Exhibit 10.1

 

 

 

 

CREDIT AGREEMENT

 

dated as of December 28, 2012

 

among

 

PRIMORIS SERVICES CORPORATION,
as Borrower,

 

THE VARIOUS FINANCIAL INSTITUTIONS PARTY HERETO,
as Lenders,

 

and

 

THE PRIVATEBANK AND TRUST COMPANY,
as Administrative Agent and Co-Lead Arranger

 

and

 

THE BANK OF THE WEST

as Co-Lead Arranger

 

 

 

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TABLE OF CONTENTS

 

 

 

 

Page

 

 

 

 

SECTION 1

DEFINITIONS

 

1

 

 

 

 

1.1

Definitions

 

1

1.2

Other Interpretive Provisions

 

17

 

 

 

 

SECTION 2

COMMITMENTS OF THE LENDERS; BORROWING, CONVERSION AND LETTER OF CREDIT
PROCEDURES

 

18

 

 

 

 

2.1

Commitments

 

18

2.2

Loan Procedures

 

18

2.3

Letter of Credit Procedures

 

20

2.4

Commitments Several

 

22

2.5

Certain Conditions

 

22

2.6

Defaulting Lenders

 

22

2.7

Incremental Facility

 

24

 

 

 

 

SECTION 3

EVIDENCING OF LOANS

 

25

 

 

 

 

3.1

Notes

 

25

3.2

Recordkeeping

 

25

 

 

 

 

SECTION 4

INTEREST

 

25

 

 

 

 

4.1

Interest Rates

 

25

4.2

Interest Payment Dates

 

26

4.3

Setting and Notice of LIBOR Rates

 

26

4.4

Computation of Interest

 

26

 

 

 

 

SECTION 5

FEES

 

26

 

 

 

 

5.1

Non-Use Fee

 

26

5.2

Letter of Credit Fees

 

26

5.3

Administrative Agent’s Fees

 

27

 

 

 

 

SECTION 6

REDUCTION OR TERMINATION OF THE REVOLVING COMMITMENT; PREPAYMENTS

 

27

 

 

 

 

6.1

Reduction or Termination of the Revolving Commitment

 

27

6.2

Prepayments

 

27

6.3

Manner of Prepayments

 

29

6.4

Repayments

 

29

 

 

 

 

SECTION 7

MAKING AND PRORATION OF PAYMENTS; SETOFF; TAXES

 

29

 

 

 

 

7.1

Making of Payments

 

29

7.2

Application of Certain Payments

 

29

7.3

Due Date Extension

 

29

7.4

Setoff

 

29

7.5

Proration of Payments

 

30

7.6

Taxes

 

30

 

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TABLE OF CONTENTS

(continued)

 

 

 

 

Page

 

 

 

 

SECTION 8

INCREASED COSTS; SPECIAL PROVISIONS FOR LIBOR LOANS

 

31

 

 

 

 

8.1

Increased Costs

 

31

8.2

Basis for Determining Interest Rate Inadequate or Unfair

 

32

8.3

Changes in Law Rendering LIBOR Loans Unlawful

 

32

8.4

Funding Losses

 

33

8.5

Right of Lenders to Fund through Other Offices

 

33

8.6

Discretion of Lenders as to Manner of Funding

 

33

8.7

Mitigation of Circumstances; Replacement of Lenders

 

33

8.8

Conclusiveness of Statements; Survival of Provisions

 

34

 

 

 

 

SECTION 9

REPRESENTATIONS AND WARRANTIES

 

34

 

 

 

 

9.1

Organization

 

34

9.2

Authorization; No Conflict

 

34

9.3

Validity and Binding Nature

 

34

9.4

Financial Condition

 

34

9.5

No Material Adverse Change

 

35

9.6

Litigation and Contingent Liabilities

 

35

9.7

Ownership of Properties; Liens

 

35

9.8

Equity Ownership; Subsidiaries

 

35

9.9

Pension Plans

 

35

9.10

Investment Company Act

 

36

9.11

Compliance with Laws

 

36

9.12

Regulation U

 

36

9.13

Taxes

 

36

9.14

Solvency, etc.

 

36

9.15

Environmental Matters

 

37

9.16

Insurance

 

37

9.17

Real Property

 

37

9.18

Information

 

37

9.19

Intellectual Property

 

37

9.20

Burdensome Obligations

 

38

9.21

Labor Matters

 

38

9.22

Anti-Terrorism Laws

 

38

9.23

No Default

 

38

9.24

RESERVED

 

38

9.25

OFAC

 

38

9.26

Patriot Act

 

39

9.27

Subordinated Debt

 

39

 

 

 

 

SECTION 10

AFFIRMATIVE COVENANTS

 

39

 

 

 

 

10.1

Reports, Certificates and Other Information

 

39

10.2

Books, Records and Inspections

 

42

10.3

Maintenance of Property; Insurance

 

42

10.4

Compliance with Laws; Payment of Taxes and Liabilities

 

43

10.5

Maintenance of Existence, etc.

 

43

10.6

Use of Proceeds

 

43

 

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TABLE OF CONTENTS

(continued)

 

 

 

 

Page

 

 

 

 

10.7

Employee Benefit Plans

 

43

10.8

Environmental Matters

 

44

10.9

Further Assurances

 

44

10.10

Deposit Accounts

 

44

10.11

RESERVED

 

44

10.12

Permissible Payments

 

44

 

 

 

 

SECTION 11

NEGATIVE COVENANTS

 

45

 

 

 

 

11.1

Debt

 

45

11.2

Liens

 

46

11.3

RESERVED

 

46

11.4

RESERVED

 

46

11.5

Mergers, Consolidations

 

46

11.6

Modification of Organizational Documents

 

47

11.7

Transactions with Affiliates

 

47

11.8

Asset Disposition

 

47

11.9

Inconsistent Agreements

 

47

11.10

Business Activities

 

48

11.11

Investments

 

48

11.12

Restriction of Amendments to Certain Documents

 

48

11.13

Fiscal Year

 

48

11.14

Financial Covenants

 

48

11.15

Cancellation of Debt

 

49

11.16

Laws, Regulations

 

49

 

 

 

 

SECTION 12

EFFECTIVENESS; CONDITIONS OF LENDING, ETC.

 

49

 

 

 

 

12.1

Initial Credit Extension

 

49

12.2

Conditions

 

51

 

 

 

 

SECTION 13

EVENTS OF DEFAULT AND THEIR EFFECT

 

51

 

 

 

 

13.1

Events of Default

 

51

13.2

Effect of Event of Default

 

53

13.3

Credit Bidding

 

53

 

 

 

 

SECTION 14

THE AGENT

 

54

 

 

 

 

14.1

Appointment and Authorization

 

54

14.2

Issuing Lenders

 

54

14.3

Delegation of Duties

 

54

14.4

Exculpation of Administrative Agent

 

54

14.5

Reliance by Administrative Agent

 

55

14.6

Notice of Default

 

55

14.7

Credit Decision

 

55

14.8

Indemnification

 

56

14.9

Administrative Agent in Individual Capacity

 

56

14.10

Successor Administrative Agent

 

56

14.11

Collateral Matters

 

57

 

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TABLE OF CONTENTS

(continued)

 

 

 

 

Page

 

 

 

 

14.12

Restriction on Actions by Lenders

 

57

14.13

Administrative Agent May File Proofs of Claim

 

57

14.14

Other Agents; Arrangers and Managers

 

58

 

 

 

 

SECTION 15

GENERAL

 

58

 

 

 

 

15.1

Waiver; Amendments

 

58

15.2

Confirmations

 

59

15.3

Notices

 

59

15.4

Computations

 

60

15.5

Costs, Expenses and Taxes

 

60

15.6

Assignments; Participations

 

60

15.7

Register

 

61

15.8

GOVERNING LAW

 

62

15.9

Confidentiality

 

62

15.10

Severability

 

62

15.11

Nature of Remedies

 

63

15.12

Entire Agreement

 

63

15.13

Counterparts

 

63

15.14

Successors and Assigns

 

63

15.15

Captions

 

63

15.16

Customer Identification - USA Patriot Act Notice

 

63

15.17

INDEMNIFICATION BY LOAN PARTIES

 

63

15.18

Nonliability of Lenders

 

64

15.19

FORUM SELECTION AND CONSENT TO JURISDICTION

 

65

15.20

WAIVER OF JURY TRIAL

 

65

15.21

WAIVER AND RELEASE OF DAMAGES

 

65

 

iv

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ANNEXES

 

 

ANNEX A

Lenders and Pro Rata Shares

ANNEX B

Addresses for Notices

 

 

SCHEDULES

 

 

SCHEDULE 9.6

Litigation and Contingent Liabilities

SCHEDULE 9.8

Subsidiaries

SCHEDULE 9.16

Insurance

SCHEDULE 9.17

Real Property

SCHEDULE 9.21

Labor Matters

SCHEDULE 11.1

Existing Debt

SCHEDULE 11.2

Existing Liens

SCHEDULE 11.11

Investments

 

 

EXHIBITS

 

 

EXHIBIT A

Form of Note (Section 3.1)

EXHIBIT B

Form of Compliance Certificate (Section 10.1.4)

EXHIBIT C

Form of Assignment Agreement (Section 15.6.1)

EXHIBIT D

Form of Notice of Borrowing (Section 2.2.2)

EXHIBIT E

Form of Notice of Conversion/Continuation (Section 2.2.3)

EXHIBIT F

Form of Subordination Agreement

 

v

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CREDIT AGREEMENT

 

THIS CREDIT AGREEMENT dated as of December 28, 2012 (this “Agreement”) is
entered into among PRIMORIS SERVICES CORPORATION (“Borrower”), the financial
institutions that are or may from time to time become parties hereto listed on
the attached Annex A (together with their respective successors and assigns, the
“Lenders”) and THE PRIVATEBANK AND TRUST COMPANY (in its individual capacity,
“PrivateBank”), as administrative agent for the Lenders.

 

The Lenders have agreed to make available to Borrower a revolving credit
facility (which includes letters of credit) upon the terms and conditions set
forth herein.

 

The Borrower, Prudential Investment Management, Inc. (“Prudential”) and the
initial purchasers of the hereafter defined Senior Notes (Prudential and such
purchasers, together with their respective successors and permitted assigns and
any other holders from time to time of the Notes described below, the
“Noteholders”) are entering into a Note Purchase and Private Shelf Agreement
dated as of even date herewith (as the same may be amended, restated,
supplemented or otherwise modified from time to time, the “Note Agreement”)
pursuant to which the Borrower will issue, and the initial purchasers described
in the Note Agreement will purchase, the Borrower’s 3.65% Senior Secured Notes,
Series A, due December 28, 2022, in the aggregate principal amount of
$50,000,000 (the “Series A Notes”).  The Borrower has also authorized the
issuance, pursuant to the Note Agreement, of the additional senior secured
promissory notes pursuant to the Note Agreement in the amounts set forth therein
(the “Shelf Notes” and, together with the Series A Notes and any other
promissory notes that may from time to time be issued pursuant to the Note
Agreement (including any notes issued in substitution for any of the foregoing)
are herein collectively called the “Senior Notes” and individually a “Senior
Note”).

 

The PrivateBank has agreed to serve as Collateral Agent for the Lenders and
Prudential pursuant to an Intercreditor and Collateral Agency Agreement dated as
of the date hereof (“Intercreditor Agreement”).

 

In consideration of the mutual agreements herein contained, the parties hereto
agree as follows:

 

SECTION 1                                                       DEFINITIONS.

 

1.1          Definitions.  When used herein the following terms shall have the
following meanings:

 

Account Debtor is defined in the Guaranty and Collateral Agreement.

 

Acquisition means any transaction or series of related transactions for the
purpose of or resulting, directly or indirectly, in (a) the acquisition of all
or a substantial portion of the assets of a Person, or of all or a substantial
portion of any business or division of a Person, (b) the acquisition of in
excess of 50% of the Capital Securities of any Person, or otherwise causing any
Person to become a Subsidiary, or (c) a merger or consolidation or any other
combination with another Person (other than a Person that is already a
Subsidiary).

 

Administrative Agent means PrivateBank in its capacity as administrative agent
for the Lenders hereunder and any successor thereto in such capacity.

 

Affected Loan is defined in Section 8.3.

 

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Affiliate of any Person means (a) any other Person which, directly or
indirectly, controls or is controlled by or is under common control with such
Person, (b) any officer or director of such Person and (c) with respect to any
Lender, any entity administered or managed by such Lender or an Affiliate or
investment advisor thereof and which is engaged in making, purchasing, holding
or otherwise investing in commercial loans.  A Person shall be deemed to be
“controlled by” any other Person if such Person possesses, directly or
indirectly, power to vote 5% or more of the securities (on a fully diluted
basis) having ordinary voting power for the election of directors or managers or
power to direct or cause the direction of the management and policies of such
Person whether by contract or otherwise.  Unless expressly stated otherwise
herein, neither Administrative Agent nor any Lender shall be deemed an Affiliate
of any Loan Party.

 

Agreement is defined in the preamble of this Agreement.

 

Applicable Margin means, for any day, the rate per annum set forth below
opposite the level (the “Level”) then in effect, it being understood that the
Applicable Margin for (i) LIBOR Loans shall be the percentage set forth under
the column “LIBOR Margin”, (ii) Base Rate Loans shall be the percentage set
forth under the column “Base Rate Margin”, (iii) the Non-Use Fee Rate shall be
the percentage set forth under the column “Non-Use Fee Rate” and (iv) the L/C
Fee shall be the percentage set forth under the column “L/C Fee Rate”:

 

Level

 

Senior Debt to
EBITDA Ratio

 

LIBOR
Margin

 

Base Rate
Margin

 

Non-Use
Fee Rate

 

L/C Fee
(Financial)

 

L/C Fee
(Performance)

I

 

Less than 0.5:1

 

100 bps

 

0 bps

 

20 bps

 

100 bps

 

75 bps

II

 

Greater than or equal to 0.5:1 but less than 1.0:1

 

125 bps

 

0 bps

 

25 bps

 

125 bps

 

100 bps

III

 

Greater than or equal to 1.0:1 but less than 1.5:1

 

150 bps

 

0 bps

 

25 bps

 

150 bps

 

125 bps

IV

 

Greater than or equal to 1.5:1 but less than 2.0:1

 

175 bps

 

0 bps

 

30 bps

 

175 bps

 

150 bps

V

 

Greater than or equal to 2.0:1

 

200 bps

 

0 bps

 

30 bps

 

200 bps

 

175 bps

 

The LIBOR Margin, the Base Rate Margin, the Non-Use Fee Rate and the L/C Fee
Rate shall be adjusted, to the extent applicable, on the fifth (5th) Business
Day after Borrower provides or is required to provide the annual and quarterly
financial statements and other information pursuant to Sections 10.1.1 or
10.1.2, as applicable, and the related Compliance Certificate, pursuant to
Section 10.1.4.  Notwithstanding anything contained in this paragraph to the
contrary, (a) if Borrower fails to deliver the financial statements and
Compliance Certificate in accordance with the provisions of Sections 10.1.1,
10.1.2 and 10.1.3, the LIBOR Margin, the Base Rate Margin, the Non-Use Fee Rate
and the L/C Fee Rate shall be based upon Level V above beginning on the date
such financial statements and Compliance Certificate were required to be
delivered until the fifth (5th) Business Day after such financial statements and
Compliance Certificate are actually delivered, whereupon the Applicable Margin
shall be determined by the then current Level; (b)  no reduction to any
Applicable Margin shall become effective at any time when a Default or an Event
of Default has occurred and is continuing; and (c) the initial Applicable Margin
on the Closing Date shall be based on Level III until the date on which the
financial statements and Compliance Certificate are required to be delivered for
the Fiscal Quarter ending December 31, 2012.

 

Asset Disposition means the sale, lease, transfer or disposal of assets of any
of the Loan Parties.

 

Assignee is defined in Section 15.6.1.

 

2

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Assignment Agreement is defined in Section 15.6.1.

 

Attorney Costs means, with respect to any Person, all reasonable fees and
charges of any counsel to such Person and all court costs and similar legal
expenses.

 

Bank Product Agreements means those certain agreements entered into from time to
time between any Loan Party and a Lender or its Affiliates in connection with
any of the Bank Products, including without limitation, Hedging Agreements.

 

Bank Product Obligations means all obligations, liabilities, contingent
reimbursement obligations, fees, and expenses owing by the Loan Parties to any
Lender or its Affiliates pursuant to or evidenced by the Bank Product Agreements
and irrespective of whether for the payment of money, whether direct or
indirect, absolute or contingent, due or to become due, now existing or
hereafter arising, and including all such amounts that a Loan Party is obligated
to reimburse to Administrative Agent or any Lender as a result of Administrative
Agent or such Lender purchasing participations or executing indemnities or
reimbursement obligations with respect to the Bank Products provided to the Loan
Parties pursuant to the Bank Product Agreements.

 

Bank Products means any service provided to, facility extended to, or
transaction entered into with, any Loan Party by any Lender or its Affiliates
consisting of, (a) deposit accounts, (b) cash management services, including,
controlled disbursement, lockbox, electronic funds transfers (including, book
transfers, fedwire transfers, ACH transfers), online reporting and other
services relating to accounts maintained with any Lender or its Affiliates, (c)
debit cards and credit cards (d) Hedging Agreements or (e) so long as prior
written notice thereof is provided to Administrative Agent by Lender (or its
Affiliate) providing such service, facility or transaction.

 

Base Rate means at any time the greater of (a) the Federal Funds Rate plus 0.5%
and (b) the Prime Rate.

 

Base Rate Loan means any Loan which bears interest at or by reference to the
Base Rate.

 

Base Rate Margin is defined in the definition of Applicable Margin.

 

Borrower is defined in the preamble of this Agreement.

 

BSA is defined in Section 10.4.

 

Business Day means any day on which PrivateBank is open for commercial banking
business in Chicago, Illinois and, in the case of a Business Day which relates
to a LIBOR Loan, on which dealings are carried on in the London interbank
eurodollar market.

 

Capital Expenditures means all expenditures which, in accordance with GAAP,
would be required to be capitalized and shown on the Consolidated balance sheet
of Borrower, including expenditures in respect of Capital Leases, but excluding
expenditures made in connection with the replacement, substitution or
restoration of assets to the extent financed (a) from insurance proceeds (or
other similar recoveries) paid on account of the loss of or damage to the assets
being replaced or restored or (b) with awards of compensation arising from the
taking by eminent domain or condemnation of the assets being replaced.

 

3

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Capital Lease means, with respect to any Person, any lease of (or other
agreement conveying the right to use) any real or personal property by such
Person that, in conformity with GAAP, is accounted for as a capital lease on the
balance sheet of such Person.

 

Capital Securities means, with respect to any Person, all shares, interests,
participations or other equivalents (however designated, whether voting or
non-voting) of such Person’s capital, whether now outstanding or issued or
acquired after the Closing Date, including common shares, preferred shares,
membership interests in a limited liability company, limited or general
partnership interests in a partnership, interests in a Trust, interests in other
unincorporated organizations or any other equivalent of such ownership interest.

 

Cash Collateralize means to deliver cash collateral to an Issuing Lender, to be
held as cash collateral for outstanding Letters of Credit, pursuant to
documentation satisfactory to such Issuing Lender and in an amount satisfactory
to such Issuing Lender which amount may exceed the Stated Amount of outstanding
Letters of Credit.  Derivatives of such term have corresponding meanings.

 

Cash Equivalent Investment means, at any time, (a) any evidence of Debt,
maturing not more than one year after such time, issued or guaranteed by the
United States Government or any agency thereof, (b) commercial paper, maturing
not more than one year from the date of issue, or corporate demand notes, in
each case (unless issued by a Lender or its holding company) rated at least A-l
by Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies,
Inc. or P-l by Moody’s Investors Service, Inc., (c) any certificate of deposit,
time deposit or banker’s acceptance, maturing not more than one year after such
time, or any overnight Federal Funds transaction that is issued or sold by any
Lender or its holding company (or by a commercial banking institution that is a
member of the Federal Reserve System and has a combined capital and surplus and
undivided profits of not less than $500,000,000), (d) any repurchase agreement
entered into with any Lender (or commercial banking institution of the nature
referred to in clause (c)) which (i) is secured by a fully perfected security
interest in any obligation of the type described in any of clauses (a) through
(c) above and (ii) has a market value at the time such repurchase agreement is
entered into of not less than 100% of the repurchase obligation of such Lender
(or other commercial banking institution) thereunder and (e) money market
accounts or mutual funds which invest exclusively in assets satisfying the
foregoing requirements, and (f) other short term liquid investments approved in
writing by Administrative Agent.

 

CFC means any Subsidiary that is a “controlled foreign corporation,” as defined
in Section 957(a) of the Code.

 

Change in Control means the acquisition of ownership, directly or indirectly,
beneficially or of record, by any Person or group (within the meaning of the
Exchange Act and the rules of the SEC thereunder as in effect on the date
hereof) other than Mr. Brian Pratt, of Capital Securities representing more than
35% of the ordinary voting power represented by the issued and outstanding
Capital Securities of Borrower.

 

Closing Date is defined in Section 12.1.

 

Code means the Internal Revenue Code of 1986.

 

Collateral means all properties, rights, interests and privileges from time to
time subject to the Liens granted to the Collateral Agent, or any security
trustee therefor, by the Collateral Documents.

 

Collateral Documents means, collectively, the Guaranty and Collateral Agreement,
each Perfection Certificate, each control agreement and any other agreement or
instrument pursuant to which

 

4

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Borrower, any Subsidiary or any other Person grants or purports to grant
collateral to Collateral Agent for the benefit of the Lenders and the
Noteholders or otherwise relates to such collateral.

 

Commitment means, as to any Lender, such Lender’s commitment to make Loans, and
to issue or participate in Letters of Credit, under this Agreement.  The initial
amount of each Lender’s Commitment is set forth on Annex A.

 

Compliance Certificate means a Compliance Certificate in substantially the form
of Exhibit B.

 

Computation Period means each period of four consecutive Fiscal Quarters ending
on the last day of a Fiscal Quarter.

 

Consolidated means the consolidation of the accounts of, unless otherwise noted,
the Borrower and its Subsidiaries in accordance with GAAP.

 

Consolidated EBIT means for any period, (i) on a Consolidated basis, operating
earnings before interest and taxes, calculated in accordance with GAAP, and,
without duplication, (ii) plus income (or less loss) from Persons in which the
Borrower or any of its Subsidiaries holds an ownership interest in any Capital
Securities issued by such Person and which Person is not consolidated with the
Borrower, calculated in accordance with GAAP, and (iii) less income (or plus
loss) attributable to any non-controlling interests.

