shall be sufficient to consummate the Acquisition and pay all related fees, commissions and expenses. The terms of the Equity Financing and the agreements relating thereto, to the extent relevant to the financing pursuant to this Agreement, shall be reasonably satisfactory in all material respects to Administrative Agent.

(e)   Consummation of Transactions Contemplated by Related Agreements.

(i)   (1) All conditions to the issuance and sale of the Senior Subordinated Notes shall have been satisfied or the fulfillment of any such conditions shall have been waived with the consent of Administrative Agent, (2) the terms of the Senior Subordinated Note Documents shall be reasonably satisfactory in all respects to Administrative Agent and its counsel, and (3) Company shall have issued $320,000,000 in aggregate face value of the Senior Subordinated Notes.

(ii)   (1) The structure utilized to consummate the Acquisition, the terms thereof, the costs and expenses incurred in connection therewith, the pro forma capitalization of the Company after giving effect to the Acquisition and the definitive documentation relating thereto shall be in form and substance reasonably satisfactory to Administrative Agent, (2) the Purchase Agreement shall be in full force and effect on the Closing Date, (3) the Acquisition shall have been consummated pursuant to the Purchase Agreement, and (4) all conditions precedent to the consummation of the Acquisition shall have been satisfied or, with the prior approval of Administrative Agent, waived.

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(iii)   There shall not exist (pro forma for the Acquisition and the financing thereof) any default or event of default under any of the Credit Documents, or under any other material Indebtedness of the Company or its Subsidiaries.

(iv)   Administrative Agent shall have received a fully executed or conformed copy of each Related Agreement and any documents executed in connection therewith.

(f)   Existing Indebtedness. On the Closing Date, Holdings and its Subsidiaries shall have (i) repaid in full all Existing Indebtedness listed in Part A of Schedule 6.1, (ii) terminated any commitments to lend or make other extensions of credit thereunder, (iii) delivered to Administrative Agent all documents or instruments necessary to release all Liens securing Existing Indebtedness listed in Part A of Schedule 6.1 or other obligations of Holdings and its Subsidiaries thereunder being repaid on the Closing Date, and (iv) made arrangements satisfactory to Administrative Agent with respect to the cancellation of any letters of credit outstanding thereunder or the issuance of Letters of Credit to support the obligations of Holdings and its Subsidiaries with respect thereto.

(g)   Transaction Costs. On or prior to the Closing Date, Company shall have delivered to Administrative Agent Company’s reasonable best estimate of the Transaction Costs (other than fees payable to any Agent).

(h)   Governmental Authorizations and Consents. Each Credit Party shall have obtained all Governmental Authorizations and all consents of other Persons, in each case that are necessary in connection with the transactions contemplated by the Credit Documents and the Related Agreements (except for any Governmental Authorizations or consents the absence of which could not reasonably be expected to have a Material Adverse Effect) and each of the foregoing shall be in full force and effect and in form and substance reasonably satisfactory to Administrative Agent. All applicable waiting periods shall have expired without any action being taken or threatened by any competent Governmental Authority which would restrain, prevent or otherwise impose materially adverse conditions on the transactions contemplated by the Credit Documents or the Related Agreements or the financing thereof and no action, request for stay, petition for review or rehearing, reconsideration, or appeal with respect to any of the foregoing shall be pending, and the time for any applicable agency to take action to set aside its consent on its own motion shall have expired.

(i)   Personal Property Collateral. In order to create in favor of Collateral Agent, for the benefit of Secured Parties, a valid, perfected First Priority security interest in the personal property Collateral, Collateral Agent shall have received:

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(i)   evidence reasonably satisfactory to Collateral Agent of the compliance by each Credit Party of their obligations under the Pledge and Security Agreement and the other Collateral Documents (including, without limitation, their obligations to execute and deliver originals of securities, instruments and chattel paper and any agreements governing deposit and/or securities accounts as provided therein);

(ii)   a completed Collateral Questionnaire dated the Closing Date and executed by an Authorized Officer of each Credit Party, together with all attachments contemplated thereby, including (A) the results of a recent search, by a Person satisfactory to Collateral Agent, of all effective UCC financing statements (or equivalent filings) made with respect to any personal or mixed property of any Credit Party in the jurisdictions specified in the Collateral Questionnaire, together with copies of all such filings disclosed by such search, and (B) UCC termination statements (or similar documents) duly executed by all applicable Persons for filing in all applicable jurisdictions as may be necessary to terminate any effective UCC financing statements (or equivalent filings) disclosed in such search (other than any such financing statements in respect of Permitted Liens);

(iii)   opinions of counsel (which counsel shall be reasonably satisfactory to Collateral Agent) with respect to the creation and perfection of the security interests in favor of Collateral Agent in such Collateral and such other matters governed by the laws of each jurisdiction in which any Credit Party is organized as Collateral Agent may reasonably request, in each case in form and substance reasonably satisfactory to Collateral Agent;

(iv)   evidence that each Credit Party shall have taken or caused to be taken any other action, executed and delivered or caused to be executed and delivered any other agreement, document and instrument (including without limitation, (i) a Landlord Personal Property Collateral Access Agreement executed by the landlord of any Leasehold Property and by the applicable Credit Party and (ii) any intercompany notes evidencing Indebtedness permitted to be incurred pursuant to Section 6.1(b)) and made or caused to be made any other filing and recording (other than as set forth herein) reasonably required by Collateral Agent; and

(v)   evidence satisfactory to the Collateral Agent that Company has retained, at its sole cost and expense, a service provider acceptable to the Collateral Agent for the tracking of all such financing statements and notification to the Collateral Agent, of, among other things, the upcoming lapse or expiration thereof.

(j)   Environmental Reports. Administrative Agent shall have received reports and other information concerning any environmental liabilities as are delivered by Seller under

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the Purchase Agreement, in form, scope and substance reasonably satisfactory to Administrative Agent.

(k)   Financial Statements; Projections. Lenders shall have received from Holdings (i) the Historical Financial Statements, (ii) pro forma consolidated and consolidating balance sheets of Holdings and its Subsidiaries as at the Closing Date, and reflecting the consummation of the Acquisition, the related financings and the other transactions contemplated by the Credit Documents to occur on or prior to the Closing Date, which pro forma financial statements shall be in form and substance reasonably satisfactory to Administrative Agent, and (iii) the Projections.

(l)   Evidence of Insurance. Collateral Agent shall have received a certificate from Company’s insurance broker or other evidence satisfactory to it that all insurance required to be maintained pursuant to Section 5.5 is in full force and effect, together with endorsements naming the Collateral Agent, for the benefit of Lenders, as additional insured and loss payee thereunder to the extent required under Section 5.5.

(m)   Opinions of Counsel to Credit Parties. Lenders and their respective counsel shall have received originally executed copies of the favorable written opinion of Schulte Roth & Zabel LLP, special New York counsel for the Credit Parties, substantially in the form of Exhibit D and as to such other matters as Administrative Agent or Syndication Agent may reasonably request, dated as of the Closing Date and otherwise in form and substance reasonably satisfactory to Administrative Agent (and each Credit Party hereby instructs such counsel to deliver such opinions to Agents and Lenders).

(n)   Fees. Company shall have paid to Syndication Agent, Administrative Agent and Documentation Agent, the fees payable on the Closing Date referred to in Section 2.11(d).

(o)   Solvency Certificate. On the Closing Date, Administrative Agent shall have received a Solvency Certificate from Company dated the Closing Date and addressed to Syndication Agent, Administrative Agent and Lenders, and in form, scope and substance reasonably satisfactory to Administrative Agent, with appropriate attachments and demonstrating that the Company and its Subsidiaries, taken as a whole, are, and after giving effect to the consummation of the Acquisition, will be Solvent.

(p)   Closing Date Certificate. Holdings and Company shall have delivered to Administrative Agent an originally executed Closing Date Certificate, together with all attachments thereto.

(q)   Credit Rating. The credit facilities provided for under this Agreement shall have been assigned a credit rating by either S&P and/or Moody’s.

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(r)   Closing Date. Lenders shall have made the Term Loans to Company on or before March 31, 2005.

(s)   No Litigation. There shall not exist any action, suit, investigation, litigation or proceeding or other legal or regulatory developments, pending or threatened in any court or before any arbitrator or Governmental Authority that, in the reasonable opinion of Administrative Agent, singly or in the aggregate, materially impairs the Acquisition, the financing thereof or any of the other transactions contemplated by the Credit Documents or the Related Agreements, or that could reasonably be expected to have a Material Adverse Effect.

(t)   Completion of Proceedings. All partnership, corporate and other proceedings taken or to be taken in connection with the transactions contemplated hereby and all documents incidental thereto not previously found acceptable by Administrative Agent and its counsel shall be reasonably satisfactory in form and substance to Administrative Agent and such counsel, and Administrative Agent and such counsel shall have received all such counterpart originals or certified copies of such documents as Administrative Agent may reasonably request.

(u)   Minimum EBITDA; Maximum Total Leverage. The pro forma Consolidated Adjusted EBITDA of the Company, after giving effect to the Acquisition, for the twelve-month period ended December 31, 2004 shall not be less than $107.4 million. The ratio of pro forma Consolidated Total Debt to pro forma Consolidated Adjusted EBITDA, after giving effect to the Acquisition, for the twelve-month period ended December 31, 2004, shall not be greater than 6.20:1.00.

Each Lender, by delivering its signature page to this Agreement and funding a Loan on the Closing Date, shall be deemed to have acknowledged receipt of, and consented to and approved, each Credit Document and each other document required to be approved by any Agent, Requisite Lenders or Lenders, as applicable on the Closing Date.

3.2.  Conditions to Each Credit Extension.

(a)   Conditions Precedent. The obligation of each Lender to make any Loan, or Issuing Bank to issue any Letter of Credit, on any Credit Date, including the Second Amendment Effective Date, are subject to the satisfaction, or waiver in accordance with Section 10.5, of the following conditions precedent:

(i)   Administrative Agent shall have received a fully executed and delivered Funding Notice or Issuance Notice, as the case may be;

(ii)   as of such Credit Date, the representations and warranties contained herein and in the other Credit Documents shall be true and correct in all material respects

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on and as of that Credit Date to the same extent as though made on and as of that date, except to the extent such representations and warranties specifically relate to an earlier date, in which case such representations and warranties shall have been true and correct in all material respects on and as of such earlier date;

(iii)   as of such Credit Date, no event shall have occurred and be continuing or would result from the consummation of the applicable Credit Extension that would constitute an Event of Default or a Default;

(iv)   on or before the date of issuance of any Letter of Credit, Administra­tive Agent shall have received all other information required by the applicable Issuance Notice, and such other documents or information as Issuing Bank may reasonably require in connection with the issuance of such Letter of Credit; and

(v)   after giving effect to such Credit Extension and the anticipated use of proceeds thereof, the aggregate Cash and Cash Equivalents of Holdings and its Subsidiaries will not exceed $10,000,000.

(b)   Notices. Any Notice shall be executed by an Authorized Officer in a writing delivered to Administrative Agent. In lieu of delivering a Notice, Company may give Administrative Agent telephonic notice by the required time of any proposed borrowing, conversion/continuation or issuance of a Letter of Credit, as the case may be; provided each such notice shall be promptly confirmed in writing by delivery of the applicable Notice to Administrative Agent on or before the applicable date of borrowing, continuation/conversion or issuance. Neither Administrative Agent nor any Lender shall incur any liability to Company in acting upon any telephonic notice referred to above that Administrative Agent believes in good faith to have been given by a duly authorized officer or other person authorized on behalf of Company or for otherwise acting in good faith.

3.3.  Conditions to Obligation to Fund the New Term Loan Commitments on the Second Amendment Effective Date.  The obligation of any New Term Loan Lender to make a Credit Extension under this Agreement on the Second Amendment Effective Date is subject to the satisfaction, or waiver in accordance with Section 10.5, of the following conditions on or before the Second Amendment Effective Date:

(a)           Credit Documents. Administrative Agent shall have received (i) the Second Amendment, executed and delivered by a duly authorized officer of the Company, Holdings, each other Guarantor, the Agents, the Issuing Bank, the Requisite Lenders (as defined in the Existing Credit Agreement) and the Continuing Lenders, (ii) if requested by any Lender making a New Term Loan on the Second Amendment Effective Date, a New Term Loan Note substantially in the form of Exhibit B-1, (iii) the Reaffirmation Agreement, executed and

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delivered by a duly authorized officer of each Grantor under the Pledge and Security Agreement and each Guarantor and (iv) sufficient copies of each Credit Document executed and delivered by each applicable Credit Party for each Lender.

(b)           Organizational Documents; Incumbency. Administrative Agent shall have received (i)  copies of each Organizational Document executed and delivered by each Credit Party, as applicable, and, to the extent applicable, certified as of a recent date by the appropriate governmental official, each dated the Second Amendment Effective Date or a recent date prior thereto or, if there has been no change in such Organizational Documents since the Closing Date, a certificate of the secretary or assistant secretary of such Credit Party to that effect; (ii) signature and incumbency certificates of the officers of such Credit Party executing the Credit Documents to which it is a party; (iii) resolutions of the Board of Directors or similar governing body of each Credit Party approving and authorizing the execution, delivery and performance of this Agreement and the other Credit Documents to which it is a party or by which it or its assets may be bound as of the Second Amendment Effective Date, certified as of the Second Amendment Effective Date by its secretary or an assistant secretary as being in full force and effect without modification or amendment; (iv) a good standing certificate from the applicable Governmental Authority of each Credit Party’s jurisdiction of incorporation, organization or formation and in each jurisdiction in which it is qualified as a foreign corporation or other entity to do business, each dated a recent date prior to the Second Amendment Effective Date; and (v) such other documents as Administrative Agent may reasonably request in writing.

(c)           Letter of Direction. On or prior to the Second Amendment Effective Date, Company shall have delivered to Lead Arranger and Administrative Agent a letter of direction with respect to the proceeds of the New Term Loans.

(d)           Consents and Approvals. All necessary governmental, shareholder and third-party approvals and consents necessary in connection with the transactions contemplated hereby shall have been received or waived and shall be in full force and effect, and all applicable waiting periods shall have expired without any action being taken by any applicable authority.

(e)           Collateral Questionnaire. Collateral Agent shall have received from Company and each applicable Guarantor an updated Collateral Questionnaire dated the Second Amendment Effective Date and executed by an Authorized Officer of each Credit Party, together with all attachments contemplated thereby, including the results of a recent search, by a Person reasonably satisfactory to Collateral Agent, of all effective UCC financing statements (or equivalent filings) made with respect to any personal or mixed property of any Credit Party in the jurisdictions specified in the Collateral Questionnaire, together with copies of all such filings disclosed by such search.

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(f)            Evidence of Insurance. Administrative Agent shall have received a certificate from Company’s insurance broker or other evidence reasonably satisfactory to it that all insurance required to be maintained pursuant to Section 5.5 is in full force and effect and that Collateral Agent, for the benefit of Lenders has been named as additional insured and loss payee thereunder to the extent required under Section 5.5.

(g)           Opinions of Counsel to Credit Parties. Lenders and their respective counsel shall have received an originally executed copy of the favorable written opinion of Schulte Roth & Zabel LLP, special New York counsel for the Credit Parties, addressed to the Agents and the Lenders substantially in the same form and substance as the opinion delivered in connection with the closing under the Existing Credit Agreement.

(h)           Fees. All costs, fees, expenses (including, without limitation, reasonable legal fees and expenses, title premiums and recording taxes and fees) and other compensation payable to Lead Arranger and Administrative Agent shall have been paid to the extent due.

(i)            Second Amendment Effective Date Solvency Certificate. On the Second Amendment Effective Date, Administrative Agent shall have received a Second Amendment Effective Date Solvency Certificate from Company dated the Second Amendment Effective Date and addressed to Administrative Agent and Lenders, and in form, scope and substance reasonably satisfactory to Administrative Agent, with appropriate attachments and demonstrating that after giving effect to the consummation of the transactions contemplated hereby, Company and its Subsidiaries, on a consolidated basis, are and will be Solvent.

(j)            Second Amendment Effective Date Certificate. Holdings and Company shall have delivered to Administrative Agent an originally executed Second Amendment Effective Date Certificate, together with all attachments thereto.

(k)           No Litigation. There shall not exist any action, suit, investigation, litigation or proceeding or other legal or regulatory development, pending or threatened in any court or before any arbitrator or Governmental Authority, that singly or in the aggregate materially impairs the transactions contemplated by the Credit Documents or that would reasonably be expected to have a Material Adverse Effect.

(l)            Completion of Proceedings. All limited liability company, partnership, corporate and other proceedings taken or to be taken in connection with the transactions contemplated hereby shall be satisfactory in form and substance to Administrative Agent and its counsel, and Administrative Agent and such counsel shall have received all such counterpart originals or certified copies of such documents as Administrative Agent may reasonably request.

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Each Lender, by delivering its signature page to the Second Amendment and/or funding a Loan on the Second Amendment Effective Date, shall be deemed to have acknowledged receipt of, and consented to and approved, each Credit Document and each other document required to be approved by any Agent, Requisite Lenders or Lenders, as applicable on the Second Amendment Effective Date.

3.4.  Effect of Agreement on Other Credit Documents.  By its signature on the Existing Credit Agreement or on the Second Amendment, each Credit Party acknowledges and agrees that this Agreement is a valid amendment of the Existing Credit Agreement made in accordance with the terms thereof and binding against such Credit Party and that each Credit Document (other than this Agreement) shall continue to be valid and binding against such Credit Party and its assets and properties as of and after the Second Amendment Effective Date (with any references to the Existing Credit Agreement in any such Credit Document construed as references to this Agreement).

SECTION 4.  REPRESENTATIONS AND WARRANTIES

In order to induce Lenders and Issuing Bank to enter into this Agreement and to make each Credit Extension to be made thereby, each Credit Party represents and warrants to each Lender and Issuing Bank, on the Closing Date and on each Credit Date (including the Second Amendment Effective Date), that the following statements are true and correct (it being understood that (i) any representations and warranties made on and as of a Credit Date other than the Closing Date shall be true and correct to the same extent as though made on and as of that date, except to the extent such representations and warranties specifically relate to an earlier date, in which case such representations and warranties shall have been true and correct on and as of such earlier date and (ii) the representations and warranties made on the Second Amendment Effective Date are deemed to be made concurrently with the consummation of the transactions contemplated hereby):

4.1.  Organization; Requisite Power and Authority; Qualification.  Each of Holdings and its Subsidiaries (a) is duly organized, validly existing and in good standing under the laws of its jurisdiction of organization as identified in Schedule 4.1, (b) has all requisite power and authority to own and operate its properties, to carry on its business as now conducted and as proposed to be conducted, to enter into the Credit Documents to which it is a party and to carry out the transactions contemplated thereby, and (c) is qualified to do business and in good standing in every jurisdiction where its assets are located and wherever necessary to carry out its business and operations, except in jurisdictions where the failure to be so qualified or in good standing has not had, and could not be reasonably expected to have, a Material Adverse Effect.

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4.2.  Capital Stock and Ownership.  The Capital Stock of each of Holdings and its Subsidiaries has been duly authorized and validly issued and is fully paid and non-assessable. Except as set forth on Schedule 4.2, as of the Closing Date, there was no existing option, warrant, call, right, commitment or other agreement to which Holdings or any of its Subsidiaries is a party requiring, and there was no membership interest or other Capital Stock of Holdings or any of its Subsidiaries outstanding which upon conversion or exchange would require, the issuance by Holdings or any of its Subsidiaries of any additional membership interests or other Capital Stock of Holdings or any of its Subsidiaries or other Securities convertible into, exchangeable for or evidencing the right to subscribe for or purchase, a membership interest or other Capital Stock of Holdings or any of its Subsidiaries. Schedule 4.2 correctly sets forth the ownership interest of Holdings and each of its Subsidiaries in their respective Subsidiaries as of the Closing Date both before and after giving effect to the Acquisition.

4.3.  Due Authorization.  The execution, delivery and performance of the Credit Documents have been duly authorized by all necessary action on the part of each Credit Party that is a party thereto.

4.4.  No Conflict.  The execution, delivery and performance by the Credit Parties of the Credit Documents to which they are parties and the consummation of the transactions contemplated by the Credit Documents do not and will not (a) violate (i) any provision of any law or any governmental rule or regulation applicable to Holdings or any of its Subsidiaries, (ii) any of the Organizational Documents of Holdings or any of its Subsidiaries, or (iii) any order, judgment or decree of any court or other agency of government binding on Holdings or any of its Subsidiaries, except in the case of clauses (i) and (iii) to the extent such violation could not reasonably be expected to have a Material Adverse Effect; (b) conflict with, result in a breach of or constitute (with due notice or lapse of time or both) a default under any material Contractual Obligation of Holdings or any of its Subsidiaries; (c) result in or require the creation or imposition of any Lien upon any of the properties or assets of Holdings or any of its Subsidiaries (other than any Liens created under any of the Credit Documents in favor of Collateral  Agent, on behalf of Secured Parties); or (d) require, as of the Closing Date, any approval of stockholders, members or partners or any approval or consent of any Person under any Contractual Obligation of Holdings or any of its Subsidiaries, except for any such approval or consent (i) which was obtained on or before the Closing Date and disclosed in writing to Lenders or (ii) where the failure to obtain such approval or consent would not be reasonably expected to have a Material Adverse Effect.

4.5.  Governmental Consents.  The execution, delivery and performance by the Credit Parties of the Credit Documents to which they are parties and the consummation of the transactions contemplated by the Credit Documents do not and will not require any registration with, consent or approval of, or notice to, or other action to, with or by, any Governmental Authority except as have been obtained or made and are in full force and effect and except for

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filings and recordings with respect to the Collateral made, or otherwise delivered to Collateral Agent for filing and/or recordation, as of the Closing Date, except for registrations, consents, approvals, notices or actions the failure to obtain or make could not reasonably be expected to have a Material Adverse Effect.

4.6.  Binding Obligation.  Each Credit Document has been duly executed and delivered by each Credit Party that is a party thereto and is the legally valid and binding obligation of such Credit Party, enforceable against such Credit Party in accordance with its respective terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors’ rights generally or by equitable principles relating to enforceability.

4.7.  Historical Financial Statements.  The Historical Financial Statements were prepared in conformity with GAAP and fairly present, in all material respects, the financial position, on a consolidated basis, of the Persons described in such financial statements as at the respective dates thereof and the results of operations and cash flows, on a consolidated basis, of the entities described therein for each of the periods then ended, subject, in the case of any such unaudited financial statements, to the absence of footnotes and changes resulting from audit and normal year-end adjustments. As of the Closing Date, any contingent liability or liability for taxes, long-term leases or unusual forward or long-term commitments of Holdings and its Subsidiaries which in any such case is material in relation to the business, operations, properties, assets or financial condition of Holdings and its Subsidiaries taken as a whole has been reflected in the most recent Historical Financial Statements or the notes thereto to the extent required by GAAP or otherwise disclosed in a Schedule hereto.

4.8.  Projections.  On and as of the Closing Date, the Projections of Holdings and its Subsidiaries for the period Fiscal Year 2005 through and including Fiscal Year 2008 (the “Projections”) were based on good faith estimates and assumptions made by the management of Holdings believed to be reasonable at the time made; provided, the Projections are not to be viewed as facts and that actual results during the period or periods covered by the Projections may differ from such Projections and that the differences may be material.

4.9.  No Material Adverse Change.  Since April 2, 2004, no event, circumstance or change has occurred that has caused or evidences, either in any case or in the aggregate, a Material Adverse Effect.

4.10.  Intentionally Omitted.

4.11.  Adverse Proceedings, etc.  There are no Adverse Proceedings, individually or in the aggregate, that could reasonably be expected to have a Material Adverse Effect. Neither Holdings nor any of its Subsidiaries (a) is in violation of any applicable laws (including

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Environmental Laws) that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect, or (b) is subject to or in default with respect to any final judgments, writs, injunctions, decrees, rules or regulations of any court or other Governmental Authority that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

4.12.  Payment of Taxes.  Except as otherwise permitted under Section 5.3, all federal and other material tax returns and reports of Holdings and its Subsidiaries required to be filed by any of them have been timely filed, and all taxes shown on such tax returns to be due and payable and all assessments, fees and other governmental charges upon Holdings and its Subsidiaries and upon their respective properties, assets, income, businesses and franchises which are due and payable have been paid when due and payable. Holdings knows of no proposed tax assessment against Holdings or any of its Subsidiaries which is not being actively contested by Holdings or such Subsidiary in good faith and by appropriate proceedings; provided, such reserves or other appropriate provisions, if any, as shall be required in conformity with GAAP shall have been made or provided therefor.

4.13.  Properties.

(a)   Title. Each of Holdings and its Subsidiaries (i) has good, sufficient and legal title to (in the case of fee interests in real property) or valid leasehold interests in (in the case of leasehold interests in real or personal property), and (ii) is the owner of (in the case of all other personal property), all of their respective properties and assets reflected in their respective Historical Financial Statements referred to in Section 4.7 and in the most recent financial statements delivered pursuant to Section 5.1, in each case except for assets disposed of since the date of such financial statements in the ordinary course of business or as otherwise permitted under Section 6.9 and except for such disposals or defects that neither individually nor in the aggregate could reasonably be expected to have a Material Adverse Effect. All such properties and assets are free and clear of Liens, except Permitted Liens.

(b)   Real Estate. Schedule 4.13 contains a true, accurate and complete list of (i) all Real Estate Assets located within the United States as of the Closing Date, (ii) all Real Estate Assets with a monthly lease payment of $10,000 or more located outside of the United States as of November 30, 2004, (iii) all leases, subleases or assignments of leases (together with all amendments, modifications, supplements, renewals or extensions of any thereof) affecting each Real Estate Asset of any Credit Party located in the United States as of the Closing Date, regardless of whether such Credit Party is the landlord or tenant (whether directly or as an assignee or successor in interest) under such lease, sublease or assignment and (iv) all leases, subleases or assignments of leases (together with all amendments, modifications, supplements, renewals or extensions of any thereof) with a monthly lease payment of $10,000 or more affecting each Real Estate Asset of any Credit Party located outside of the United States as of

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November 30, 2004, regardless of whether such Credit Party is the landlord or tenant (whether directly or as an assignee or successor in interest) under such lease, sublease or assignment. Each agreement listed in clauses (iii) and (iv) of the immediately preceding sentence is in full force and effect and Holdings and its Subsidiaries do not have knowledge of any default that has occurred and is continuing thereunder, and each such agreement constitutes the legally valid and binding obligation of each applicable Credit Party, enforceable against such Credit Party in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors’ rights generally or by equitable principles.

4.14.  Environmental Matters.  Except as set forth in Schedule 4.14: (i) neither Holdings nor any of its Subsidiaries nor any of their respective Facilities or operations have received a written order, consent decree or settlement agreement that remains outstanding from any Person relating to any Environmental Law in effect during the term of this Agreement or any Environmental Claim that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect; (ii) to Holdings’ or its Subsidiaries’ knowledge, neither Holdings nor any of its Subsidiaries has received any letter or request for information under Section 104 of the Comprehensive Environmen­tal Response, Compensation, and Liability Act (42 U.S.C. § 9604) or any comparable state law; (iii) there are and, to each of Holdings’ and its Subsidiaries’ knowledge, there have been, no conditions, occurrences, or Hazardous Materials Activities which could reasonably be expected to form the basis of an Environmental Claim against Holdings or any of its Subsidiaries that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect; (iv) neither Holdings nor any of its Subsidiaries nor, to any Credit Party’s knowledge, any predecessor of Holdings or any of its Subsidiaries has operated a facility to treat Hazardous Materials; (v) none of Holdings’ or any of its Subsidiaries’ operations involves the generation, transportation, treatment, storage or disposal of hazardous waste, as defined under 40 C.F.R. Parts 260-270 or any state equivalent, except in compliance in all material respects with applicable Environmental Laws; (vi) to Holdings’ or its Subsidiaries’ knowledge, compliance with Environmental Laws could not be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect; (vii) to Holdings’ or its Subsidiaries’ knowledge, there exists no Release of Hazardous Materials at any Facility or any Hazardous Materials Activity in violation of Environmental Laws, which individually or in the aggregate, could reasonably be expected to have, a Material Adverse Effect.

4.15.  No Defaults.  Neither Holdings nor any of its Subsidiaries is in default in the performance, observance or fulfillment of any of the obligations, covenants or conditions contained in any of its Contractual Obligations, and no condition exists which, with the giving of notice or the lapse of time or both, could constitute such a default, except where the consequences, direct or indirect, of such default or defaults, if any, could not reasonably be expected to have a Material Adverse Effect.

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4.16.       Material Contracts. Schedule 4.16 contains a true, correct and complete list of all the Material Contracts in effect on the Closing Date, and except as described thereon, all such Material Contracts are in full force and effect and, to the knowledge of Holdings and its Subsidiaries, no defaults currently exist thereunder.

4.17.       Governmental Regulation. Neither Holdings nor any of its Subsidiaries is subject to regulation under the Federal Power Act or the Investment Company Act of 1940 or under any other federal or state statute or regulation which may limit its ability to incur Indebtedness. Neither Holdings nor any of its Subsidiaries is a “registered investment company” or a company “controlled” by a “registered investment company” or a “principal underwriter” of a “registered investment company” as such terms are defined in the Investment Company Act of 1940.

4.18.       Margin Stock. Neither Holdings nor any of its Subsidiaries is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying any Margin Stock. No part of the proceeds of the Loans made to such Credit Party will be used to purchase or carry any such Margin Stock or to extend credit to others for the purpose of purchasing or carrying any such Margin Stock or for any purpose that violates, or is inconsistent with, the provisions of Regulation T, U or X of said Board of Governors.

4.19.       Employee Matters. Neither Holdings nor any of its Subsidiaries is engaged in any unfair labor practice that could reasonably be expected to have a Material Adverse Effect. There is (a) no unfair labor practice complaint pending against Holdings or any of its Subsidiaries, or to the knowledge of Holdings and Company, threatened against any of them before the National Labor Relations Board and no grievance or arbitration proceeding arising out of or under any collective bargaining agreement that is so pending against Holdings or any of its Subsidiaries or to the knowledge of Holdings and Company, threatened against any of them, (b) no strike or work stoppage in existence or threatened involving Holdings or any of its Subsidiaries, and (c) to the knowledge of Holdings and Company, no union representation question existing with respect to the employees of Holdings or any of its Subsidiaries and, to the knowledge of Holdings and Company, no union organization activity that is taking place, except (with respect to any matter specified in clause (a), (b) or (c) above, either individually or in the aggregate) such as is not reasonably likely to have a Material Adverse Effect.

4.20.       Employee Benefit Plans. Holdings, each of its Subsidiaries and each of their respective ERISA Affiliates are in compliance in all material respects with all applicable provisions and requirements of ERISA and the Internal Revenue Code and the regulations and published interpretations thereunder with respect to each Employee Benefit Plan, and have performed all their obligations under each Employee Benefit Plan in all material respects. Except as set forth on Schedule 4.20, each Employee Benefit Plan which is intended to qualify

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under Section 401(a) of the Internal Revenue Code has received a favorable determination letter from the Internal Revenue Service indicating that such Employee Benefit Plan is so qualified and nothing has occurred subsequent to the issuance of such determination letter which would cause such Employee Benefit Plan to lose its qualified status. No liability to the PBGC (other than required premium payments), the Internal Revenue Service, any Employee Benefit Plan or any trust established under Title IV of ERISA has been or is expected to be incurred by Holdings, any of its Subsidiaries or any of their ERISA Affiliates that, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect. No ERISA Event has occurred or is reasonably expected to occur. Except to the extent required under Section 4980B of the Internal Revenue Code or similar state laws, no Employee Benefit Plan provides health or welfare benefits (through the purchase of insurance or otherwise) for any retired or former employee of Holdings, any of its Subsidiaries or any of their respective ERISA Affiliates (other than life insurance policies for terminated employees in the ordinary course of business consistent with past practice). The present value of the aggregate benefit liabilities under each Pension Plan sponsored, maintained or contributed to by Holdings, any of its Subsidiaries or any of their ERISA Affiliates, (determined as of the end of the most recent plan year on the basis of the actuarial assumptions specified for funding purposes in the most recent actuarial valuation for such Pension Plan), did not exceed the aggregate current value of the assets of such Pension Plan in an amount that could reasonably be expected to have a Material Adverse Effect. As of the most recent valuation date for each Multiemployer Plan for which the actuarial report is available, none of Holdings, its Subsidiaries or their respective ERISA Affiliates would become subject to any material liability under ERISA if Holdings, its Subsidiaries or any of their respective ERISA Affiliates were to withdraw completely (within the meaning of Section 4203 of ERISA) from all Multiemployer Plans, based on information available pursuant to Section 4221(e) of ERISA. Holdings, each of its Subsidiaries and each of their ERISA Affiliates have complied in all material respects with the requirements of Section 515 of ERISA with respect to each Multiemployer Plan and are not in material “default” (as defined in Section 4219(c)(5) of ERISA) with respect to payments to a Multiemployer Plan.

4.21.       Certain Fees. No broker’s or finder’s fee or commission will be payable by or on behalf of Sponsor, Holdings or Company with respect hereto or any of the transactions contemplated hereby.

4.22.       Solvency. The Credit Parties, taken as a whole, are and, upon the incurrence of any Obligation by such Credit Parties on any date on which this representation and warranty is made, will be, Solvent.

4.23.       Related Agreements.

(a)   Delivery. Holdings and Company have delivered to Administrative Agent complete and correct copies of (i) each Related Agreement and of all exhibits and schedules

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thereto as of the Closing Date and (ii) copies of any material amendment, restatement, supplement or other modification to or waiver of each Related Agreement entered into after the Closing Date.

(b)   Representations and Warranties. Except to the extent otherwise expressly set forth in this Agreement or the applicable Related Agreement or in the schedules to this Agreement or the applicable Related Agreement, and subject to the qualifications set forth therein, each of the representations and warranties given by Holdings or Finance Sub in any Related Agreement is true and correct in all material respects as of the Closing Date (or as of any earlier date to which such representation and warranty specifically relates). Notwithstanding anything in the Related Agreement to the contrary, the representations and warranties of Holdings set forth in this Section 4.23 shall, solely for purposes hereof, survive the Closing Date for the benefit of Lenders.

(c)   Governmental Approvals. Except as set forth on Schedule 4.23, as of the Closing Date, all Governmental Authorizations and all other authorizations, approvals and consents of any other Person required by the Related Agreements or to consummate the Acquisition had been obtained and were in full force and effect.

(d)   Conditions Precedent. On the Closing Date, (i) all of the conditions to effecting or consummating the transactions set forth in the Related Agreements have been duly satisfied or, with the consent of Administrative Agent, waived, and (ii) the transactions contemplated by Related Agreements have been consummated in accordance with the Related Agreements and all applicable laws.

4.24.       Compliance with Statutes, etc. Each of Holdings and its Subsidiaries is in compliance with all applicable statutes, regulations and orders of, and all applicable restrictions imposed by, all Governmental Authorities, in respect of the conduct of its business and the ownership of its property (including compliance with all applicable Environmental Laws with respect to any Real Estate Asset or governing its business and the requirements of any permits issued under such Environmental Laws with respect to any such Real Estate Asset or the operations of Holdings or any of its Subsidiaries), except such non-compliance that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

4.25.       Disclosure. No representation or warranty of any Credit Party contained in any Credit Document or in any other documents, certificates or written statements furnished to Lenders by or on behalf of Holdings or any of its Subsidiaries for use in connection with the transactions contemplated hereby contained (as of the date such Credit Document or other document, certificate or statement was so furnished) any untrue statement of a material fact or omitted to state a material fact (known to Holdings or Company, in the case of any document not furnished by either of them) necessary in order to make the statements contained herein or

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therein (taken as a whole) not misleading in light of the circumstances in which the same were made. As of the Closing Date, there are no facts known (or which should upon the reasonable exercise of diligence be known) to Holdings or Company (other than matters of a general economic nature) that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect and that have not been disclosed herein or in such other documents, certificates and statements furnished to Lenders for use in connection with the transactions contemplated hereby.

4.26.       Patriot Act. To the extent applicable, each Credit Party is in compliance, in all material respects, with the (i) Trading with the Enemy Act, as amended, and each of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) and any other enabling legislation or executive order relating thereto, and (ii) Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA Patriot Act of 2001) (the “Act”). No part of the proceeds of the Loans will be used, directly or indirectly, for any payments to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended.

SECTION 5.  AFFIRMATIVE COVENANTS

Each Credit Party covenants and agrees that so long as any Commitment is in effect and until payment in full of all Obligations (other than contingent indemnification Obligations) and cancellation or expiration or cash-collateralization, in a manner satisfactory to the Administrative Agent, of all Letters of Credit, each Credit Party shall perform, and shall cause each of its Subsidiaries to perform, all covenants in this Section 5.

5.1.         Financial Statements and Other Reports. Holdings will deliver to Administrative Agent, Lead Arrangers and Lenders:

(a)   Monthly Reports. As soon as available, and in any event within 30 days after the end of each month ending after the Closing Date, the consolidated balance sheet of Company and its Subsidiaries as at the end of such month and the related consolidated statements of income, stockholders’ equity and cash flows of Company and its Subsidiaries for such month and for the period from the beginning of the then current Fiscal Year to the end of such month, setting forth in each case in comparative form the corresponding figures for the corresponding periods of the previous Fiscal Year and the corresponding figures from the Financial Plan for the current Fiscal Year, to the extent prepared on a monthly basis, all in reasonable detail, together with a Financial Officer Certification with respect thereto;

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(b)   Quarterly Financial Statements. As soon as available, and in any event within 45 days (or such shorter period in which Holdings or Company shall have filed its Quarterly Report on Form 10-Q) after the end of each of the first three Fiscal Quarters of each Fiscal Year, the consolidated and consolidating balance sheets of Company and its Subsidiaries as at the end of such Fiscal Quarter and the related consolidated (and with respect to statements of income, consolidating) statements of income, stockholders’ equity and cash flows of Company and its Subsidiaries for such Fiscal Quarter and for the period from the beginning of the then current Fiscal Year to the end of such Fiscal Quarter, setting forth in each case in comparative form the corresponding figures for the corresponding periods of the previous Fiscal Year and the correspond­ing figures from the Financial Plan for the current Fiscal Year, all in reasonable detail, together with a Financial Officer Certification and a Narrative Report with respect thereto;

(c)   Annual Financial Statements. As soon as available, and in any event within 90 days (or such shorter period in which Holdings or Company shall have filed its Annual Report on Form 10-K) after the end of each Fiscal Year, (i) the consolidated and consolidating balance sheets of Company and its Subsidiaries as at the end of such Fiscal Year and the related consolidated (and with respect to statements of income, consolidating) statements of income, stockholders’ equity and cash flows of Company and its Subsidiaries for such Fiscal Year, setting forth in each case in comparative form the corresponding figures for the previous Fiscal Year and the corresponding figures from the Financial Plan for the Fiscal Year covered by such financial statements, in reasonable detail, together with a Financial Officer Certification and a Narrative Report with respect thereto; and (ii) with respect to such consolidated financial statements a report thereon of Deloitte & Touche LLP or other independent certified public accountants of recognized national standing selected by Company, and reasonably satisfactory to Administrative Agent (which report shall be unqualified as to going concern and scope of audit, and shall state that such consoli­dated financial statements fairly present, in all material respects, the consolidated financial position of Company and its Subsidiaries as at the dates indicated and the results of their operations and their cash flows for the periods indicat­ed in conformity with GAAP applied on a basis consistent with prior years (except as otherwise disclosed in such financial state­ments) and that the examination by such accountants in connection with such consolidated financial statements has been made in accordance with generally accepted auditing standards) together with a written statement by such independent certified public accountants stating (1) that their audit examination has included a review of the terms of the Credit Documents, (2) whether, in connection therewith, any condition or event that constitutes a Default or an Event of Default has come to their attention and, if such a condition or event has come to their attention, specifying the nature and period of existence thereof, and (3) that nothing has come to their attention that causes them to believe that the information contained in any Compliance Certificate is not correct or that the matters set forth in such Compliance Certificate are not stated in accordance with the terms hereof;

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(d)   Compliance Certificate. Together with each delivery of financial statements of Company and its Subsidiaries pursuant to Sections 5.1(b) and 5.1(c), a duly executed and completed Compliance Certificate;

(e)   Statements of Reconciliation after Change in Accounting Principles. If, as a result of any change in accounting principles and policies from those used in the preparation of the Historical Financial Statements, the consolidated financial statements of Company and its Subsidiaries delivered pursuant to Section 5.1(b) or 5.1(c) will differ in any material respect from the consolidated financial statements that would have been delivered pursuant to such subdivisions had no such change in accounting principles and policies been made, then, together with the first delivery of such financial statements after such change, one or more statements of reconciliation for the most recent prior financial statements in form and substance reasonably satisfactory to Administrative Agent;

(f)   Notice of Default. Promptly upon any senior officer of Holdings or Company obtaining knowledge (i) of any condition or event that constitutes a Default or an Event of Default or that notice has been given to Holdings or Company with respect thereto; (ii) that any Person has given any notice to Holdings or any of its Subsidiaries or taken any other action with respect to any event or condition set forth in Section 8.1(b); or (iii) of the occurrence of any event or change that has caused or evidences, either in any case or in the aggregate, a Material Adverse Effect, a certificate of its Authorized Officers specifying the nature and period of existence of such condition, event or change, or specifying the notice given and action taken by any such Person and the nature of such claimed Event of Default, Default, default, event or condition, and what action Company has taken, is taking and proposes to take with respect thereto;

(g)   Notice of Litigation. Promptly upon any senior officer of Holdings or Company obtaining knowledge of (i) the institution of, or non-frivolous written threat of, any Adverse Proceeding not previously disclosed in writing by Company to Lenders, or (ii) any material development in any Adverse Proceeding that, in the case of either (i) or (ii) if adversely determined, could be reasonably expected to have a Material Adverse Effect, or seeks to enjoin or otherwise prevent the consumma­tion of, or to recover any damages or obtain relief as a result of, the transactions contemplated hereby, written notice thereof together with such other information as may be reasonably available to Holdings or Company to enable Lenders and their counsel to evaluate such matters;

(h)   ERISA. (i) Promptly upon becoming aware of the occurrence of any ERISA Event, a written notice specifying the nature thereof, what action Holdings, any of its Subsidiaries or any of their respective ERISA Affiliates has taken, is taking or proposes to take with respect thereto and, when known, any action taken or threatened by the Internal Revenue Service, the Department of Labor or the PBGC with respect thereto; and (ii) with reasonable

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promptness, copies of (1) each Schedule B (Actuarial Information) to the annual report (Form 5500 Series) filed by Holdings, any of its Subsidiaries or any of their respective ERISA Affiliates with the Internal Revenue Service with respect to each Pension Plan; (2) all notices received by Holdings, any of its Subsidiaries or any of their respective ERISA Affiliates from a Multiemployer Plan sponsor concerning an ERISA Event; and (3) copies of such other documents or governmental reports or filings relating to any Employee Benefit Plan as Administrative Agent shall reasonably request;