 

Consolidated Net Income means, for any Computation Period, Consolidated net
income during such period, determined in accordance with GAAP.

 

Construction Partnership means any joint venture to the extent not constituting
an Investment (without giving effect to the final proviso of the definition of
“Investment”) with any other Person (other than the Borrower or any of its
Subsidiaries) which joint venture is entered into and exists for the purpose of
engagement in business activities related to teaming the performance of
construction or construction/engineering related services delivered by the
Borrower or any other Loan Party for one or more projects.

 

Contingent Liability means, with respect to any Person, each obligation and
liability of such Person and all such obligations and liabilities of such Person
incurred pursuant to any agreement, undertaking or arrangement by which such
Person:  (a) guarantees, endorses or otherwise becomes or is contingently liable
upon (by direct or indirect agreement, contingent or otherwise, to provide funds
for payment, to supply funds to, or otherwise to invest in, a debtor, or
otherwise to assure a creditor against loss) the indebtedness, dividend,
obligation or other liability of any other Person in any manner (other than by
endorsement of instruments in the course of collection), including any
indebtedness, dividend or other obligation which may be issued or incurred at
some future time; (b) guarantees the payment of dividends or other distributions
upon the Capital Securities of any other Person; (c) undertakes or agrees
(whether contingently or otherwise):  (i) to purchase, repurchase, or otherwise
acquire any indebtedness, obligation or liability of any other Person or any
property or assets constituting security therefor, (ii) to advance or provide
funds for the payment or discharge of any indebtedness, obligation or liability
of any other Person (whether in the form of loans, advances, stock purchases,
capital contributions or otherwise), or to maintain solvency, assets, level of
income, working capital or other financial condition of any other Person, or
(iii) to make payment to any other Person other than for value received; (d)
agrees to lease property or to purchase securities, property or services from
such other Person with the purpose or intent of assuring the owner of such
indebtedness or obligation of the ability of such other Person to make payment
of the indebtedness or obligation; (e) to induce the issuance of, or in
connection with the issuance of, any letter of credit for the benefit of such
other Person; or (f) undertakes or agrees otherwise to assure a creditor against
loss.  The amount of any Contingent Liability shall (subject to any limitation
set forth herein) be deemed to be the outstanding principal amount (or maximum
permitted principal amount, if larger) of the indebtedness, obligation or other
liability guaranteed or supported thereby.

 

5

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Controlled Group means all members of a controlled group of corporations, all
members of a controlled group of trades or businesses (whether or not
incorporated) under common control and all members of an affiliated service
group which, together with Borrower or any of its Subsidiaries, are treated as a
single employer under Section 414 of the Code or Section 4001 of ERISA.

 

Debt of any Person means, without duplication, (a) all indebtedness of such
Person for borrowed money, (b) all indebtedness evidenced by bonds, debentures,
notes or similar instruments, (c) all obligations of such Person as lessee under
Capital Leases which have been or should be recorded as liabilities on a balance
sheet of such Person in accordance with GAAP, (d) all obligations of such Person
to pay the deferred purchase price of property or services (excluding trade
accounts payable in the ordinary course of business), (e) all indebtedness
secured by a Lien on the property of such Person, whether or not such
indebtedness shall have been assumed by such Person; provided that if such
Person has not assumed or otherwise become liable for such indebtedness, such
indebtedness shall be measured at the fair market value of such property
securing such indebtedness at the time of determination, (f) all obligations,
contingent or otherwise, with respect to the face amount of all letters of
credit (whether or not drawn), bankers’ acceptances and similar obligations
issued for the account of such Person (including the Letters of Credit), (g) all
Hedging Obligations of such Person, (h) all Contingent Liabilities of such
Person, (i) all Debt of any partnership of which such Person is a general
partner, (j) all non-compete payment obligations, Earn-Outs and similar
obligations and (k) any Capital Securities or other equity instrument, whether
or not mandatorily redeemable, that under GAAP is characterized as debt, whether
pursuant to financial accounting standards board issuance No. 150 or otherwise.

 

Default means any event that, if it continues uncured, will, with lapse of time
or notice or both, constitute an Event of Default.

 

Defaulting Lender means any Lender that (a) has failed to fund any portion of
the Loans, participations in Letters of Credit required to be funded by it
hereunder within one Business Day of the date required to be funded by it
hereunder, (b) has otherwise failed to pay over to Administrative Agent or any
other Lender any other amount required to be paid by it hereunder within one
Business Day of the date when due, unless the subject of a good faith dispute,
(c) has been deemed or has a parent company that has been deemed insolvent or
become the subject of a bankruptcy or insolvency proceeding, (d) has notified
Borrower, Administrative Agent, any Issuing Lender or any Lender that it does
not intend to comply with any of its funding obligations under this Agreement or
has made a public statement to the effect that it does not intend to comply with
its funding obligations under this Agreement or under other agreements in which
it commits to extend credit or (e) has failed to confirm within three (3)
Business Days of a request by Administrative Agent that it will comply with the
terms of this Agreement relating to its obligations to fund prospective
Revolving Loans and participations in then outstanding Letters of Credit.

 

Dollar and the sign “$” mean lawful money of the United States of America.

 

Domestic Subsidiary means an entity organized under the laws of one of the
United States which entity is a Subsidiary of the Borrower.

 

Earn-Outs shall mean contingent earn-out liabilities as reflected on the
financial statements delivered pursuant to Section 10.1.1.

 

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EBITDA means, for any Computation Period, as calculated in accordance with GAAP,
Consolidated EBIT for such period plus Consolidated depreciation, amortization
and other noncash charges of the Borrower and its Subsidiaries as agreed to by
Administrative Agent.

 

Environmental Claims means all claims, however asserted, by any governmental,
regulatory or judicial authority or other Person alleging potential liability or
responsibility for violation of any Environmental Law, or for release into, or
injury to the environment.

 

Environmental Laws means all present or future federal, state or local laws,
statutes, common law duties, rules, regulations, ordinances and codes, together
with all administrative or judicial orders, consent agreements, directed duties,
requests, licenses, authorizations and permits of, and agreements with, any
governmental authority, in each case relating to any matter arising out of or
relating to public health and safety, or pollution or protection of the
environment or workplace, including any of the foregoing relating to the
presence, use, production, generation, handling, transport, treatment, storage,
disposal, distribution, discharge, emission, release, threatened release,
control or cleanup of any Hazardous Substance.

 

ERISA means the Employee Retirement Income Security Act of 1974.

 

Event of Default means any of the events described in Section 13.1.

 

Excluded Taxes means taxes based upon, or measured by, a Lender’s or
Administrative Agent’s (or a branch of a Lender’s or Administrative Agent’s)
overall net income, overall net receipts, or overall net profits (including
franchise taxes imposed in lieu of such taxes), but only to the extent such
taxes are imposed by a taxing authority (a) in a jurisdiction in which such
Lender or Administrative Agent is organized, (b) in a jurisdiction which a
Lender’s or Administrative Agent’s principal office is located, or (c) in a
jurisdiction in which such Lender’s or Administrative Agent’s lending office (or
branch) in respect of which payments under this Agreement are made is located.

 

Federal Funds Rate means, for any day, a fluctuating interest rate equal for
each day during such period to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published for such day (or, if such day is not a
Business Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations for such day on such transactions
received by Administrative Agent from three Federal funds brokers of recognized
standing selected by Administrative Agent.  Administrative Agent’s determination
of such rate shall be binding and conclusive absent manifest error.

 

Fiscal Quarter means a fiscal quarter of a Fiscal Year.

 

Fiscal Year means the fiscal year of Borrower and its Subsidiaries, which period
shall be the 12-month period ending on December 31 of each year.

 

Fixed Assets means, on any date of determination and on a Consolidated (unless
otherwise noted) basis determined in accordance with GAAP, equipment, real
property and any other long term fixed asset of the Borrower and its
Subsidiaries.

 

Fixed Charge Coverage Ratio means, on any date of determination for the Borrower
and its Subsidiaries (unless otherwise noted) on a Consolidated basis determined
in accordance with GAAP, the ratio of (x) EBITDA, minus Unfinanced Capital
Expenditures, tax expense, dividends/distributions/share buybacks to (y) the sum
for such period of Consolidated Interest Expense, plus required payments of
principal in respect of Funded Debt of the Borrower and its Subsidiaries, in
each case calculated on a trailing 12 month basis.

 

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FRB means the Board of Governors of the Federal Reserve System or any successor
thereto.

 

Funded Debt means, as to any Person, all Debt of such Person that matures more
than one year from the date of its creation (or is renewable or extendible, at
the option of such Person, to a date more than one year from such date).

 

GAAP means generally accepted accounting principles set forth from time to time
in the opinions and pronouncements of the Accounting Principles Board and the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the U.S. accounting
profession) and the Securities and Exchange Commission, which are applicable to
the circumstances as of the date of determination.

 

General Intangibles shall be defined in accordance with GAAP.

 

Group is defined in Section 2.2.1.

 

Guarantor means each Subsidiary which is a party to the Guaranty and Collateral
Agreement.

 

Guaranty and Collateral Agreement means the Guaranty and Collateral Agreement
dated as of the date hereof executed and delivered by the Loan Parties, together
with any joinders thereto and any other guaranty and collateral agreement
executed by a Loan Party, in each case in form and substance satisfactory to
Administrative Agent.

 

Hazardous Substances means hazardous waste, hazardous substance, pollutant,
contaminant, toxic substance, oil, hazardous material, chemical or other
substance regulated by any Environmental Law.

 

Hedging Agreement means any bank underwritten cash and/or derivative financial
instrument including, but not limited to, any interest rate, currency or
commodity swap agreement, cap agreement, collar agreement, spot foreign
exchange, forward foreign exchange, foreign exchange option (or series of
options) and any other agreement or arrangement designed to protect a Person
against fluctuations in interest rates, currency exchange rates or commodity
prices.

 

Hedging Obligation means, with respect to any Person, any liability of such
Person under any Hedging Agreement.

 

Indemnified Liabilities - see Section 15.17.

 

Intangible Assets means General Intangibles.

 

Interest Expense means, for any period, Consolidated interest expense (including
all imputed interest in respect of Capital Leases), as determined in accordance
with GAAP.

 

Interest Period means, as to any LIBOR Loan, the period commencing on the date
such Loan is borrowed or continued as, or converted into, a LIBOR Loan and
ending on the date one, two or three months thereafter as selected by Borrower
pursuant to Section 2.2.2 or 2.2.3, as the case may be; provided that:

 

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

 

(b)           any Interest Period that begins on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period shall end on the last Business Day of the calendar month at the end of
such Interest Period; and

 

(c)           Borrower may not select any Interest Period for a Revolving  Loan
which would extend beyond the scheduled Termination Date.

 

Inventory is defined in the Guaranty and Collateral Agreement.

 

Investment means, with respect to any Person, any investment in another Person,
whether by acquisition of any debt or Capital Security, by making any loan or
advance, by becoming obligated with respect to a Contingent Liability in respect
of obligations of such other Person (other than travel and similar advances to
employees in the ordinary course of business) or by making an Acquisition;
provided that, for purposes of clarification, a Construction Partnership shall
not constitute an Investment hereunder.

 

Issuing Lender means The PrivateBank or The Bank of the West, in their
respective capacities as the issuer of Letters of Credit hereunder, or any
Affiliate of either that may from time to time issue Letters of Credit, or any
other financial institution that either may cause to issue Letters of Credit for
the account of Borrower, and their successors and assigns in such capacity.

 

Joint Venture means (i) any joint venture entity, whether a company,
unincorporated firm, association, partnership or any other entity which, in each
case, is not a Subsidiary of the Borrower or any of the Subsidiaries but in
which the Borrower or a Subsidiary has a direct or indirect Investment in the
Capital Securities issued by such joint venture entity and/or joint or shared
control with one or more other Persons (other than the Borrower or any
Subsidiary) and (ii) any asset or group of assets in which the Borrower or any
Subsidiary thereof has a joint or shared ownership interest and/or control with
one or more other Persons (other than the Borrower or any Subsidiary).

 

L/C Application means, with respect to any request for the issuance of a Letter
of Credit, a letter of credit application in the form being used by an Issuing
Lender at the time of such request for the type of letter of credit requested.

 

L/C Fee Rate is defined in the definition of Applicable Margin.

 

L/C Fronting Fee means the fronting fee in the amount of 25 basis points per
annum, applied to the outstanding amount of any letters of credit, paid by the
Borrower to any Issuing Lender quarterly in arrears.

 

L/C Sublimit means Seventy-Five Million and 00/100 Dollars ($75,000,000).

 

Lender is defined in the preamble of this Agreement.  References to the
“Lenders” shall include the Issuing Lenders; for purposes of clarification only,
to the extent that PrivateBank (or any successor Issuing Lender) may have any
rights or obligations in addition to those of the other Lenders due to its
status as Issuing Lender, its status as such will be specifically referenced. 
In addition to the foregoing, for the purpose of identifying the Persons
entitled to share in the Collateral and the proceeds thereof under, and in
accordance with the provisions of, this Agreement and the Collateral Documents,
the term “Lender” shall include Affiliates of a Lender providing a Bank Product.

 

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Lender Party is defined in Section 15.17.

 

Letter of Credit is defined in Section 2.1.3.

 

LIBOR Loan means any Loan which bears interest at a rate determined by reference
to the LIBOR Rate.

 

LIBOR Margin is defined in the definition of Applicable Margin.

 

LIBOR Office means with respect to any Lender the office or offices of such
Lender which shall be making or maintaining the LIBOR Loans of such Lender
hereunder.  A LIBOR Office of any Lender may be, at the option of such Lender,
either a domestic or foreign office.

 

LIBOR Rate means a rate of interest equal to (a) the per annum rate of interest
at which United States dollar deposits for a period equal to the relevant
Interest Period are offered in the London Interbank Eurodollar market at 11:00
A.M. (London time) two (2) Business Days prior to the commencement of such
Interest Period (or three (3) Business Days prior to the commencement of such
Interest Period if banks in London, England were not open and dealing in
offshore United States dollars on such second preceding Business Day), as
displayed in the Bloomberg Financial Markets system (or other authoritative
source selected by Administrative Agent in its sole discretion), divided by (b)
a number determined by subtracting from 1.00 the then stated maximum reserve
percentage for determining reserves to be maintained by member banks of the
Federal Reserve System for Eurocurrency funding or liabilities as defined in
Regulation D (or any successor category of liabilities under Regulation D), or
as LIBOR is otherwise determined by Administrative Agent in its sole and
absolute discretion.  Administrative Agent’s determination of the LIBOR Rate
shall be conclusive, absent manifest error and shall remain fixed during such
Interest Period.

 

Lien means, with respect to any Person, any interest granted by such Person in
any real or personal property, asset or other right owned or being purchased or
acquired by such Person (including an interest in respect of a Capital Lease)
which secures payment or performance of any obligation and shall include any
mortgage, lien, encumbrance, title retention lien, charge or other security
interest of any kind, whether arising by contract, as a matter of law, by
judicial process or otherwise.

 

Loan Documents means this Agreement, the Notes, the Letters of Credit, the
Master Letter of Credit Agreement, the L/C Applications, the Agent Fee Letter,
the Collateral Documents, the Subordination Agreements, the Intercreditor
Agreement and all documents, instruments and agreements delivered in connection
with the foregoing.

 

Loan Party means Borrower and each Guarantor.

 

Loan or Loans means Revolving Loans.

 

Margin Stock means any “margin stock” as defined in Regulation U.

 

Master Letter of Credit Agreement means, at any time, with respect to the
issuance of Letters of Credit, a master letter of credit agreement or
reimbursement agreement in the form, if any, being used by an Issuing Lender at
such time.

 

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Material Adverse Effect means (a) a material adverse change in, or a material
adverse effect upon, the financial condition, operations, assets, business,
properties or prospects of the Loan Parties taken as a whole, (b) a material
impairment of the ability of any Loan Party to perform any of the Obligations
under any Loan Document or (c) a material adverse change in or impairment of any
substantial portion of the Collateral under the Collateral Documents or the
legality, validity, binding effect or enforceability against the Loan Parties
taken as a whole.

 

Modified Ratable Portion means, with respect to any prepayment of the Loans
required by Section 6.2.2 in respect of any event described in Section
6.2.2(a)(i) through (iii), 100% of Net Cash Proceeds of such event, as
applicable; provided, that for so long as there are any financial obligations
outstanding under the Note Documents and the Senior Note Agreement requires a
prepayment of such obligations thereunder in connection with any event described
in Section 6.2.2(a)(i) through (iii), and in any event subject to the terms and
provisions of the Intercreditor Agreement, the Modified Ratable Portion shall be
the portion of all Net Cash Proceeds, as applicable, of the applicable event, as
the case may be, equal to the percentage equivalent of a fraction, (i) the
numerator of which is the aggregate outstanding principal amount of all Loans
then outstanding and (ii) the denominator of which is the sum of (a) the
aggregate outstanding principal amount of all Senior Notes then outstanding plus
(b) the aggregate principal amount of all loans, undrawn letters of credit and
letter of credit reimbursement obligations under the Loan Documents then
outstanding.

 

Multiemployer Pension Plan means a multiemployer plan, as defined in Section
4001(a)(3) of ERISA, to which Borrower or any other member of the Controlled
Group may have any liability.

 

Net Cash Proceeds means:

 

(a)                                 with respect to any Asset Disposition, the
aggregate cash proceeds (including cash proceeds received pursuant to policies
of insurance or by way of deferred payment of principal pursuant to a note,
installment receivable or otherwise, but only as and when received) received by
any Loan Party pursuant to such Asset Disposition net of (i) the direct costs
relating to such sale, transfer or other disposition (including sales
commissions and legal, accounting and investment banking fees), (ii) taxes paid
or reasonably estimated by the Borrower to be payable as a result thereof (after
taking into account any available tax credits or deductions and any tax sharing
arrangements) and (iii) amounts required to be applied to the repayment of any
Debt secured by a Lien (other than Liens arising under the Collateral Documents)
on the property subject to such Asset Disposition;

 

(b)                                 with respect to any issuance of Capital
Securities, the aggregate cash proceeds received by any Loan Party pursuant to
such issuance, net of the direct costs relating to such issuance (including
sales and underwriters’ commissions); and

 

(c)                                  with respect to any issuance of Debt, the
aggregate cash proceeds received by any Loan Party pursuant to such issuance,
net of the direct costs of such issuance (including up-front, underwriters’ and
placement fees).

 

Net Worth means, as of any date, the sum of the capital stock and additional
paid-in capital plus retained earnings (or minus accumulated deficit) calculated
in conformity with GAAP.

 

Non-Consenting Lender is defined in Section 15.1.

 

Non-U.S. Participant is defined in Section 7.6(d).

 

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Non-Use Fee Rate is defined in the definition of Applicable Margin.

 

Note means a promissory note substantially in the form of Exhibit A.

 

Noteholder is defined in the Intercreditor Agreement.

 

Notice of Borrowing is defined in Section 2.2.2.

 

Notice of Conversion/Continuation is defined in Section 2.2.3.

 

Obligations means all obligations (monetary (including post-petition interest,
allowed or not) or otherwise) of any Loan Party under this Agreement and any
other Loan Document including Attorney Costs and any reimbursement obligations
of each Loan Party in respect of Letters of Credit and surety bonds, all Hedging
Obligations permitted hereunder which are owed to any Lender (or its Affiliates)
or Administrative Agent, and all other Bank Products Obligations, all in each
case howsoever created, arising or evidenced, whether direct or indirect,
absolute or contingent, now or hereafter existing, or due or to become due.

 

OFAC is defined in Section 10.4.

 

Participant is defined in Section 15.6.2.

 

Patriot Act is defined in Section 15.16.

 

PBGC means the Pension Benefit Guaranty Corporation and any entity succeeding to
any or all of its functions under ERISA.

 

Pension Plan means a “pension plan”, as such term is defined in Section 3(2) of
ERISA, which is subject to Title IV of ERISA or the minimum funding standards of
ERISA (other than a Multiemployer Pension Plan), and as to which Borrower or any
member of the Controlled Group may have any liability, including any liability
by reason of having been a substantial employer within the meaning of Section
4063 of ERISA at any time during the preceding five years, or by reason of being
deemed to be a contributing sponsor under Section 4069 of ERISA.

 

Perfection Certificate means a perfection certificate executed and delivered to
Administrative Agent by a Loan Party.

 

Permitted Acquisition means any Acquisition by Borrower or any Loan Party where:

 

(A) the business or division acquired are for use, or the Person acquired is
engaged, in the construction and engineering businesses engaged in by the Loan
Parties on the date hereof or otherwise as required to preserve compliance with
Section 11.5;

 

(B) immediately before such Acquisition, and as a consequence of such
Acquisition, no Default or Event of Default shall exist;

 

(C) immediately after giving effect to such Acquisition, Borrower is in pro
forma compliance with the financial covenants set forth in Section 11.14 herein;

 

(D)  immediately after giving effect to such Acquisition, Debt to EBITDA on a
pro forma basis is less than 1.75x;

 

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(E) in the case of the Acquisition of any Person, the board of directors or
similar governing body of such Person has approved such Acquisition;

 

(F) promptly following such Acquisition, the Administrative Agent and the
Collateral Agent shall have received complete execution copies of each material
document, instrument and agreement to be executed in connection with such
Acquisition together with all lien search reports and lien release letters and
other documents as the Administrative Agent and/or the Collateral Agent may
require to evidence the termination of Liens on the assets or business to be
acquired;

 

(G) not less than ten (10) Business Days prior to such Acquisition,
Administrative Agent shall have received an acquisition summary with respect to
the Person and/or business or division to be acquired, such summary to include a
reasonably detailed description thereof (including financial information) and
operating results (including financial statements for the most recent 12 month
period for which they are available and as otherwise available), the terms and
conditions, including economic terms, of the proposed Acquisition, and
Borrower’s calculation of Pro Forma EBITDA, and a pro forma balance sheet of
Borrower taking into account the effect of any proposed Acquisition on the most
recent quarterly balance sheet per the Compliance Certificate of the Borrower;

 

(H) Administrative Agent shall have approved Borrower’s computation of Pro Forma
EBITDA;

 

(I) consents have been obtained in favor of Collateral Agent, the Administrative
Agent and the Lenders to the collateral assignment of rights and indemnities
under the related acquisition documents and opinions of counsel for the Loan
Parties and (if delivered to the Loan Parties) the selling party in favor of the
Collateral Agent, the Administrative Agent and the Lenders have been delivered;

 

(J) the provisions of Section 10.9 have been satisfied;

 

(K) simultaneously with the closing of such Acquisition, the target company (if
such Acquisition is structured as a purchase of Capital Securities) or the Loan
Party (if such Acquisition is structured as a purchase of assets or a merger and
a Loan Party is the surviving entity) executes and delivers to the Collateral
Agent, the Administrative Agent and the Lenders such documents necessary to
grant to the Collateral Agent a Lien in all of the assets (subject to any
exceptions in the applicable Collateral Document) of such target company or
surviving company, and their respective Subsidiaries, each in form and substance
and with such perfection and priority as is satisfactory to the Collateral Agent
and the Administrative Agent and, in the event of an Acquisition structured as a
purchase of Capital Securities, the issuer, unless such issuer is a CFC, of such
Capital Securities becomes a party to the Guaranty and Collateral Agreement as a
Guarantor thereunder, in accordance with the terms thereof;

 

(L) if the Acquisition is structured as a merger involving the Borrower, the
Borrower is the surviving entity, or if the Acquisition is structured as a
merger involving a Guarantor, a Guarantor is the surviving entity; and

 

(M) Administrative Agent shall have received a summary of sources and uses of
funds for any Acquisition at the time of the consummation of such Acquisition.