(i)   Financial Plan. As soon as practicable and in any event no later than thirty days after the beginning of each Fiscal Year, a consolidated plan and financial forecast for such Fiscal Year and each Fiscal Year (or portion thereof) through the final maturity date of the Loans (a “Financial Plan”), including (i) a forecasted consolidated balance sheet and forecasted consolidated statements of income and cash flows of Holdings and its Subsidiaries for each such Fiscal Year, together with pro forma Compliance Certificates for each such Fiscal Year and an explanation of the assumptions on which such forecasts are based, (ii) forecasted consolidated statements of income and cash flows of Holdings and its Subsidiaries for each month of the first such Fiscal Year covered in such Financial Plan, (iii) forecasts demonstrating projected compliance with the requirements of Section 6.8 through the final maturity date of the Loans and (iv) forecasts demonstrating adequate liquidity through the final maturity date of the Loans without giving effect to any additional debt or equity offerings not reflected in the Projections, together, in each case, with an explanation of the assumptions on which such forecasts are based all in form and substance reasonably satisfactory to Agents;

(j)   Insurance Report. As soon as practicable and in any event by the last day of each Fiscal Year, a report in form and substance satisfactory to Administrative Agent outlining all material insurance coverage maintained as of the date of such report by Holdings and its Subsidiaries and all material insurance coverage planned to be maintained by Holdings and its Subsidiaries in the immediately succeeding Fiscal Year;

(k)   Notice of Change in Board of Directors. With reasonable promptness, written notice of any change in the Board of Directors of Holdings or Company;

(l)   Notice Regarding Material Contracts. Promptly, and in any event within ten Business Days (i) after any Material Contract of Holdings or any of its Subsidiaries is terminated or amended in a manner that could reasonably be expected to have a Material Adverse Effect or (ii) any new Material Contract is entered into, a written statement describing such event, with copies of such material amendments or new contracts, delivered to Administrative Agent (to the extent such delivery is permitted by the terms of any such Material Contract, provided, no such prohibition on delivery shall be effective if it were bargained for by Holdings or its applicable Subsidiary with the intent of avoiding compliance with this Section 5.1(l)), and an explanation of any actions being taken with respect thereto;

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(m)   Environmental Reports and Audits. As soon as practicable following receipt thereof, copies of all environmental audits and reports with respect to environmental matters at any Facility or which relate to any environmental liabilities of Holdings or its Subsidiaries which, in any such case, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect;

(n)   Information Regarding Collateral. (a)  Company will furnish to Collateral Agent prompt written notice of any change (i) in any Credit Party’s corporate name, (ii) in any Credit Party’s identity or corporate structure or (iii) in any Credit Party’s Federal Taxpayer Identification Number. Company agrees not to effect or permit any change referred to in the preceding sentence unless all filings have been made under the Uniform Commercial Code or otherwise that are required in order for Collateral Agent to continue at all times following such change to have a valid, legal and perfected security interest in all the Collateral as contemplated in the Collateral Documents. Company also agrees promptly to notify Collateral Agent if any material portion of the Collateral is damaged or destroyed;

(o)   Annual Collateral Verification. Each year, at the time of delivery of annual financial statements with respect to the preceding Fiscal Year pursuant to Section 5.1(c), Company shall deliver to Collateral Agent an Officer’s Certificate (i) either confirming that there has been no change in such information since the date of the Collateral Questionnaire delivered on the Closing Date or the date of the most recent certificate delivered pursuant to this Section and/or identifying such changes and (ii) certifying that all Uniform Commercial Code financing statements (including fixtures filings, as applicable) or other appropriate filings, recordings or registrations, have been filed of record in each governmental, municipal or other appropriate office in each jurisdiction identified in the Collateral Questionnaire or in the Officer’s Certificate updating such Collateral Questionnaire pursuant to clause (i) above to the extent necessary to protect and perfect the security interests under the Collateral Documents for a period of not less than 18 months after the date of such certificate (except as noted therein with respect to any continuation statements to be filed within such period);

(p)   Notices to or from Holders of Subordinated Indebtedness. Copies of all notices, reports, certificates and other information furnished to or received from any of the holders of Subordinated Indebtedness or any other agent or representative of such holders (including any notices or other documents relating to any default or potential default under the Senior Subordinated Note Documents, but in any event excluding routine notices, reports and certificates of an administrative nature), in each case promptly after the same are so furnished or received; furthermore, on the date of the occurrence thereof under the Senior Subordinated Note Documents, notice that any or all of the obligations under the Senior Subordinated Note Documents have been accelerated; and

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(q)   Other Information. (A) Promptly upon their becoming available, copies of (i) all financial statements, reports, notices and proxy statements sent or made available generally by Holdings to its security holders (acting in such capacity) generally or by any Subsidiary of Holdings to its security holders other than Holdings or another Subsidiary of Holdings, (ii) all regular and periodic reports and all registration statements and prospectuses, if any, filed by Holdings or any of its Subsidiaries with any securities exchange or with the Securities and Exchange Commission or any governmental or private regulatory authority, (iii) all press releases and other statements made available generally by Holdings or any of its Subsidiaries to the public concerning material developments in the business of Holdings or any of its Subsidiaries, and (B) such other information and data with respect to Holdings or any of its Subsidiaries as from time to time may be reasonably requested by Administrative Agent or any Lender.

5.2.         Existence. Except as otherwise permitted under Section 6.9, each Credit Party will, and will cause each of its Subsidiaries to, at all times preserve and keep in full force and effect (i) its existence and (ii) all rights and franchises, licenses and permits, except in the case of clause (ii) to the extent that the failure to do so could not reasonably be expected to have a Material Adverse Effect; provided, no Credit Party or any of its Subsidiaries shall be required to preserve any such existence, right, franchise, license or permit if such Person’s Board of Directors shall determine that the preservation thereof is no longer desirable in the conduct of the business of such Person, and that the loss thereof will not materially and adversely affect such Person or the Lenders.

5.3.         Payment of Taxes and Claims. Each Credit Party will, and will cause each of its Subsidiaries to, pay all Taxes imposed upon it or any of its properties or assets or in respect of any of its income, businesses or franchises before any penalty or fine accrues thereon, and all liabilities (including claims for labor, services, materials and supplies) for sums that have become due and payable and that by law have or may become a Lien upon any of its properties or assets, prior to the time when any penalty or fine shall be incurred with respect thereto; provided, no such Tax or claim need be paid if it is being contested in good faith by appropriate proceedings promptly instituted and diligently conducted, so long as (a) adequate reserve or other appropriate provision, as shall be required in conformity with GAAP shall have been made therefor, and (b) in the case of a Tax or claim which has or may become a Lien against any of the Collateral, such contest proceedings conclusively operate to stay the sale of any portion of the Collateral to satisfy such Tax or claim. No Credit Party will, nor will it permit any of its Subsidiaries to, file or consent to the filing of any consolidated income tax return with any Person (other than Holdings or any of its Subsidiaries).

5.4.         Maintenance of Properties. Each Credit Party will, and will cause each of its Subsidiaries to, maintain or cause to be maintained in good repair, working order and condition, ordinary wear and tear excepted, all material properties used or useful in the business of

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Holdings and its Subsidiaries and from time to time will make or cause to be made all appropriate repairs, renewals and replacements thereof.

5.5.         Insurance. Holdings will maintain or cause to be maintained, with financially sound and reputable insurers, such public liability insurance, third party property damage insurance, business interruption insurance and casualty insurance with respect to liabilities, losses or damage in respect of the assets, properties and businesses of Holdings and its Subsidiaries as may customarily be carried or maintained under similar circumstances by Persons of established reputation engaged in similar businesses, in each case in such amounts (giving effect to self-insurance), with such deductibles, covering such risks and otherwise on such terms and conditions as shall be customary for such Persons. Without limiting the generality of the foregoing, Holdings will maintain or cause to be maintained (a) flood insurance with respect to each Flood Hazard Property that is located in a community that participates in the National Flood Insurance Program, in each case in compliance with any applicable regulations of the Board of Governors of the Federal Reserve System, and (b) replacement value casualty insurance on the Collateral under such policies of insurance, with such insurance companies, in such amounts, with such deductibles, and covering such risks as are at all times carried or maintained under similar circumstances by Persons of established reputation engaged in similar businesses. Each such policy of insurance shall (i) name Collateral Agent, on behalf of Lenders, as an additional insured thereunder as its interests may appear and (ii) in the case of each casualty insurance policy, contain a loss payable clause or endorsement, reasonably satisfactory in form and substance to Collateral Agent, that names Collateral Agent, on behalf of Lenders, as the loss payee thereunder and provides for at least thirty days’ prior written notice to Collateral Agent of any modification or cancellation of such policy.

5.6.         Inspections. Each Credit Party will, and will cause each of its Subsidiaries to, permit any authorized representatives designated by the Administrative Agent to visit and inspect any of the properties of any Credit Party and any of its respective Subsidiaries, to inspect, copy and take extracts from its and their financial and accounting records, and to discuss its and their affairs, finances and accounts with its and their officers and independent public accountants, all upon prior reasonable notice and at such reasonable times during normal business hours and as often as may reasonably be requested.

5.7.         Lenders Meetings. Holdings and Company will, upon the request of Administrative Agent or Requisite Lenders, participate in a meeting of Administrative Agent and Lenders once during each Fiscal Year to be held at Company’s corporate offices (or at such other location as may be agreed to by Company and Administrative Agent) at such time as may be agreed to by Company and Administrative Agent.

5.8.         Compliance with Laws. Each Credit Party will comply, and shall cause each of its Subsidiaries and all other Persons, if any, on or occupying any Facilities to comply, with the

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requirements of all applicable laws, rules, regulations and orders of any Governmental Authority (including all Environmental Laws), noncompliance with which could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

5.9.         Environmental.

(a)   Environmental Disclosure. Holdings will deliver to Administrative Agent and Lenders:

(i)   promptly upon the occurrence thereof, written notice describing in reasonable detail (1) any Release required to be reported to any federal, state or local governmental or regulatory agency under any applicable Environmental Laws, (2) any remedial action taken by Holdings or any other Person in response to (A) any Hazardous Materials Activities the existence of which could reasonably be expected to result in one or more Environmental Claims  which, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect, or (B) any Environmental Claims that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect;

(ii)   as soon as practicable following the sending or receipt thereof by Holdings or any of its Subsidiaries, a copy of any and all written communications with respect to (1) any Environmental Claims that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect, (2) any Release required to be reported to any federal, state or local governmental or regulatory agency, and (3) any written request for information from any governmental agency identifying Holdings or any of its Subsidiaries as potentially responsible for any Hazardous Materials Activity;

(iii)   prompt written notice describing in reasonable detail (1) any proposed acquisition of stock, assets, or property by Holdings or any of its Subsidiaries that could reasonably be expected to (A) expose Holdings or any of its Subsidiaries to, or result in, Environmental Claims that could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect or (B) affect the ability of Holdings or any of its Subsidiaries to maintain in full force and effect all material Governmental Authorizations required under any Environmental Laws for their respective operations and (2) any proposed action to be taken by Holdings or any of its Subsidiaries to modify current operations in a manner that could reasonably be expected to subject Holdings or any of its Subsidiaries to any additional obligations or requirements under any Environmental Laws that would be reasonably expected to have a Material Adverse Effect; and

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(iv)   with reasonable promptness, such other documents and information as from time to time may be reasonably requested by Administrative Agent in relation to any matters disclosed pursuant to this Section 5.9.

(b)   Hazardous Materials Activities, Etc. Each Credit Party shall promptly take, and shall cause each of its Subsidiaries promptly to take, any and all actions reasonably necessary to (i) cure any violation of applicable Environmental Laws by such Credit Party or its Subsidiaries that could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, and (ii) make an appropriate response to any Environmental Claim against such Credit Party or any of its Subsidiaries and discharge any obligations it may have to any Person thereunder where failure to do so could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

5.10.       Subsidiaries. In the event that any Person becomes a Domestic Subsidiary of Company, Company shall (a) promptly cause such Domestic Subsidiary to become a Guarantor hereunder and a Grantor under the Pledge and Security Agreement by executing and delivering to Administrative Agent and Collateral Agent a Counterpart Agreement, and (b) take all such actions and execute and deliver, or cause to be executed and delivered, all such documents, instruments, agreements, and certificates as are similar to those described in Sections 3.1(b), 3.1(i), and 3.1(l). In the event that any Person becomes a Foreign Subsidiary of Company, and the ownership interests of such Foreign Subsidiary are owned by Company or by any Domestic Subsidiary thereof, Company shall, or shall cause such Domestic Subsidiary to, deliver all such documents, instruments, agreements, and certificates as are similar to those described in Section 3.1(b)(i), (iv) and (v), and Company shall take, or shall cause such Domestic Subsidiary to take, all of the actions referred to in Section 3.1(i)(i) necessary to grant and to perfect a First Priority Lien in favor of Collateral Agent, for the benefit of Secured Parties, under the Pledge and Security Agreement in 65% of such ownership interests. With respect to each such Subsidiary, Company shall promptly send to Administrative Agent written notice setting forth with respect to such Person (i) the date on which such Person became a Subsidiary of Company, and (ii) all of the data required to be set forth in Schedules 4.1 and 4.2 with respect to Subsidiaries of Company; provided, such written notice shall be deemed to supplement Schedules 4.1 and 4.2 for all purposes hereof.

5.11.       Additional Material Real Estate Assets. In the event that any Credit Party acquires a Material Real Estate Asset, or a Real Estate Asset owned or leased on the Closing Date becomes a Material Real Estate Asset, and such interest has not otherwise been made subject to the Lien of the Collateral Documents in favor of Collateral Agent, for the benefit of Secured Parties, then such Credit Party, promptly but in any event not more than 60 days (i) after acquiring such Material Real Estate Asset (in the case of any Material Real Estate Asset owned by a Credit Party) or (ii) after request by the Collateral Agent (in the case of any Material Real Estate Asset leased by a Credit Party), shall take all such actions and execute and deliver, or

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cause to be executed and delivered, all such mortgages, documents, instruments, agreements, title policies, landlord waivers and/or estoppels, reports, opinions and certificates, which may include items similar to those described in Sections 3.1(i) and 3.1(j), with respect to each such Material Real Estate Asset that Collateral Agent shall reasonably request to create in favor of Collateral Agent, for the benefit of Secured Parties, a valid and, subject to any filing and/or recording referred to herein, perfected First Priority Lien in such Material Real Estate Assets. In addition to the foregoing, Company shall, at the request of Requisite Lenders, deliver, from time to time, to Administrative Agent such appraisals as are required by law or regulation of Real Estate Assets with respect to which Collateral Agent has been granted a Lien.

5.12.       Interest Rate Protection. No later than 90 days following the Closing Date and at all times thereafter, Company shall maintain, or caused to be maintained, in effect one or more Interest Rate Agreements for a term of not less than three years and otherwise in form and substance reasonably satisfactory to Administrative Agent, which Interest Rate Agreements shall effectively limit the Unadjusted Eurodollar Rate Component of the interest costs to Company with respect to an aggregate notional principal amount of not less than 50% of the aggregate principal amount of Term Loans outstanding from time to time (based on the assumption that such notional principal amount was a Eurodollar Rate Loan with an Interest Period of three months).

5.13.       Further Assurances. At any time or from time to time upon the request of Administrative Agent, each Credit Party will, at its expense, promptly execute, acknowledge and deliver such further documents and do such other acts and things as Administrative Agent or Collateral Agent may reasonably request in order to effect fully the purposes of the Credit Documents. In furtherance and not in limitation of the foregoing, each Credit Party shall take such actions as Administrative Agent or Collateral Agent may reasonably request from time to time to ensure that the Obligations are guarantied by the Guarantors and are secured by substantially all of the assets of Holdings and its Domestic Subsidiaries and all of the outstanding Capital Stock of Company and its Domestic Subsidiaries and first-tier Foreign Subsidiaries (subject to limitations contained in the Credit Documents with respect to Foreign Subsidiaries).

5.14.       Non-Consolidation. Unless otherwise consented to by Agents or Requisite Lenders, Holdings will and will cause each of its Subsidiaries to:  (i)  maintain entity records and books of account separate from those of any other entity which is an Affiliate of such entity; (ii) not commingle its funds or assets with those of any other entity which is an Affiliate of such entity (except pursuant to cash management systems reasonably acceptable to the Administrative Agent); and (iii) provide that its Board of Directors or other analogous governing body will hold all appropriate meetings to authorize and approve such entity’s actions, which meetings will be separate from those of other entities.

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SECTION 6.  NEGATIVE COVENANTS

Each Credit Party covenants and agrees that, so long as any Commitment is in effect and until payment in full of all Obligations (other than contingent indemnification Obligations) and cancellation or expiration or cash-collateralization, in a manner satisfactory to the Administrative Agent, of all Letters of Credit, such Credit Party shall perform, and shall cause each of its Subsidiaries to perform, all covenants in this Section 6.

6.1.   Indebtedness. No Credit Party shall, nor shall it permit any of its Subsidiaries to, directly or indirectly, create, incur, assume or guaranty, or otherwise become or remain directly or indirectly liable with respect to any Indebtedness, except:

(a)   the Obligations;

(b)   (i) Indebtedness of any Guarantor Subsidiary to Company or to any other Guarantor Subsidiary, or of Company to any Guarantor Subsidiary; (ii) Indebtedness of any Subsidiary of Company that is not a Guarantor to Company or any Subsidiary of Company in an aggregate principal amount that, together with Indebtedness under the proviso of Section 6.1(h), does not exceed $7,500,000 at any time; and (iii) Indebtedness of Company or any Guarantor Subsidiary to any Subsidiary of Company that is not a Guarantor; provided, (A) all such Indebtedness under this clause (b) shall be evidenced by promissory notes and all such notes shall be subject to a First Priority Lien pursuant to the Pledge and Security Agreement (except to the extent that the Indebtedness is owed to a Foreign Subsidiary), (B) all such Indebtedness shall be unsecured and subordinated in right of payment to the payment in full of the Obligations pursuant to the terms of the applicable promissory notes or an intercompany subordination agreement that in any such case, is reasonably satisfactory to Administrative Agent, and (C) any payment by any such Guarantor Subsidiary under any guaranty of the Obligations shall result in a pro tanto reduction of the amount of any Indebtedness owed by such Subsidiary to Company or to any of its Subsidiaries for whose benefit such payment is made;

(c)   the Senior Subordinated Notes in an aggregate principal amount not to exceed $320,000,000;

(d)   Indebtedness incurred by Holdings or any of its Subsidiaries arising from agreements providing for indemnification, adjustment of purchase price or similar obligations, or from guaranties or letters of credit, surety bonds or performance bonds securing the performance of Company or any such Subsidiary pursuant to such agreements, in connection with Permitted Acquisitions or permitted dispositions of any business, assets or Subsidiary of Holdings or any of its Subsidiaries;

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(e)   Indebtedness which may be deemed to exist pursuant to any guaranties, performance, surety, statutory, appeal or similar obligations incurred in the ordinary course of business;

(f)   Indebtedness in respect of netting services, overdraft protections and otherwise in connection with deposit accounts;

(g)   guaranties in the ordinary course of business of the obligations of suppliers, customers, franchisees and licensees of Holdings and its Subsidiaries;

(h)   guaranties by Company of Indebtedness of a Subsidiary and guaranties by a Subsidiary of Company of Indebtedness of Company or a Subsidiary of Company with respect to, in each case, Indebtedness otherwise permitted to be incurred pursuant to this Section 6.1; provided, that the aggregate amount of Indebtedness of Subsidiaries of Company that are not Guarantors which has been guaranteed by Company and the Guarantor Subsidiaries, together with Indebtedness under clause (b)(ii), shall not exceed $7,500,000 at any time;

(i)   Existing Indebtedness not refinanced on the Closing Date;

(j)   Indebtedness with respect to Capital Leases and purchase money Indebtedness in an aggregate amount not to exceed at any time $25,000,000; provided, any such Indebtedness (i) shall be secured only by the asset acquired in connection with the incurrence of such Indebtedness, and (ii) shall constitute not less than 95% of the aggregate consideration paid with respect to such asset;

(k)   Indebtedness in an amount not to exceed $10,000,000 in the aggregate at any time outstanding (i) consisting of Subordinated Indebtedness issued to a seller in connection with a Permitted Acquisition or (ii) incurred or assumed by Company and its Subsidiaries as a result of Permitted Acquisitions (A) that is unsecured or secured only by collateral consisting of property, plant and equipment of the acquired business or entity that was provided by such business or entity prior to the consummation of any such Permitted Acquisition and (B) that was not incurred in anticipation of any such Permitted Acquisition;

(l)   Indebtedness under Hedge Agreements required pursuant to, and entered into in accordance with, Section 5.12 or other Interest Rate Agreements or Currency Agreements entered into in the ordinary course of business and not for speculative purposes;

(m)   obligations on account of non-current accounts payable which the applicable Credit Party is contesting in good faith and by appropriate proceedings diligently conducted and with respect to which adequate reserves have been established and are being maintained in accordance with GAAP;

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(n)   other unsecured Indebtedness of Holdings and its Subsidiaries, which is subordinated to the Obligations in a manner satisfactory to Administrative Agent in an aggregate amount not to exceed at any time $15,000,000;

(o)   Indebtedness incurred by Foreign Subsidiaries of Company in an aggregate principal amount not exceeding $5,000,000 at any time; and

(p)   any extensions, renewals, refinancings or replacements of Indebtedness described in subsection (c)(i), (i), (j) or (l) above, including renewals and extensions expressly provided for in the agreements evidencing any such Indebtedness as the same are in effect on the Closing Date; provided that such extensions, renewals, refinancings and replacements of any such Indebtedness shall be permitted only so long as the covenants, events of default, subordination and other provisions thereof (including any guarantees thereof) are not less favorable to the obligor thereon or to the Lenders than the Indebtedness being extended, renewed refinanced or replaced, and the average life to maturity thereof is greater than or equal to that of the Indebtedness being extended, renewed refinanced or replaced; provided, further, such Indebtedness permitted under this subsection (p) shall not (i) include Indebtedness of an obligor that was not an obligor with respect to the Indebtedness being extended, renewed, refinanced or replaced, (ii) exceed in principal amount the Indebtedness being renewed, extended, refinanced or replaced (plus accrued interest thereon and premium, if any) or (iii) be incurred, created or assumed if any Default or Event of Default has occurred and is continuing or would result therefrom.