 

Permitted Lien means a Lien expressly permitted hereunder pursuant to Section
11.2.

 

Person means any natural person, corporation, partnership, trust, limited
liability company, association, governmental authority or unit, or any other
entity, whether acting in an individual, fiduciary or other capacity.

 

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Prime Rate means, for any day, the rate of interest in effect for such day as
announced from time to time by Administrative Agent as its prime rate (whether
or not such rate is actually charged by Administrative Agent), which is not
intended to be Administrative Agent’s lowest or most favorable rate of interest
at any one time.  Any change in the Prime Rate announced by Administrative Agent
shall take effect at the opening of business on the day specified in the public
announcement of such change; provided that Administrative Agent shall not be
obligated to give notice of any change in the Prime Rate.

 

PrivateBank is defined in the preamble of this Agreement.

 

Pro Forma EBITDA means a rolling four quarter EBITDA number when taking into
account the most recent quarterly financial statements provided by the Borrower
and adding to it for the same Computation Period a comparable EBITDA number from
any Permitted Acquisition.

 

Pro Rata Share means:

 

                                                with respect to a Lender’s
obligation to make Revolving Loans, participate in Letters of Credit, reimburse
the Issuing Lenders, and receive payments of principal, interest, fees, costs,
and expenses with respect thereto, (x) prior to the Revolving Commitment being
terminated or reduced to zero, the percentage obtained by dividing (i) such
Lender’s Revolving Commitment, by (ii) the aggregate Revolving Commitments of
all Lenders and (y) from and after the time the Revolving Commitment has been
terminated or reduced to zero, the percentage obtained by dividing (i) the
aggregate unpaid principal amount of such Lender’s Revolving Outstandings by
(ii) the aggregate unpaid principal amount of all Revolving Outstandings.

 

Regulation D means Regulation D of the FRB.

 

Regulation U means Regulation U of the FRB.

 

Reportable Event means a reportable event as defined in Section 4043 of ERISA
and the regulations issued thereunder as to which the PBGC has not waived the
notification requirement of Section 4043(a), or the failure of a Pension Plan to
meet the minimum funding standards of Section 412 of the Code (without regard to
whether the Pension Plan is a plan described in Section 4021(a)(2) of ERISA) or
under Section 302 of ERISA.

 

Required Lenders means, at any time, Lenders whose Pro Rata Shares equal 662/3%
as determined pursuant to clauses (x) and (y) of the definition of “Pro Rata
Share”; provided that the Pro Rata Shares held or deemed held by, any Defaulting
Lender shall be excluded for purposes of making a determination of Required
Lenders.

 

Revolving Commitment means $75,000,000, as increased or reduced from time to
time pursuant to Section 2.7 or Section 6.1.

 

Revolving Loan is defined in Section 2.1.1.

 

Revolving Loan Availability means the Revolving Commitment less Revolving
Outstandings.

 

Revolving Outstandings means, at any time, the sum of (a) the aggregate
principal amount of all outstanding Revolving Loans, plus (b) the Stated Amount
of all Letters of Credit.

 

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SEC means the Securities and Exchange Commission or any other governmental
authority succeeding to any of the principal functions thereof.

 

Senior Debt means, as of any date of determination and on a Consolidated basis
in accordance with GAAP, all Debt of Borrower and its Subsidiaries other than
Subordinated Debt.

 

Senior Debt to EBITDA Ratio means, as of the last day of any Fiscal Quarter, the
ratio of (a) Senior Debt excluding, to the extent otherwise included in Senior
Debt, Earn-Outs of the Borrower and its Subsidiaries to (b) EBITDA of the
Borrower and its Subsidiaries for the Computation Period ending on such day.

 

Senior Note Documents means the Senior Note Agreement, the Senior Notes, the
Senior Note Guaranty Agreement, the Security Documents, the Intercreditor
Agreement, the Perfection Certificate, the Subordination Agreements and all
other instruments, certificates and other documents now or hereafter executed
and delivered by or on behalf of the Borrower or any of its Subsidiaries
pursuant to or in connection with any of the foregoing or any of the
transactions contemplated hereby, and any and all amendments, supplements and
other modifications to any of the foregoing.

 

Senior Note Obligations means all of the monetary obligations owed by the
Borrower or any Guarantor to any holder of Senior Notes under the Senior Note
Agreement, the Senior Notes, the Guaranty Agreement (as defined in the Senior
Note Agreement), the Collateral Documents or any other Senior Note Document, and
related agreements, documents, and instruments, including, without limitation
(but for certainty without duplication), (a) the outstanding principal amount
of, accrued and unpaid interest on, and any unpaid Make-Whole Amount (as defined
in the Senior Note Agreement) due with respect to, the Senior Notes, and (b) any
other unpaid amounts (including amounts in respect of fees, expenses,
indemnification and reimbursement) due from the Borrower or any of its
Subsidiaries under any of the Senior Note Agreement, the Senior Notes, the
Guaranty Agreement (as defined in the Senior Note Agreement), the Collateral
Documents or any other Senior Note Document.

 

Senior Officer means, with respect to any Loan Party, any of the chief executive
officer, the chief financial officer, the chief operating officer or the
treasurer of such Loan Party.

 

Stated Amount means, with respect to any Letter of Credit at any date of
determination, (a) the maximum aggregate amount available for drawing thereunder
under any and all circumstances plus (b) the aggregate amount of all
unreimbursed payments and disbursements under such Letter of Credit.

 

Subordinated Debt means any unsecured Debt of Borrower and its Subsidiaries
which has subordination terms, covenants, pricing and other terms which have
been approved in writing by the Administrative Agent and is (i) in form
materially similar to Exhibit F hereto or (ii) is otherwise approved in writing
by the Required Lenders.

 

Subordination Agreement (Rockford) means the agreement or agreements existing on
the date hereof (and as in effect on the date hereof) and entered into for the
purpose of subordinating Indebtedness owed by any of the Borrower or its
Subsidiaries arising under the Rockford Note (as defined in the most recent, as
of the date hereof, 10-Q of the Borrower filed with the SEC) to obligations owed
by the Company and/or its Subsidiaries to The PrivateBank and Trust Company, as
the lender in respect of the Loan and Security Agreement dated September 30,
2012.

 

Subordination Agreements means (i) the Subordination Agreement (Rockford) and
(ii) each subordination agreement executed by a holder of Subordinated Debt in
favor of the Secured Parties from time to time after the Closing Date in form
and substance and on terms and conditions satisfactory to the Administrative
Agent.

 

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Subsidiary means, as to any Person, any other Person in which such first Person
or one or more of its Subsidiaries or such first Person and one or more of its
Subsidiaries owns sufficient equity or voting interests to enable it or them (as
a group) ordinarily, in the absence of contingencies, to elect a majority of the
directors (or Persons performing similar functions) of such second Person, and
any partnership or Joint Venture if more than a 50% interest in the profits or
capital thereof is owned by such first Person or one or more of its Subsidiaries
or such first Person and one or more of its Subsidiaries (unless such
partnership can and does ordinarily take major business actions without the
prior approval of such Person or one or more of its Subsidiaries); provided
that, for purposes of clarification, no Construction Partnership shall
constitute a Subsidiary hereunder.  Unless the context otherwise clearly
requires, any reference to a “Subsidiary” is a reference to a “Subsidiary” of
the Borrower (excluding Onquest Heaters, Inc.).

 

Tangible Assets means all assets of the Borrower and its Subsidiaries,
calculated in accordance with GAAP, excluding assets that are Intangible Assets.

 

Tangible Net Worth means, for the Borrower and its Subsidiaries, at any date,
the Consolidated Net Worth, plus the aggregate amount of Subordinated Debt, less
(i) patents, trademarks, copyrights, deferred charges and other Intangible
Assets (including, but not limited to, unamortized discounts and expenses,
organizational expenses, experimental and developmental expenses, but excluding
prepaid expenses); less (ii) all obligations owed by, excluding amounts owed by
the Borrower and its Subsidiaries, any Affiliate of the Borrower and its
Subsidiaries to the Borrower or any of its Subsidiaries; and less (iii) all
loans made by the Borrower and/or its Subsidiaries to such Person’s officers,
stockholders, or employees, in each case, determined in accordance with GAAP.

 

Taxes means any and all present and future taxes, duties, levies, imposts,
deductions, assessments, charges or withholdings, and any and all liabilities
(including interest and penalties and other additions to taxes) with respect to
the foregoing, but excluding Excluded Taxes.

 

Termination Date means the earlier to occur of (a) December 28, 2017, or (b)
such other date on which the Commitments terminate pursuant to Section 5 or
Section 13.

 

Termination Event means, with respect to a Pension Plan that is subject to Title
IV of ERISA, (a) a Reportable Event, (b) the withdrawal of Borrower or any other
member of the Controlled Group from such Pension Plan during a plan year in
which Borrower or any other member of the Controlled Group was a “substantial
employer” as defined in Section 4001(a)(2) of ERISA or was deemed such under
Section 4068(f) of ERISA, (c) the termination of such Pension Plan, the filing
of a notice of intent to terminate the Pension Plan or the treatment of an
amendment of such Pension Plan as a termination under Section 4041 of ERISA, (d)
the institution by the PBGC of proceedings to terminate such Pension Plan or (e)
any event or condition that might constitute grounds under Section 4042 of ERISA
for the termination of, or appointment of a trustee to administer, such Pension
Plan.

 

Total Plan Liability means, at any time, the present value of all vested and
unvested accrued benefits under all Pension Plans, determined as of the then
most recent valuation date for each Pension Plan, using PBGC actuarial
assumptions for single employer plan terminations.

 

Type is defined in Section 2.2.1.

 

UCC is defined in the Guaranty and Collateral Agreement.

 

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Unfinanced Capital Expenditures means 65% of Capital Expenditures in a
Computation Period minus sales of Fixed Assets during such period net of
repayments of Debt of the Borrower and its Subsidiaries during such period,
minus, as of the date of calculation, outstanding Debt incurred by the Borrower
and/or its Subsidiaries with a final maturity exceeding 12 months from the date
of issuance thereof, which Debt financed such Capital Expenditures, in each
case, determined in accordance with GAAP.

 

Unfunded Liability means the amount (if any) by which the present value of all
vested and unvested accrued benefits under all Pension Plans exceeds the fair
market value of all assets allocable to those benefits, all determined as of the
then most recent valuation date for each Pension Plan, using PBGC actuarial
assumptions for single employer plan terminations.

 

Withholding Certificate is defined in Section 7.6(d).

 

Wholly-Owned Subsidiary means, at any time, any Subsidiary one hundred percent
of all of the Capital Securities (except directors’ qualifying shares) and
voting interests of which are owned by any one or more of the Borrower and/or
the Borrower’s other Wholly-Owned Subsidiaries at such time.

 

1.2          Other Interpretive Provisions.  (a) The meanings of defined terms
are equally applicable to the singular and plural forms of the defined terms.

 

(b)           Section, Annex, Schedule and Exhibit references are to this
Agreement unless otherwise specified.

 

(c)           The term “including” is not limiting and means “including without
limitation.”

 

(d)           In the computation of periods of time from a specified date to a
later specified date, the word “from” means “from and including”; the words “to”
and “until” each mean “to but excluding”, and the word “through” means “to and
including.”

 

(e)           Unless otherwise expressly provided herein, (i) references to
agreements (including this Agreement and the other Loan Documents) and other
contractual instruments shall be deemed to include all subsequent amendments,
restatements, supplements and other modifications thereto, but only to the
extent such amendments, restatements, supplements and other modifications are
not prohibited by the terms of any Loan Document, and (ii) references to any
statute or regulation shall be construed as including all statutory and
regulatory provisions amending, replacing, supplementing or interpreting such
statute or regulation.

 

(f)            This Agreement and the other Loan Documents may use several
different limitations, tests or measurements to regulate the same or similar
matters.  All such limitations, tests and measurements are cumulative and each
shall be performed in accordance with its terms.

 

(g)           This Agreement and the other Loan Documents are the result of
negotiations among and have been reviewed by counsel to Administrative Agent,
Borrower, the Lenders and the other parties thereto and are the products of all
parties.  Accordingly, they shall not be construed against Administrative Agent
or the Lenders merely because of Administrative Agent’s or Lenders’ involvement
in their preparation.

 

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SECTION 2                                                       COMMITMENTS OF
THE LENDERS; BORROWING, CONVERSION AND LETTER OF CREDIT PROCEDURES.

 

2.1          Commitments.  On and subject to the terms and conditions of this
Agreement, each of the Lenders, severally and for itself alone, agrees to make
loans to, and to issue or participate in letters of credit for the account of,
Borrower as follows:

 

2.1.1            Revolving Loan Commitment.  Each Lender with a Revolving Loan
Commitment agrees to make loans on a revolving basis (“Revolving Loans”) from
time to time until the Termination Date in such Lender’s Pro Rata Share of such
aggregate amounts as Borrower may request from all Lenders; provided that the
Revolving Outstandings will not at any time exceed Revolving Loan Availability.

 

2.1.2            RESERVED

 

2.1.3            L/C Commitment.  Subject to Section 2.3.1, each Issuing Lender
agrees to issue letters of credit, in each case containing such terms and
conditions as are permitted by this Agreement and are reasonably satisfactory to
such Issuing Lender (each, a “Letter of Credit”), at the request of and for the
account of Borrower from time to time before the scheduled Termination Date and,
as more fully set forth in Section 2.3.2, each Lender agrees to purchase a
participation in each such Letter of Credit; provided that (a) the aggregate
Stated Amount of all Letters of Credit shall not at any time exceed the L/C
Sublimit and (b) the Revolving Outstandings shall not at any time exceed
Revolving Loan Availability.

 

2.2          Loan Procedures.

 

2.2.1            Various Types of Loans.  Each Revolving Loan shall be divided
into tranches which are either a Base Rate Loan or a LIBOR Loan (each a “type”
of Loan), as Borrower shall specify in the related notice of borrowing or
conversion pursuant to Section 2.2.2 or 2.2.3.  LIBOR Loans having the same
Interest Period which expire on the same day are sometimes called a “Group” or
collectively “Groups”.  Base Rate Loans and LIBOR Loans may be outstanding at
the same time, provided that not more than three (3) different Groups of LIBOR
Loans shall be outstanding at any one time.  All borrowings, conversions and
repayments of Loans shall be effected so that each Lender will have a ratable
share (according to its Pro Rata Share) of all types and Groups of Loans.

 

2.2.2            Borrowing Procedures.

 

(a)           Borrower shall give written notice (each such written notice, a
“Notice of Borrowing”) substantially in the form of Exhibit D or telephonic
notice (followed immediately by a Notice of Borrowing) to Administrative Agent
of each proposed borrowing not later than (a) in the case of a Base Rate
borrowing, 10:00 A.M., Chicago time, on the proposed date of such borrowing, and
(b) in the case of a LIBOR borrowing, 10:00 A.M., Chicago time, at least three
(3) Business Days prior to the proposed date of such borrowing.  Each such
notice shall be effective upon receipt by Administrative Agent, shall be
irrevocable, and shall specify the date, amount and type of borrowing and, in
the case of a LIBOR borrowing, the initial Interest Period therefor.  Promptly
upon receipt of such notice, Administrative Agent shall advise each Lender
thereof.  Not later than 1:00 P.M., Chicago time, on the date of a proposed
borrowing, each Lender shall provide Administrative Agent at the office
specified by Administrative Agent with immediately available funds covering such
Lender’s Pro Rata Share of such borrowing and, so long as Administrative Agent
has not received written notice that the conditions precedent set forth in
Section 12 with respect to such borrowing have not been satisfied,
Administrative Agent shall pay over the funds received by Administrative Agent
to Borrower on the requested borrowing date.  Each borrowing shall be on a
Business Day.  Each Base Rate borrowing shall be in an aggregate amount of at
least $5,000,000, and an integral multiple of $1,000,000, and each LIBOR
borrowing shall be in an aggregate amount of at least $5,000,000 and an integral
multiple of at least $1,000,000.

 

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(b)           Unless payment is otherwise timely made by Borrower, the becoming
due of any Obligations (whether principal, interest, fees or other charges)
shall be deemed to be a request for a Base Rate borrowing of a Revolving Loan on
the due date, in the amount of such Obligations. The proceeds of such Revolving
Loans may be disbursed as direct payment of the relevant Obligation. In
addition, Administrative Agent may, at its option, charge any such Obligations
against any operating, investment or other account of Borrower maintained with
Administrative Agent or any of its Affiliates.  In no such circumstance shall
Borrower be charged more than the amount of such Obligations.

 

2.2.3            Conversion and Continuation Procedures.  (a) Subject to Section
2.2.1, Borrower may, upon irrevocable written notice to Administrative Agent in
accordance with clause (b) below:

 

(B)          elect, as of any Business Day, to convert any Loans (or any part
thereof in an aggregate amount not less than $5,000,000  a higher integral
multiple of $1,000,000) into Loans of the other type; or

 

(C)          elect, as of the last day of the applicable Interest Period, to
continue any LIBOR Loans having Interest Periods expiring on such day (or any
part thereof in an aggregate amount not less than $5,000,000 or a higher
integral multiple of $1,000,000) for a new Interest Period;

 

provided that after giving effect to any prepayment, conversion or continuation,
the aggregate principal amount of each Group of LIBOR Loans shall be at least
$5,000,000 and an integral multiple of $1,000,000.

 

(b)           Borrower shall give written notice (each such written notice, a
“Notice of Conversion/Continuation”) substantially in the form of Exhibit E or
telephonic notice (followed immediately by a Notice of Conversion/Continuation)
to Administrative Agent of each proposed conversion or continuation not later
than (i) in the case of conversion into Base Rate Loans, 10:00 A.M., Chicago
time, on the proposed date of such conversion and (ii) in the case of conversion
into or continuation of LIBOR Loans, 10:00 A.M., Chicago time, at least three
(3) Business Days prior to the proposed date of such conversion or continuation,
specifying in each case:

 

(A)          the proposed date of conversion or continuation;

 

(B)          the aggregate amount of Loans to be converted or continued;

 

(C)          the type of Loans resulting from the proposed conversion or
continuation; and

 

(D)          in the case of conversion into, or continuation of, LIBOR Loans,
the duration of the requested Interest Period therefor.

 

(c)           If upon the expiration of any Interest Period applicable to LIBOR
Loans, Borrower has failed to select timely a new Interest Period to be
applicable to such LIBOR Loans, Borrower shall be deemed to have elected to
convert such LIBOR Loans into Base Rate Loans effective on the last day of such
Interest Period.

 

(d)           Administrative Agent will promptly notify each Lender of its
receipt of a notice of conversion or continuation pursuant to this Section 2.2.3
or, if no timely notice is provided by Borrower, of the details of any automatic
conversion.

 

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(e)           Any conversion of a LIBOR Loan on a day other than the last day of
an Interest Period therefor shall be subject to Section 8.4.

 

2.3          Letter of Credit Procedures.

 

2.3.1            L/C Applications.  Borrower shall execute and deliver to each
Issuing Lender each Master Letter of Credit Agreement from time to time in
effect with respect to such Issuing Lender.  Borrower shall give notice to
Administrative Agent and the applicable Issuing Lender of the proposed issuance
of each Letter of Credit on a Business Day which is at least three (3) Business
Days (or such lesser number of days as Administrative Agent and such Issuing
Lender shall agree in any particular instance in their sole discretion) prior to
the proposed date of issuance of such Letter of Credit.  Each such notice shall
be accompanied by an L/C Application, duly executed by Borrower and in all
respects satisfactory to Administrative Agent and the applicable Issuing Lender,
together with such other documentation as Administrative Agent or such Issuing
Lender may request in support thereof, it being understood that each L/C
Application shall specify, among other things, the date on which the proposed
Letter of Credit is to be issued, the expiration date of such Letter of Credit
which shall not be later than the scheduled Termination Date unless such Letter
of Credit is Cash Collateralized, whether the Letter of Credit is for financial
or performance purposes, and whether such Letter of Credit is to be transferable
in whole or in part.  Any Letter of Credit outstanding after the scheduled
Termination Date which is Cash Collateralized for the benefit of an Issuing
Lender shall be the sole responsibility of such Issuing Lender.  So long as the
applicable Issuing Lender has not received written notice that the conditions
precedent set forth in Section 12 with respect to the issuance of such Letter of
Credit have not been satisfied, such Issuing Lender shall issue such Letter of
Credit on the requested issuance date.  Each Issuing Lender shall promptly
advise Administrative Agent of the issuance of each Letter of Credit and of any
amendment thereto, extension thereof or event or circumstance changing the
amount available for drawing thereunder.  In the event of any inconsistency
between the terms of any Master Letter of Credit Agreement, any L/C Application
and the terms of this Agreement, the terms of this Agreement shall control. 
Upon issuance, the Issuing Lender will determine whether each Letter of Credit
is a financial or a performance Letter of Credit and will so notify the Borrower
and the Administrative Agent.

 

2.3.2            Participations in Letters of Credit.  Concurrently with the
issuance of each Letter of Credit, the applicable Issuing Lender shall be deemed
to have sold and transferred to each Lender with a Revolving Loan Commitment,
and each such Lender shall be deemed irrevocably and unconditionally to have
purchased and received from such Issuing Lender, without recourse or warranty,
an undivided interest and participation, to the extent of such Lender’s Pro Rata
Share, in such Letter of Credit and Borrower’s reimbursement obligations with
respect thereto.  If Borrower does not pay any reimbursement obligation when
due, Borrower shall be deemed to have immediately requested that the Lenders
make a Revolving Loan which is a Base Rate Loan in a principal amount equal to
such reimbursement obligations.  Administrative Agent shall promptly notify such
Lenders of such deemed request and, without the necessity of compliance with the
requirements of Section 2.2.2, Section 12.2 or otherwise such Lender shall make
available to Administrative Agent its Pro Rata Share of such Loan.  The proceeds
of such Loan shall be paid over by Administrative Agent to the applicable
Issuing Lender for the account of Borrower in satisfaction of such reimbursement
obligations.  For the purposes of this Agreement, the unparticipated portion of
each Letter of Credit shall be deemed to be the applicable Issuing Lender’s
“participation” therein.  Each Issuing Lender hereby agrees, upon request of
Administrative Agent or any Lender, to deliver to Administrative Agent or such
Lender a list of all outstanding Letters of Credit issued by such Issuing
Lender, together with such information related thereto as Administrative Agent
or such Lender may reasonably request.

 

2.3.3            Reimbursement Obligations.  (a)  Borrower hereby
unconditionally and irrevocably agrees to reimburse each Issuing Lender for each
payment or disbursement made by such

 

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Issuing Lender under any Letter of Credit honoring any demand for payment made
by the beneficiary thereunder, in each case on the date that such payment or
disbursement is made.  Any amount not reimbursed on the date of such payment or
disbursement shall bear interest from the date of such payment or disbursement
to the date that the applicable Issuing Lender is reimbursed by Borrower
therefor, payable on demand, at a rate per annum equal to the Base Rate from
time to time in effect plus the Base Rate Margin from time to time in effect
plus, beginning on the third Business Day after receipt of notice from such
Issuing Lender of such payment or disbursement, 2%.  Each Issuing Lender shall
notify Borrower and Administrative Agent whenever any demand for payment is made
under any Letter of Credit by the beneficiary thereunder; provided that the
failure of an Issuing Lender to so notify Borrower or Administrative Agent shall
not affect the rights of such Issuing Lender or the Lenders in any manner
whatsoever.

 

(b)           Borrower’s reimbursement obligations hereunder shall be
irrevocable and unconditional under all circumstances, including (a) any lack of
validity or enforceability of any Letter of Credit, this Agreement or any other
Loan Document, (b) the existence of any claim, set-off, defense or other right
which any Loan Party may have at any time against a beneficiary named in a
Letter of Credit, any transferee of any Letter of Credit (or any Person for whom
any such transferee may be acting), Administrative Agent, the Issuing Lenders,
any Lender or any other Person, whether in connection with any Letter of Credit,
this Agreement, any other Loan Document, the transactions contemplated herein or
any unrelated transactions (including any underlying transaction between any
Loan Party and the beneficiary named in any Letter of Credit), (c) the validity,
sufficiency or genuineness of any document which an Issuing Lender has
determined complies on its face with the terms of the applicable Letter of
Credit, even if such document should later prove to have been forged,
fraudulent, invalid or insufficient in any respect or any statement therein
shall have been untrue or inaccurate in any respect, or (d) the surrender or
impairment of any security for the performance or observance of any of the terms
hereof.  Without limiting the foregoing, no action or omission whatsoever by
Administrative Agent or any Lender (excluding any Lender in its capacity as an
Issuing Lender) under or in connection with any Letter of Credit or any related
matters shall result in any liability of Administrative Agent or any Lender to
Borrower, or relieve Borrower of any of its obligations hereunder to any such
Person.

 

2.3.4            Funding by Lenders to Issuing Lender.  If any Issuing Lender
makes any payment or disbursement under any Letter of Credit and (a) Borrower
has not reimbursed such Issuing Lender in full for such payment or disbursement
by 10:00 A.M., Chicago time, on the date of such payment or disbursement, (b) a
Revolving Loan may not be made in accordance with Section 2.3.2 or (c) any
reimbursement received by such Issuing Lender from Borrower is or must be
returned or rescinded upon or during any bankruptcy or reorganization of
Borrower or otherwise, each other Lender with a Revolving Loan Commitment shall
be obligated to pay to Administrative Agent for the account of such Issuing
Lender, in full or partial payment of the purchase price of its participation in
such Letter of Credit, its Pro Rata Share of such payment or disbursement (but
no such payment shall diminish the obligations of Borrower under Section 2.3.3),
and, upon notice from such Issuing Lender, Administrative Agent shall promptly
notify each other Lender thereof.  Each other Lender irrevocably and
unconditionally agrees to so pay to Administrative Agent in immediately
available funds for the applicable Issuing Lender’s account the amount of such
other Lender’s Pro Rata Share of such payment or disbursement.  If and to the
extent any Lender shall not have made such amount available to Administrative
Agent by 2:00 P.M., Chicago time, on the Business Day on which such Lender
receives notice from Administrative Agent of such payment or disbursement (it
being understood that any such notice received after noon, Chicago time, on any
Business Day shall be deemed to have been received on the next following
Business Day), such Lender agrees to pay interest on such amount to
Administrative Agent for the applicable Issuing Lender’s account forthwith on
demand, for each day from the date such amount was to have been delivered to
Administrative Agent to the date such amount is paid, at a rate per annum equal
to (a) for the first three days after demand, the Federal Funds Rate from time
to time in

 

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effect and (b) thereafter, the Base Rate from time to time in effect.  Any
Lender’s failure to make available to Administrative Agent its Pro Rata Share of
any such payment or disbursement shall not relieve any other Lender of its
obligation hereunder to make available to Administrative Agent such other
Lender’s Pro Rata Share of such payment, but no Lender shall be responsible for
the failure of any other Lender to make available to Administrative Agent such
other Lender’s Pro Rata Share of any such payment or disbursement.

 

2.4          Commitments Several.  The failure of any Lender to make a requested
Loan on any date shall not relieve any other Lender of its obligation (if any)
to make a Loan on such date, but no Lender shall be responsible for the failure
of any other Lender to make any Loan to be made by such other Lender.

 

2.5          Certain Conditions.  Except as otherwise provided in Section 2.3.4
of this Agreement, no Lender shall have an obligation to make any Loan, or to
permit the continuation of or any conversion into any LIBOR Loan, and no Issuing
Lender shall have any obligation to issue any Letter of Credit, if an Event of
Default or Default exists.

 

2.6          Defaulting Lenders.  Notwithstanding any provision of this
Agreement to the contrary, if any Lender becomes a Defaulting Lender, then the
following provisions shall apply for so long as such Lender is a Defaulting
Lender:

 

2.6.1            Fees shall cease to accrue on the unfunded portion of the
Revolving Commitment of such Defaulting Lender pursuant to Section 5.1;

 

2.6.2            If any or Letters of Credit are outstanding at the time a
Lender becomes a Defaulting Lender then:

 

(a)           all or any part of the Defaulting Lender’s obligation to
participate in Letters of Credit shall be reallocated among the non-Defaulting
Lenders in accordance with their respective Pro Rata Shares as determined
pursuant to clause (a) of the definition of “Pro Rata Share” but only to the
extent (x) the sum of all non-Defaulting Lenders’ Revolving Outstandings plus
such Defaulting Lender’s obligation to participate in Letters of Credit does not
exceed the total of all non-Defaulting Lenders’ Commitments and (y) the
conditions set forth in Section 12.2 are satisfied at such time; and

 

(b)           if the reallocation described in clause (a) above cannot, or can
only partially, be effected, Borrower shall within one Business Day following
notice by Administrative Agent Cash Collateralize such Defaulting Lender’s
obligation to participate in Letters of Credit (after giving effect to any
partial reallocation pursuant to clause (a) above) in accordance with the
procedures set forth in Section 2.3.1 for so long as such obligation to
participate in Letters of Credit is outstanding;

 

(c)           if Borrower Cash Collateralizes any portion of such Defaulting
Lender’s obligation to participate in Letters of Credit pursuant to Section
2.6.2, Borrower shall not be required to pay any fees to such Defaulting Lender
pursuant to Section 5.2 with respect to such Defaulting Lender’s obligation to
participate in Letters of Credit during the period such Defaulting Lender’s
obligation to participate in Letters of Credit is Cash Collateralized;

 

(d)           if the obligation to participate in Letters of Credit of the
non-Defaulting Lenders is reallocated pursuant to Section 2.6.2, then the fees
payable to the Lenders pursuant to Section 5.1 and Section 5.2 shall be adjusted
in accordance with such non-Defaulting Lenders’ Pro Rata Shares (as determined
pursuant to clause (a) of the definition of “Pro Rata Share”); or

 

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(e)           if any Defaulting Lender’s obligation to participate in Letters of
Credit is neither Cash Collateralized nor reallocated pursuant to Section 2.6.2,
then, without prejudice to any rights or remedies of any Issuing Lender or any
Lender hereunder, all letter of credit fees payable under Section 5.2 with
respect to such Defaulting Lender’s obligation to participate in Letters of
Credit shall be payable to the applicable Issuing Lender until such obligation
to participate in Letters of Credit is cash collateralized and/or reallocated;
and

 

2.6.3            So long as any Lender is a Defaulting Lender, no Issuing Lender
shall be required to issue, amend or increase any Letter of Credit, unless it is
satisfied that the related exposure will be 100% covered by the Commitments of
the non-Defaulting Lenders and/or cash collateral will be provided by Borrower
in accordance with Section 2.6.2, and participating interests in any such newly
issued or increased Letter of Credit shall be allocated among non-Defaulting
Lenders in a manner consistent with Section 2.6.2(a) (and Defaulting Lenders
shall not participate therein).

 

2.6.4            In the event that Administrative Agent, Borrower, and the
applicable Issuing Lender(s) each agrees that a Defaulting Lender has adequately
remedied all matters that caused such Lender to be a Defaulting Lender, then the
obligations to participate in Letters of Credit of the Lenders shall be
readjusted to reflect the inclusion of such Lender’s Commitment and on such date
such Lender shall purchase at par such of the Loans of the other Lenders as
Administrative Agent shall determine may be necessary in order for such Lender
to hold such Loans in accordance with its Pro Rata Share (as determined pursuant
to clause (a) of the definition of “Pro Rata Share”).

 

2.6.5            Any amount payable to a Defaulting Lender hereunder (whether on
account of principal, interest, fees or otherwise and including any amount that
would otherwise be payable to such Defaulting Lender pursuant to Section 7.5 but
excluding Section 8.7(b)) shall, in lieu of being distributed to such Defaulting
Lender, be retained by Administrative Agent in a segregated account and, subject
to any applicable requirements of law, be applied at such time or times as may
be determined by Administrative Agent (i) first, to the payment of any amounts
owing by such Defaulting Lender to Administrative Agent hereunder, (ii) second,
pro rata, to the payment of any amounts owing by such Defaulting Lender to the
Issuer Lender(s), (iii) third, to the funding of any Revolving Loan or the
funding or cash collateralization of any participating interest in any Letter of
Credit in respect of which such Defaulting Lender has failed to fund its portion
thereof as required by this Agreement, as determined by Administrative Agent,
(iv) fourth, if so determined by Administrative Agent and Borrower, held in such
account as cash collateral for future funding obligations of the Defaulting
Lender under this Agreement, (v) fifth, pro rata, to the payment of any amounts
owing to Borrower or the Lenders as a result of any judgment of a court of
competent jurisdiction obtained by Borrower or any Lender against such
Defaulting Lender as a result of such Defaulting Lender’s breach of its
obligations under this Agreement, and (vi) sixth, to such Defaulting Lender or
as otherwise directed by a court of competent jurisdiction; provided, that if
such payment is (x) a prepayment of the principal amount of any Loans or
reimbursement obligations in respect of draws under Letters of Credit with
respect to which the Issuing Lender has funded its participation obligations and
(y) made at a time when the conditions set forth in Section 12.2 are satisfied,
such payment shall be applied solely to prepay the Loans of, and reimbursement
obligations owed to, all Revolving Lenders that are not Defaulting Lenders pro
rata prior to being applied to the prepayment of any Loans, or reimbursement
obligations owed to, any Defaulting Lender.

 

2.6.6            No Defaulting Lender shall have any right to approve or
disapprove any amendment, waiver, consent or any other action the Lenders or the
Required Lenders have taken or may take hereunder (including any consent to any
amendment or waiver pursuant to Section 15.1), provided that any waiver,
amendment or modification requiring the consent of all Lenders or each directly
affected Lender which affects such Defaulting Lender differently than other
affected Lenders shall require the consent of such Defaulting Lender.

 

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2.7          Incremental Facility.

 

2.7.1            Incremental Revolving Commitment Increases.  Subject to the
terms and conditions set forth herein, the Borrower shall have the right, at any
time and from time to time prior to the Termination Date, to incur additional
indebtedness under this Credit Agreement in the form of an increase to the
Revolving Commitment Amount (each, a “Revolving Facility Increase”) that, (a)
all Revolving Loans made pursuant to any Revolving Facility Increase shall be
deemed to be Revolving Loans for all purposes hereof except as otherwise
provided in this Section 2.7 and (b) for the avoidance of doubt, all Revolving
Loans made pursuant to any Revolving Facility Increase will be held ratably,
borrowed, repaid and otherwise treated as necessary to provide for pro rata
borrowing and repayment with respect to other Revolving Loans made pursuant to
the Revolving Loan Facility; provided that the aggregate principal amount of all
additional Commitments that have been added pursuant to this Section 2.7
(whether or not still outstanding or in effect) shall not exceed $50,000,000
(“Incremental Increase Amount”).

 

2.7.2            Terms and Conditions.  The following terms and conditions shall
apply to any Revolving Facility Increase (i) no Default or Event of Default
shall exist immediately prior to or after giving effect to such Revolving
Facility Increase, and, after giving effect to such Revolving Facility Increase
on a pro forma basis, the Borrower shall be in compliance with the financial
covenants set forth herein based on the financial information most recently
delivered to the Administrative Agent, (ii) the terms and documentation in
respect of any Revolving Facility Increase shall be consistent with the
Revolving Loans, (iii) any loans made pursuant to a Revolving Facility Increase
shall be incurred by the Borrower and will be secured and guaranteed on a pari
passu basis with the other obligations of the Borrower, (iv) any such Revolving
Facility Increase shall have a maturity date on the Termination Date, (v) any
Lenders providing such Revolving Facility Increase shall be entitled to the same
voting rights as the existing Lenders, (vi) any such Revolving Facility Increase
shall be in a minimum principal amount of (A) $5,000,000 and integral multiples
of $5,000,000 in excess thereof, (vii) the proceeds of any such Revolving
Facility Increase will be used for the purposes set forth in herein, (viii) the
Borrower shall execute a promissory note in favor of any new Lender or any
existing Lender requesting a promissory note, as applicable, who provides a
Revolving Facility Increase or whose Revolving Commitment is increased, as
applicable, pursuant to this Section, (ix) the conditions to Extensions of
Credit herein shall have been satisfied, (x) the Administrative Agent shall have
received (A) an opinion or opinions (including, if reasonably requested by the
Administrative Agent, local counsel opinions) of counsel for the Borrower,
addressed to the Administrative Agent and the Lenders, in form and substance
reasonably acceptable to the Administrative Agent, (B) any authorizing corporate
documents as the Administrative Agent may reasonably request and (C) if
applicable, a duly executed Notice of Borrowing, and (xi) the Administrative
Agent shall have received from a Responsible Officer of the Borrower updated
financial projections and an officer’s certificate, in each case, in form and
substance reasonably satisfactory to the Administrative Agent, demonstrating
that, (A) no Default or Event of Default shall exist immediately prior to or
after giving effect to such Revolving Facility Increase, and (B) after giving
effect to any such Revolving Facility Increase on a pro forma basis, the
Borrower will be in compliance with the financial covenants set forth herein. 
Revolving Facility Increases shall be available to the Borrower notwithstanding
any previous election by the Borrower to reduce the Revolving Committed Amount.

 

2.7.3            Revolving Facility Increase.  In connection with the closing of
any Revolving Facility Increase, the outstanding Revolving Loans and
Participation Interests shall be reallocated by causing such fundings and
repayments (and shall not be subject to any processing and/or recordation fees)
among the Revolving Lenders (and the Borrower shall be responsible for any costs
of the

 

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Administrative Agent arising hereunder resulting from such reallocation and
repayments and for any payments owing under Section 15.5 of Revolving Loans as
necessary such that, after giving effect to such Revolving Facility Increase,
each Revolving Lender will hold Revolving Loans and Participation Interests
based on its Revolving Commitment Percentage (after giving effect to such
Revolving Facility Increase).

 

2.7.4            Participation.  Existing Lenders may be offered the opportunity
to provide any such Revolving Facility Increase, but each such Lender shall have
no obligation to provide all or any portion of such Revolving Facility
Increase.  The Borrower may invite other banks, financial institutions and
investment funds reasonably acceptable to the Administrative Agent (such consent
not to be unreasonably withheld or delayed) to join this Credit Agreement as
Lenders hereunder for any portion of such Revolving Facility Increase; provided
that such other banks, financial institutions and investment funds shall enter
into such joinder agreements to give effect thereto as the Administrative Agent
may reasonably request.

 

2.7.5            Amendments.  The Administrative Agent is authorized to enter
into, on behalf of the Lenders, any amendment to this Credit Agreement or any
other Credit Document or any joinder agreements as may be necessary or advisable
to incorporate the terms of any such Revolving Facility Increase.

 

SECTION 3                                                       EVIDENCING OF
LOANS.

 

3.1          Notes.  At a Lender’s request, the Loans of such Lender shall be
evidenced by a Note, with appropriate insertions, payable to the order of such
Lender in a face principal amount equal to such Lender’s Revolving Loan
Commitment.

 

3.2          Recordkeeping.  Administrative Agent, on behalf of each Lender,
shall record in its records, the date and amount of each Loan made by each
Lender, each repayment or conversion thereof and, in the case of each LIBOR
Loan, the dates on which each Interest Period for such Loan shall begin and
end.  The aggregate unpaid principal amount so recorded shall be rebuttably
presumptive evidence of the principal amount of the Loans owing and unpaid.  The
failure to so record any such amount or any error in so recording any such
amount shall not, however, limit or otherwise affect the Obligations of Borrower
hereunder or under any Note to repay the principal amount of the Loans
hereunder, together with all interest accruing thereon.

 

SECTION 4                                                       INTEREST.

 

4.1          Interest Rates.  Borrower promises to pay interest on the unpaid
principal amount of each Loan for the period commencing on the date of such Loan
until such Loan is paid in full as follows:

 

(a)           at all times while such Loan is a Base Rate Loan, at a rate per
annum equal to the sum of the Base Rate from time to time in effect plus the
Base Rate Margin from time to time in effect; and

 

(b)           at all times while such Loan is a LIBOR Loan, at a rate per annum
equal to the sum of the LIBOR Rate applicable to each Interest Period for such
Loan plus the LIBOR Margin from time to time in effect;

 

provided that at any time an Event of Default exists, unless the Required
Lenders otherwise consent, the interest rate applicable to each Loan shall be
increased by 2% (and, in the case of Obligations not bearing interest, such
Obligations shall bear interest at the Base Rate applicable to Revolving Loans
plus 2%), provided further that such increase may thereafter be rescinded by the
Required Lenders, notwithstanding

 

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Section 15.1.  Notwithstanding the foregoing, upon the occurrence of an Event of
Default under Sections 13.1.1 or 13.1.4, such increase shall occur
automatically.  In no event shall interest payable by Borrower to any Lender
hereunder exceed the maximum rate permitted under applicable law, and if any
such provision of this Agreement is in contravention of any such law, such
provision shall be deemed modified to limit such interest to the maximum rate
permitted under such law.

 

4.2          Interest Payment Dates.  Accrued interest on each Base Rate Loan
shall be payable in arrears on the last day of each calendar quarter and at
maturity.  Accrued interest on each LIBOR Loan shall be payable on the last day
of each Interest Period relating to such Loan, upon a prepayment of such Loan,
and at maturity.  After maturity, and at any time an Event of Default exists,
accrued interest on all Loans shall be payable on demand.

 

4.3          Setting and Notice of LIBOR Rates.  The applicable LIBOR Rate for
each Interest Period shall be determined by Administrative Agent, and notice
thereof shall be given by Administrative Agent promptly to Borrower and each
Lender.  Each determination of the applicable LIBOR Rate by Administrative Agent
shall be conclusive and binding upon the parties hereto, in the absence of
demonstrable error.  Administrative Agent shall, upon written request of
Borrower or any Lender, deliver to Borrower or such Lender a statement showing
the computations used by Administrative Agent in determining any applicable
LIBOR Rate hereunder.

 

4.4          Computation of Interest.  Interest shall be computed for the actual
number of days elapsed on the basis of a year of (a) 360 days for interest
calculated at the LIBOR Rate and (b) 365/366 days for interest calculated at the
Base Rate.  The applicable interest rate for each Base Rate Loan shall change
simultaneously with each change in the Base Rate.

 

SECTION 5                                                       FEES.

 

5.1          Non-Use Fee.  Borrower agrees to pay to Administrative Agent for
the account of each Lender (except as provided in Section 2.6) a non-use fee,
for the period from the Closing Date to the Termination Date, at the Non-Use Fee
Rate in effect from time to time of such Lender’s Pro Rata Share (as adjusted
from time to time) of the unused amount of the Revolving Commitment.  For
purposes of calculating usage under this Section, the Revolving Commitment shall
be deemed used to the extent of Revolving Outstandings.  Such non-use fee shall
be payable in arrears on the last day of each calendar quarter and on the
Termination Date for any period then ending for which such non-use fee shall not
have previously been paid.  The non-use fee shall be computed for the actual
number of days elapsed on the basis of a year of 360 days.

 

5.2          Letter of Credit Fees.  (a)  Except as provided in Section 2.6,
Borrower agrees to pay to Administrative Agent for the account of each Lender
(except as provided in Section 2.6) a letter of credit fee for each Letter of
Credit equal to the L/C Fee Rate in effect from time to time of such Lender’s
Pro Rata Share (as adjusted from time to time) of the undrawn amount of such
Letter of Credit (computed for the actual number of days elapsed on the basis of
a year of 360 days); provided that, unless the Required Lenders otherwise
consent, the rate applicable to each Letter of Credit shall be increased by 2%
at any time that an Event of Default exists.  Such letter of credit fee shall be
payable in arrears on the last day of each calendar quarter and on the
Termination Date (or such later date on which such Letter of Credit expires or
is terminated) for the period from the date of the issuance of each Letter of
Credit (or the last day on which the letter of credit fee was paid with respect
thereto) to the date such payment is due or, if earlier, the date on which such
Letter of Credit expired or was terminated.