6.2.   Liens. No Credit Party shall, nor shall it permit any of its Subsidiaries to, directly or indirectly, create, incur, assume or permit to exist any Lien on or with respect to any property or asset of any kind (including any document or instrument in respect of goods or accounts receivable) of Holdings or any of its Subsidiaries, whether now owned or hereafter acquired, or any income or profits therefrom, or file or permit the filing of, or permit to remain in effect, any financing statement or other similar notice of any Lien with respect to any such property, asset, income or profits under the UCC of any State or under any similar recording or notice statute, except:

(a)   Liens in favor of Collateral Agent for the benefit of Secured Parties granted pursuant to any Credit Document;

(b)   Liens for Taxes that are not yet required to be paid pursuant to Section 5.3;

(c)   statutory Liens of landlords, carriers, warehousemen, mechanics, repairmen, workmen and materialmen, and other Liens imposed by law (other than any such Lien imposed pursuant to Section 401(a)(29) or 412(n) of the Internal Revenue Code or by ERISA), in each case incurred in the ordinary course of business (i) for amounts not yet overdue or (ii) for

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amounts that are overdue and that (in the case of any such amounts overdue for a period in excess of fifteen days) are being contested in good faith by appropriate proceedings, so long as such reserves or other appropriate provisions, if any, as shall be required by GAAP shall have been made for any such contested amounts;

(d)   Liens incurred in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other types of social security, or to secure the performance of tenders, statutory obligations, surety and appeal bonds, bids, leases, government contracts, trade contracts, performance and return-of-money bonds and other similar obligations (exclusive of obligations for the payment of borrowed money or other Indebtedness), so long as no foreclosure, sale or similar proceedings have been commenced with respect to any portion of the Collateral on account thereof;

(e)   easements, rights-of-way, restrictions, encroachments, and other minor defects or irregularities in title, in each case which do not and will not interfere in any material respect with the ordinary conduct of the business of Holdings or any of its Subsidiaries;

(f)   any interest or title of a lessor or sublessor under any lease of real or personal property which is not a Capital Lease;

(g)   Liens solely on any cash earnest money deposits made by Holdings or any of its Subsidiaries in connection with any letter of intent or purchase agreement for a Permitted Acquisition;

(h)   purported Liens evidenced by the filing of precautionary UCC financing statements relating solely to operating leases of personal property entered into in the ordinary course of business;

(i)   Liens in favor of customs and revenue authorities or freight handlers or forwarders to secure payment of customs duties in connection with the importation of goods;

(j)   any zoning or similar law or right reserved to or vested in any Governmental Authority;

(k)   licenses and sublicenses of patents, trademarks and other intellectual property rights granted by Holdings or any of its Subsidiaries in the ordinary course of business and not interfering in any respect with the ordinary conduct of the business of Company or such Subsidiary;

(l)   Liens described in Schedule 6.2 or on a title report delivered with respect to any Real Estate Asset subject to a Mortgage;

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(m)   Liens securing Indebtedness permitted pursuant to Section 6.1(j); provided, any such Lien shall encumber only the asset acquired, constructed or improved with the proceeds of such Indebtedness and substitutions and replacements thereof and accessions and attachments thereto, and extensions, renewals and replacements of such Liens; provided, that any extension, renewal or replacement is no more restrictive in any material respect than the Liens so extended, renewed or replaced and does not extent to any additional property or assets;

(n)   any attachment or judgment Lien not constituting an Event of Default under Section 8.1(h);

(o)   customary security deposits under operating leases in the ordinary course of business;

(p)   customary rights of set off, bankers’ lien, refund or charge back under deposit agreements, the Uniform Commercial Code or common law of banks or other financial institutions where Company or any of its Subsidiaries maintains deposits (other than deposits intended as cash collateral) in the ordinary course of business;

(q)   any leases or subleases granted to others in the ordinary course of business of Company and its Subsidiaries not interfering in any material respect with the business of Company and its Subsidiaries;

(r)   Liens to secure Indebtedness permitted by Sections 6.1(i) and 6.1(o);

(s)   Liens in connection with permitted repurchase obligations;

(t)   Liens upon specific items of inventory or other goods and proceeds of any Person securing such Person’s obligations in respect of bankers’ acceptances issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods;

(u)   Liens in favor of any Credit Party;

(v)   (i) Liens on property, plant and equipment of a Person existing at the time such Person is merged with or into or consolidated with Holdings or a Subsidiary thereof; provided, that such Liens were in existence prior to and were not incurred in connection with or in contemplation of such merger or consolidation and do not extend to any assets other than those of the Person merged into or consolidated with Holdings or such Subsidiary and (ii) extensions, renewals and replacements of any Liens set forth in clause (i) of this subsection (v); provided, that any such extension, renewal or replacement is no more restrictive in any material

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respect than the Lien so extended, renewed or replaced and does not extend to any additional property or assets;

(w)   (i) Liens on property, plant and equipment existing at the time of acquisition thereof by Holdings or any Subsidiary of Holdings, provided, that such Liens were in existence prior to such acquisition and not incurred in contemplation of such acquisition and (ii) extensions, renewals and replacements of any Liens set forth in clause (i) of this subsection (w); provided, that any such extension, renewal or replacement is no more restrictive in any material respect than the Lien so extended, renewed or replaced and does not extend to any additional property or assets; and

(x)   other Liens on assets other than the Collateral securing Indebtedness in an aggregate amount not to exceed $1,000,000 at any time outstanding.

6.3.   Equitable Lien. If any Credit Party or any of its Subsidiaries shall create or assume any Lien upon any of its properties or assets, whether now owned or hereafter acquired, other than Permitted Liens, it shall make or cause to be made effective provisions whereby the Obligations will be secured by such Lien equally and ratably with any and all other Indebtedness secured thereby as long as any such Indebtedness shall be so secured; provided, notwithstanding the foregoing, this covenant shall not be construed as a consent by Requisite Lenders to the creation or assumption of any such Lien not otherwise permitted hereby.

6.4.   No Further Negative Pledges. Except with respect to (a) specific property encumbered to secure payment of particular Indebtedness or to be sold pursuant to an executed agreement with respect to a permitted sale or other disposition of assets or property, (b) the Senior Subordinated Note Documents as in effect on the Closing Date, and (c) restrictions by reason of customary provisions restricting assignments, subletting or other transfers contained in leases, licenses and similar agreements entered into in the ordinary course of business (provided that such restrictions are limited to the property or assets secured by such Liens or the property or assets subject to such leases, licenses or similar agreements, as the case may be), no Credit Party nor any of its Subsidiaries shall enter into any agreement prohibiting the creation or assumption of any Lien upon any of its properties or assets, whether now owned or hereafter acquired.

6.5.   Restricted Junior Payments. No Credit Party shall, nor shall it permit any of its Subsidiaries or Affiliates through any manner or means or through any other Person to, directly or indirectly, declare, order, pay, make or set apart, or agree to declare, order, pay, make or set apart, any sum for any Restricted Junior Payment except that:

(a)   Company may make regularly scheduled payments of interest in respect of the Senior Subordinated Notes and any other Subordinated Indebtedness in accordance with the

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terms of, and only to the extent required by, and subject to the subordination provisions contained in, the indenture or other agreement pursuant to which such Subordinated Indebtedness was issued;

(b)   so long as no Default or Event of Default shall have occurred and be continuing or shall be caused thereby, Company may make Restricted Junior Payments to Holdings (i) in an aggregate amount not to exceed $750,000 in any Fiscal Year, to the extent necessary to permit Holdings or its parent entity to pay general administrative costs and expenses and out-of-pocket legal, accounting and filing and other general corporate overhead costs of Holdings or its parent entity actually incurred by Holdings or its parent entity and (ii) to the extent necessary to permit Holdings to discharge the consolidated tax liabilities of Holdings and its Subsidiaries and to pay franchise taxes and other fees required to maintain its existence, in each case so long as Holdings applies the amount of any such Restricted Junior Payment for such purpose;

(c)   Subsidiaries of Company may make Restricted Junior Payments (i) to Company or to any parent entity of such Subsidiary which is a Subsidiary and (ii) on a pro rata basis to the other equity holders of such Subsidiary;

(d)   so long as no Default or Event of Default shall have occurred and be continuing or shall be caused thereby, the Company may repurchase, redeem or otherwise acquire or retire for value any Capital Stock of the Company or any of its Subsidiaries held by any current or former officer, director, consultant or employee of the Company or any of its Subsidiaries, or his or her estate, spouse, former spouse, or family member (or pay principal or interest on any Indebtedness issued in connection with such repurchase, redemption or other acquisition) and may make Restricted Junior Payments to Holdings utilized for the repurchase, redemption or other acquisition or retirement for value of any Capital Stock of Holdings held by any current or former officer, director, employee or consultant of the Company or any of its Subsidiaries, or his or her estate, spouse, former spouse, or family member (or for the payment of principal or interest on any Indebtedness issued in connection with such repurchase, redemption or other acquisition) in each case, pursuant to any equity subscription agreement, stock option agreement, shareholders’ agreement or similar agreement or benefit plan of any kind; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $1,000,000 in any calendar year period (with unused amounts in any immediately preceding calendar year being carried over to the succeeding calendar year subject to a maximum carry-over amount of $2,000,000 in any calendar year); provided further, that such amount in any calendar year may be increased by an amount not to exceed:

(i)   to the extent of any such proceeds that are not required to be applied to prepay Loans in accordance with Section 2.14, the cash proceeds from the sale of Capital Stock of Company and, to the extent contributed to Company as common equity

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capital, Capital Stock of any of Company’s direct or indirect parent entities, in each case to members of management, directors or consultants of Company, any of its Subsidiaries or any of its direct or indirect parent entities that occurs after the Closing Date, plus

(ii)   the cash proceeds of key person life insurance policies received by Company and its Subsidiaries after the Closing Date, less

(iii)   the amount of any payments previously made pursuant to clauses (i) and (ii) of this clause (d);

(e)   Company and its Subsidiaries may redeem or repurchase Capital Stock in exchange for Capital Stock or with the proceeds of a substantially contemporaneous sale of Capital Stock, or a substantially contemporaneous receipt of a capital contribution, to the extent of any such proceeds that are not required to be applied to prepay Loans in accordance with Section 2.14;

(f)   Company and its Subsidiaries may repay, repurchase, redeem or otherwise acquire for value any Subordinated Indebtedness with the proceeds of Indebtedness permitted by Section 6.1(n) or (p) or with the proceeds of a substantially contemporaneous sale of Capital Stock, or a substantially contemporaneous receipt of a capital contribution, to the extent of any such proceeds that are not required to be applied to prepay Loans in accordance with Section 2.14;

(g)   Company and its Subsidiaries may repurchase Capital Stock which repurchase is deemed to occur upon any “cashless” exercise of stock options, warrants or other convertible securities;

(h)   the redemption, repurchase or other acquisition for value of any Capital Stock of any Foreign Subsidiary that is held by any Person that is not an Affiliate of Company to the extent required by applicable laws, rules or regulations; provided that the amount of any such redemptions, repurchases or other acquisitions shall not exceed $5,000,000 during the term of this Agreement; and

(i)   so long as no Default or Event of Default shall have occurred and be continuing or shall be caused thereby, Holdings may declare and pay dividends to the holders of its Capital Stock and repurchase, redeem or otherwise acquire for value any Capital Stock of Holdings (collectively, “share repurchases”), and Company may pay dividends to Holdings for such purpose, if after giving effect to such dividend or share repurchase, the aggregate amount of such dividends and share repurchases during the term of this Agreement does not exceed (i) $10,000,000 plus (ii) so long as the Leverage Ratio is less than 3.25:1.00 on a pro forma basis after giving effect to such dividend or share repurchase, 25% of the Consolidated Excess Cash

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Flow for each Fiscal Year of Company ended prior to the date of such dividend or share repurchase on a cumulative basis (commencing with the Fiscal Year ended March 31, 2006).

6.6.   Restrictions on Subsidiary Distributions. Except as provided herein, no Credit Party shall, nor shall it permit any of its Subsidiaries to, create or otherwise cause or suffer to exist or become effective any consensual encumbrance or restriction of any kind on the ability of any Subsidiary of Company to (a) pay dividends or make any other distributions on any of such Subsidiary’s Capital Stock owned by Company or any other Subsidiary of Company, (b) repay or prepay any Indebtedness owed by such Subsidiary to Company or any other Subsidiary of Company, (c) make loans or advances to Company or any other Subsidiary of Company, or (d) transfer any of its property or assets to Company or any other Subsidiary of Company other than restrictions (i) existing under this Agreement, (ii) in the Senior Subordinated Note Documents as in effect on the Closing Date or as modified in accordance with this Agreement, (iii) in agreements evidencing Indebtedness permitted by Section 6.1(j) that impose restrictions on the property so acquired, (iv) by reason of customary provisions restricting assignments, subletting or other transfers contained in leases, licenses, joint venture agreements and similar agreements otherwise permitted hereunder, (v) arising under applicable laws, rules, regulations or orders, (vi) that are or were created by virtue of any transfer of, agreement to transfer or option or right with respect to any property, assets or Capital Stock not otherwise prohibited under this Agreement, (vii) any instrument governing Indebtedness or Capital Stock of a Person acquired by Company and its Subsidiaries as in effect at the time of such acquisition (except to the extent such Indebtedness or Capital Stock was incurred or issued in connection with or in contemplation of such acquisition), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person or property or assets of the Person so acquired; provided that, in the case of Indebtedness, such Indebtedness was permitted by the terms of this Agreement to be incurred, (viii) in agreements set forth on Schedule 6.6, (ix) provisions in agreements or instruments that prohibit the payment of dividends or the making of other distributions with respect to Capital Stock other than on a pro rata basis and (x) imposed by any amendments, modifications restatements, renewals, increases, supplements, refundings, replacements or refinancings of the contracts, instruments or obligations referred to in clauses (i) through (ix) above; provided that the encumbrances or restrictions in such amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings are not materially more restrictive, in the good faith judgment of the Board of Directors of Holdings, taken as a whole, than the encumbrances or restrictions prior to such amendment, modification, restatement, renewal, increase, supplement, refunding, replacement or refinancing.

6.7.   Investments. No Credit Party shall, nor shall it permit any of its Subsidiaries to, directly or indirectly, make or own any Investment in any Person, including without limitation any Joint Venture, except:

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(a)   Investments in Cash and Cash Equivalents;

(b)   (i) Investments owned as of the Closing Date in any Subsidiary; (ii) Investments made after the Closing Date in any Guarantor Subsidiary; and (iii) Investments made after the Closing Date in any Subsidiary of Company that is not a Guarantor in an aggregate amount, together with any sales, leases, licenses and other dispositions of assets permitted under Section 6.9(b), not to exceed $7,500,000 at any time;

(c)   Investments (i) received in satisfaction or partial satisfaction of delinquent accounts and disputes with customers or suppliers of such Person in the ordinary course of business; (ii) acquired as a result of foreclosure of a Lien securing an Investment or the transfer of the assets subject to such Lien in lieu of foreclosure and (iii) consisting of deposits, prepayments and other credits to suppliers made in the ordinary course of business consistent with the past practices of Holdings and its Subsidiaries;

(d)   intercompany loans to the extent permitted under Section 6.1(b);

(e)   Consolidated Capital Expenditures permitted by Section 6.8(c);

(f)   loans and advances to employees of Holdings and its Subsidiaries made in the ordinary course of business in an aggregate principal amount not to exceed $1,000,000 in the aggregate at any time; and payroll, travel and similar advances to employees to cover matters that are expected at the time of such advances ultimately to be treated as expenses for accounting purposes and that are made in the ordinary course of business;

(g)   Investments made in connection with Permitted Acquisitions permitted pursuant to Section 6.9;

(h)   Investments described in Schedule 6.7;

(i)   extensions of credit to customers or advances, deposits and payment to or with suppliers, lessors or utilities or for workers’ compensation, in each case, in the ordinary course of business that are recorded as accounts receivable, prepaid expenses or deposits on the balance sheet of the Company and its Subsidiaries prepared in accordance with GAAP;

(j)   Investments constituting non-Cash consideration received by Company or any of its Subsidiaries in connection with permitted Asset Sales and other sales and dispositions permitted under Section 6.9;

(k)   Investments under Hedge Agreements to the extent permitted under Section 6.1;

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(l)   Investments consisting of loans by Company to Holdings for purposes otherwise permitted under Section 6.5 to be distributed to Holdings;

(m)   Investments in joint ventures having an aggregate value (measured on the date each such Investment was made and without giving effect to subsequent changes in value), when taken together with all other Investments made pursuant to this clause (m) since the Closing Date, not to exceed $20,000,000; provided that the Capital Stock of any joint venture created or acquired after the Closing Date owned by the Company or any of its Subsidiaries shall be pledged to the Collateral Agent; and

(n)   other Investments in an aggregate amount not to exceed at any time $5,000,000.

Notwithstanding the foregoing, in no event shall any Credit Party make any Investment which results in or facilitates in any manner any Restricted Junior Payment not otherwise permitted under the terms of Section 6.5.

6.8.   Financial Covenants.

(a)   Interest Coverage Ratio. Company shall not permit the Interest Coverage Ratio as of the last day of any Fiscal Quarter, beginning with the first Fiscal Quarter of the Fiscal Year ending in 2006 (“FQ1 2006”), to be less than the correlative ratio indicated: 

Fiscal Quarter	Interest Coverage Ratio
FQ1 2006	2.00:1.00
FQ2 2006	2.00:1.00
FQ3 2006	2.00:1.00
FQ4 2006	2.00:1.00
FQ1 2007	2.05:1.00
FQ2 2007	2.10:1.00
FQ3 2007	2.20:1.00
FQ4 2007	2.30:1.00
FQ1 2008	2.50:1.00
FQ2 2008	2.50:1.00
FQ3 2008	2.50:1.00

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Fiscal Quarter	Interest Coverage Ratio
FQ4 2008	2.50:1.00
FQ1 2009	2.75:1.00
FQ2 2009	2.75:1.00
FQ3 2009	2.75:1.00
FQ4 2009	2.75:1.00
FQ1 2010	3.00:1.00
FQ2 2010	3.00:1.00
FQ3 2010	3.00:1.00
FQ4 2010	3.00:1.00
FQ1 2011	3.20:1.00
FQ2 2011	3.20:1.00
FQ3 2011 and thereafter	3.20:1.00

(b)   Leverage Ratio. Company shall not permit the Leverage Ratio as of the last day of any Fiscal Quarter, beginning with the first Fiscal Quarter of the Fiscal Year ending in 2006 (“FQ1 2006”), to exceed the correlative ratio indicated:

Fiscal Quarter	Leverage Ratio
FQ1 2006	6.00:1.00
FQ2 2006	6.00:1.00
FQ3 2006	6.00:1.00
FQ4 2006	6.00:1.00
FQ1 2007	5.75:1.00
FQ2 2007	5.50:1.00
FQ3 2007	5.25:1.00
FQ4 2007	5.00:1.00
FQ1 2008	4.50:1.00

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Fiscal Quarter	Leverage Ratio
FQ2 2008	4.50:1.00
FQ3 2008	4.50:1.00
FQ4 2008	4.50:1.00
FQ1 2009	4.00:1.00
FQ2 2009	4.00:1.00
FQ3 2009	4.00:1.00
FQ4 2009	4.00:1.00
FQ1 2010	3.50:1.00
FQ2 2010	3.50:1.00
FQ3 2010	3.50:1.00
FQ4 2010	3.50:1.00
FQ1 2011	3.00:1.00
FQ2 2011	3.00:1.00
FQ3 2011 and thereafter	3.00:1.00

(c)   Maximum Consolidated Capital Expenditures. Holdings shall not, and shall not permit its Subsidiaries to, make or incur Consolidated Capital Expenditures, in any Fiscal Year indicated below, in an aggregate amount for Holdings and its Subsidiaries in excess of the corresponding amount set forth below opposite such Fiscal Year:

Fiscal Year	Consolidated  Capital Expenditures
2006	$	8,000,000
2007	$	8,000,000
2008	$	8,000,000
2009	$	8,000,000
2010	$	8,000,000
2011	$	8,000,000

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(d)   Certain Calculations. With respect to any period during which a Permitted Acquisition or an Asset Sale has occurred (each, a “Subject Transaction”), for purposes of determining compliance with the financial covenants set forth in this Section 6.8 (but not for purposes of determining the Applicable Margin or Applicable Commitment Fee Percentage), Consolidated Adjusted EBITDA shall be calculated with respect to such period on a pro forma basis (including pro forma adjustments arising out of events which are directly attributable to a specific transaction, are factually supportable and are expected to have a continuing impact, in each case determined in good faith on a basis consistent with Article 11 of Regulation S-X promulgated under the Securities Act and as interpreted by the staff of the Securities and Exchange Commission, which would include cost savings resulting from head count reduction, closure of facilities and similar restructuring charges, which pro forma adjustments shall be certified by the chief financial officer of Holdings) using the historical audited financial statements of any business so acquired or to be acquired or sold or to be sold and the consolidated financial statements of Holdings and its Subsidiaries which shall be reformulated as if such Subject Transaction, and any Indebtedness incurred or repaid in connection therewith, had been consum­mated or incurred or repaid at the beginning of such period (and assuming that such Indebtedness bears interest during any portion of the applicable measurement period prior to the relevant acquisition at the weighted average of the interest rates applicable to outstanding Loans incurred during such period).

6.9.   Fundamental Changes; Disposition of Assets; Acquisitions. No Credit Party shall, nor shall it permit any of its Subsidiaries to, enter into any transaction of merger or consolidation, or liquidate, wind-up or dissolve itself (or suffer any liquidation or dissolution), or convey, sell, lease or sub-lease (as lessor or sublessor), exchange, transfer or otherwise dispose of, in one transaction or a series of transactions, all or any part of its business, assets or property of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible, whether now owned or hereafter acquired, or acquire by purchase or otherwise (other than purchases or other acquisitions of inventory, supplies, intellectual property, materials and equipment and Capital Expenditures in the ordinary course of business) the business, all or substantially all of the property or fixed assets of, or stock or other evidence of beneficial ownership of, any Person or any division or line of business or other business unit of any Person, except:

(a)   any Subsidiary of Company may be merged with or into Company or any Guarantor Subsidiary, or be liquidated, wound up or dissolved, or all or any part of its business, property or assets may be conveyed, sold, leased, transferred or otherwise disposed of, in one transaction or a series of transactions, to Company or any Guarantor Subsidiary; provided, in the case of such a merger, Company or such Guarantor Subsidiary, as applicable shall be the continuing or surviving Person; and any Subsidiary of Company which is not a Guarantor Subsidiary may be merged with or into any other Subsidiary which is not a Guarantor

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Subsidiary, or be liquidated, wound up or dissolved, or all or any part of its business, property or assets may be conveyed, sold, leased, transferred or otherwise disposed of, in one transaction or a series of transactions to any Subsidiary which is not a Guarantor Subsidiary;

(b)   sales, leases, licenses or other dispositions of assets that do not constitute Asset Sales; provided, that the fair market value of assets sold, leased, licensed, or otherwise disposed of to Subsidiaries of Company that are not Guarantors, together with any Investments permitted under Section 6.7(b)(iii), shall not exceed $7,500,000 in any Fiscal Year;

(c)   Asset Sales, the proceeds of which (valued at the principal amount thereof in the case of non-Cash proceeds consisting of notes or other debt Securities and valued at fair market value in the case of other non-Cash proceeds) (i) are less than $1,000,000 with respect to any single Asset Sale or series of related Asset Sales and (ii) when aggregated with the proceeds of all other Asset Sales made within the same Fiscal Year, are less than $2,000,000; provided (1) the consideration received for such assets shall be in an amount at least equal to the fair market value thereof (determined in good faith by the Board of Directors of Company), (2) no less than 75% thereof shall be paid in Cash, and (3) the Net Asset Sale Proceeds thereof shall be applied as required by Section 2.14(a);

(d)   Permitted Acquisitions, the consideration for which constitutes less than $50,000,000 in the aggregate from the Closing Date to the date of determination;

(e)   Investments made in accordance with Section 6.7;

(f)   the lapse of registered intellectual property of Company or any of its Subsidiaries that is no longer useful and the lapse of which could not reasonably be expected to result in a Material Adverse Effect;

(g)   the settlement or write-off of accounts receivable or sale of overdue accounts receivable for collection in the ordinary course of business consistent with past practice; and

(h)   the termination, surrender or sublease of a real estate lease of Company or any of its Subsidiaries in the ordinary course of business.

6.10.   Disposal of Subsidiary Interests. Except for any sale of all of its interests in the Capital Stock of any of its Subsidiaries in compliance with the provisions of Section 6.9, no Credit Party shall, nor shall it permit any of its Subsidiaries to, (a) directly or indirectly sell, assign, pledge or otherwise encumber or dispose of any Capital Stock of any of its Subsidiaries, except to qualify directors if required by applicable law; or (b) permit any of its Subsidiaries directly or indirectly to sell, assign, pledge or otherwise encumber or dispose of any Capital

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Stock of any of its Subsidiaries, except to another Credit Party (subject to the restrictions on such disposition otherwise imposed hereunder), or to qualify directors if required by applicable law.

6.11.   Sales and Lease-Backs. No Credit Party shall, nor shall it permit any of its Subsidiaries to, directly or indirectly, become or remain liable as lessee or as a guarantor or other surety with respect to any lease of any property (whether real, personal or mixed), whether now owned or hereafter acquired, which such Credit Party (a) has sold or transferred or is to sell or to transfer to any other Person (other than Holdings or any of its Subsidiaries), or (b) intends to use for substantially the same purpose as any other property which has been or is to be sold or transferred by such Credit Party to any Person (other than Holdings or any of its Subsidiaries) in connection with such lease.

6.12.   Transactions with Shareholders and Affiliates. No Credit Party shall, nor shall it permit any of its Subsidiaries to, directly or indirectly, enter into or permit to exist any transaction (including the purchase, sale, lease or exchange of any property or the rendering of any service) with any Affiliate of Holdings, on terms that are less favorable to Holdings or that Subsidiary, as the case may be, than those that might be obtained at the time from a Person who is not an Affiliate; provided, the foregoing restriction shall not apply to (a) any transaction (i) between Company and any Guarantor Subsidiary, (ii) between two or more Guarantor Subsidiaries and (iii) between two or more Subsidiaries that are not Guarantors; (b) reasonable and customary fees paid to and indemnification arrangements entered into with members of the Board of Directors (or similar governing body) of Holdings and its Subsidiaries; (c) (i) so long as no Default or Event of Default has occurred and is continuing, payment of management fees to Sponsor and its Affiliates in an amount not to exceed $300,000 per Fiscal Year, which amount may be increased by an amount equal to $300,000 per Fiscal Year for each Permitted Acquisition consummated during such Fiscal Year, subject to a maximum aggregate amount of management fees of $2,000,000 in any twelve-month period and (ii) reimbursement of reasonable expenses actually incurred by Sponsor and its Affiliates; (d) transactions described in Schedule 6.12; (e) any transactions contemplated by and effected in connection with the transactions contemplated hereby, including the payment of fees and expenses related thereto; and (f) any transaction otherwise permitted by Section 6.1, 6.2, 6.5, 6.7 or 6.9.

6.13.   Conduct of Business. From and after the Closing Date, no Credit Party shall, nor shall it permit any of its Subsidiaries to, engage in any business other than (i) the businesses engaged in by such Credit Party on the Closing Date and similar or related businesses and (ii) such other lines of business as may be consented to by Requisite Lenders.

6.14.   Permitted Activities of Holdings. Holdings shall not (a) incur, directly or indirectly, any Indebtedness or any other obligation or liability whatsoever other than the Indebtedness and obligations under the Credit Documents and the Related Agreements; (b) create or suffer to exist any Lien upon any property or assets now owned or hereafter acquired by

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it other than the Liens created under the Collateral Documents to which it is a party or permitted pursuant to Section 6.2; (c) engage in any business or activity or own any assets other than (i) holding 100% of the Capital Stock of Company, (ii) performing its obligations and activities incidental thereto under the Credit Documents, and to the extent not inconsistent therewith, the Related Agreements; and (iii) making Restricted Junior Payments and Investments to the extent permitted by this Agreement; (d) consolidate with or merge with or into, or convey, transfer or lease all or substantially all its assets to, any Person; (e) sell or otherwise dispose of any Capital Stock of any of its Subsidiaries except as permitted under Section 6.9 and 6.10; (f) create or acquire any Subsidiary or make or own any Investment in any Person other than Company; or (g) fail to hold itself out to the public as a legal entity separate and distinct from all other Persons.

6.15.   Amendments or Waivers of Purchase Agreement and Organizational Documents. No Credit Party shall, nor shall it permit any of its Subsidiaries to, agree to any amendment, restatement, supplement or other modification to, or waiver of, any of its material rights under the Purchase Agreement or the terms of any of its Organizational Documents after the Closing Date if the effect of such amendment, restatement, supplement, modification or waiver would be adverse to any Credit Party or Lenders, without in each case obtaining the prior written consent of Requisite Lenders to such amendment, restatement, supplement or other modification or waiver.

6.16.   Amendments or Waivers with respect to Subordinated Indebtedness. No Credit Party shall, nor shall it permit any of its Subsidiaries to, amend or otherwise change the terms of any Subordinated Indebtedness, or make any payment consistent with an amendment thereof or change thereto, if the effect of such amendment or change is to increase the interest rate on such Subordinated Indebtedness, change (to earlier dates) any dates upon which payments of principal or interest are due thereon, change any event of default or condition to an event of default with respect thereto (other than to eliminate any such event of default or increase any grace period related thereto), change the redemption, prepayment or defeasance provisions thereof, change the subordination provisions of such Subordinated Indebtedness (or of any guaranty thereof), or if the effect of such amendment or change, together with all other amendments or changes made, is to increase materially the obligations of the obligor thereunder or to confer any additional rights on the holders of such Subordinated Indebtedness (or a trustee or other representative on their behalf) which would be adverse to any Credit Party or Lenders.

6.17.   Fiscal Year. No Credit Party shall, nor shall it permit any of its Subsidiaries to change its Fiscal Year-end from the Friday closest to March 31.

6.18.   Designated Senior Debt. The Company shall not designate any Indebtedness other than Indebtedness under this Agreement and the other Credit Documents as “Designated Senior Debt” under the Senior Subordinated Note Agreement without the prior written consent of the Requisite Lenders.

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SECTION 7.  GUARANTY

7.1.   Guaranty of the Obligations. Subject to the provisions of Section 7.2, Guarantors jointly and severally hereby irrevocably and unconditionally guaranty to Administrative Agent for the ratable benefit of the Beneficiaries the due and punctual payment in full of all Obligations when the same shall become due, whether at stated maturity, by required prepayment, declaration, acceleration, demand or otherwise (including amounts that would become due but for the operation of the automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. § 362(a)) (collectively, the “Guaranteed Obligations”).

7.2.   Contribution by Guarantors. All Guarantors desire to allocate among themselves (collectively, the “Contributing Guarantors”), in a fair and equitable manner, their obligations arising under this Guaranty. Accordingly, in the event any payment or distribution is made on any date by a Guarantor (a “Funding Guarantor”) under this Guaranty such that its Aggregate Payments exceeds its Fair Share as of such date, such Funding Guarantor shall be entitled to a contribution from each of the other Contributing Guarantors in an amount sufficient to cause each Contributing Guarantor’s Aggregate Payments to equal its Fair Share as of such date. “Fair Share” means, with respect to a Contributing Guarantor as of any date of determination, an amount equal to (a) the ratio of (i) the Fair Share Contribution Amount with respect to such Contributing Guarantor to (ii) the aggregate of the Fair Share Contribution Amounts with respect to all Contributing Guarantors multiplied by (b) the aggregate amount paid or distributed on or before such date by all Funding Guarantors under this Guaranty in respect of the obligations Guaranteed. “Fair Share Contribution Amount” means, with respect to a Contributing Guarantor as of any date of determination, the maximum aggregate amount of the obligations of such Contributing Guarantor under this Guaranty that would not render its obligations hereunder or thereunder subject to avoidance as a fraudulent transfer or conveyance under Section 548 of Title 11 of the United States Code or any comparable applicable provisions of state law; provided, solely for purposes of calculating the “Fair Share Contribution Amount” with respect to any Contributing Guarantor for purposes of this Section 7.2, any assets or liabilities of such Contributing Guarantor arising by virtue of any rights to subrogation, reimbursement or indemnification or any rights to or obligations of contribution hereunder shall not be considered as assets or liabilities of such Contributing Guarantor. “Aggregate Payments” means, with respect to a Contributing Guarantor as of any date of determination, an amount equal to (1) the aggregate amount of all payments and distributions made on or before such date by such Contributing Guarantor in respect of this Guaranty (including, without limitation, in respect of this Section 7.2), minus (2) the aggregate amount of all payments received on or before such date by such Contributing Guarantor from the other Contributing Guarantors as contributions under this Section 7.2. The amounts payable as contributions hereunder shall be determined as of the date on which the related payment or distribution is made by the applicable Funding Guarantor. The allocation among Contributing Guarantors of their obligations as set forth in this Section 7.2

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shall not be construed in any way to limit the liability of any Contributing Guarantor hereunder. Each Guarantor is a third party beneficiary to the contribution agreement set forth in this Section 7.2.

7.3.   Payment by Guarantors. Subject to Section 7.2, Guarantors hereby jointly and severally agree, in furtherance of the foregoing and not in limitation of any other right which any Beneficiary may have at law or in equity against any Guarantor by virtue hereof, that upon the failure of Company to pay any of the Guaranteed Obligations when and as the same shall become due, whether at stated maturity, by required prepayment, declaration, acceleration, demand or otherwise (including amounts that would become due but for the operation of the automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. § 362(a)), Guarantors will upon demand pay, or cause to be paid, in Cash, to Administrative Agent for the ratable benefit of Beneficiaries, an amount equal to the sum of the unpaid principal amount of all Guaranteed Obligations then due as aforesaid, accrued and unpaid interest on such Guaranteed Obligations (including interest which, but for Company’s becoming the subject of a case under the Bankruptcy Code, would have accrued on such Guaranteed Obligations, whether or not a claim is allowed against Company for such interest in the related bankruptcy case) and all other Guaranteed Obligations then owed to Beneficiaries as aforesaid.

7.4.   Liability of Guarantors Absolute. Each Guarantor agrees that its obligations hereunder are irrevocable, absolute, independent and unconditional and shall not be affected by any circumstance which constitutes a legal or equitable discharge of a guarantor or surety other than payment in full of the Guaranteed Obligations. In furtherance of the foregoing and without limiting the generality thereof, each Guarantor agrees as follows:

(a)   this Guaranty is a guaranty of payment when due and not of collectability. This Guaranty is a primary obligation of each Guarantor and not merely a contract of surety;

(b)   Administrative Agent may enforce this Guaranty upon the occurrence of an Event of Default notwithstanding the existence of any dispute between Company and any Beneficiary with respect to the existence of such Event of Default;

(c)   the obligations of each Guarantor hereunder are independent of the obligations of Company and the obligations of any other guarantor (including any other Guarantor) of the obligations of Company, and a separate action or actions may be brought and prosecuted against such Guarantor whether or not any action is brought against Company or any of such other guarantors and whether or not Company is joined in any such action or actions;

(d)   payment by any Guarantor of a portion, but not all, of the Guaranteed Obligations shall in no way limit, affect, modify or abridge any Guarantor’s liability for any portion of the Guaranteed Obligations which has not been paid. Without limiting the generality

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of the foregoing, if Administrative Agent is awarded a judgment in any suit brought to enforce any Guarantor’s covenant to pay a portion of the Guaranteed Obligations, such judgment shall not be deemed to release such Guarantor from its covenant to pay the portion of the Guaranteed Obligations that is not the subject of such suit, and such judgment shall not, except to the extent satisfied by such Guarantor, limit, affect, modify or abridge any other Guarantor’s liability hereunder in respect of the Guaranteed Obligations;

(e)   any Beneficiary, upon such terms as it deems appropriate, without notice or demand and without affecting the validity or enforceability hereof or giving rise to any reduction, limitation, impairment, discharge or termination of any Guarantor’s liability hereunder, from time to time may (i) renew, extend, accelerate, increase the rate of interest on, or otherwise change the time, place, manner or terms of payment of the Guaranteed Obligations; (ii) settle, compromise, release or discharge, or accept or refuse any offer of performance with respect to, or substitutions for, the Guaranteed Obligations or any agreement relating thereto and/or subordinate the payment of the same to the payment of any other obligations; (iii) request and accept other guaranties of the Guaranteed Obligations and take and hold security for the payment hereof or the Guaranteed Obligations; (iv) release, surrender, exchange, substitute, compromise, settle, rescind, waive, alter, subordinate or modify, with or without consideration, any security for payment of the Guaranteed Obligations, any other guaranties of the Guaranteed Obligations, or any other obligation of any Person (including any other Guarantor) with respect to the Guaranteed Obligations; (v) enforce and apply any security now or hereafter held by or for the benefit of such Beneficiary in respect hereof or the Guaranteed Obligations and direct the order or manner of sale thereof, or exercise any other right or remedy that such Beneficiary may have against any such security, in each case as such Beneficiary in its discretion may determine consistent herewith or the applicable Hedge Agreement and any applicable security agreement, including foreclosure on any such security pursuant to one or more judicial or nonjudicial sales, whether or not every aspect of any such sale is commercially reasonable, and even though such action operates to impair or extinguish any right of reimbursement or subrogation or other right or remedy of any Guarantor against Company or any security for the Guaranteed Obligations; and (vi) exercise any other rights available to it under the Credit Documents or the Hedge Agreements; and

(f)   this Guaranty and the obligations of Guarantors hereunder shall be valid and enforceable and shall not be subject to any reduction, limitation, impairment, discharge or termination for any reason (other than payment in full of the Guaranteed Obligations), including the occurrence of any of the following, whether or not any Guarantor shall have had notice or knowledge of any of them: (i) any failure or omission to assert or enforce or agreement or election not to assert or enforce, or the stay or enjoining, by order of court, by operation of law or otherwise, of the exercise or enforcement of, any claim or demand or any right, power or remedy (whether arising under the Credit Documents or the Hedge Agreements, at law, in equity or

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otherwise) with respect to the Guaranteed Obligations or any agreement relating thereto, or with respect to any other guaranty of or security for the payment of the Guaranteed Obligations; (ii) any rescission, waiver, amendment or modification of, or any consent to departure from, any of the terms or provisions (including provisions relating to events of default) hereof, or of any of the other Credit Documents, any of the Hedge Agreements or any agreement or instrument executed pursuant thereto, or of any other guaranty or security for the Guaranteed Obligations, in each case whether or not in accordance with the terms hereof or such Credit Document, such Hedge Agreement or any agreement relating to such other guaranty or security; (iii) the Guaranteed Obligations, or any agreement relating thereto, at any time being found to be illegal, invalid or unenforceable in any respect; (iv) the application of payments received from any source (other than payments received pursuant to the other Credit Documents or any of the Hedge Agreements or from the proceeds of any security for the Guaranteed Obligations, except to the extent such security also serves as collateral for indebtedness other than the Guaranteed Obligations) to the payment of indebtedness other than the Guaranteed Obligations, even though any Beneficiary might have elected to apply such payment to any part or all of the Guaranteed Obligations; (v) any Beneficiary’s consent to the change, reorganization or termination of the corporate structure or existence of Holdings or any of its Subsidiaries and to any correspond­ing restructuring of the Guaranteed Obligations; (vi) any failure to perfect or continue perfection of a security interest in any collateral which secures any of the Guaranteed Obligations; (vii) any defenses, set-offs or counterclaims which Company may allege or assert against any Beneficiary in respect of the Guaranteed Obligations, including failure of consideration, breach of warranty, payment, statute of frauds, statute of limitations, accord and satisfaction and usury; and (viii) any other act or thing or omission, or delay to do any other act or thing, which may or might in any manner or to any extent vary the risk of any Guarantor as an obligor in respect of the Guaranteed Obligations.

7.5.   Waivers by Guarantors. Each Guarantor hereby waives, for the benefit of Beneficiaries: (a) any right to require any Beneficiary, as a condition of payment or performance by such Guarantor, to (i) proceed against Company, any other guarantor (including any other Guarantor) of the Guaranteed Obligations or any other Person, (ii) proceed against or exhaust any security held from Company, any such other guarantor or any other Person, (iii) proceed against or have resort to any balance of any Deposit Account or credit on the books of any Beneficiary in favor of Company or any other Person, or (iv) pursue any other remedy in the power of any Beneficiary whatsoever; (b) any defense arising by reason of the incapacity, lack of authority or any disability or other defense of Company or any other Guarantor including any defense based on or arising out of the lack of validity or the unenforceability of the Guaranteed Obligations or any agreement or instrument relating thereto or by reason of the cessation of the liability of Company or any other Guarantor from any cause other than payment in full of the Guaranteed Obligations; (c) any defense based upon any statute or rule of law which provides that the obligation of a surety must be neither larger in amount nor in other respects more

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burdensome than that of the principal; (d) any defense based upon any Beneficiary’s errors or omissions in the administration of the Guaranteed Obligations, except behavior which amounts to gross negligence, willful misconduct or bad faith; (e) (i) any principles or provisions of law, statutory or otherwise, which are or might be in conflict with the terms hereof and any legal or equitable discharge of such Guarantor’s obligations hereunder, (ii) the benefit of any statute of limitations affecting such Guarantor’s liability hereunder or the enforcement hereof, (iii) any rights to set-offs, recoupments and counterclaims, and (iv) promptness, diligence and any requirement that any Beneficiary protect, secure, perfect or insure any security interest or lien or any property subject thereto; (f) notices, demands, presentments, protests, notices of protest, notices of dishonor and notices of any action or inaction, including acceptance hereof, notices of default hereunder, under the Hedge Agreements or under any agreement or instrument related thereto, notices of any renewal, extension or modification of the Guaranteed Obligations or any agreement related thereto, notices of any extension of credit to Company and notices of any of the matters referred to in Section 7.4 and any right to consent to any thereof; and (g) any defenses or benefits that may be derived from or afforded by law which limit the liability of or exonerate guarantors or sureties, or which may conflict with the terms hereof.

7.6.   Guarantors’ Rights of Subrogation, Contribution, etc. Until the Guaranteed Obligations shall have been indefeasibly paid in full and the Revolving Commitments shall have terminated and all Letters of Credit shall have expired or been cancelled, each Guarantor hereby waives any claim, right or remedy, direct or indirect, that such Guarantor now has or may hereafter have against Company or any other Guarantor or any of its assets in connection with this Guaranty or the performance by such Guarantor of its obligations hereunder, in each case whether such claim, right or remedy arises in equity, under contract, by statute, under common law or otherwise and including without limitation (a) any right of subrogation, reimbursement or indemnification that such Guarantor now has or may hereafter have against Company with respect to the Guaranteed Obligations, (b) any right to enforce, or to participate in, any claim, right or remedy that any Beneficiary now has or may hereafter have against Company, and (c) any benefit of, and any right to participate in, any collateral or security now or hereafter held by any Beneficiary. In addition, until the Guaranteed Obligations shall have been indefeasibly paid in full and the Revolving Commitments shall have terminated and all Letters of Credit shall have expired or been cancelled, each Guarantor shall withhold exercise of any right of contribution such Guarantor may have against any other guarantor (including any other Guarantor) of the Guaranteed Obligations, including, without limitation, any such right of contribution as contemplated by Section 7.2. Each Guarantor further agrees that, to the extent the waiver or agreement to withhold the exercise of its rights of subrogation, reimbursement, indemnification and contribution as set forth herein is found by a court of competent jurisdiction to be void or voidable for any reason, any rights of subrogation, reimbursement or indemnification such Guarantor may have against Company or against any collateral or security, and any rights of contribution such Guarantor may have against any such other guarantor, shall be junior and

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subordinate to any rights any Beneficiary may have against Company, to all right, title and interest any Beneficiary may have in any such collateral or security, and to any right any Beneficiary may have against such other guarantor. If any amount shall be paid to any Guarantor on account of any such subrogation, reimbursement, indemnification or contribution rights at any time when all Guaranteed Obligations shall not have been finally and indefeasibly paid in full, such amount shall be held in trust for Administrative Agent on behalf of Beneficiaries and shall forthwith be paid over to Administrative Agent for the benefit of Beneficiaries to be credited and applied against the Guaranteed Obligations, whether matured or unmatured, in accordance with the terms hereof.