 

(b)           In addition, with respect to each Letter of Credit, except as
provided in Section 2.6, Borrower agrees to pay to any Issuing Lender, for its
own account, (i) such fees and expenses as such Issuing Lender customarily
requires in connection with the issuance, negotiation, processing and/or
administration of letters of credit in similar situations and (ii) a letter of
credit fronting fee in the amount and at the times agreed to by Borrower and
such Issuing Lender.

 

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5.3          Administrative Agent’s Fees.  Borrower agrees to pay to
Administrative Agent such agent’s fees as are mutually agreed to from time to
time by Borrower and Administrative Agent including the fees set forth in the
Agent Fee Letter.

 

SECTION 6                                                       REDUCTION OR
TERMINATION OF THE REVOLVING COMMITMENT; PREPAYMENTS.

 

6.1          Reduction or Termination of the Revolving Commitment.

 

6.1.1            Voluntary Reduction or Termination of the Revolving
Commitment.  Borrower may from time to time on at least five (5) Business Days’
prior written notice received by Administrative Agent (which shall promptly
advise each Lender thereof) permanently reduce the Revolving Commitment to an
amount not less than the Revolving Outstandings.  Any such reduction shall be in
an amount not less than $5,000,000 or a higher integral multiple of $1,000,000. 
Concurrently with any reduction of the Revolving Commitment to zero, Borrower
shall pay all interest on the Revolving Loans, all non-use fees and all letter
of credit fees and shall Cash Collateralize in full all obligations arising with
respect to the Letters of Credit.

 

6.1.2            Mandatory Reductions of Revolving Commitment.  To the extent
that in any Fiscal Year the Borrower and its Subsidiaries sell, lease, transfer
or otherwise dispose of more than 20% of the Tangible Assets of the Borrower and
its Subsidiaries as of the end of the prior Fiscal Year, then (i) the Borrower
shall prepay the amount of Revolving Outstandings subject to the Intercreditor
Agreement, (ii) there shall be a mandatory reduction of the Revolving Commitment
to $75,000,000 to be allocated among the Lenders based on their Pro Rata Share
at the time of such mandatory reduction, and (iii) the Borrower’s rights under
Section 2.7 herein shall terminate.

 

6.1.3            All Reductions of the Revolving Commitment.  All reductions of
the Revolving Commitment shall reduce the Commitments ratably among the Lenders
according to their respective Pro Rata Shares.

 

6.2          Prepayments.

 

6.2.1            Voluntary Prepayments.  Borrower may from time to time prepay
the Loans in whole or in part; provided that Borrower shall give Administrative
Agent (which shall promptly advise each Lender) notice thereof not later than
10:00 A.M., Chicago time, on the day of such prepayment (which shall be a
Business Day), specifying the Loans to be prepaid and the date and amount of
prepayment.  Any such partial prepayment shall be in an amount equal to
$5,000,000 or a higher integral multiple of $1,000,000.

 

6.2.2            Net Cash Proceeds of Asset Dispositions; Net Cash Proceeds of
Issuance of Capital Securities; and Net Cash Proceeds of Incurrence of Debt.

 

(a)           The Revolving Commitment shall be reduced by the amount of any
prepayments required to be made to the Administrative Agent and/or the Lenders
pursuant to the following clauses (i) through (iii):

 

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(i)            Net Cash Proceeds of Asset Dispositions.  The Borrower shall
prepay the Loans in an amount equal to the Modified Ratable Portion if the
Borrower or any Loan Party shall at any time or from time to time make an Asset
Disposition with respect to any property that, pursuant to Section 11.8, results
in a requirement to prepay the Loans and that gives rise to a Modified Ratable
Portion; provided that in the case of any such Asset Disposition, so long as no
Default or Event of Default then exists or would result therefrom, if the
Borrower states in its notice of such event that the Borrower or the relevant
other Loan Party intends to reinvest, within 180 days of the applicable Asset
Disposition, (i) the Net Cash Proceeds thereof, in the event that the assets
subject to such Asset Disposition constituted Collateral, in property, all or
substantially all (as determined by the Collateral Agent) of which property is
purchased with such Net Cash Proceeds shall be made subject to the Lien of the
applicable Loan Documents in favor of the Collateral Agent or (ii) the Net Cash
Proceeds thereof, in the event that the assets subject to such Asset Disposition
did not constitute Collateral, in assets similar to the assets which were
subject to such Asset Disposition or in property which is otherwise used or
useful in the business of the Borrower and the other Loan Parties and, in each
case, such property is located within the United States, then the Borrower shall
not be required to prepay the Loans in respect of such Net Cash Proceeds to the
extent such Net Cash Proceeds are actually reinvested in such assets or property
within such 180 day period or committed to be reinvested within 90 days
thereafter.  Promptly after the end of such 180 day period (or such 90 day
period, if applicable), the Borrower shall notify the Administrative Agent as to
whether the Borrower or such other Loan Party has reinvested such Net Cash
Proceeds in such similar assets or property, and, to the extent such Net Cash
Proceeds have not been so reinvested, the Borrower shall prepay the Loans in an
amount equal to the Modified Ratable Portion.  If the Administrative Agent or
the Collateral Agent so request, all proceeds of such Asset Disposition shall be
deposited with the Collateral Agent (or its agent) and held by it as Collateral.

 

(ii)           Net Cash Proceeds of Issuance of Capital Securities.  The
Borrower shall the prepay Loans in an amount equal to the Modified Ratable
Portion if, after the Closing Date, the Borrower or any Subsidiary shall receive
Net Cash Proceeds from any issuance of Capital Securities of any Loan Party
(excluding (x) any issuance of Capital Securities pursuant to any employee or
director option program, benefit plan or compensation program and (y) any
issuance by a Subsidiary to the Borrower or another Loan Party) that gives rise
to a Modified Ratable Portion and a Default or Event of Default then exists. 
The Borrower acknowledges that its performance hereunder shall not limit the
rights and remedies of the Loan Parties for any breach of the terms of this
Agreement or the other Loan Documents.

 

(iii)          Net Cash Proceeds of Incurrence of Debt.  The Borrower shall
prepay the Loans in an amount equal to the Modified Ratable Portion, after the
Closing Date, the Borrower or any Subsidiary shall issue any Debt of any Loan
Party (excluding Debt permitted by Section 11.1 hereof) that gives rise to a
Modified Ratable Portion and Default or Event of Default then exists or would
result therefrom.  The Borrower acknowledges that its performance hereunder
shall not limit the rights and remedies of the Loan Parties for any breach of
Section 11.1 hereof or any other terms of the Loan Documents.

 

(b)           If on any day on which the Revolving Commitment is reduced
pursuant to Section 6.2.2(a) the Revolving Outstandings exceeds the Revolving
Commitment, Borrower shall immediately first prepay Revolving Loans and second
Cash Collateralize the outstanding Letters of Credit, in an aggregate amount
sufficient to eliminate such excess.

 

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6.3          Manner of Prepayments.

 

6.3.1            All Prepayments.  Each voluntary partial prepayment shall be in
a principal amount of $5,000,000 or a higher integral multiple of $1,000,000. 
Any partial prepayment of a Group of LIBOR Loans shall be subject to the proviso
to Section 2.2.3(a).  Any prepayment of a LIBOR Loan on a day other than the
last day of an Interest Period therefor shall include interest on the principal
amount being repaid and shall be subject to Section 8.4.  Except as otherwise
provided by this Agreement, all principal payments in respect of the Loans shall
be applied first, to repay outstanding Base Rate Loans and then to repay
outstanding LIBOR Rate Loans in direct order of Interest Period maturities.

 

6.4          Repayments.

 

The Revolving Loans of each Lender shall be paid in full and the Revolving
Commitment shall terminate on the Termination Date.

 

SECTION 7                                                       MAKING AND
PRORATION OF PAYMENTS; SETOFF; TAXES.

 

7.1          Making of Payments.  All payments of principal or interest on the
Note(s), and of all fees, shall be made by Borrower to Administrative Agent in
immediately available funds at the office specified by Administrative Agent not
later than noon, Chicago time, on the date due; and funds received after that
hour shall be deemed to have been received by Administrative Agent on the
following Business Day.  Subject to Section 2.6, Administrative Agent shall
promptly remit to each Lender its share of all such payments received in
collected funds by Administrative Agent for the account of such Lender.  All
payments under Section 8.1 shall be made by Borrower directly to the Lender
entitled thereto without setoff, counterclaim or other defense.

 

7.2          Application of Certain Payments.  So long as no Default or Event of
Default has occurred and is continuing, (a) payments matching specific scheduled
payments then due shall be applied to those scheduled payments and (b)
prepayments shall be applied as set forth in Sections 6.2 and 6.3.  After the
occurrence and during the continuance of a Default or an Event of Default, all
amounts collected or received by Administrative Agent or any Lender as proceeds
from the sale of, or other realization upon, all or any part of the Collateral
shall be applied as Administrative Agent shall determine in its discretion. 
Concurrently with each remittance to any Lender of its share of any such
payment, Administrative Agent shall advise such Lender as to the application of
such payment.

 

7.3          Due Date Extension.  If any payment of principal or interest with
respect to any of the Loans, or of any fees, falls due on a day which is not a
Business Day, then such due date shall be extended to the immediately following
Business Day (unless, in the case of a LIBOR Loan, such immediately following
Business Day is the first Business Day of a calendar month, in which case such
due date shall be the immediately preceding Business Day) and, in the case of
principal, additional interest shall accrue and be payable for the period of any
such extension.

 

7.4          Setoff.  Borrower, for itself and each other Loan Party, agrees
that Administrative Agent and each Lender have all rights of set-off and
bankers’ lien provided by applicable law, and in addition thereto, Borrower, for
itself and each other Loan Party, agrees that at any time any Event of Default
exists, Administrative Agent and each Lender may apply to the payment of any
Obligations of Borrower and each other Loan Party hereunder, whether or not then
due, any and all balances, credits, deposits, accounts or moneys of Borrower and
each other Loan Party then or thereafter with Administrative Agent or such
Lender.

 

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7.5          Proration of Payments.  Except as provided in Section 2.6, if any
Lender shall obtain any payment or other recovery (whether voluntary,
involuntary, by application of offset or otherwise), on account of (a) principal
of or interest on any Loan (but excluding (i) any payment pursuant to Section 8
or 15.6 and (ii) payments of interest on any Affected Loan) or (b) its
participation in any Letter of Credit in excess of its applicable Pro Rata Share
of payments and other recoveries obtained by all Lenders on account of principal
of and interest on the Loans (or such participation) then held by them, then
such Lender shall purchase from the other Lenders such participations in the
Loans (or sub-participations in Letters of Credit) held by them as shall be
necessary to cause such purchasing Lender to share the excess payment or other
recovery ratably with each of them; provided that if all or any portion of the
excess payment or other recovery is thereafter recovered from such purchasing
Lender, the purchase shall be rescinded and the purchase price restored to the
extent of such recovery.

 

7.6          Taxes.

 

(a)           All payments made by Borrower hereunder or under any Loan
Documents shall be made without setoff, counterclaim, or other defense.  To the
extent permitted by applicable law, all payments hereunder or under the Loan
Documents (including any payment of principal, interest, or fees) to, or for the
benefit, of any person shall be made by Borrower free and clear of and without
deduction or withholding for, or account of, any Taxes now or hereinafter
imposed by any taxing authority.

 

(b)           If Borrower makes any payment hereunder or under any Loan Document
in respect of which it is required by applicable law to deduct or withhold any
Taxes, Borrower shall increase the payment hereunder or under any such Loan
Document such that after the reduction for the amount of Taxes withheld (and any
taxes withheld or imposed with respect to the additional payments required under
this Section 7.6(b)), the amount paid to the Lenders or Administrative Agent
equals the amount that was payable hereunder or under any such Loan Document
without regard to this Section 7.6(b).  To the extent Borrower withholds any
Taxes on payments hereunder or under any Loan Document, Borrower shall pay the
full amount deducted to the relevant taxing authority within the time allowed
for payment under applicable law and shall deliver to Administrative Agent
within 30 days after it has made payment to such authority a receipt issued by
such authority (or other evidence satisfactory to Administrative Agent)
evidencing the payment of all amounts so required to be deducted or withheld
from such payment.

 

(c)           If any Lender or Administrative Agent is required by law to make
any payments of any Taxes on or in relation to any amounts received or
receivable hereunder or under any other Loan Document, or any Tax is assessed
against a Lender or Administrative Agent with respect to amounts received or
receivable hereunder or under any other Loan Document, Borrower will indemnify
such person against (i) such Tax (and any reasonable counsel fees and expenses
associated with such Tax) and (ii) any taxes imposed as a result of the receipt
of the payment under this Section 7.6(c).  A certificate prepared in good faith
as to the amount of such payment by such Lender or Administrative Agent shall,
absent manifest error, be final, conclusive, and binding on all parties.

 

(d)           (i)            To the extent permitted by applicable law, each
Lender that is not a United States person within the meaning of Code Section
7701(a)(30) (a “Non-U.S. Participant”) shall deliver to Borrower and
Administrative Agent on or prior to the Closing Date (or in the case of a Lender
that is an Assignee, on the date of such assignment to such Lender) two accurate
and complete original signed copies of IRS Form W-8BEN, W-8ECI, or W-8IMY (or
any successor or other applicable form prescribed by the IRS) certifying to such
Lender’s entitlement to a complete exemption from, or a reduced rate in, United
States withholding tax on interest payments to be made hereunder or any Loan. 
If a Lender that is a Non-U.S. Participant is claiming a complete exemption from
withholding on interest pursuant to Code Sections 871(h) or 881(c), the Lender
shall deliver (along with two accurate and complete original signed copies of
IRS Form W-8BEN) a certificate in form and substance reasonably

 

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acceptable to Administrative Agent (any such certificate, a “Withholding
Certificate”).  In addition, each Lender that is a Non-U.S. Participant agrees
that from time to time after the Closing Date, (or in the case of a Lender that
is an Assignee, after the date of the assignment to such Lender), when a lapse
in time (or change in circumstances occurs) renders the prior certificates
hereunder obsolete or inaccurate in any material respect, such Lender shall, to
the extent permitted under applicable law, deliver to Borrower and
Administrative Agent two new and accurate and complete original signed copies of
an IRS Form W-8BEN, W-8ECI, or W-8IMY (or any successor or other applicable
forms prescribed by the IRS), and if applicable, a new Withholding Certificate,
to confirm or establish the entitlement of such Lender or Administrative Agent
to an exemption from, or reduction in, United States withholding tax on interest
payments to be made hereunder or any Loan.

 

(ii)                                  Each Lender that is not a Non-U.S.
Participant (other than any such Lender which is taxed as a corporation for U.S.
federal income tax purposes) shall provide two properly completed and duly
executed copies of IRS Form W-9 (or any successor or other applicable form) to
Borrower and Administrative Agent certifying that such Lender is exempt from
United States backup withholding tax.  To the extent that a form provided
pursuant to this Section 7.6(d)(ii) is rendered obsolete or inaccurate in any
material respect as result of change in circumstances with respect to the status
of a Lender, such Lender shall, to the extent permitted by applicable law,
deliver to Borrower and Administrative Agent revised forms necessary to confirm
or establish the entitlement to such Lender’s or Administrative Agent’s
exemption from United States backup withholding tax.

 

(iii)                               Borrower shall not be required to pay
additional amounts to a Lender, or indemnify any Lender, under this Section 7.6
to the extent that such obligations would not have arisen but for the failure of
such Lender to comply with Section 7.6(d).

 

(iv)                              Each Lender agrees to indemnify Administrative
Agent and hold Administrative Agent harmless for the full amount of any and all
present or future Taxes and related liabilities (including penalties, interest,
additions to tax and expenses, and any Taxes imposed by any jurisdiction on
amounts payable to Administrative Agent under this Section 7.6) which are
imposed on or with respect to principal, interest or fees payable to such Lender
hereunder and which are not paid by Borrower pursuant to this Section 7.6,
whether or not such Taxes or related liabilities were correctly or legally
asserted.  This indemnification shall be made within 30 days from the date
Administrative Agent makes written demand therefor.

 

SECTION 8                                                       INCREASED COSTS;
SPECIAL PROVISIONS FOR LIBOR LOANS.

 

8.1                               Increased Costs.  (a)  If, after the date
hereof, the adoption of, or any change in, any applicable law, rule or
regulation, or any change in the interpretation or administration of any
applicable law, rule or regulation by any governmental authority, central bank
or comparable agency charged with the interpretation or administration thereof,
or compliance by any Lender with any request or directive (whether or not having
the force of law) of any such authority, central bank or comparable agency: 
(i) shall impose, modify or deem applicable any reserve (including any reserve
imposed by the FRB, but excluding any reserve included in the determination of
the LIBOR Rate pursuant to Section 4), special deposit or similar requirement
against assets of, deposits with or for the account of, or credit extended by
any Lender; or (ii) shall impose on any Lender any other condition affecting its
LIBOR Loans, its Note or its obligation to make LIBOR Loans; and the result of
anything described in clauses (i) and (ii) above is to increase the cost to (or
to impose a cost on) such Lender (or any LIBOR Office of such Lender) of making
or maintaining any LIBOR Loan, or to reduce the amount of any sum received or
receivable by such Lender (or its LIBOR Office) under this Agreement or under
its Note with respect thereto, then upon demand by such Lender (which demand
shall be accompanied by a statement setting forth the basis for such demand and
a calculation of the amount thereof in reasonable detail, a copy of which shall
be

 

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furnished to Administrative Agent), Borrower shall pay directly to such Lender
such additional amount as will compensate such Lender for such increased cost or
such reduction, so long as such amounts have accrued on or after the day which
is 180 days prior to the date on which such Lender first made demand therefor.

 

(b)                                 If any Lender shall reasonably determine
that any change in, or the adoption or phase-in of, any applicable law, rule or
regulation regarding capital adequacy, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or the
compliance by any Lender or any Person controlling such Lender with any request
or directive regarding capital adequacy (whether or not having the force of law)
of any such authority, central bank or comparable agency, has or would have the
effect of reducing the rate of return on such Lender’s or such controlling
Person’s capital as a consequence of such Lender’s obligations hereunder or
under any Letter of Credit to a level below that which such Lender or such
controlling Person could have achieved but for such change, adoption, phase-in
or compliance (taking into consideration such Lender’s or such controlling
Person’s policies with respect to capital adequacy) by an amount deemed by such
Lender or such controlling Person to be material, then from time to time, upon
demand by such Lender (which demand shall be accompanied by a statement setting
forth the basis for such demand and a calculation of the amount thereof in
reasonable detail, a copy of which shall be furnished to Administrative Agent),
Borrower shall pay to such Lender such additional amount as will compensate such
Lender or such controlling Person for such reduction so long as such amounts
have accrued on or after the day which is 180 days prior to the date on which
such Lender first made demand therefor.

 

8.2                               Basis for Determining Interest Rate Inadequate
or Unfair.  If:

 

(a)                                 Administrative Agent reasonably determines
(which determination shall be binding and conclusive on Borrower) that by reason
of circumstances affecting the interbank LIBOR market adequate and reasonable
means do not exist for ascertaining the applicable LIBOR Rate; or

 

(b)                                 the Required Lenders advise Administrative
Agent that the LIBOR Rate as determined by Administrative Agent will not
adequately and fairly reflect the cost to such Lenders of maintaining or funding
LIBOR Loans for such Interest Period (taking into account any amount to which
such Lenders may be entitled under Section 8.1) or that the making or funding of
LIBOR Loans has become impracticable as a result of an event occurring after the
date of this Agreement which in the opinion of such Lenders materially affects
such Loans;

 

then Administrative Agent shall promptly notify the other parties thereof and,
so long as such circumstances shall continue, (i) no Lender shall be under any
obligation to make or convert any Base Rate Loans into LIBOR Loans and (ii) on
the last day of the current Interest Period for each LIBOR Loan, such Loan
shall, unless then repaid in full, automatically convert to a Base Rate Loan.

 

8.3                               Changes in Law Rendering LIBOR Loans
Unlawful.  If any change in, or the adoption of any new, law or regulation, or
any change in the interpretation of any applicable law or regulation by any
governmental or other regulatory body charged with the administration thereof,
should make it (or in the good faith judgment of any Lender cause a substantial
question as to whether it is) unlawful for any Lender to make, maintain or fund
LIBOR Loans, then such Lender shall promptly notify each of the other parties
hereto and, so long as such circumstances shall continue, (a) such Lender shall
have no obligation to make or convert any Base Rate Loan into a LIBOR Loan (but
shall make Base Rate Loans concurrently with the making of or conversion of Base
Rate Loans into LIBOR Loans by the Lenders which are not so affected, in each
case in an amount equal to the amount of LIBOR Loans which would be made or
converted into by such Lender at such time in the absence of such circumstances)
and (b) on the last day

 

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of the current Interest Period for each LIBOR Loan of such Lender (or, in any
event, on such earlier date as may be required by the relevant law, regulation
or interpretation), such LIBOR Loan shall, unless then repaid in full,
automatically convert to a Base Rate Loan.  Each Base Rate Loan made by a Lender
which, but for the circumstances described in the foregoing sentence, would be a
LIBOR Loan (an “Affected Loan”) shall remain outstanding for the period
corresponding to the Group of LIBOR Loans of which such Affected Loan would be a
part absent such circumstances.

 

8.4                               Funding Losses.  Borrower hereby agrees that
upon demand by any Lender (which demand shall be accompanied by a statement
setting forth the basis for the amount being claimed, a copy of which shall be
furnished to Administrative Agent), Borrower will indemnify such Lender against
any net loss or expense which such Lender may sustain or incur (including any
net loss or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by such Lender to fund or maintain any LIBOR
Loan), as reasonably determined by such Lender, as a result of (a) any payment,
prepayment or conversion of any LIBOR Loan of such Lender on a date other than
the last day of an Interest Period for such Loan (including any conversion
pursuant to Section 8.3) or (b) any failure of Borrower to borrow, prepay,
convert or continue any Loan on a date specified therefor in a notice of
borrowing, prepayment, conversion or continuation pursuant to this Agreement. 
For this purpose, all notices to Administrative Agent pursuant to this Agreement
shall be deemed to be irrevocable.

 

8.5                               Right of Lenders to Fund through Other
Offices.  Each Lender may, if it so elects, fulfill its commitment as to any
LIBOR Loan by causing a foreign branch or Affiliate of such Lender to make such
Loan; provided that in such event for the purposes of this Agreement such Loan
shall be deemed to have been made by such Lender and the obligation of Borrower
to repay such Loan shall nevertheless be to such Lender and shall be deemed held
by it, to the extent of such Loan, for the account of such branch or Affiliate.