7.7.   Subordination of Other Obligations. Any Indebtedness of Company or any Guarantor now or hereafter held by any Guarantor (the “Obligee Guarantor”) is hereby subordinated in right of payment to the Guaranteed Obligations, and any such indebtedness collected or received by the Obligee Guarantor after an Event of Default has occurred and is continuing shall be held in trust for Administrative Agent on behalf of Beneficiaries and shall forthwith be paid over to Administrative Agent for the benefit of Beneficiaries to be credited and applied against the Guaranteed Obligations but without affecting, impairing or limiting in any manner the liability of the Obligee Guarantor under any other provision hereof.

7.8.   Continuing Guaranty. This Guaranty is a continuing guaranty and shall remain in effect until all of the Guaranteed Obligations shall have been paid in full and the Revolving Commitments shall have terminated and all Letters of Credit shall have expired or been cancelled. Each Guarantor hereby irrevocably waives any right to revoke this Guaranty as to future transactions giving rise to any Guaranteed Obligations.

7.9.   Authority of Guarantors or Company. It is not necessary for any Beneficiary to inquire into the capacity or powers of any Guarantor or Company or the officers, directors or any agents acting or purporting to act on behalf of any of them.

7.10.   Financial Condition of Company. Any Credit Extension may be made to Company or continued from time to time, and any Hedge Agreements may be entered into from time to time, in each case without notice to or authorization from any Guarantor regardless of the financial or other condition of Company at the time of any such grant or continuation or at the time such Hedge Agreement is entered into, as the case may be. No Beneficiary shall have any obligation to disclose or discuss with any Guarantor its assessment, or any Guarantor’s assessment, of the financial condition of Company. Each Guarantor has adequate means to obtain information from Company on a continuing basis concerning the financial condition of Company and its ability to perform its obligations under the Credit Documents and the Hedge Agreements, and each Guarantor assumes the responsibility for being and keeping informed of the financial condition of Company and of all circumstances bearing upon the risk of nonpayment of the Guaranteed Obligations. Each Guarantor hereby waives and relinquishes any

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duty on the part of any Beneficiary to disclose any matter, fact or thing relating to the business, operations or conditions of Company now known or hereafter known by any Beneficiary.

7.11.   Bankruptcy, etc.  (a)  So long as any Guaranteed Obligations remain outstanding, no Guarantor shall, without the prior written consent of Administrative Agent acting pursuant to the instructions of Requisite Lenders, commence or join with any other Person in commencing any bankruptcy, reorganization or insolvency case or proceeding of or against Company or any other Guarantor. The obligations of Guarantors hereunder shall not be reduced, limited, impaired, discharged, deferred, suspended or terminated by any case or proceeding, voluntary or involuntary, involving the bankruptcy, insolvency, receivership, reorganization, liquidation or arrangement of Company or any other Guarantor or by any defense which Company or any other Guarantor may have by reason of the order, decree or decision of any court or administrative body resulting from any such proceeding.

(b)   Each Guarantor acknowledges and agrees that any interest on any portion of the Guaranteed Obligations which accrues after the commencement of any case or proceeding referred to in clause (a) above (or, if interest on any portion of the Guaranteed Obligations ceases to accrue by operation of law by reason of the commencement of such case or proceeding, such interest as would have accrued on such portion of the Guaranteed Obligations if such case or proceeding had not been commenced) shall be included in the Guaranteed Obligations because it is the intention of Guarantors and Beneficiaries that the Guaranteed Obligations which are guaranteed by Guarantors pursuant hereto should be determined without regard to any rule of law or order which may relieve Company of any portion of such Guaranteed Obligations. Guarantors will permit any trustee in bankruptcy, receiver, debtor in possession, assignee for the benefit of creditors or similar person to pay Administrative Agent, or allow the claim of Administrative Agent in respect of, any such interest accruing after the date on which such case or proceeding is commenced.

(c)   In the event that all or any portion of the Guaranteed Obligations are paid by Company, the obligations of Guarantors hereunder shall continue and remain in full force and effect or be reinstated, as the case may be, in the event that all or any part of such payment(s) are rescinded or recovered directly or indirectly from any Beneficiary as a preference, fraudulent transfer or otherwise, and any such payments which are so rescinded or recovered shall constitute Guaranteed Obligations for all purposes hereunder.

7.12.   Discharge of Guaranty Upon Sale of Guarantor. If all of the Capital Stock of any Guarantor or any of its successors in interest hereunder shall be sold or otherwise disposed of (including by merger or consolidation) in accordance with the terms and conditions hereof, the Guaranty of such Guarantor or such successor in interest, as the case may be, hereunder shall automatically be discharged and released without any further action by any Beneficiary or any other Person effective as of the time of such Asset Sale.

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SECTION 8.  EVENTS OF DEFAULT

8.1.   Events of Default. If any one or more of the following conditions or events shall occur:

(a)   Failure to Make Payments When Due. Failure by Company to pay (i) when due any installment of principal of any Loan, whether at stated maturity, by acceleration, by notice of voluntary prepayment, by mandatory prepayment or otherwise; (ii) when due any amount payable to Issuing Bank in reimbursement of any drawing under a Letter of Credit; or (iii) any interest on any Loan or any fee or any other amount due hereunder within five days after the date due; or

(b)   Default in Other Agreements. (i) Failure of any Credit Party or any of their respective Subsidiaries to pay when due any principal of or interest on or any other amount payable in respect of one or more items of Indebtedness (other than Indebtedness referred to in Section 8.1(a)) in an individual principal amount of $2,500,000 or more or with an aggregate principal amount of $5,000,000 or more, in each case beyond the grace period, if any, provided therefor; or (ii) breach or default by any Credit Party with respect to any other material term of (1) one or more items of Indebtedness in the individual or aggregate principal amounts referred to in clause (i) above or (2) any loan agreement, mortgage, indenture or other agreement relating to such item(s) of Indebtedness, in each case beyond the grace period, if any, provided therefor, if the effect of such breach or default is to cause, or to permit the holder or holders of that Indebtedness (or a trustee on behalf of such holder or holders), to cause, that Indebtedness to become or be declared due and payable (or redeemable) prior to its stated maturity or the stated maturity of any underlying obligation, as the case may be; or

(c)   Breach of Certain Covenants. Failure of any Credit Party to perform or comply with any term or condition contained in Section 2.6, Section 5.2(i) or Section 6; or

(d)   Breach of Representations, etc. Any representation, warranty, certification or other statement made or deemed made by any Credit Party in any Credit Document or in any statement or certificate at any time given by any Credit Party or any of its Subsidiaries in writing pursuant hereto or thereto or in connection herewith or therewith shall be false in any material respect as of the date made or deemed made; or

(e)   Other Defaults Under Credit Documents. Any Credit Party shall default in the performance of or compliance with any term contained herein or any of the other Credit Documents, other than any such term referred to in any other paragraph of this Section 8.1, and such default shall not have been remedied or waived within thirty days after the earlier of (i) an officer of such Credit Party becoming aware of such default or (ii) receipt by Company of notice from Administrative Agent or any Lender of such default; or

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(f)   Involuntary Bankruptcy; Appointment of Receiver, etc. (i) A court of competent jurisdiction shall enter a decree or order for relief in respect of Holdings, Company, any Significant Subsidiary of Company or any group of Subsidiaries constituting a Significant Subsidiary of Company in an involuntary case under the Bankruptcy Code or under any other applicable bankruptcy, insolvency or similar law now or hereafter in effect, which decree or order is not stayed; or any other similar relief shall be granted under any applicable federal or state law; or (ii) an involuntary case shall be commenced against Holdings, Company, any Significant Subsidiary of Company or any group of Subsidiaries constituting a Significant Subsidiary of Company under the Bankruptcy Code or under any other applicable bankruptcy, insolvency or similar law now or hereafter in effect; or a decree or order of a court having jurisdiction in the premises for the appointment of a receiver, liquidator, sequestrator, trustee, custodian or other officer having similar powers over Holdings, Company, any Significant Subsidiary of Company or any group of Subsidiaries constituting a Significant Subsidiary of Company, or over all or a substantial part of its property, shall have been entered; or there shall have occurred the involuntary appointment of an interim receiver, trustee or other custodian of Holdings, Company, any Significant Subsidiary of Company or any group of Subsidiaries constituting a Significant Subsidiary of Company for all or a substantial part of its property; or a warrant of attachment, execution or similar process shall have been issued against any substantial part of the property of Holdings, Company, any Significant Subsidiary of Company or any group of Subsidiaries constituting a Significant Subsidiary of Company, and any such event described in this clause (ii) shall continue for sixty days without having been dismissed, bonded or discharged; or

(g)   Voluntary Bankruptcy; Appointment of Receiver, etc. (i) Holdings, Company, any Significant Subsidiary of Company or any group of Subsidiaries constituting a Significant Subsidiary of Company shall have an order for relief entered with respect to it or shall commence a voluntary case under the Bankruptcy Code or under any other applicable bankruptcy, insolvency or similar law now or hereafter in effect, or shall consent to the entry of an order for relief in an involuntary case, or to the conversion of an involuntary case to a voluntary case, under any such law, or shall consent to the appointment of or taking possession by a receiver, trustee or other custodian for all or a substantial part of its property; or Holdings, Company, any Significant Subsidiary of Company or any group of Subsidiaries constituting a Significant Subsidiary of Company shall make any assignment for the benefit of creditors; or (ii) Holdings, Company, any Significant Subsidiary of Company or any group of Subsidiaries constituting a Significant Subsidiary of Company shall be unable, or shall fail generally, or shall admit in writing its inability, to pay its debts as such debts become due; or the Board of Directors of Holdings, Company, any Significant Subsidiary of Company or any group of Subsidiaries constituting a Significant Subsidiary of Company (or any committee thereof) shall adopt any resolution or otherwise authorize any action to approve any of the actions referred to herein or in Section 8.1(f); or

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(h)   Judgments and Attachments. Any money judgment, writ or warrant of attachment or similar process involving (i) in any individual case an amount in excess of $2,500,000 or (ii) in the aggregate at any time an amount in excess of $5,000,000 (in either case to the extent not adequately covered by insurance as to which a solvent and unaffiliated insurance company has acknowledged coverage excluding customary deductibles) shall be entered or filed against Holdings or any of its Subsidiaries or any of their respective assets and shall remain undischarged, unvacated, unbonded or unstayed for a period of sixty days (or in any event later than five days prior to the date of any proposed sale thereunder); or

(i)   Dissolution. Any order, judgment or decree shall be entered against Holdings, Company, any Significant Subsidiary of Company or any group of Subsidiaries constituting a Significant Subsidiary of Company decreeing the dissolution or split up of such Person and such order shall remain undischarged or unstayed for a period in excess of thirty days; or

(j)   Employee Benefit Plans. (i) There shall occur one or more ERISA Events which individually or in the aggregate results in or might reasonably be expected to result in liability of Holdings, any of its Subsidiaries or any of their respective ERISA Affiliates in excess of $2,500,000 during the term hereof; or (ii) there exists any fact or circumstance that reasonably could be expected to result in the imposition of a Lien or security interest under Section 412(n) of the Internal Revenue Code or under ERISA; or

(k)   Change of Control. A Change of Control shall occur; or

(l)   Guaranties, Collateral Documents and other Credit Documents. At any time after the execution and delivery thereof, (i) the Guaranty for any reason, other than the satisfaction in full of all Obligations, shall cease to be in full force and effect (other than in accordance with its terms) or shall be declared to be null and void or any Guarantor shall repudiate its obligations thereunder, (ii) this Agreement or any material Collateral Document ceases to be in full force and effect (other than by reason of a release of Collateral in accordance with the terms hereof or thereof or the satisfaction in full of the Obligations in accordance with the terms hereof) or shall be declared null and void, or Collateral Agent shall not have or shall cease to have a valid and perfected Lien in any Collateral purported to be covered by the Collateral Documents with the priority required by the relevant Collateral Document, in each case for any reason other than the failure of Collateral Agent or any Secured Party to take any action within its control, or (iii) any Credit Party shall contest the validity or enforceability of any Credit Document in writing or deny in writing that it has any further liability, including with respect to future advances by Lenders, under any Credit Document to which it is a party; or

(m)   Failure of Merger to Occur. The Merger shall not have occurred on the Closing Date;

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THEN, (1) upon the occurrence of any Event of Default described in Section 8.1(f) or 8.1(g), automatically, and (2) upon the occurrence of any other Event of Default, at the request of (or with the consent of) Requisite Lenders, upon notice to Company by Administrative Agent, (A) the Revolving Commitments, if any, of each Lender having such Revolving Commitments and the obligation of Issuing Bank to issue any Letter of Credit shall immediately terminate; (B) each of the following shall immediately become due and payable, in each case without presentment, demand, protest or other requirements of any kind, all of which are hereby expressly waived by each Credit Party: (I) the unpaid principal amount of and accrued interest on the Loans and (II) all other Obligations; provided, the foregoing shall not affect in any way the obligations of Lenders under Section 2.3(b)(iv) or Section 2.4(e); (C) Administrative Agent may cause Collateral Agent to enforce any and all Liens and security interests created pursuant to the Collateral Documents; and (D) Administrative Agent shall direct Company to pay (and Company hereby agrees upon receipt of such notice, or upon the occurrence of any Event of Default specified in Section 8.1(f) and (g) to pay) to Administrative Agent such additional amounts of cash, to be held as security for Company’s reimbursement Obligations in respect of Letters of Credit then outstanding, equal to the Letter of Credit Usage at such time.

SECTION 9.  AGENTS

9.1.         Appointment of Agents. GSCP is hereby appointed Syndication Agent hereunder, and each Lender hereby authorizes Syndication Agent to act as its agent in accordance with the terms hereof and the other Credit Documents. GSCP is hereby appointed Administrative Agent hereunder and under the other Credit Documents and each Lender hereby authorizes Administrative Agent to act as its agent in accordance with the terms hereof and the other Credit Documents. Bank of America, N.A. is hereby appointed Documentation Agent hereunder, and each Lender hereby authorizes Documentation Agent to act as its agent in accordance with the terms hereof and the other Credit Documents. Each Agent hereby agrees to act upon the express conditions contained herein and the other Credit Documents, as applicable. The provisions of this Section 9 are solely for the benefit of Agents and Lenders and no Credit Party shall have any rights as a third party beneficiary of any of the provisions thereof. In performing its functions and duties hereunder, each Agent shall act solely as an agent of Lenders and does not assume and shall not be deemed to have assumed any obligation towards or relationship of agency or trust with or for Holdings or any of its Subsidiaries. Each of Syndication Agent and Documenta­tion Agent, without consent of or notice to any party hereto, may assign any and all of its rights or obligations hereunder to any of its Affiliates. As of the Closing Date, neither GSCP, in its capacity as Syndication Agent, nor Bank of America, N.A., in its capacity as Documentation Agent, shall have any obligations but shall be entitled to all benefits of this Section 9.

9.2.         Powers and Duties. Each Lender irrevocably authorizes each Agent to take such action on such Lender’s behalf and to exercise such powers, rights and remedies hereunder and

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under the other Credit Documents as are specifically delegated or granted to such Agent by the terms hereof and thereof, together with such powers, rights and remedies as are reasonably incidental thereto. Each Agent shall have only those duties and responsibilities that are expressly specified herein and the other Credit Documents. Each Agent may exercise such powers, rights and remedies and perform such duties by or through its agents or employees. No Agent shall have, by reason hereof or any of the other Credit Documents, a fiduciary relationship in respect of any Lender; and nothing herein or in any of the other Credit Documents, expressed or implied, is intended to or shall be so construed as to impose upon any Agent any obligations in respect hereof or any of the other Credit Documents except as expressly set forth herein or therein.

9.3.         General Immunity.

(a)   No Responsibility for Certain Matters. No Agent shall be responsible to any Lender for the execution, effectiveness, genuineness, validity, enforceability, collectability or sufficiency hereof or any other Credit Document or for any representations, warranties, recitals or statements made herein or therein or made in any written or oral statements or in any financial or other statements, instruments, reports or certificates or any other documents furnished or made by any Agent to Lenders or by or on behalf of any Credit Party, any Lender or any Person providing the Settlement Service to any Agent or any Lender in connection with the Credit Documents and the transactions contemplated thereby or for the financial condition or business affairs of any Credit Party or any other Person liable for the payment of any Obligations, nor shall any Agent be required to ascertain or inquire as to the performance or observance of any of the terms, conditions, provisions, covenants or agreements contained in any of the Credit Documents or as to the use of the proceeds of the Loans or as to the existence or possible existence of any Event of Default or Default or to make any disclosures with respect to the foregoing. Anything contained herein to the contrary notwithstanding, Administrative Agent shall not have any liability arising from confirmations of the amount of outstanding Loans or the Letter of Credit Usage or the component amounts thereof.

(b)   Exculpatory Provisions. No Agent nor any of its officers, partners, directors, employees or agents shall be liable to Lenders for any action taken or omitted by any Agent under or in connection with any of the Credit Documents except to the extent caused by such Agent’s gross negligence or willful misconduct. Each Agent shall be entitled to refrain from any act or the taking of any action (including the failure to take an action) in connection herewith or any of the other Credit Documents or from the exercise of any power, discretion or authority vested in it hereunder or thereunder unless and until such Agent shall have received instructions in respect thereof from Requisite Lenders (or such other Lenders as may be required to give such instructions under Section 10.5) and, upon receipt of such instructions from Requisite Lenders (or such other Lenders, as the case may be), such Agent shall be entitled to act or (where so instructed) refrain from acting, or to exercise such power, discretion or authority, in accordance with such instructions. Without prejudice to the generality of the foregoing, (i) each Agent shall

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be entitled to rely, and shall be fully protected in relying, upon any communication, instrument or document believed by it to be genuine and correct and to have been signed or sent by the proper Person or Persons, including any Settlement Confirmation or other communication issued by any Settlement Service, and shall be entitled to rely and shall be protected in relying on opinions and judgments of attorneys (who may be attorneys for Holdings and its Subsidiaries), accountants, experts and other professional advisors selected by it; and (ii) no Lender shall have any right of action whatsoever against any Agent as a result of such Agent acting or (where so instructed) refraining from acting hereunder or under any of the other Credit Documents in accordance with the instructions of Requisite Lenders (or such other Lenders as may be required to give such instructions under Section 10.5).

(c)   Delegation of Duties. Administrative Agent may perform any and all of its duties and exercise its rights and powers under this Agreement or under any other Credit Document by or through any one or more sub-agents appointed by Administrative Agent. Administrative Agent and any sub-agent may perform any and all of their duties and exercise their rights and powers by or through their respective Affiliates. The exculpatory, indemnification and other provisions of this Section 9.3 and of Section 9.6 shall apply to any Affiliates of Administrative Agent and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent. All of the rights, benefits and privileges (including the exculpatory and indemnification provisions) of this Section 9.3 and of Section 9.6 shall apply to any such sub-agent and to the Affiliates of any such sub-agent, and shall apply to their respective activities as sub-agent as if such sub-agent and Affiliates were named herein. Notwithstanding anything herein to the contrary, with respect to each sub-agent appointed by Administrative Agent, (i) such sub-agent shall be a third party beneficiary under this Agreement with respect to all such rights, benefits and privileges (including exculpatory rights and rights to indemnification) and shall have all of the rights and benefits of a third party beneficiary, including an independent right of action to enforce such rights, benefits and privileges (including exculpatory rights and rights to indemnification) directly, without the consent or joinder of any other Person, against any or all of the Credit Parties and the Lenders, (ii) such rights, benefits and privileges (including exculpatory rights and rights to indemnification) shall not be modified or amended without the consent of such sub-agent, and (iii) such sub-agent shall only have obligations to Administrative Agent and not to any Credit Party, Lender or any other Person, and no Credit Party, Lender or any other Person shall have any rights, directly or indirectly, as a third party beneficiary or otherwise, against such sub-agent.

9.4.         Agents Entitled to Act as Lender. The agency hereby created shall in no way impair or affect any of the rights and powers of, or impose any duties or obligations upon, any Agent in its individual capacity as a Lender hereunder. With respect to its participation in the Loans and the Letters of Credit, each Agent shall have the same rights and powers hereunder as

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any other Lender and may exercise the same as if it were not performing the duties and functions delegated to it hereunder, and the term “Lender” shall, unless the context clearly otherwise indicates, include each Agent in its individual capacity. Any Agent and its Affiliates may accept deposits from, lend money to, own securities of, and generally engage in any kind of banking, trust, financial advisory or other business with Holdings or any of its Affiliates as if it were not performing the duties specified herein, and may accept fees and other consideration from Company for services in connection herewith and otherwise without having to account for the same to Lenders.

9.5.         Lenders’ Representations, Warranties and Acknowledgment. Each Lender represents and warrants that it has made its own independent investigation of the financial condition and affairs of Holdings and its Subsidiaries in connection with Credit Extensions hereunder and that it has made and shall continue to make its own appraisal of the creditworthiness of Holdings and its Subsidiaries. No Agent shall have any duty or responsibility, either initially or on a continuing basis, to make any such investigation or any such appraisal on behalf of Lenders or to provide any Lender with any credit or other information with respect thereto, whether coming into its possession before the making of the Loans or at any time or times thereafter, and no Agent shall have any responsibility with respect to the accuracy of or the completeness of any information provided to Lenders.