 

8.6                               Discretion of Lenders as to Manner of
Funding.  Notwithstanding any provision of this Agreement to the contrary, each
Lender shall be entitled to fund and maintain its funding of all or any part of
its Loans in any manner it sees fit, it being understood, however, that for the
purposes of this Agreement all determinations hereunder shall be made as if such
Lender had actually funded and maintained each LIBOR Loan during each Interest
Period for such Loan through the purchase of deposits having a maturity
corresponding to such Interest Period and bearing an interest rate equal to the
LIBOR Rate for such Interest Period.

 

8.7                               Mitigation of Circumstances; Replacement of
Lenders.  (a)  Each Lender shall promptly notify Borrower and Administrative
Agent of any event of which it has knowledge which will result in, and will use
reasonable commercial efforts available to it (and not, in such Lender’s sole
judgment, otherwise disadvantageous to such Lender) to mitigate or avoid,
(i) any obligation by Borrower to pay any amount pursuant to Sections 7.6 or 8.1
or (ii) the occurrence of any circumstances described in Sections 8.2 or 8.3
(and, if any Lender has given notice of any such event described in clause
(i) or (ii) above and thereafter such event ceases to exist, such Lender shall
promptly so notify Borrower and Administrative Agent).  Without limiting the
foregoing, each Lender will designate a different funding office if such
designation will avoid (or reduce the cost to Borrower of) any event described
in clause (i) or (ii) above and such designation will not, in such Lender’s sole
judgment, be otherwise disadvantageous to such Lender.

 

(b)                                 If Borrower becomes obligated to pay
additional amounts to any Lender pursuant to Sections 7.6 or 8.1, or any Lender
gives notice of the occurrence of any circumstances described in Sections 8.2 or
8.3, or any Lender becomes a Defaulting Lender, Borrower may designate another
bank which is acceptable to Administrative Agent and the Issuing Lender in their
reasonable discretion (such other bank being called a “Replacement Lender”) to
purchase the Loans of such Lender and such

 

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Lender’s rights hereunder, without recourse to or warranty by, or expense to,
such Lender, for a purchase price equal to the outstanding principal amount of
the Loans payable to such Lender plus any accrued but unpaid interest on such
Loans and all accrued but unpaid fees owed to such Lender and any other amounts
payable to such Lender under this Agreement, and to assume all the obligations
of such Lender hereunder, and, upon such purchase and assumption (pursuant to an
Assignment Agreement), such Lender shall no longer be a party hereto or have any
rights hereunder (other than rights with respect to indemnities and similar
rights applicable to such Lender prior to the date of such purchase and
assumption) and shall be relieved from all obligations to Borrower hereunder,
and the Replacement Lender shall succeed to the rights and obligations of such
Lender hereunder.

 

8.8                               Conclusiveness of Statements; Survival of
Provisions.  Determinations and statements of any Lender pursuant to Sections
8.1, 8.2, 8.3 or 8.4 shall be conclusive absent demonstrable error.  Lenders may
use reasonable averaging and attribution methods in determining compensation
under Sections 8.1 and 8.4, and the provisions of such Sections shall survive
repayment of the Obligations, cancellation of any Note(s), expiration or
termination of the Letters of Credit and termination of this Agreement.

 

SECTION 9                                                       REPRESENTATIONS
AND WARRANTIES.

 

To induce Administrative Agent and the Lenders to enter into this Agreement and
to induce the Lenders to make Loans and participate in Letters of Credit
hereunder and the Issuing Lenders to issue Letters of Credit hereunder, Borrower
represents and warrants to Administrative Agent and the Lenders that:

 

9.1                               Organization.  Each Loan Party is validly
existing and in good standing under the laws of its jurisdiction of
organization; and each Loan Party is duly qualified to do business in each
jurisdiction where, because of the nature of its activities or properties, such
qualification is required, except for such jurisdictions where the failure to so
qualify would not have a Material Adverse Effect.

 

9.2                               Authorization; No Conflict.  Each Loan Party
is duly authorized to execute and deliver each Loan Document to which it is a
party, Borrower is duly authorized to borrow monies hereunder and each Loan
Party is duly authorized to perform its Obligations under each Loan Document to
which it is a party.  The execution, delivery and performance by each Loan Party
of each Loan Document to which it is a party, and the borrowings by Borrower
hereunder, do not and will not (a) require any consent or approval of any
governmental agency or authority (other than any consent or approval which has
been obtained and is in full force and effect), (b) conflict with (i) any
provision of law, (ii) the charter, by-laws or other organizational documents of
any Loan Party or (iii) any agreement, indenture, instrument or other document,
or any judgment, order or decree, which is binding upon any Loan Party or any of
their respective properties or (c) require, or result in, the creation or
imposition of any Lien on any asset of any Loan Party (other than Liens in favor
of Administrative Agent created pursuant to the Collateral Documents).

 

9.3                               Validity and Binding Nature.  Each of this
Agreement and each other Loan Document to which any Loan Party is a party is the
legal, valid and binding obligation of such Person, enforceable against such
Person in accordance with its terms, subject to bankruptcy, insolvency and
similar laws affecting the enforceability of creditors’ rights generally and to
general principles of equity.

 

9.4                               Financial Condition.  The audited consolidated
financial statements of Borrower and its Subsidiaries as at Borrower’s Fiscal
Year End, 2011 and the unaudited consolidated financial statements of Borrower
and the Subsidiaries as at September 30, 2012, copies of each of which have been
delivered to each Lender, were prepared in accordance with GAAP and present
fairly the consolidated financial condition of Borrower and its Subsidiaries as
at such date and the results of their operations for the period then ended.

 

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9.5                               No Material Adverse Change.  Since Borrower’s
Fiscal Year End, 2011 there has been no material adverse change in the financial
condition, operations, assets, business, properties or prospects of the Loan
Parties taken as a whole.

 

9.6                               Litigation and Contingent Liabilities.  No
litigation (including derivative actions), arbitration proceeding or
governmental investigation or proceeding is pending or, to Borrower’s knowledge,
threatened against any Loan Party which could reasonably be expected to have a
Material Adverse Effect, except as set forth in Schedule 9.6.  Other than any
liability incident to such litigation or proceedings, no Loan Party has any
material contingent liabilities not listed on Schedule 9.6 or permitted by
Section 11.1.

 

9.7                               Ownership of Properties; Liens.  Each Loan
Party owns good and, in the case of real property, marketable title to all of
its properties and assets, real and personal, tangible and intangible, of any
nature whatsoever (including patents, trademarks, trade names, service marks and
copyrights), free and clear of all Liens, charges and claims (including
infringement claims with respect to patents, trademarks, service marks,
copyrights and the like) except as permitted by Section 11.2.  No financing
statement or other public notice with respect to all or any part of the
Collateral is on file or of record in any public office, except filings
evidencing Permitted Liens and filings for which termination statements have
been delivered to Administrative Agent.

 

9.8                               Equity Ownership; Subsidiaries.  All issued
and outstanding Capital Securities of each Loan Party are duly authorized and
validly issued, fully paid, non-assessable, and free and clear of all Liens
other than those in favor of Administrative Agent, and such securities were
issued in compliance with all applicable state and federal laws concerning the
issuance of securities.  Schedule 9.8 sets forth the authorized Capital
Securities of each Loan Party as of the Closing Date.  All of the issued and
outstanding Capital Securities of Borrower are owned as set forth on Schedule
9.8 as of the Closing Date, and all of the issued and outstanding Capital
Securities of each Wholly-Owned Subsidiary is, directly or indirectly, owned by
Borrower.  As of the Closing Date, except as set forth on Schedule 9.8, there
are no pre-emptive or other outstanding rights, options, warrants, conversion
rights or other similar agreements or understandings for the purchase or
acquisition of any Capital Securities of any Loan Party.

 

9.9                               Pension Plans.  (a)  The Unfunded Liability of
all Pension Plans does not in the aggregate exceed twenty percent of the Total
Plan Liability for all such Pension Plans.  Each Pension Plan complies in all
material respects with all applicable requirements of law and regulations.  No
contribution failure under Section 412 of the Code, Section 302 of ERISA or the
terms of any Pension Plan has occurred with respect to any Pension Plan,
sufficient to give rise to a Lien under Section 302(f) of ERISA, or otherwise to
have a Material Adverse Effect.  There are no pending or, to the knowledge of
Borrower, threatened, claims, actions, investigations or lawsuits against any
Pension Plan, any fiduciary of any Pension Plan, or Borrower or any other member
of the Controlled Group with respect to a Pension Plan or a Multiemployer
Pension Plan which could reasonably be expected to have a Material Adverse
Effect.  Neither Borrower nor any other member of the Controlled Group has
engaged in any prohibited transaction (as defined in Section 4975 of the Code or
Section 406 of ERISA) in connection with any Pension Plan or Multiemployer
Pension Plan which would subject that Person to any material liability.  Within
the past five years, neither Borrower nor any other member of the Controlled
Group has engaged in a transaction which resulted in a Pension Plan with an
Unfunded Liability being transferred out of the Controlled Group, which could
reasonably be expected to have a Material Adverse Effect.  No Termination Event
has occurred or is reasonably expected to occur with respect to any Pension
Plan, which could reasonably be expected to have a Material Adverse Effect.

 

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(b)                                 Except as disclosed in the Borrower’s 10K or
10Q and as set forth on Schedule 9.9(b), all contributions (if any) have been
made to any Multiemployer Pension Plan that are required to be made by Borrower
or any other member of the Controlled Group under the terms of the plan or of
any collective bargaining agreement or by applicable law; neither Borrower nor
any other member of the Controlled Group has withdrawn or partially withdrawn
from any Multiemployer Pension Plan, incurred any withdrawal liability with
respect to any such plan or received notice of any claim or demand for
withdrawal liability or partial withdrawal liability from any such plan, and no
condition has occurred which, if continued, could result in a withdrawal or
partial withdrawal from any such plan; and neither Borrower nor any other member
of the Controlled Group has received any notice that any Multiemployer Pension
Plan is in reorganization, that increased contributions may be required to avoid
a reduction in plan benefits or the imposition of any excise tax, that any such
plan is or has been funded at a rate less than that required under Section 412
of the Code, that any such plan is or may be terminated, or that any such plan
is or may become insolvent.

 

9.10                        Investment Company Act.  No Loan Party is an
“investment company” or a company “controlled” by an “investment company” or a
“subsidiary” of an “investment company,” within the meaning of the Investment
Company Act of 1940.

 

9.11                        Compliance with Laws.  To Borrower’s knowledge, each
Loan Party and each Subsidiary thereof is in compliance in all material respects
with the requirements of all laws and all orders, writs, injunctions and decrees
applicable to it or to its properties, except in such instances in which
(a) such requirement of law or order, writ, injunction or decree is being
contested in good faith by appropriate proceedings diligently conducted or
(b) the failure to comply therewith, either individually or in the aggregate,
could not reasonably be expected to have a Material Adverse Effect.

 

9.12                        Regulation U.  Borrower is not engaged principally,
or as one of its important activities, in the business of extending credit for
the purpose of purchasing or carrying Margin Stock.

 

9.13                        Taxes.  Each Loan Party has timely filed all tax
returns and reports required by law to have been filed by it and has paid all
taxes and governmental charges due and payable with respect to such return,
except any such taxes or charges which are being diligently contested in good
faith by appropriate proceedings and for which adequate reserves in accordance
with GAAP shall have been set aside on its books.  The Loan Parties have made
adequate reserves on their books and records in accordance with GAAP for all
taxes that have accrued but which are not yet due and payable.  No Loan Party
has participated in any transaction that relates to a year of the taxpayer
(which is still open under the applicable statute of limitations) which is a
“reportable transaction” within the meaning of Treasury Regulation
Section 1.6011-4(b)(2) (irrespective of the date when the transaction was
entered into).

 

9.14                        Solvency, etc.  On the Closing Date, and immediately
prior to and after giving effect to the issuance of each Letter of Credit and
each borrowing hereunder and the use of the proceeds thereof, with respect to
each Loan Party, individually, (a) the fair value of its assets is greater than
the amount of its liabilities (including disputed, contingent and unliquidated
liabilities) as such value is established and liabilities evaluated in
accordance with GAAP, (b) the present fair saleable value of its assets is not
less than the amount that will be required to pay the probable liability on its
debts as they become absolute and matured, (c) it is able to realize upon its
assets and pay its debts and other liabilities (including disputed, contingent
and unliquidated liabilities) as they mature in the normal course of business,
(d) it does not intend to, and does not believe that it will, incur debts or
liabilities beyond its ability to pay as such debts and liabilities mature and
(e) it is not engaged in business or a transaction, and is not about to engage
in business or a transaction, for which its property would constitute
unreasonably small capital.

 

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9.15                        Environmental Matters.  To Borrower’s knowledge, the
on-going operations of each Loan Party comply in all respects with all
Environmental Laws, except such non-compliance which could not (if enforced in
accordance with applicable law) reasonably be expected to result, either
individually or in the aggregate, in a Material Adverse Effect.  Each Loan Party
has obtained, and maintained in good standing, all licenses, permits,
authorizations, registrations and other approvals required under any
Environmental Law and required for their respective ordinary course operations,
and for their reasonably anticipated future operations, and each Loan Party is
in compliance with all terms and conditions thereof, except where the failure to
do so could not reasonably be expected to result in material liability to any
Loan Party and could not reasonably be expected to result, either individually
or in the aggregate, in a Material Adverse Effect.  No Loan Party or any of its
properties or operations is subject to, or reasonably anticipates the issuance
of, any written order from or agreement with any Federal, state or local
governmental authority, nor subject to any judicial or docketed administrative
or other proceeding, respecting any Environmental Law, Environmental Claim or
Hazardous Substance.  To Borrower’s knowledge, there are no Hazardous Substances
or other conditions or circumstances existing with respect to any property,
arising from operations prior to the Closing Date, or relating to any waste
disposal, of any Loan Party that would reasonably be expected to result, either
individually or in the aggregate, in a Material Adverse Effect.  No Loan Party
has any underground storage tanks that are not properly registered or permitted
under applicable Environmental Laws or that at any time have released, leaked,
disposed of or otherwise discharged Hazardous Substances.

 

9.16                        Insurance.  Set forth on Schedule 9.16 is a complete
and accurate summary of the property and casualty insurance program of the Loan
Parties as of the Closing Date (including the names of all insurers, policy
numbers, expiration dates, amounts and types of coverage, annual premiums,
deductibles, self-insured retention, and a description in reasonable detail of
any fronting arrangement or other risk assumption arrangement involving any Loan
Party).  Each Loan Party and its properties are insured with financially sound
and reputable insurance companies which are not Affiliates of the Loan Parties,
in such amounts, with such deductibles/self-insured retentions and covering such
risks as are customarily carried by companies engaged in similar businesses and
owning similar properties in localities where such Loan Parties operate.

 

9.17                        Real Property.  Set forth on Schedule 9.17 is a
complete and accurate list, as of the Closing Date, of the address of all real
property owned or leased by any Loan Party, together with, in the case of leased
property, the name and mailing address of the lessor of such property.

 

9.18                        Information.  All information heretofore or
contemporaneously herewith furnished in writing by any Loan Party to
Administrative Agent or any Lender for purposes of or in connection with this
Agreement and the transactions contemplated hereby is, and all written
information hereafter furnished by or on behalf of any Loan Party to
Administrative Agent or any Lender pursuant hereto or in connection herewith
will be, true and accurate in every material respect on the date as of which
such information is dated or certified, and none of such information is or will
be incomplete by omitting to state any material fact necessary to make such
information not misleading in light of the circumstances under which made (it
being recognized by Administrative Agent and the Lenders that any projections
and forecasts provided by Borrower are based on good faith estimates and
assumptions believed by Borrower to be reasonable as of the date of the
applicable projections or assumptions and that actual results during the period
or periods covered by any such projections and forecasts may differ from
projected or forecasted results).

 

9.19                        Intellectual Property.  Each Loan Party owns and
possesses or has a license or other right to use all patents, patent rights,
trademarks, trademark rights, trade names, trade name rights, service marks,
service mark rights and copyrights as are necessary for the conduct of the
businesses of the Loan Parties, without any infringement upon rights of others
which could reasonably be expected to have a Material Adverse Effect.

 

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9.20                        Burdensome Obligations.  No Loan Party is a party to
any agreement or contract or subject to any restriction contained in its
organizational documents which could reasonably be expected to have a Material
Adverse Effect.

 

9.21                        Labor Matters.  Except as set forth on Schedule
9.21, no Loan Party is subject to any labor or collective bargaining agreement. 
There are no existing or threatened strikes, lockouts or other labor disputes
involving any Loan Party that singly or in the aggregate could reasonably be
expected to have a Material Adverse Effect.  Hours worked by and payment made to
employees of the Loan Parties are in substantial compliance with the Fair Labor
Standards Act or any other applicable law, rule or regulation dealing with such
matters.

 

9.22                        Anti-Terrorism Laws.  (a)  No Loan Party (and, to
the knowledge of each Loan Party, no joint venture or subsidiary thereof) is in
violation in any material respects of any United States Requirements of Law
relating to terrorism, sanctions or money laundering (the “Anti-Terrorism
Laws”), including the United States Executive Order No. 13224 on Terrorist
Financing (the “Anti-Terrorism Order”) and the Patriot Act.

 

(b)                                 No Loan Party (and, to the knowledge of each
Loan Party, no joint venture or subsidiary thereof) (i) is listed in the annex
to, or is otherwise subject to the provisions of, the Anti-Terrorism Order,
(ii) is owned or controlled by, or acting for or on behalf of, any person listed
in the annex to, or is otherwise subject to the provisions of, the
Anti-Terrorism Order, (iii) commits, threatens or conspires to commit or
supports “terrorism” as defined in the Anti-Terrorism Order or (iv) is named as
a “specially designated national and blocked person” in the most current list
published by OFAC.

 

(c)                                  No Loan Party (and, to the knowledge of
each Loan Party, no joint venture or Affiliate thereof) (i) conducts any
business or engages in making or receiving any contribution of funds, goods or
services to or for the benefit of any person described in clauses (b)(i) through
(b)(iv) above, (ii) deals in, or otherwise engages in any transactions relating
to, any property or interests in property blocked pursuant to the Anti-Terrorism
Order or (iii) engages in or conspires to engage in any transaction that evades
or avoids, or has the purpose of evading or avoiding, or attempts to violate,
any of the prohibitions set forth in any Anti-Terrorism Law.

 

9.23                        No Default.  No Default or Event of Default exists
or would result from the incurrence by any Loan Party of any Debt hereunder or
under any other Loan Document.

 

9.24                        RESERVED.

 

9.25                        OFAC.  Borrower and each Subsidiary of Borrower is
and will remain in compliance in all material respects with all U.S. economic
sanctions laws, Executive Orders and implementing regulations as promulgated by
the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”), and
all applicable anti-money laundering and counter-terrorism financing provisions
of the Bank Secrecy Act and all regulations issued pursuant to it.  Neither
Borrower nor any Subsidiary or Affiliate of Borrower (i) is a Person designated
by the U.S. government on the list of the Specially Designated Nationals and
Blocked Persons (the “SDN List”) with which a U.S. Person cannot deal with or
otherwise engage in business transactions, (ii) is a Person who is otherwise the
target of U.S. economic sanctions laws such that a U.S. Person cannot deal or
otherwise engage in business transactions with such Person or (iii) is
controlled by (including without limitation by virtue of such person being a
director or owning voting shares or interests), or acts, directly or indirectly,
for or on behalf of, any person or entity on the SDN List or a foreign
government that is the target of U.S. economic sanctions prohibitions such that
the entry into, or performance under, this Agreement or any other Loan Document
would be prohibited under U.S. law.

 

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9.26                        Patriot Act.  Borrower, each of its Subsidiaries and
each of their Affiliates are in compliance with (a) the Trading with the Enemy
Act, 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, (b) the Patriot Act
and (c) other federal or state laws relating to “know your customer” and
anti-money laundering rules and regulations.  No part of the proceeds of any
Loan will be used directly or indirectly for any payments to any government
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.

 

9.27                        Subordinated Debt.  Other than in respect of Debt
subject to the Subordination Agreement (Rockford), the subordination provisions
of the Subordinated Debt are enforceable against the holders of the Subordinated
Debt by Administrative Agent and the Lenders.  All Obligations constitute Senior
Debt entitled to the benefits of the subordination provisions contained in the
Subordinated Debt other than with respect to Debt subject to the Subordination
Agreement than in respect of Debt subject to the Subordination Agreement
(Rockford).  Borrower acknowledges that Administrative Agent and each Lender are
entering into this Agreement and are extending the Commitments and making the
Loans in reliance upon this Section 9.27.  Any payment made on existing
Subordinated Debt or future Subordinated Debt shall be distributed by the
Collateral Agent among the Lenders and Prudential according to their Pro Rata
Shares.

 

SECTION 10                                                AFFIRMATIVE COVENANTS.

 

Until the expiration or termination of the Commitments and thereafter until all
Obligations hereunder and under the other Loan Documents are paid in full and
all Letters of Credit have been terminated, Borrower agrees that, unless at any
time the Required Lenders shall otherwise expressly consent in writing, it will:

 

10.1                        Reports, Certificates and Other Information.  The
Borrower shall at all times maintain a standard and modern system of accounting,
on the accrual basis of accounting and in all respects in accordance with GAAP,
and shall furnish to the Administrative Bank and each Lender such information
regarding the business affairs, operations and financial condition of the
Borrower, including:

 

10.1.1                             Financial Statements.

 

(a)                                 promptly when available, and in any event,
(i) within ninety (90) days after the close of each of its fiscal years, a copy
of the annual audited consolidated financial statements of the Borrower and its
Subsidiaries, including balance sheet, statement of income and retained
earnings, statement of cash flows for the fiscal year then ended, work in
process reports, accounts receivable agings, accounts payable agings (if
available), summary of litigation and claims, as the Administrative Agent may
request, in reasonable detail, prepared and certified without adverse reference
to going concern value and without qualification by an independent auditor of
recognized standing, selected by the Borrower and reasonably acceptable to the
Administrative Agent; and (ii) within sixty (60) days after the close of each of
its fiscal years, financial forecasts, budgets and updates thereto and such
other information (including nonfinancial information) as the Administrative
Agent may request, in reasonable detail.

 

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(b)                                 promptly when available, and in any event,
within forty-five (45) days following the end of each fiscal quarter, a copy of
the management prepared consolidated financial statements of the Borrower and
its Subsidiaries regarding such fiscal quarter, including balance sheet,
statement of income and retained earnings, statement of cash flows for the
fiscal quarter then ended, work in process reports, accounts receivable aging
reports, summary of litigation and claims and such other information (including
nonfinancial information) as the Bank may request, in reasonable detail,
prepared and certified as true and correct by the Borrower’s treasurer or chief
financial officer.

 

The Borrower represents and warrants to the Administrative Agent and each Lender
that the financial statements delivered to the Administrative Agent and each
Lender at or prior to the execution and delivery of this Agreement and to be
delivered at all times thereafter accurately reflect and will accurately reflect
the financial condition of the Borrower.  The Administrative Agent shall have
the right at all times during business hours to inspect the books and records of
the Borrower and make extracts therefrom.

 

10.1.2                             Guarantor Financial Information.  The
Borrower shall furnish, or cause to be furnished, to the Administrative Agent
and each Lender such information regarding the business affairs, operations and
financial condition of each Guarantor. The Borrower represents and warrants to
the Administrative Agent and each Lender that (i) each Guarantor shall at all
times maintain a standard and modern system of accounting, on the accrual basis
of accounting and in all respects in accordance with GAAP, and (ii) the
Administrative Agent shall have the right at all times during business hours to
inspect the books and records of each Guarantor and make extracts therefrom. If
the Borrower ceases to be publicly traded, then the Borrower agrees to advise
the Administrative Agent immediately of any development, condition or event that
may have a Material Adverse Effect on each Guarantor.

 

10.1.3                             Supplemental Financial Statements.  The
Borrower shall immediately upon receipt thereof, provide to the Administrative
Agent and each Lender copies of interim and supplemental reports if any,
submitted to the Borrower by independent accountants in connection with any
interim audit or review of the books of the Borrower.

 

10.1.4                             Compliance Certificates.  Contemporaneously
with the furnishing of a copy of each annual audit report pursuant to
Section 10.1.1(a) and each set of quarterly statements pursuant to
Section 10.1.1(b), a duly completed compliance certificate in the form of
Exhibit B, with appropriate insertions, dated the date of such annual report or
such quarterly statements and signed by a Senior Officer of Borrower, containing
(i) a computation of each of the financial ratios and restrictions set forth in
Section 11.14 and to the effect that such officer has not become aware of any
Default or Event of Default that has occurred and is continuing or, if there is
any such event, describing it and the steps, if any, being taken to cure it and
(ii) a written statement of Borrower’s management setting forth a discussion of
Borrower’s financial condition, changes in financial condition and results of
operations.

 

10.1.5                             Reports to the SEC and to Shareholders. 
Unless available on-line to the public, promptly upon the filing or sending
thereof, copies of all regular, periodic or special reports of any Loan Party
filed with the SEC; copies of all registration statements of any Loan Party
filed with the SEC (other than on Form S-8); and copies of all proxy statements
or other communications made to security holders generally.

 

10.1.6                             Notice of Default, Litigation and ERISA
Matters.  Within five (5) Business Days of becoming aware of any of the
following, written notice describing the same and the steps being taken by
Borrower or the Subsidiary affected thereby with respect thereto:

 

(a)                                 the occurrence of a Default or an Event of
Default;

 

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(b)                                 if reasonably expected to have a Material
Adverse Effect, any litigation, arbitration or governmental investigation or
proceeding not previously disclosed by Borrower to the Lenders which has been
instituted or, to the knowledge of Borrower, is threatened against any Loan
Party or to which any of the properties of any thereof is subject;

 

(c)                                  the institution of any steps by any member
of the Controlled Group or any other Person to terminate any Pension Plan, or
the failure of any member of the Controlled Group to make a required
contribution to any Pension Plan (if such failure is sufficient to give rise to
a Lien under Section 302(f) of ERISA) or to any Multiemployer Pension Plan, or
the taking of any action with respect to a Pension Plan which could result in
the requirement that Borrower furnish a bond or other security to the PBGC or
such Pension Plan, or the occurrence of any event with respect to any Pension
Plan or Multiemployer Pension Plan which could result in the incurrence by any
member of the Controlled Group of any material liability, fine or penalty
(including any claim or demand for withdrawal liability or partial withdrawal
from any Multiemployer Pension Plan), or any material increase in the contingent
liability of Borrower with respect to any post-retirement welfare benefit plan
or other employee benefit plan of Borrower or another member of the Controlled
Group, or any notice that any Multiemployer Pension Plan is in reorganization,
that increased contributions may be required to avoid a reduction in plan
benefits or the imposition of an excise tax, that any such plan is or has been
funded at a rate less than that required under Section 412 of the Code, that any
such plan is or may be terminated, or that any such plan is or may become
insolvent;

 

(d)                                 any non-renewal cancellation or material
change in any insurance maintained by any Loan Party; or

 

(e)                                  if reasonably expected to have a Material
Adverse Effect, any other event (including (i) any violation of any
Environmental Law or the assertion of any Environmental Claim or (ii) the
enactment or effectiveness of any law, rule or regulation).

 

10.1.7                             Management Reports.  Promptly upon receipt
thereof, copies of all detailed financial and management reports submitted to
Borrower by independent auditors in connection with each annual or interim audit
made by such auditors of the books of Borrower.

 

10.1.8                             Projections.  As soon as practicable, and in
any event not later than 60 days after the commencement of each Fiscal Year,
financial projections for Borrower and its Subsidiaries for such Fiscal Year
prepared in a manner consistent with the projections delivered by Borrower to
the Lenders prior to the Closing Date or otherwise in a manner reasonably
satisfactory to Administrative Agent, accompanied by a certificate of a Senior
Officer of Borrower on behalf of Borrower to the effect that (a) such
projections were prepared by Borrower in good faith, (b) Borrower has a
reasonable basis for the assumptions contained in such projections and (c) such
projections have been prepared in accordance with such assumptions.

 

10.1.9                             Subordinated Debt Notices.  Promptly
following receipt, copies of any notices (including notices of default or
acceleration) received from any holder or trustee of, under or with respect to
any Subordinated Debt.

 

10.1.10                      Updated Schedule.  Contemporaneously with the
furnishing of each annual audit report pursuant to Section 10.1.1, an updated
version of Schedule 9.17 showing information as of the date of such audit report
(it being agreed and understood that this requirement shall be in addition to
the other notice and delivery requirements set forth herein).

 

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10.1.11                      Other Information.  Promptly from time to time,
such other information (including, without limitation, business or financial
data, reports, appraisals and projections) concerning the Loan Parties, their
properties or business, as any Lender or Administrative Agent may reasonably
request.

 

10.2                        Books, Records and Inspections.  Keep, and cause
each other Loan Party to keep, its books and records in accordance with sound
business practices sufficient to allow the preparation of financial statements
in accordance with GAAP; permit, and cause each other Loan Party to permit, any
Lender or Administrative Agent or any representative thereof to inspect the
properties and operations of the Loan Parties; and permit, and cause each other
Loan Party to permit, at any reasonable time and with reasonable notice (or at
any time without notice if an Event of Default exists), any Lender or
Administrative Agent or any representative thereof to visit any or all of its
offices, to discuss its financial matters with its officers and its independent
auditors and to examine (and, at the expense of the Loan Parties, photocopy
extracts from) any of its books or other records; and permit, and cause each
other Loan Party to permit, Administrative Agent and its representatives to
inspect the Inventory and other tangible assets of the Loan Parties, to perform
appraisals of the equipment of the Loan Parties, and to inspect, audit, check
and make copies of and extracts from the books, records, computer data, computer
programs, journals, orders, receipts, correspondence and other data relating to
Inventory, Accounts and any other collateral.  All such inspections or audits by
Administrative Agent shall be at Borrower’s expense.

 

10.3                        Maintenance of Property; Insurance.  (a)  Keep, and
cause each other Loan Party to keep, all property useful and necessary in the
business of the Loan Parties in good working order and condition, ordinary wear
and tear excepted.

 

(b)                                 Maintain, and cause each other Loan Party to
maintain self insurance or insurance with responsible insurance companies, with
such insurance coverage as may be required by any law or governmental regulation
or court decree or order applicable to it and such other insurance, to such
extent and against such hazards and liabilities, as is customarily maintained by
companies similarly situated, but which shall insure against all risks and
liabilities of the type identified on Schedule 9.16 and shall have insured
amounts no less than, and deductibles or self-insured retentions no higher than,
as are customarily maintained by companies similarly situated; and, upon request
of Administrative Agent or any Lender, furnish to Administrative Agent or such
Lender original or electronic copies of policies evidencing such insurance if
then available, or if not then available, within three (3) Business Days of the
date such policies become available to Borrower, and a certificate setting forth
in reasonable detail the nature and extent of all insurance maintained by the
Loan Parties.  Borrower shall cause each issuer of an insurance policy to
provide Administrative Agent with an endorsement (i) showing Administrative
Agent as loss payee with respect to each policy of property or casualty
insurance and naming Collateral Agent as an additional insured, where
permissible, with respect to each policy of liability insurance, (ii) providing
that 30 days’ notice will be given to Collateral Agent prior to any cancellation
of, material reduction or change in coverage provided by or other material
modification to such policy and (iii) reasonably acceptable in all other
respects to Administrative Agent.  Borrower shall execute and deliver to
Administrative Agent a collateral assignment, in form and substance satisfactory
to Administrative Agent, of each business interruption insurance policy
maintained by Borrower.

 

(c)                                  UNLESS BORROWER PROVIDES ADMINISTRATIVE
AGENT WITH EVIDENCE OF THE INSURANCE COVERAGE REQUIRED BY THIS AGREEMENT, AND IN
THE EVENT BORROWER FAILS TO PURCHASE FURTHER OR OTHER INSURANCE AS REASONABLY
REQUIRED BY ADMINISTRATIVE AGENT TO BE IN COMPLIANCE WITH THE INSURANCE COVERAGE
REQUIREMENTS OF THIS AGREEMENT, ADMINISTRATIVE AGENT MAY PURCHASE INSURANCE AT
BORROWER’S EXPENSE TO PROTECT ADMINISTRATIVE AGENT’S AND THE LENDERS’ INTERESTS
IN THE COLLATERAL.  THIS INSURANCE MAY, BUT NEED NOT, PROTECT ANY LOAN PARTY’S

 

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INTERESTS.  THE COVERAGE THAT ADMINISTRATIVE AGENT PURCHASES MAY NOT PAY ANY
CLAIM THAT IS MADE AGAINST ANY LOAN PARTY IN CONNECTION WITH THE COLLATERAL. 
BORROWER MAY LATER CANCEL ANY INSURANCE PURCHASED BY ADMINISTRATIVE AGENT, BUT
ONLY AFTER PROVIDING ADMINISTRATIVE AGENT WITH EVIDENCE THAT BORROWER HAS
OBTAINED INSURANCE AS REQUIRED BY THIS AGREEMENT.  IF ADMINISTRATIVE AGENT
PURCHASES INSURANCE FOR THE COLLATERAL, BORROWER WILL BE RESPONSIBLE FOR THE
COSTS OF THAT INSURANCE, INCLUDING INTEREST AND ANY OTHER CHARGES THAT MAY BE
IMPOSED WITH THE PLACEMENT OF THE INSURANCE, UNTIL THE EFFECTIVE DATE OF THE
CANCELLATION OR EXPIRATION OF THE INSURANCE.  THE COSTS OF THE INSURANCE MAY BE
ADDED TO THE PRINCIPAL AMOUNT OF THE LOANS OWING HEREUNDER.  THE COSTS OF THE
INSURANCE MAY BE MORE THAN THE COST OF THE INSURANCE THE LOAN PARTIES MAY BE
ABLE TO OBTAIN ON THEIR OWN.

 

10.4                        Compliance with Laws; Payment of Taxes and
Liabilities.  (a)  Comply, and cause each other Loan Party to comply, in all
material respects with all applicable laws, rules, regulations, decrees, orders,
judgments, licenses and permits, except where failure to comply could not
reasonably be expected to have a Material Adverse Effect; (b) without limiting
clause (a) above, ensure, and cause each other Loan Party to ensure, that no
person who owns a controlling interest in or otherwise controls a Loan Party is
or shall be (i) listed on the Specially Designated Nationals and Blocked Person
List maintained by the Office of Foreign Assets Control (“OFAC”), Department of
the Treasury, and/or any other similar lists maintained by OFAC pursuant to any
authorizing statute, Executive Order or regulation or (ii) a person designated
under Section 1(b), (c) or (d) of Executive Order No. 13224 (September 23,
2001), any related enabling legislation or any other similar Executive Orders,
(c) without limiting clause (a) above, comply, and cause each other Loan Party
to comply, with all applicable Bank Secrecy Act (“BSA”) and anti-money
laundering laws and regulations and (d) pay, and cause each other Loan Party to
pay, prior to delinquency, all taxes and other governmental charges against it
or any of its property, as well as claims of any kind which, if unpaid, could
become a Lien on any of its property; provided that the foregoing shall not
require any Loan Party to pay any such tax or charge so long as it shall contest
the validity thereof in good faith by appropriate proceedings and shall set
aside on its books adequate reserves with respect thereto in accordance with
GAAP and, in the case of a claim which could become a Lien on any collateral,
such contest proceedings shall stay the foreclosure of such Lien or the sale of
any portion of the collateral to satisfy such claim.

 

10.5                        Maintenance of Existence, etc.  Maintain and
preserve, and (subject to Section 11.5) cause each other Loan Party to maintain
and preserve, (a) its existence and good standing in the jurisdiction of its
organization and (b) its qualification to do business and good standing in each
jurisdiction where the nature of its business makes such qualification necessary
(other than such jurisdictions in which the failure to be qualified or in good
standing could not reasonably be expected to have a Material Adverse Effect).

 

10.6                        Use of Proceeds.  Use the proceeds of the Loans, and
the Letters of Credit, solely for working capital purposes for Capital
Expenditures and for other general business purposes; and not use or permit any
proceeds of any Loan to be used, either directly or indirectly, for the purpose,
whether immediate, incidental or ultimate, of “purchasing or carrying” any
Margin Stock.

 

10.7                        Employee Benefit Plans.

 

(a)                                 Maintain, and cause each other member of the
Controlled Group to maintain, each Pension Plan in substantial compliance with
all applicable requirements of law and regulations.

 

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(b)                                 Make, and cause each other member of the
Controlled Group to make, on a timely basis, all required contributions to any
Multiemployer Pension Plan.

 

(c)                                  Not, and not permit any other member of the
Controlled Group to (i) seek a waiver of the minimum funding standards of ERISA,
(ii) terminate or withdraw from any Pension Plan or Multiemployer Pension Plan
or (iii) take any other action with respect to any Pension Plan that would
reasonably be expected to entitle the PBGC to terminate, impose liability in
respect of, or cause a trustee to be appointed to administer, any Pension Plan,
unless the actions or events described in clauses (i), (ii) and
(iii) individually or in the aggregate would not have a Material Adverse Effect.

 

10.8                        Environmental Matters.  If any release or threatened
release or other disposal of Hazardous Substances shall occur or shall have
occurred on any real property or any other assets of any Loan Party, Borrower
shall, or shall cause the applicable Loan Party to, cause the prompt containment
and removal of such Hazardous Substances and the remediation of such real
property or other assets as necessary to comply with all Environmental Laws and
to preserve the value of such real property or other assets.  Without limiting
the generality of the foregoing, Borrower shall, and shall cause each other Loan
Party to, comply with any Federal or state judicial or administrative order
requiring the performance at any real property of any Loan Party of activities
in response to the release or threatened release of a Hazardous Substance.  To
the extent that the transportation of Hazardous Substances is permitted by this
Agreement, Borrower shall, and shall cause its Subsidiaries to, dispose of such
Hazardous Substances, or of any other wastes, only at licensed disposal
facilities operating in compliance with Environmental Laws.

 

10.9                        Further Assurances.  Take, and cause each other Loan
Party to take, such actions as are necessary or as Administrative Agent or the
Required Lenders may reasonably request from time to time to ensure that the
Obligations of each Loan Party under the Loan Documents are secured by a first
priority perfected Lien in favor of Collateral Agent (subject to Permitted
Liens) on certain of the assets of Borrower and each Loan Party and guaranteed
by each Loan Party (including, within 30 days of the acquisition or creation
thereof, any Subsidiary acquired or created after the Closing Date), in each
case as Administrative Agent may determine. Furthermore, within 30 days of the
date hereof, the Borrower shall provide to the Administrative Agent evidence
satisfactory to the Administrative Agent that Onquest Heaters, Inc. has been
dissolved and neither the Borrower nor any of its Subsidiaries owns any of the
Capital Securities issued by Onquest Heaters, Inc.

 

10.10                 Deposit Accounts.  Unless Administrative Agent otherwise
consents in writing, in order to facilitate Administrative Agent’s and the
Lenders’ maintenance and monitoring of their security interests in the
collateral, maintain all of their principal deposit accounts with Lenders.

 

10.11                 RESERVED.

 

10.12                 Permissible Payments.  So long as there is pro forma
compliance with the financial covenants contained in Section 11.14 hereof, the
Borrower may (a) make any distribution to any holders of its Capital Securities,
(b) purchase or redeem any of its Capital Securities, (c) pay any management
fees or similar fees to any of its equity holders or any Affiliate thereof,
(d) make any redemption, prepayment (whether mandatory or optional), defeasance,
repurchase or any other payment in respect of any Subordinated Debt, (e) set
aside funds for any of the foregoing, (f) may make regularly scheduled payments
of interest and principal in respect of Subordinated Debt to the extent
permitted under the subordination provisions thereof and, (g) pay any Earn-Outs;
provided that, for purposes of clarification, Subsidiaries of the Borrower shall
at all times be permitted to make dividends or distributions to any of the Loan
Parties.

 

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10.13                 Other Agreements.   In the event that the Borrower shall,
directly or indirectly, enter into, or otherwise consent to any agreement or
instrument which includes financial covenants not included in this Agreement or
any other more favorable terms (including without limitation events of default),
or covenants that are more restrictive as to the Borrower than those contained
in this Agreement, this Agreement shall be deemed to be amended to include such
additional or more restrictive covenants or terms so long as such additional or
more restrictive covenants or terms remain in effect under the other agreement
or instrument.

 

SECTION 11                                                NEGATIVE COVENANTS

 

Until the expiration or termination of the Commitments and thereafter until all
Obligations hereunder and under the other Loan Documents are paid in full and
all Letters of Credit have been terminated or Cash Collateralized, Borrower
agrees that, unless at any time the Required Lenders shall otherwise expressly
consent in writing, it will:

 

11.1                        Debt.  Not, and not permit any other Loan Party to,
create, incur, assume or suffer to exist any Debt, except:

 

(a)                                 Obligations under this Agreement, the other
Loan Documents, the Note Agreement and the Senior Note Documents;

 

(b)                                 Debt secured by Liens permitted by
Section 11.2(d) (including the Debt set forth in Schedule 10.1(c)), and
extensions, renewals and refinancings thereof subject to pro forma compliance
with the financial covenants set forth in Section 11.14 herein;

 

(c)                                  Debt of Borrower to any Guarantor or Debt
of any Guarantor to Borrower or another Guarantor;

 

(d)                                 Subordinated Debt provided that (i) Borrower
is in pro forma compliance with the financial covenants set forth in
Section 11.14 herein including pro forma compliance with the Fixed Charge
Coverage Ratio such that the denominator also includes the greater of $7,500,000
or the actual maximum amount of annual principal amortization under any Senior
Notes, whether or not such amortization has occurred in the past 12 months;
(ii) the aggregate amount of Subordinated Debt shall not exceed 0.5x Pro Forma
EBITDA when such Subordinated Debt is, or is to be, issued; and (iii) Borrower
uses a Subordination Agreement substantially in the form attached hereto as
Exhibit F;

 

(e)                                  Hedging Obligations approved by
Administrative Agent and incurred in favor of a Lender or an Affiliate thereof
for bona fide hedging purposes and not for speculation;

 

(f)                                   Debt described on Schedule 11.1 and any
extension, renewal or refinancing thereof so long as the principal amount
thereof is not increased;

 

(g)                                  Contingent Liabilities arising with respect
to customary indemnification obligations in favor of sellers in connection with
Permitted Acquisitions and purchasers in connection with dispositions permitted
under Section 11.8; and

 

(h)                                 Other unsecured Debt subject to pro forma
compliance with the financial covenants set forth in Section 11.14 herein.

 

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11.2                        Liens.  Subject to Section 11.14.4, not, and not
permit any other Loan Party to, create or permit to exist any Lien on any of its
real or personal properties, assets or rights of whatsoever nature (whether now
owned or hereafter acquired), except:

 

(a)                                 Liens for taxes or other governmental
charges not at the time delinquent or thereafter payable without penalty or
being diligently contested in good faith by appropriate proceedings and, in each
case, for which it maintains adequate reserves in accordance with GAAP and the
execution or other enforcement of which is effectively stayed;

 

(b)                                 Liens arising in the ordinary course of
business (such as (i) Liens of carriers, warehousemen, mechanics and materialmen
and other similar Liens imposed by law and (ii) Liens in the form of deposits or
pledges incurred in connection with worker’s compensation, unemployment
compensation and other types of social security (excluding Liens arising under
ERISA) or in connection with surety bonds, bids, performance bonds and similar
obligations) for sums not overdue or being diligently contested in good faith by
appropriate proceedings and not involving any advances or borrowed money or the
deferred purchase price of property or services and, in each case, for which it
maintains adequate reserves in accordance with GAAP and the execution or other
enforcement of which is effectively stayed;

 

(c)                                  Liens described on Schedule 11.2 as of the
Closing Date and the replacement, extension or renewal thereof;

 

(d)                                 subject to the limitation set forth in
Section 11.1(b), (i) Liens arising in connection with Capital Leases (and
attaching only to the property being leased), (ii) Liens existing on property at
the time of the acquisition thereof by any Loan Party (and not created in
contemplation of such acquisition) and (iii) Liens on equipment or real
property;

 

(e)                                  attachments, appeal bonds, judgments and
other similar Liens, for sums not exceeding $3,000,000 arising in connection
with court proceedings, provided the execution or other enforcement of such
Liens is effectively stayed and the claims secured thereby are being actively
contested in good faith and by appropriate proceedings;

 

(f)                                   easements, rights of way, restrictions,
minor defects or irregularities in title and other similar Liens not interfering
in any material respect with the ordinary conduct of the business of any Loan
Party; and

 

(g)                                  Liens arising under the Loan Documents.