9.6.         Right to Indemnity. Each Lender, in proportion to its Pro Rata Share, severally agrees to indemnify each Agent, to the extent that such Agent shall not have been reimbursed by any Credit Party, for and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses (including counsel fees and disbursements) or disbursements of any kind or nature whatsoever which may be imposed on, incurred by or asserted against such Agent in exercising its powers, rights and remedies or performing its duties hereunder or under the other Credit Documents or otherwise in its capacity as such Agent in any way relating to or arising out of this Agreement or the other Credit Documents; provided, no Lender shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from such Agent’s gross negligence or willful misconduct. If any indemnity furnished to any Agent for any purpose shall, in the opinion of such Agent, be insufficient or become impaired, such Agent may call for additional indemnity and cease, or not commence, to do the acts indemnified against until such additional indemnity is furnished; provided, in no event shall this sentence require any Lender to indemnify any Agent against any liability, obligation, loss, damage, penalty, action, judgment, suit, cost, expense or disbursement in excess of such Lender’s Pro Rata Share thereof; and provided further, this sentence shall not be deemed to require any Lender to indemnify any Agent against any liability, obligation, loss, damage, penalty, action, judgment, suit, cost, expense or disbursement described in the proviso in the immediately preceding sentence.

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9.7.         Successor Administrative Agent and Swing Line Lender. Administrative Agent may resign at any time by giving thirty days’ prior written notice thereof to Lenders and Company, and Administrative Agent may be removed at any time with or without cause by an instrument or concurrent instruments in writing delivered to Company and Administrative Agent and signed by Requisite Lenders. Upon any such notice of resignation or any such removal, Requisite Lenders shall have the right, upon five Business Days’ notice to Company, to appoint a successor Administrative Agent; provided that so long as no Event of Default then exists, such successor Administrative Agent shall have been approved in writing by the Company. Upon the acceptance of any appointment as Administrative Agent hereunder by a successor Administrative Agent, that successor Administrative Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring or removed Administrative Agent and the retiring or removed Administrative Agent shall promptly (i) transfer to such successor Administrative Agent all sums, Securities and other items of Collateral held under the Collateral Documents, together with all records and other documents necessary or appropriate in connection with the performance of the duties of the successor Administrative Agent under the Credit Documents, and (ii) execute and deliver to such successor Administrative Agent such amendments to financing statements, and take such other actions, as may be necessary or appropriate in connection with the assignment to such successor Administrative Agent of the security interests created under the Collateral Documents, whereupon such retiring or removed Administrative Agent shall be discharged from its duties and obligations hereunder. After any retiring or removed Administrative Agent’s resignation or removal hereunder as Administrative Agent, the provisions of this Section 9 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Administrative Agent hereunder. Any resignation or removal of GSCP or its successor as Administrative Agent pursuant to this Section shall also constitute the resignation or removal of GSCP or its successor as Swing Line Lender, and any successor Administrative Agent appointed pursuant to this Section shall, upon its acceptance of such appointment, become the successor Swing Line Lender for all purposes hereunder. In such event (a) Company shall prepay any outstanding Swing Line Loans made by the retiring or removed Administrative Agent in its capacity as Swing Line Lender, (b) upon such prepayment, the retiring or removed Administrative Agent and Swing Line Lender shall surrender any Swing Line Note held by it to Company for cancellation, and (c) Company shall issue, if so requested by successor Administrative Agent and Swing Line Loan Lender, a new Swing Line Note to the successor Administrative Agent and Swing Line Lender, in the principal amount of the Swing Line Loan Sublimit then in effect and with other appropriate insertions.

9.8.         Collateral Documents and Guaranty.

(a)   Agents under Collateral Documents and Guaranty. Each Lender hereby further authorizes Administrative Agent or Collateral Agent, as applicable, on behalf of and for the benefit of Lenders, to be the agent for and representative of Lenders with respect to the

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Guaranty, the Collateral and the Collateral Documents. Subject to Section 10.5, without further written consent or authorization from Lenders, Administra­tive Agent or Collateral Agent, as applicable may execute any documents or instruments necessary to (i) release any Lien encumbering any item of Collateral that is the subject of a sale or other disposition of assets permitted hereby or to which Requisite Lenders (or such other Lenders as may be required to give such consent under Section 10.5) have otherwise consented or (ii) release any Guarantor from the Guaranty pursuant to Section 7.12 or with respect to which Requisite Lenders (or such other Lenders as may be required to give such consent under Section 10.5) have otherwise consented. Without limiting the generality of the foregoing, upon the termination of the Commitments and the payment of all Obligations then due and payable and the cancellation, expiration or cash collateralization (in a manner reasonably acceptable to Administrative Agent, but in no event to exceed 105% of the face amount thereof) of all Letters of Credit, (i) the Liens created by the Collateral Documents shall terminate and all rights to the Collateral shall revert to the applicable Credit Party, and (ii) Collateral Agent will, upon a Credit Party’s request and at such Credit Party’s expense, (x) return to such Credit Party such of the Collateral as shall not have been sold or otherwise disposed of or applied pursuant to the terms of the Credit Documents and (y) at such Credit Party’s expense, execute and deliver to such Credit Party such UCC termination statements, releases, mortgage releases, discharges of security interests, reassignments of Intellectual Property, terminations of control agreements and other similar discharge or release documents (and, if applicable, in recordable form) (collectively, “Release Documents”) as are necessary to release, of record, the Liens and security interests granted pursuant to this Agreement and any other Credit Documents as such Credit Party shall reasonably request to evidence such termination, all without any representation, warranty or recourse whatsoever. If a Credit Party shall acquire any property or asset securing Indebtedness in accordance with Section 6.1(j) or (k) and such Credit Party is prohibited at the time of acquisition (and in the case of Section 6.1(k), so long as such prohibition is not agreed to in contemplation of such acquisition) by any agreement or contractual arrangement from allowing the Collateral Agent to have a Lien on such property or assets, the Collateral Agent will, upon such Credit Party’s request and at such Credit Party’s expense, execute and deliver to such Credit Party such Release Documents with respect to such property or asset as such Credit Party shall reasonably request to evidence the release of Collateral Agent’s Lien on the property or asset so acquired.

(b)   Right to Realize on Collateral and Enforce Guaranty. Anything contained in any of the Credit Documents to the contrary notwithstanding, Company, Administrative Agent, Collateral Agent and each Lender hereby agree that (i) no Lender shall have any right individually to realize upon any of the Collateral or to enforce the Guaranty, it being understood and agreed that all powers, rights and remedies hereunder may be exercised solely by Administrative Agent, on behalf of Lenders in accordance with the terms hereof and all powers, rights and remedies under the Collateral Documents may be exercised solely by Collateral Agent, and (ii) in the event of a foreclosure by Collateral Agent on any of the Collateral pursuant

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to a public or private sale, Collateral Agent or any Lender may be the purchaser of any or all of such Collateral at any such sale and Collateral Agent, as agent for and representative of Secured Parties (but not any Lender or Lenders in its or their respective individual capacities unless Requisite Lenders shall otherwise agree in writing) shall be entitled, for the purpose of bidding and making settlement or payment of the purchase price for all or any portion of the Collateral sold at any such public sale, to use and apply any of the Obligations as a credit on account of the purchase price for any collateral payable by Collateral Agent at such sale.

SECTION 10.  MISCELLANEOUS

10.1.       Notices. Unless otherwise specifically provided herein, any notice or other communication herein required or permitted to be given to a Credit Party, Syndication Agent, Collateral Agent, Administrative Agent, Swing Line Lender, Issuing Bank or Documentation Agent, shall be sent to such Person’s address as set forth on Appendix B or in the other relevant Credit Document, and in the case of any Lender, the address as indicated on Appendix B or otherwise indicated to Administrative Agent and Company in writing. Each notice hereunder shall be in writing and may be personally served or sent by telefacsimile or United States certified or registered mail or courier service and shall be deemed to have been given when delivered in person or by courier service and signed for against receipt thereof, upon receipt of telefacsimile, or three Business Days after depositing it in the United States mail with postage prepaid and properly addressed; provided, no notice to any Agent shall be effective until received by such Agent; provided further, any such notice or other communication shall at the request of Administrative Agent be provided to any sub-agent appointed pursuant to Section 9.3(c) hereof as designated by Administrative Agent from time to time.

10.2        Expenses. Whether or not the transactions contemplated hereby shall be consum­mated, Company agrees to pay promptly (a) all the actual and reasonable costs and expenses incurred by the Lead Arrangers and each Agent in connection with preparation of the Credit Documents and any consents, amendments, waivers or other modifications thereto; (b) all the costs of furnishing all opinions by counsel for Company and the other Credit Parties; (c) the reasonable fees, expenses and disbursements of counsel to Agents (in each case including allocated costs of internal counsel) in connection with the negotiation, preparation, execution and administration of the Credit Documents and any consents, amendments, waivers or other modifications thereto and any other documents or matters requested by Company; (d) all the actual costs and reasonable expenses of creating and perfecting Liens in favor of Collateral Agent, for the benefit of Lenders pursuant hereto, including filing and recording fees, expenses and taxes, stamp or documentary taxes, search fees, title insurance premiums and reasonable fees, expenses and disbursements of counsel to each Agent and of counsel providing any opinions that any Agent or Requisite Lenders may reasonably request in respect of the Collateral or the Liens created pursuant to the Collateral Documents; (e) all the actual costs and reasonable

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fees, expenses and disbursements of any auditors, accountants, consultants or appraisers; (f) all the actual costs and reasonable expenses (including the reasonable fees, expenses and disbursements of any appraisers, consultants, advisors and agents employed or retained by Collateral Agent and its counsel) in connection with the custody or preservation of any of the Collateral; (g) all other actual and reasonable costs and expenses incurred by each Agent in connection with the syndication of the Loans and Commitments and the negotiation, preparation and execution of the Credit Documents and any consents, amendments, waivers or other modifications thereto and the transactions contemplated thereby; and (h) after the occurrence of an Event of Default, all costs and expenses, including reasonable attorneys’ fees (including allocated costs of internal counsel) and costs of settlement, incurred by any Agent and Lenders in enforcing any Obligations of or in collecting any payments due from any Credit Party hereunder or under the other Credit Documents by reason of such Default or Event of Default (including in connection with the sale of, collection from, or other realization upon any of the Collateral or the enforcement of the Guaranty) or in connection with any refinancing or restructuring of the credit arrangements provided hereunder in the nature of a “work-out” or pursuant to any insolvency or bankruptcy cases or proceedings.

10.3.       Indemnity.

(a)   In addition to the payment of expenses pursuant to Section 10.2, whether or not the transactions contemplated hereby shall be consummated, each Credit Party agrees to defend (if requested by the Indemnitees and subject to Indemnitees’ selection of counsel), indemnify, pay and hold harmless, each Agent, Lead Arranger and Lender and the Issuing Bank and the officers, partners, directors, trustees, employees, agents, sub-agents and Affiliates of each Agent, each Lead Arranger, each Lender and the Issuing Bank (each, an “Indemnitee”), from and against any and all Indemnified Liabilities; provided, no Credit Party shall have any obligation to any Indemnitee hereunder with respect to any Indemnified Liabilities to the extent such Indemnified Liabilities arise from the gross negligence or willful misconduct of that Indemnitee. To the extent that the undertakings to defend, indemnify, pay and hold harmless set forth in this Section 10.3 may be unenforceable in whole or in part because they are violative of any law or public policy, the applicable Credit Party shall contribute the maximum portion that it is permitted to pay and satisfy under applicable law to the payment and satisfaction of all Indemnified Liabilities incurred by Indemnitees or any of them.

(b)   To the extent permitted by applicable law, no Credit Party shall assert, and each Credit Party hereby waives, any claim against Lenders, Agents, Lead Arrangers and Issuing Bank and their respective Affiliates, directors, employees, attorneys, agents or sub-agents, on any theory of liability, for special, indirect, consequential or punitive damages  (as opposed to direct or actual damages) (whether or not the claim therefor is based on contract, tort or duty imposed by any applicable legal requirement) arising out of, in connection with, as a result of, or in any way related to, this Agreement or any Credit Document or any agreement or instrument

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contemplated hereby or thereby or referred to herein or therein, the transactions contemplated hereby or thereby, any Loan or the use of the proceeds thereof or any act or omission or event occurring in connection therewith, and each of Holdings and Company hereby waives, releases and agrees not to sue upon any such claim or any such damages, whether or not accrued and whether or not known or suspected to exist in its favor.

10.4.       Set-Off. In addition to any rights now or hereafter granted under applicable law and not by way of limitation of any such rights, upon the occurrence of any Event of Default each Lender is hereby authorized by each Credit Party at any time or from time to time subject to the consent of Administrative Agent (such consent not to be unreasonably withheld or delayed), without prior notice to any Credit Party or to any other Person (other than Administrative Agent), any such notice being hereby expressly waived, to set off and to appropriate and to apply any and all deposits (general or special, including Indebtedness evidenced by certificates of deposit, whether matured or unmatured, but not including trust accounts) and any other Indebtedness at any time held or owing by such Lender to or for the credit or the account of any Credit Party against and on account of the obligations and liabilities of any Credit Party to such Lender hereunder, the Letters of Credit and participations therein and under the other Credit Documents, including all claims of any nature or description arising out of or connected hereto, the Letters of Credit and participations therein or with any other Credit Document, irrespective of whether or not (a) such Lender shall have made any demand hereunder or (b) the principal of or the interest on the Loans or any amounts in respect of the Letters of Credit or any other amounts due hereunder shall have become due and payable pursuant to Section 2 and although such obligations and liabilities, or any of them, may be contingent or unmatured. Administrative Agent and each Lender agree promptly to notify Company after any such set-off and application made by such Person.

10.5.       Amendments and Waivers.

(a)   Requisite Lenders’ Consent. Subject to Section 10.5(b) and 10.5(c), no amendment, modification, termination or waiver of any provision of the Credit Documents, or consent to any departure by any Credit Party therefrom, shall in any event be effective without the written concurrence of the Requisite Lenders.

(b)   Affected Lenders’ Consent. Without the written consent of each Lender  (other than a Defaulting Lender) that would be affected thereby, no amendment, modification, termination, or consent shall be effective if the effect thereof would:

(i)   extend the scheduled final maturity of any Loan or Note;

(ii)   waive, reduce or postpone any scheduled repayment (but not prepayment);

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(iii)   extend the stated expiration date of any Letter of Credit beyond the Revolving Commitment Termination Date;

(iv)   reduce the rate of interest on any Loan (other than any waiver of any increase in the interest rate applicable to any Loan or any reimbursement obligation in respect of any Letter of Credit pursuant to Section 2.8(f) or 2.10) or any fee payable hereunder;

(v)   extend the time for payment of any such interest or fees;

(vi)   reduce the principal amount of any Loan or any reimbursement obligation in respect of any Letter of Credit;

(vii)   amend, modify, terminate or waive any provision of this Section 10.5(b) or Section 10.5(c);

(viii)   amend the definition of “Requisite Lenders” or “Pro Rata Share”; provided, with the consent of Requisite Lenders, additional extensions of credit pursuant hereto may be included in the determination of “Requisite Lenders” or “Pro Rata Share” on substantially the same basis as the Existing Term Loan Commitments, the Existing Term Loans, the Revolving Commitments and the Revolving Loans are included on the Closing Date;

(ix)   release all or substantially all of the Collateral or all or substantially all of the Guarantors from the Guaranty except as expressly provided in the Credit Documents; or

(x)   consent to the assignment or transfer by any Credit Party of any of its rights and obligations under any Credit Document except as otherwise provided herein.

(c)   Other Consents. No amendment, modification, termination or waiver of any provision of the Credit Documents, or consent to any departure by any Credit Party therefrom, shall:

(i)   increase any Revolving Commitment of any Lender over the amount thereof then in effect without the consent of such Lender; provided, no amendment, modification or waiver of any condition precedent, covenant, Default or Event of Default shall constitute an increase in any Revolving Commitment of any Lender;

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(ii)   amend, modify, terminate or waive any provision hereof relating to the Swing Line Sublimit or the Swing Line Loans without the consent of Swing Line Lender;

(iii)   amend the definition of “Requisite Class Lenders” without the consent of Requisite Class Lenders of each Class; provided, with the consent of the Requisite Lenders, additional extensions of credit pursuant hereto may be included in the determination of such “Requisite Class Lenders” on substantially the same basis as the Existing Term Loan Commitments, the Existing Term Loans, the Revolving Commitments and the Revolving Loans are included on the Closing Date;

(iv)   alter the required application of any repayments or prepayments as between Classes pursuant to Section 2.15 without the consent of Requisite Class Lenders of each Class which is being allocated a lesser repayment or prepayment as a result thereof; provided, Requisite Lenders may waive, in whole or in part, any prepayment so long as the application, as between Classes, of any portion of such prepayment which is still required to be made is not altered;

(v)   amend, modify, terminate or waive any obligation of Lenders relating to the purchase of participations in Letters of Credit as provided in Section 2.4(e) without the written consent of Administrative Agent and of Issuing Bank; or

(vi)   amend, modify, terminate or waive any provision of Section 9 as the same applies to any Agent, or any other provision hereof as the same applies to the rights or obligations of any Agent, in each case without the consent of such Agent.

(d)   Execution of Amendments, etc. Administrative Agent may, but shall have no obligation to, with the concurrence of any Lender, execute amendments, modifications, waivers or consents on behalf of such  Lender. Any waiver or consent shall be effective only in the specific instance and for the specific purpose for which it was given. No notice to or demand on any Credit Party in any case shall entitle any Credit Party to any other or further notice or demand in similar or other circumstances. Any amendment, modification, termination, waiver or consent effected in accordance with this Section 10.5 shall be binding upon each Lender at the time outstanding, each future Lender and, if signed by a Credit Party, on such Credit Party.

10.6.       Successors and Assigns; Participations.

(a)   Generally. This Agreement shall be binding upon the parties hereto and their respective successors and assigns and shall inure to the benefit of the parties hereto and the successors and assigns of Lenders. No Credit Party’s rights or obligations hereunder nor any interest therein may be assigned or delegated by any Credit Party without the prior written

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consent of all Lenders. Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby and, to the extent expressly contemplated hereby, Affiliates of each of the Agents and Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.

(b)   Register. Company, Administrative Agent and Lenders shall deem and treat the Persons listed as Lenders in the Register as the holders and owners of the corresponding Commitments and Loans listed therein for all purposes hereof, and no assignment or transfer of any such Commitment or Loan shall be effective, in each case, unless and until recorded in the Register following receipt of (x) a written or electronic confirmation of an assignment issued by a Settlement Service pursuant to Section 10.6(d) (a “Settlement Confirmation”) or (y) an Assignment Agreement effecting the assignment or transfer thereof, in each case, as provided in Section 10.6(d). Each assignment shall be recorded in the Register on the Business Day the Settlement Confirmation or Assignment Agreement is received by the Administrative Agent, if received by 12:00 noon New York City time, and on the following Business Day if received after such time, prompt notice thereof shall be provided to Company and a copy of such Assignment Agreement or Settlement Confirmation shall be maintained, as applicable. The date of such recordation of a transfer shall be referred to herein as the “Assignment Effective Date.”  Any request, authority or consent of any Person who, at the time of making such request or giving such authority or consent, is listed in the Register as a Lender shall be conclusive and binding on any subsequent holder, assignee or transferee of the corresponding Commitments or Loans. The Register shall be available for inspection by the Company or any Lender at any reasonable time upon reasonable notice.

(c)   Right to Assign. Each Lender shall have the right at any time to sell, assign or transfer all or a portion of its rights and obligations under this Agreement, including, without limitation, all or a portion of its Commitment or Loans owing to it or other Obligation (provided, however, that each such assignment shall be of a uniform, and not varying, percentage of all rights and obligations under and in respect of any Loan and any related Commitments):

(i)   to any Person meeting the criteria of clause (i) of the definition of the term of “Eligible Assignee” upon the giving of notice to Administrative Agent; and

(ii)   to any Person meeting the criteria of clause (ii) of the definition of the term “Eligible Assignee” and, in the case of assignments of Revolving Loans or Revolving Commitments to any such Person (except in the case of assignments made by or to GSCP), consented to by each of Company and Administrative Agent (such consent not to be (x) unreasonably withheld or delayed or, (y) in the case of Company, required at any time an Event of Default shall have occurred and then be continuing); provided, further each such assignment pursuant to this Section 10.6(c)(ii) shall be in an aggregate

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amount of not less than (A) $5,000,000 (or such lesser amount as may be agreed to by Company and Administrative Agent or as shall constitute the aggregate amount of the Revolving Commitments and Revolving Loans of the assigning Lender) with respect to the assignment of the Revolving Commitments and Revolving Loans and (B) $1,000,000 (or such lesser amount as may be agreed to by Company and Administrative Agent or as shall constitute the aggregate amount of the Term Loan of the assigning Lender) with respect to the assignment of Term Loans; provided further, that (1) simultaneous assignments by or to two or more related funds will be treated as one assignment for purposes of determining whether the minimum assignment requirement is met and (2) no consent of Company or Administrative Agent shall be required in connection with any assignments to or from GSCP during primary syndication.

(d)   Mechanics. Assignments of Term Loans by Lenders may be made via an electronic settlement system acceptable to Administrative Agent as designated in writing from time to time to the Lenders by Administrative Agent (the “Settlement Service”). Each such assignment shall be effected by the assigning Lender and proposed assignee pursuant to the procedures then in effect under the Settlement Service, which procedures shall be consistent with the other provisions of this Section 10.6. Each assignor Lender and proposed assignee shall comply with the requirements of the Settlement Service in connection with effecting any transfer of Loans pursuant to the Settlement Service. Administrative Agent’s and Company’s consent shall be deemed to have been granted pursuant to Section 10.6(c)(ii) with respect to any transfer effected through the Settlement Service. Subject to the other requirements of this Section 10.6, assignments and assumptions of Term Loans may also be effected by manual execution and delivery to the Administrative Agent of an Assignment Agreement with, in the case of assignments to Persons meeting the requirements of clause (ii) of the definition of “Eligible Assignee”, the prior written consent of each of Company and Administrative Agent (such consent not to be (x) unreasonably withheld or delayed or (y) in the case of Company, required at any time an Event of Default shall have occurred and then be continuing). Initially, assignments and assumptions of Term Loans shall be effected by such manual execution until Administrative Agent notifies Lenders to the contrary. Assignments and assumptions of Revolving Loans and Revolving Commitments shall only be effected by manual execution and delivery to the Administrative Agent of an Assignment Agreement. Assignments made pursuant to the foregoing provision shall be effective as of the Assignment Effective Date. In connection with all assignments there shall be delivered to Administrative Agent such forms, certificates or other evidence, if any, with respect to United States federal income tax withholding matters as the assignee under such Assignment Agreement may be required to deliver pursuant to Section 2.20(c). Notwithstanding anything herein or in any Assignment Agreement to the contrary and (i) unless notice to the contrary is delivered to the Lenders from the Administrative Agent or (ii) so long as no Default or Event of Default has occurred and is continuing, payment to the assignor by the assignee in respect of the settlement of an assignment of any Term Loan (but not any

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Revolving Loan or Revolving Commitment) shall include such compensation to the assignor as may be agreed upon by the assignor and the assignee with respect to all unpaid interest which has accrued on such Term Loan to but excluding the Assignment Effective Date. On and after the applicable Assignment Effective Date, the applicable assignee shall be entitled to receive all interest paid or payable with respect to the assigned Term Loan, whether such interest accrued before or after the applicable Assignment Effective Date.

(e)   Representations and Warranties of Assignee. Each Lender, upon execution and delivery hereof or upon succeeding to an interest in the Commitments and Loans, as the case may be, represents and warrants as of the Closing Date or as of the Assignment Effective Date  that (i) it is an Eligible Assignee; (ii) it has experience and expertise in the making of or investing in commitments or loans such as the applicable Commit­ments or Loans, as the case may be; and (iii) it will make or invest in, as the case may be, its Commitments or Loans for its own account in the ordinary course of its business and without a view to distribution of such Commitments or Loans within the meaning of the Securities Act or the Exchange Act or other federal securities laws (it being understood that, subject to the provisions of this Section 10.6, the disposition of such Revolving Commitments or Loans or any interests therein shall at all times remain within its exclusive control).

(f)   Effect of Assignment. Subject to the terms and conditions of this Section 10.6, as of the Assignment Effective Date: (i) the assignee thereunder shall have the rights and obligations of a “Lender” hereunder to the extent of its interest in the Loans and Commitments as reflected in the Register and shall thereafter be a party hereto and a “Lender” for all purposes hereof; (ii) the assigning Lender thereunder shall, to the extent that rights and obligations hereunder have been assigned to the assignee, relinquish its rights (other than any rights which survive the termination hereof under Section 10.8) and be released from its obligations hereunder (and, in the case of an assignment covering all or the remaining portion of an assigning Lender’s rights and obligations hereunder, such Lender shall cease to be a party hereto on the Assignment Effective Date; provided, anything contained in any of the Credit Documents to the contrary notwithstanding, (y) Issuing Bank shall continue to have all rights and obligations thereof with respect to such Letters of Credit until the cancellation or expiration of such Letters of Credit and the reimbursement of any amounts drawn thereunder and (z) such assigning Lender shall continue to be entitled to the benefit of all indemnities hereunder as specified herein with respect to matters arising out of the prior involvement of such assigning Lender as a Lender hereunder); (iii) the Commitments shall be modified to reflect the Commitment of such assignee and any Revolving Commitment of such assigning Lender, if any; and (iv) if any such assignment occurs after the issuance of any Note hereunder, the assigning Lender shall, upon the effectiveness of such assignment or as promptly thereafter as practicable, surrender its applicable Notes to Administrative Agent for cancellation, and thereupon Company shall issue and deliver new Notes, if so requested by the assignee and/or assigning Lender, to such assignee and/or to such

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assigning Lender, with appropriate insertions, to reflect the new Revolving Commitments and/or outstanding Loans of the assignee and/or the assigning Lender.

(g)   Participations. Each Lender shall have the right at any time to sell one or more participations to any Person (other than Holdings, any of its Subsidiaries or any of its Affiliates) in all or any part of its Commitments, Loans or in any other Obligation. The holder of any such participation, other than an Affiliate of the Lender granting such participation, shall not be entitled to require such Lender to take or omit to take any action hereunder, or to consent to any action to be taken or omitted hereunder by such Lender, except with respect to any amendment, modification or waiver that would (i) extend the final scheduled maturity of any Loan, Note or Letter of Credit (unless such Letter of Credit is not extended beyond the Revolving Commitment Termination Date) in which such participant is participating, or reduce the rate or extend the time of payment of interest or fees thereon (except in connection with a waiver of applicability of any post-default increase in interest rates) or reduce the principal amount thereof, or increase the amount of the participant’s participation over the amount thereof then in effect (it being understood that a waiver of any Default or Event of Default or of a mandatory reduction in the Commitment shall not constitute a change in the terms of such participation, and that an increase in any Commitment or Loan shall be permitted without the consent of any participant if the participant’s participation is not increased as a result thereof), (ii) consent to the assignment or transfer by any Credit Party of any of its rights and obligations under this Agreement (except as otherwise expressly permitted by a Credit Document) or (iii) release all or substantially all of the Collateral under the Collateral Documents (except as expressly provided in the Credit Documents) supporting the Loans hereunder in which such participant is participating.  Company agrees that each participant shall be entitled to the benefits of Sections 2.18(c), 2.19 and 2.20 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (c) of this Section; provided, (i) a participant shall not be entitled to receive any greater payment under Section 2.19 or 2.20 than the applicable Lender would have been entitled to receive with respect to the participation sold to such participant, unless the sale of the participation to such participant is made with Company’s prior written consent and (ii) a participant that would be a Non-US Lender if it were a Lender shall not be entitled to the benefits of Section 2.20 unless Company is notified of the participation sold to such participant and such participant agrees, for the benefit of Company, to comply with Section 2.20 as though it were a Lender. To the extent permitted by law, each participant also shall be entitled to the benefits of Section 10.4 as though it were a Lender, provided such Participant agrees to be subject to Section 2.17 as though it were a Lender.

(h)   Certain Other Assignments. In addition to any other assignment permitted pursuant to this Section 10.6, any Lender may assign and/or pledge all or any portion of its Loans, the other Obligations owed by or to such Lender, and its Notes, if any, to secure obligations of such Lender including, without limitation, any Federal Reserve Bank as collateral

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security pursuant to Regulation A of the Board of Governors of the Federal Reserve System and any operating circular issued by such Federal Reserve Bank; provided, no Lender, as between Company and such Lender, shall be relieved of any of its obligations hereunder as a result of any such assignment and pledge, and provided further, in no event shall the applicable Federal Reserve Bank, pledgee or trustee be considered to be a “Lender” or be entitled to require the assigning Lender to take or omit to take any action hereunder.

10.7.       Independence of Covenants. All covenants hereunder shall be given independent effect so that if a particular action or condition is not permitted by any of such covenants, the fact that it would be permitted by an exception to, or would otherwise be within the limitations of, another covenant shall not avoid the occurrence of a Default or an Event of Default if such action is taken or condition exists.

10.8.       Survival of Representations, Warranties and Agreements. All representations, warranties and agreements made herein shall survive the execution and delivery hereof and the making of any Credit Extension. Notwithstanding anything herein or implied by law to the contrary, the agreements of each Credit Party set forth in Sections 2.18(c), 2.19, 2.20, 10.2, 10.3 and 10.4 and the agreements of Lenders set forth in Sections 2.17, 9.3(b) and 9.6 shall survive the payment of the Loans, the cancellation or expiration of the Letters of Credit and the reimbursement of any amounts drawn thereunder, and the termination hereof.

10.9.       No Waiver; Remedies Cumulative. No failure or delay on the part of any Agent or any Lender in the exercise of any power, right or privilege hereunder or under any other Credit Document shall impair such power, right or privilege or be construed to be a waiver of any default or acquiescence therein, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other power, right or privilege. The rights, powers and remedies given to each Agent and each Lender hereby are cumulative and shall be in addition to and independent of all rights, powers and remedies existing by virtue of any statute or rule of law or in any of the other Credit Documents or any of the Hedge Agreements. Any forbearance or failure to exercise, and any delay in exercising, any right, power or remedy hereunder shall not impair any such right, power or remedy or be construed to be a waiver thereof, nor shall it preclude the further exercise of any such right, power or remedy.

10.10.     Marshalling; Payments Set Aside. Neither any Agent nor any Lender shall be under any obligation to marshal any assets in favor of any Credit Party or any other Person or against or in payment of any or all of the Obligations. To the extent that any Credit Party makes a payment or payments to Administrative Agent or Lenders (or to Administrative Agent, on behalf of Lenders), or Administrative Agent or Lenders enforce any security interests or exercise their rights of setoff, and such payment or payments or the proceeds of such enforcement or setoff or any part thereof are subsequently invalidated, declared to be fraudulent or preferential,

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set aside and/or required to be repaid to a trustee, receiver or any other party under any bankruptcy law, any other state or federal law, common law or any equitable cause, then, to the extent of such recovery, the obligation or part thereof originally intended to be satisfied, and all Liens, rights and remedies therefor or related thereto, shall be revived and continued in full force and effect as if such payment or payments had not been made or such enforcement or setoff had not occurred.

10.11.     Severability. In case any provision in or obligation hereunder or any Note shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.

10.12.     Obligations Several; Independent Nature of Lenders’ Rights. The obligations of Lenders hereunder are several and no Lender shall be responsible for the obligations or Commitment of any other Lender hereunder. Nothing contained herein or in any other Credit Document, and no action taken by Lenders pursuant hereto or thereto, shall be deemed to constitute Lenders as a partnership, an association, a joint venture or any other kind of entity. The amounts payable at any time hereunder to each Lender shall be a separate and independent debt, and subject to the final paragraph of Section 8 and Section 9.8(b), each Lender shall be entitled to protect and enforce its rights arising hereunder and it shall not be necessary for any other Lender to be joined as an additional party in any proceeding for such purpose.

10.13.     Headings. Section headings herein are included herein for convenience of reference only and shall not constitute a part hereof for any other purpose or be given any substantive effect.

10.14.     APPLICABLE LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF.

10.15.     CONSENT TO JURISDICTION. ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY CREDIT PARTY ARISING OUT OF OR RELATING HERETO OR TO ANY OTHER CREDIT DOCUMENT, OR TO ANY OF THE OBLIGATIONS, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE AND COUNTY OF NEW YORK. BY EXECUTING AND DELIVERING THIS AGREEMENT, EACH CREDIT PARTY, FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, IRREVOCABLY (a) ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS; (b) WAIVES ANY DEFENSE OF

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FORUM NON CONVENIENS; (c) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO THE APPLICABLE CREDIT PARTY AT ITS ADDRESS PROVIDED IN ACCORDANCE WITH SECTION 10.1; (d) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (c) ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER THE APPLICABLE CREDIT PARTY IN ANY SUCH PROCEED­ING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT; AND (e) AGREES THAT AGENTS AND LENDERS RETAIN THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST ANY CREDIT PARTY IN THE COURTS OF ANY OTHER JURISDICTION.

10.16.     WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING HEREUNDER OR UNDER ANY OF THE OTHER CREDIT DOCUMENTS OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR THE LENDER/COMPANY RELATIONSHIP THAT IS BEING ESTABLISHED. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. EACH PARTY HERETO ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATION­SHIP, THAT EACH HAS ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT, AND THAT EACH WILL CONTINUE TO RELY ON THIS WAIVER IN ITS RELATED FUTURE DEALINGS. EACH PARTY HERETO FURTHER WAR­RANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SECTION 10.16 AND EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS HERETO OR ANY OF THE OTHER CREDIT DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS

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MADE HEREUNDER. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

10.17.     Confidentiality. Each Lender shall hold all non-public informa­tion regarding Holdings and its Subsidiaries and their businesses identified as such by Company and obtained by such Lender pursuant to the requirements hereof  in accordance with such Lender’s customary procedures for handling confidential information of  such nature, it being understood and agreed by Company that, in any event, a Lender may make (i) disclosures of such information to Affiliates of such Lender and to their agents and advisors (and to other persons authorized by a Lender or Agent to organize, present or disseminate such information in connection with disclosures otherwise made in accordance with this Section 10.17), (ii) disclosures of such information reasonably required by any pledgee under Section 10.6(h) or any bona fide or potential assignee, transferee or partici­pant in connection with the contem­plated assignment, transfer or participation by such Lender of any Loans or any participations therein or by any direct or indirect contractual counterparties (or the profession­al advisors thereto) in Hedge Agreements (provided, such counterparties and advisors are advised of and agree to be bound by the provisions of this Section 10.17), (iii) disclosure to any rating agency when required by it, provided that, prior to any disclosure, such rating agency shall undertake in writing to preserve the confidentiality of any confidential information relating to the Credit Parties received by it from any of the Agents or any Lender, and (iv) disclo­sures required or requested by any govern­mental agency or repre­sentative thereof or by the NAIC or pursuant to legal or judicial process; provided, unless specifically prohibited by applicable law or court order, each Lender shall make reasonable efforts to notify Company of any request by any governmental agency or repre­sentative thereof (other than any such request in connection with any examina­tion of the financial condition or other routine examination of such Lender by such governmental agency) for disclosure of any such non-public information prior to disclosure of such informa­tion.

10.18.     Usury Savings Clause. Notwithstanding any other provision herein, the aggregate interest rate charged with respect to any of the Obligations, including all charges or fees in connection therewith deemed in the nature of interest under applicable law shall not exceed the Highest Lawful Rate. If the rate of interest (determined without regard to the preceding sentence) under this Agreement at any time exceeds the Highest Lawful Rate, the outstanding amount of the Loans made hereunder shall bear interest at the Highest Lawful Rate until the total amount of interest due hereunder equals the amount of interest which would have been due hereunder if the stated rates of interest set forth in this Agreement had at all times been in effect. In addition, if when the Loans made hereunder are repaid in full the total interest due hereunder (taking into account the increase provided for above) is less than the total amount of interest which would have been due hereunder if the stated rates of interest set forth in this Agreement had at all times been in effect, then to the extent permitted by law, Company shall pay to Administrative Agent an amount equal to the difference between the amount of interest

143

paid and the amount of interest which would have been paid if the Highest Lawful Rate had at all times been in effect. Notwithstanding the foregoing, it is the intention of Lenders and Company to conform strictly to any applicable usury laws. Accordingly, if any Lender contracts for, charges, or receives any consideration which constitutes interest in excess of the Highest Lawful Rate, then any such excess shall be cancelled automatically and, if previously paid, shall at such Lender’s option be applied to the outstanding amount of the Loans made hereunder or be refunded to Company.

10.19.     Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument.

10.20.     Effectiveness. This Agreement shall become effective upon the execution of a counterpart hereof by each of the parties hereto and receipt by Company and Administrative Agent of written or telephonic notification of such execution and authorization of delivery thereof.

10.21.     Patriot Act. Each Lender and Administrative Agent (for itself and not on behalf of any Lender) hereby notifies Company that pursuant to the requirements of the Act, it is required to obtain, verify and record information that identifies Company, which information includes the name and address of Company and other information that will allow such Lender or Administrative Agent, as applicable, to identify Company in accordance with the Act.

10.22.     Electronic Execution of Assignments. The words “execution,” “signed,” “signature” and words of like import in any Assignment Agreement shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.

[Remainder of page intentionally left blank]

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APPENDIX A
TO CREDIT AND GUARANTY AGREEMENT

Revolving Commitments

On file with Administrative Agent

APPENDIX A-1

APPENDIX B
TO CREDIT AND GUARANTY AGREEMENT

Notice Addresses

DYNCORP INTERNATIONAL INC.

c/o Veritas Capital Management II, L.L.C.
660 Madison Avenue, 14th Floor
New York, New York  10021
Attention: Robert McKeon
Telecopier: (212) 688-9411

DYNCORP INTERNATIONAL LLC
DIV CAPITAL CORPORATION
DTS AVIATION SERVICES, LLC
DYNCORP AEROSPACE OPERATIONS, LLC
DYNCORP INTERNATIONAL SERVICES, INC.
DYN MARINE SERVICES, LLC
DYN MARINE SERVICES OF VIRGINIA, LLC
SERVICES INTERNATIONAL LLC
WORLDWIDE HUMANITARIAN SERVICES LLC
DYNCORP INTERNATIONAL OF NIGERIA LLC

8445 Freeport Parkway, Suite 400
Irving, Texas 75063
Attention: Chief Financial Officer
Telecopier: (972) 929-2848

in each case, with a copy to:

Schulte Roth & Zabel LLP
919 Third Avenue
New York, New York 10022
Attention:  Benjamin M. Polk
Telecopier: (212) 593-5955

APPENDIX B-1

GOLDMAN SACHS CREDIT PARTNERS L.P.,
as Joint Lead Arranger, Administrative Agent,
Collateral Agent, Syndication Agent, Swing Line Lender and a Lender

Goldman Sachs Credit Partners L.P.
85 Broad Street
New York, New York  10004
Attention:  Stephen King
Telecopier:  (212) 357-0932

with a copy to:

Goldman Sachs Credit Partners L.P.
85 Broad Street
New York, New York  10004
Attention: John Makrinos
Telecopier:  (212) 357-4597

APPENDIX B-2

BEAR STEARNS CORPORATE LENDING INC.,
as a Lender

Bear Stearns Corporate Lending Inc.
383 Madison Avenue
New York, New York  10179
Attention:  Stephen J. Kampf
Telecopier:  (917) 849-2127

with a copy to:

Bear Stearns Corporate Lending Inc.
383 Madison Avenue
New York, New York 10179
Attention: Victor Bulzacchelli
Telecopier:  (917) 849-0519

APPENDIX B-3

BANK OF AMERICA, N.A.,
as Issuing Bank, Documentation Agent and a Lender

1101 Wootton Parkway, 4th Floor
Rockville, Maryland 20852
Attention: Derinda Hammond
Telecopier: (301) 517-3140

APPENDIX B-4

EX-12.1

Exhibit 12.1

DynCorp International LLC
Exhibit 12.1 - Statement Regarding Computation of Ratios -
Fixed Charge Coverage Ratio
(Dollars in thousands)

	Original Predecessor Period						Immediate Predecessor Period								Successor Period
	Fiscal Year Ended March 29, 2002			March 30, 2002 – March 7, 2003			21 Days Ended  March 28, 2003			Fiscal Year Ended April 2, 2004			April 3, 2004 – Feb. 11,  2005		49 Days Ended April 1, 2005				Fiscal Year Ended March 31, 2006
Income (loss) from continuing operations before income taxes		$	32,239		$	30,839		$	2,081		$	51,284	$	94,689		$	(862	)		$	45,012
Computation of fixed charges:
Interest expense and amortization of debt issue costs on all indebtedness		—			—			—			—		—			8,054				56,686
Interest factor on rent expense(1)		2,980			2,851			168			6,529		3,757			583				18,058
Total fixed charges		2,980			2,851			168			6,529		3,757			8,637				74,744
Income from continuing operations before income taxes and fixed charges		$	35,219		$	33,690		$	2,249		$	57,813	$	98,446		$	7,775			$	119,756
Ratio of earnings to fixed charges		11.8			11.8			13.4			8.9		26.2			0.9				1.6

(1)           Amount included in fixed charges for rentals is considered by management to be a reasonable approximation of the interest factor.

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Steve J. Cannon, Chief Executive Officer, certify that:

1.I have reviewed this Annual Report on Form 10-K of DynCorp International Inc.

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Annual Report.

3.Based on my knowledge, the financial statements, and other financial information included in this Annual Report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a.designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Annual Report is being prepared;

b.evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

c.disclosed in this Annual Report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ STEVE J. CANNON

Steve J. Cannon

President and Chief Executive Officer
(principal executive officer)

June 29, 2006

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Michael J. Thorne, Chief Financial Officer, certify that:

1.I have reviewed this Annual Report on Form 10-K of DynCorp International Inc.

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Annual Report.

3.Based on my knowledge, the financial statements, and other financial information included in this Annual Report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a.designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Annual Report is being prepared;

b.evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

c.disclosed in this Annual Report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ MICHAEL J. THORNE

Michael J. Thorne

Senior Vice President, Chief Financial Officer and Treasurer (principal financial and principal accounting officer)

June 29, 2006

EX-32.1

EXHIBIT 32.1

Certification Pursuant to
18 U.S.C. Section 1350,
as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Annual Report on Form 10-K of DynCorp International Inc. (the “Company”) for the fiscal year ended March 31, 2006, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, Stephen J. Cannon, Chief Executive Officer, hereby certifies, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(i)  The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and

(ii) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: June 29, 2006

/s/ STEPHEN J. CANNON

Stephen J. Cannon

President and Chief Executive Officer
(principal executive officer)

EX-32.2

EXHIBIT 32.2

Certification Pursuant to
18 U.S.C. Section 1350,
as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Annual Report on Form 10-K of DynCorp International Inc. (the “Company”) for the fiscal year ended March 31, 2006, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, Michael J. Thorne, Chief Financial Officer, hereby certifies, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(i)  The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and

(ii) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: June 29, 2006

/s/ MICHAEL J. THORNE

Michael J. Thorne

Senior Vice President, Chief Financial Officer and Treasurer (principal financial and principal accounting officer)