 

11.3                        RESERVED.

 

11.4                        RESERVED.

 

11.5                        Mergers, Consolidations.  Not, and not permit any
other Loan Party to be a party to any merger or consolidation except (a)(x) any
Subsidiary may merge or consolidate with or into, or transfer its assets to, any
Guarantor; provided that in any such merger or consolidation, the continuing or
surviving Person is such Guarantor and (y) any Subsidiary may merge or
consolidate with or into, or transfer its assets to, the Borrower; provided that
in any such merger or consolidation, the continuing or surviving Person is the
Borrower; and

 

(b)                              other than as set forth in clause (a), the
Borrower may merge or consolidate with or into any Person (other than any of its
Subsidiaries); provided that in any such merger or consolidation, the continuing
or surviving Person is the Borrower and such merger or consolidation is
otherwise in compliance with 11.11 and the requirements of a Permitted
Acquisition.

 

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11.6                        Modification of Organizational Documents.  Not
permit the charter, by-laws or other organizational documents of any Loan Party
to be amended or modified in any way which could reasonably be expected to
materially adversely affect the interests of the Lenders; not change, or allow
any Loan Party to change, its state of formation or its organizational form in
any way which could reasonably be expected to have a material adverse affect on
the interests of the Lenders.

 

11.7                        Transactions with Affiliates.  Not, and not permit
any other Loan Party to, enter into, or cause, suffer or permit to exist any
transaction, arrangement or contract with any of its other Affiliates (other
than the Loan Parties) which is on terms which are less favorable than are
obtainable from any Person which is not one of its Affiliates.

 

11.8                        Asset Disposition.  Not, and not permit any other
Loan Party to sell, lease, transfer, or otherwise dispose of any assets of the
Borrower or any other Loan Party except (a) transfers of assets to any of the
Loan Parties, (b) Asset Dispositions of Inventory of any of the Loan Parties and
Fixed Assets of any of the Loan Parties (in each case subject to clause (d) of
this Section 11.8 and the latter also subject to Section 11.14.4) sold in the
ordinary course of business, (c) obsolete or worn out equipment and (d) subject
to the following sentence, Asset Dispositions to the extent the aggregate Net
Cash Proceeds of such Asset Dispositions does not exceed, in any such Fiscal
Year, 20% of the Tangible Assets of the Borrower and the other Loan Parties, as
of the end of the immediately preceding Fiscal Year, and to the extent 100% of
the consideration for such Asset Dispositions is in cash; provided that, to the
extent otherwise meeting the requirements of this clause (d): (1) Net Cash
Proceeds from Asset Dispositions which in the event that the assets subject to
such Asset Disposition constituted Collateral, such Net Cash Proceeds are
reinvested in property, all or substantially all (as determined by the
Collateral Agent) of which such property shall be made subject to the Lien of
the applicable Collateral Documents in favor of the Collateral Agent or (2) in
the event that the assets subject to such Asset Disposition did not constitute
Collateral, such Net Cash Proceeds are reinvested in assets similar to the
assets which were subject to such Asset Disposition or in property which is
otherwise used or useful in the business of the Borrower and the other Loan
Parties, and in each case, such property is located within the United States;
provided further that, to the extent actually reinvested in such assets or
property within the 180-day period after the applicable Asset Disposition or
committed to be reinvested within 90 days after the end of such period, such Net
Cash Proceeds will be excluded from the calculation of aggregate Net Cash
Proceeds in such Fiscal Year.  If the net sales proceeds of any asset sales,
including the sale of any business, Subsidiary or investment, for any Fiscal
Year are greater than 20% of Consolidated Tangible Assets of the Borrower and
the Loan Parties, the Borrower shall be required to make prepayments in
accordance with Section 6.2.2(i) and the Revolving Commitment shall be reduced
as set forth in Section 6.2.2(a).

 

11.9                        Inconsistent Agreements.  Not, and not permit any
other Loan Party to, enter into any agreement containing any provision which
would (a) be violated or breached by any borrowing by Borrower hereunder or by
the performance by any Loan Party of any of its Obligations hereunder or under
any other Loan Document, (b) prohibit any Loan Party from granting to
Administrative Agent and the Lenders, a Lien on any of its assets or (c) create
or permit to exist or become effective any encumbrance or restriction on the
ability of any Subsidiary to (i) pay dividends or make other distributions to
Borrower or any other Subsidiary, or pay any Debt owed to Borrower or any other
Subsidiary, (ii) make loans or advances to any Loan Party or (iii) transfer any
of its assets or properties to any Loan Party, other than (A) customary
restrictions and conditions contained in agreements relating to the sale of all
or a substantial part of the assets of any Subsidiary pending such sale,
provided that such restrictions and conditions apply only to the Subsidiary to
be sold and such sale is permitted hereunder (B) restrictions or conditions
imposed by any agreement relating to purchase money Debt, Capital Leases

 

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and other secured Debt permitted by this Agreement if such restrictions or
conditions apply only to the property or assets securing such Debt,
(C) customary provisions in leases and other contracts restricting the
assignment thereof, and (D) provisions contained in the Senior Note Documents
for so long as the obligations arising thereunder are subject to the
Intercreditor Agreement.

 

11.10                 Business Activities.  Not, and not permit any other Loan
Party to, engage in any line of business other than the businesses engaged in on
the date hereof and businesses reasonably related thereto.

 

11.11                 Investments.  Not, and not permit any other Loan Party to,
make or permit to exist any Investment in any other Person, except the
following:

 

(a)                                 Investments in the form of contributions by
any Loan Party in respect of the Capital Securities of any Guarantor, or as set
forth on Schedule 11.1(a), Investments in existence on the date hereof in the
form of contributions by any Loan Party in respect of the Capital Securities of
any other Subsidiary of the Borrower; Investments constituting Debt permitted by
Section 11.1;

 

(b)                                 Contingent Liabilities constituting Debt
permitted by Section 11.1;

 

(c)                                  Cash Equivalent Investments;

 

(d)                                 Investments in securities of Account Debtors
received pursuant to any plan of reorganization or similar arrangement upon the
bankruptcy or insolvency of such Account Debtors;

 

(e)                                  to the extent not otherwise permitted
hereunder, Investments listed on Schedule 11.11 as of the Closing Date;

 

(g)                                  to the extent not otherwise permitted
hereunder, Investments in Joint Ventures (other than Construction Partnerships)
not exceeding $50,000,000 in aggregate; and

 

(h)                                 Investments in the form of Permitted
Acquisitions; provided that all such Investments, in Foreign Subsidiaries shall
at no time exceed $20,000,000.

 

provided that any Investment which when made complies with the requirements of
the definition of the term “Cash Equivalent Investment” may continue to be held
notwithstanding that such Investment if made thereafter would not comply with
such requirements.

 

11.12                 Restriction of Amendments to Certain Documents.  Not, and
not permit any other Loan Party to, amend or otherwise modify, or waive any
rights under any provisions of any Subordinated Debt.

 

11.13                 Fiscal Year.  Not, and not permit any other Loan Party to,
change its Fiscal Year.

 

11.14                 Financial Covenants.

 

11.14.1                      Tangible Net Worth.  The Borrower will not permit
Tangible Net Worth, calculated as of the last day of each Fiscal Quarter
(commencing December 31, 2012), to be less than $100,000,000, which required
minimum amount will increase (i) on December 31, 2012, by twenty-five percent
(25%) of Consolidated Net Income, as reported on the Borrower’s annual audited
financial statements delivered pursuant to Section 10.1.1 for the fourth Fiscal
Quarter of 2012 (but without reduction for any net loss) and (ii) thereafter,
annually, commencing December 31, 2013, and each anniversary of such date by an
amount equal to twenty-five percent (25%) of Consolidated Net Income reported on
the Borrower’s annual audited financial statements delivered pursuant to
Section 10.1.1 for the preceding Fiscal Year (but without reduction for any net
loss).

 

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11.14.2                      Fixed Charge Coverage Ratio.  Not permit the Fixed
Charge Coverage Ratio for the Borrower and the Subsidiaries for any Computation
Period, calculated at the end of each Fiscal Quarter, commencing with the
Computation Period ending December 31, 2012 to be less than 1.25x.

 

 11.14.3                   Senior Debt to EBITDA Ratio.  Not permit the Senior
Debt to EBITDA Ratio for the Borrower and the Subsidiaries as of the last day of
any Computation Period, calculated at the end of each Fiscal Quarter, to exceed
2.25x.

 

11.14.4                      Unencumbered Assets.  The Borrower will not permit,
at any time, Unencumbered Fixed Assets owned by any of the Borrower and the
other Loan Parties, to be valued at less than $45,000,000, calculated at the
greatest of (a) net book value, (b) most recent insurance valuation, (c) market
value (such as, for example, in the case of equipment, the value therefore as
published by Ritchie Bros. Auctioneers), or (d) the estimated value provided by
an independent third party acceptable to the Administrative Agent (in the case
of Fixed Assets to which the foregoing clause (c) or (d) applies, with estimates
of equipment value to be updated annually and estimates of real property value
to be in accordance with most recent appraisals provided to the Administrative
Agent prior to the date hereof) provided that, in the case of real property to
which any of clauses (b), (c) or (d) shall apply, such calculation shall deduct
from such insurance value, market value or estimated value, as applicable, the
amount of any Debt secured by a Lien on such real property.  These Fixed Assets
may be substituted for from time to time with consent of the Administrative
Agent.

 

11.15                 Cancellation of Debt.  Not, and not permit any other Loan
Party to, cancel any claim or debt owing to it, except for reasonable
consideration or in the ordinary course of business, and except for the
cancellation of debts or claims not to exceed $3,000,000  in any Fiscal Year.

 

11.16                 Laws, Regulations.  Borrower shall not, and shall not
permit any other Loan Party to fail to comply with the laws, regulations and
executive orders referred to in Sections 9.25 and 9.26.

 

SECTION 12                                                EFFECTIVENESS;
CONDITIONS OF LENDING, ETC.

 

The obligation of each Lender to make its Loans and of the Issuing Lenders to
issue Letters of Credit is subject to the following conditions precedent:

 

12.1                        Initial Credit Extension.  The obligation of the
Lenders to make the initial Loans and the obligation of the Issuing Lenders to
issue their initial Letters of Credit (whichever first occurs) is, in addition
to the conditions precedent specified in Section 12.2, subject to the condition
precedent that the Administrative Agent shall have received all of the
following, each duly executed and dated the Closing Date (or such earlier date
as shall be satisfactory to Administrative Agent), in form and substance
satisfactory to Administrative Agent (and the date on which all such conditions
precedent have been satisfied or waived in writing by Administrative Agent and
the Lenders is called the “Closing Date”):

 

12.1.1                             Agreement and Notes.  This Agreement and, to
the extent requested by any Lender, a Note made payable to such Lender.

 

12.1.2                             Authorization Documents.  For each Loan
Party, such Person’s (a) charter (or similar formation document), certified by
the appropriate governmental authority; (b) good standing certificates in its
state of incorporation (or formation) and in each other state requested by
Administrative Agent; (c) bylaws (or similar governing document);
(d) resolutions of its board of directors (or similar

 

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governing body) approving and authorizing such Person’s execution, delivery and
performance of the Loan Documents to which it is party and the transactions
contemplated thereby; and (e) signature and incumbency certificates of its
officers executing any of the Loan Documents (it being understood that
Administrative Agent and each Lender may conclusively rely on each such
certificate until formally advised by a like certificate of any changes
therein), all certified by its secretary or an assistant secretary (or similar
officer) as being in full force and effect without modification.

 

12.1.3                             Consents, etc.  Certified copies of all
documents evidencing any necessary corporate or partnership action, consents and
governmental approvals (if any) required for the execution, delivery and
performance by the Loan Parties of the documents referred to in this Section 12.

 

12.1.4                             Letter of Direction.  A letter of direction
containing funds flow information with respect to the proceeds of the Loans on
the Closing Date.

 

12.1.5                             Guaranty and Collateral Agreement.  A
counterpart of the Guaranty and Collateral Agreement executed by each Loan
Party, together with all instruments, transfer powers and other items required
to be delivered in connection therewith.

 

12.1.6                             Perfection Certificate.  A Perfection
Certificate completed and executed by each Loan Party.

 

12.1.7                             Subordination Agreements.  Subordination
Agreements with respect to all Subordinated Debt.

 

12.1.8                             Opinions of Counsel.  Opinions of counsel for
each Loan Party, including local counsel reasonably requested by Administrative
Agent.

 

12.1.9                             Insurance.  Evidence of the existence of
insurance required to be maintained pursuant to Section 10.3(b), together with
evidence that Administrative Agent and, in the case of property and casualty,
that the Collateral Agent has been named as a lender’s loss payee and an
additional insured on all related insurance policies.

 

12.1.10                      Copies of Documents.  Copies of the Prudential
Agreement and related documents certified by the secretary or assistant
secretary (or similar officer) of Borrower as being true, accurate and complete.

 

12.1.11                      Payment of Fees.  Evidence of payment by Borrower
of all accrued and unpaid fees, costs and expenses to the extent then due and
payable on the Closing Date, together with all Attorney Costs of Administrative
Agent to the extent invoiced prior to the Closing Date, plus such additional
amounts of Attorney Costs as shall constitute Administrative Agent’s reasonable
estimate of Attorney Costs incurred or to be incurred by Administrative Agent
through the closing proceedings (provided that such estimate shall not
thereafter preclude final settling of accounts between Borrower and
Administrative Agent).

 

12.1.12                      Intercreditor Agreement.  The Intercreditor
Agreement executed by Prudential.

 

12.1.13                      Search Results; Lien Terminations.  Certified
copies of Uniform Commercial Code search reports dated a date reasonably near to
the Closing Date, listing all effective financing statements which name any Loan
Party (under their present names and any previous names) as debtors, together
with (a) copies of such financing statements, and (b) such other Uniform
Commercial Code termination statements as Administrative Agent may reasonably
request.

 

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12.1.14                      Filings, Registrations and Recordings. 
Administrative Agent shall have received each document (including Uniform
Commercial Code financing statements) required by the Collateral Documents or
under law or reasonably requested by Administrative Agent to be filed,
registered or recorded in order to create in favor of Collateral Agent, for the
benefit of the Lenders, a perfected Lien on the collateral described therein,
prior to any other Liens (subject only to Liens permitted pursuant to Section
11.2), in proper form for filing, registration or recording.

 

12.1.15                      RESERVED.

 

12.1.16                      RESERVED.

 

12.1.17                      Other.  Such other documents as Administrative
Agent or any Lender may reasonably request.

 

12.2                        Conditions.  The obligation (a) of each Lender to
make each Loan and (b) of the Issuing Lenders to issue each Letter of Credit is
subject to the following further conditions precedent that:

 

12.2.1                             Compliance with Warranties, No Default, etc. 
Both before and after giving effect to any borrowing and the issuance of any
Letter of Credit, the following statements shall be true and correct:

 

(a)                                 the representations and warranties of each
Loan Party set forth in this Agreement and the other Loan Documents shall be
true and correct in all respects with the same effect as if then made (except to
the extent stated to relate to a specific earlier date, in which case such
representations and warranties shall be true and correct as of such earlier
date); and

 

(b)                                 no Default or Event of Default shall have
then occurred and be continuing.

 

12.2.2                             Confirmatory Certificate.  If requested by
Administrative Agent or any Lender, Administrative Agent shall have received (in
sufficient counterparts to provide one to each Lender) a certificate dated the
date of such requested Loan or Letter of Credit and signed by a duly authorized
representative of Borrower as to the matters set out in Section 12.2.1 (it being
understood that each request by Borrower for the making of a Loan or the
issuance of a Letter of Credit shall be deemed to constitute a representation
and warranty by Borrower that the conditions precedent set forth in Section
12.2.1 will be satisfied at the time of the making of such Loan or the issuance
of such Letter of Credit), together with such other documents as Administrative
Agent or any Lender may reasonably request in support thereof.

 

SECTION 13                                                EVENTS OF DEFAULT AND
THEIR EFFECT.

 

13.1                        Events of Default.  Each of the following shall
constitute an Event of Default under this Agreement:

 

13.1.1                             Non-Payment of the Loans, etc.  Default in
the payment when due of the principal of any Loan; or default, and continuance
thereof for five (5) Business Days, in the payment when due of any interest,
fee, reimbursement obligation with respect to any Letter of Credit or other
amount payable by Borrower hereunder or under any other Loan Document.

 

13.1.2                             Non-Payment of Other Debt.  Any default shall
occur under the terms applicable to any Debt of any Loan Party in an aggregate
amount (for all such Debt so affected and including undrawn committed or
available amounts and amounts owing to all creditors under any combined or

 

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syndicated credit arrangement) exceeding $3,000,000 and such default shall (a)
consist of the failure to pay such Debt when due, whether by acceleration or
otherwise, or (b) accelerate the maturity of such Debt or permit the holder or
holders thereof, or any trustee or agent for such holder or holders, to cause
such Debt to become due and payable (or require any Loan Party to purchase or
redeem such Debt or post cash collateral in respect thereof) prior to its
expressed maturity.

 

13.1.3                             Other Material Obligations.  Default in the
payment when due, or in the performance or observance of, any material
obligation of, or condition agreed to by, any Loan Party with respect to any
material purchase or lease of goods or services where such default, singly or in
the aggregate with all other such defaults, might reasonably be expected to have
a Material Adverse Effect.

 

13.1.4                             Bankruptcy, Insolvency, etc.  Any Loan Party
becomes insolvent or generally fails to pay, or admits in writing its inability
or refusal to pay, debts as they become due; or any Loan Party applies for,
consents to, or acquiesces in the appointment of a trustee, receiver or other
custodian for such Loan Party or any property thereof, or makes a general
assignment for the benefit of creditors; or, in the absence of such application,
consent or acquiescence, a trustee, receiver or other custodian is appointed for
any Loan Party or for a substantial part of the property of any thereof and is
not discharged within 60 days; or any bankruptcy, reorganization, debt
arrangement, or other case or proceeding under any bankruptcy or insolvency law,
or any dissolution or liquidation proceeding, is commenced in respect of any
Loan Party, and if such case or proceeding is not commenced by such Loan Party,
it is consented to or acquiesced in by such Loan Party, or remains for 60 days
undismissed; or any Loan Party takes any action to authorize, or in furtherance
of, any of the foregoing.

 

13.1.5                             Non-Compliance with Loan Documents.  (a)
Failure by any Loan Party to comply with or to perform any covenant set forth in
Sections 10.1.1, 10.1.2, 10.1.3, 10.1.4, 10.1.5(a), 10.1.6, 10.1.8, 10.3(b),
10.5, 10.6 or Section 11; or (b) failure by any Loan Party to comply with or to
perform any other provision of this Agreement or any other Loan Document (and
not constituting an Event of Default under any other provision of this Section
13) and continuance of such failure described in this clause (b) for 30 days
after written notice thereof by Administrative Agent.

 

13.1.6                             Representations; Warranties.  Any
representation or warranty made by any Loan Party herein or any other Loan
Document is breached or is false or misleading in any material respect, or any
schedule, certificate, financial statement, report, notice or other writing
furnished by any Loan Party to Administrative Agent or any Lender in connection
herewith is false or misleading in any material respect on the date as of which
the facts therein set forth are stated or certified.

 

13.1.7                             Pension Plans.  (a) Any Person institutes
steps to terminate a Pension Plan if as a result of such termination Borrower or
any member of the Controlled Group could be required to make a contribution to
such Pension Plan, or could incur a liability or obligation to such Pension
Plan, in excess of $10,000,000; (b) a contribution failure occurs with respect
to any Pension Plan sufficient to give rise to a Lien under Section 302(f) of
ERISA; (c) the Unfunded Liability exceeds twenty percent of the Total Plan
Liability, or (d) there shall occur any withdrawal or partial withdrawal from a
Multiemployer Pension Plan and the withdrawal liability (without unaccrued
interest) to Multiemployer Pension Plans as a result of such withdrawal
(including any outstanding withdrawal liability that Borrower or any member of
the Controlled Group have incurred on the date of such withdrawal) exceeds
$10,000,000.

 

13.1.8                             Judgments.  Final judgments which exceed an
aggregate of $3,000,000 shall be rendered against any Loan Party and shall not
have been paid, discharged or vacated or had execution thereof stayed pending
appeal within 30 days after entry or filing of such judgments.

 

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13.1.9                             Invalidity of Collateral Documents, etc.  Any
Collateral Document shall cease to be in full force and effect; or any Loan
Party (or any Person by, through or on behalf of any Loan Party) shall contest
in any manner the validity, binding nature or enforceability of any Collateral
Document.

 

13.1.10                      Invalidity of Subordination Provisions, etc.  Any
subordination provision in any document or instrument governing Subordinated
Debt, or any subordination provision in any subordination agreement that relates
to any Subordinated Debt, or any subordination provision in any guaranty by any
Loan Party of any Subordinated Debt, shall cease to be in full force and effect,
or any Loan Party or any other Person (including the holder of any applicable
Subordinated Debt) shall contest in any manner the validity, binding nature or
enforceability of any such provision.

 

13.1.11                      Change in Control.  A Change in Control shall
occur.

 

13.2                        Effect of Event of Default.  If any Event of Default
described in Section 13.1.4 shall occur in respect of Borrower, the Commitments
shall immediately terminate and the Loans and all other Obligations hereunder
shall become immediately due and payable and Borrower shall become immediately
obligated to Cash Collateralize all Letters of Credit, all without presentment,
demand, protest or notice of any kind; and, if any other Event of Default shall
occur and be continuing, Administrative Agent may (and, upon the written request
of the Required Lenders shall) declare the Commitments to be terminated in whole
or in part and/or declare all or any part of the Loans and all other Obligations
hereunder to be due and payable and/or demand that Borrower immediately Cash
Collateralize all or any Letters of Credit, whereupon the Commitments shall
immediately terminate (or be reduced, as applicable) and/or the Loans and other
Obligations hereunder shall become immediately due and payable (in whole or in
part, as applicable) and/or Borrower shall immediately become obligated to Cash
Collateralize the Letters of Credit (all or any, as applicable), all without
presentment, demand, protest or notice of any kind.  Administrative Agent shall
promptly advise Borrower of any such declaration, but failure to do so shall not
impair the effect of such declaration.  Subject to the terms of the
Intercreditor Agreement, any cash collateral delivered hereunder shall be held
by Administrative Agent (without liability for interest thereon) and applied to
the Obligations arising in connection with any drawing under a Letter of
Credit.  After the expiration or termination of all Letters of Credit, such cash
collateral shall be applied by Administrative Agent to any remaining Obligations
hereunder and any excess shall be delivered to Borrower or as a court of
competent jurisdiction may elect.

 

13.3                        Credit Bidding.  The Loan Parties and the Lenders
hereby irrevocably authorize (and by entering into a Bank Product Agreement,
each Bank Product provider shall be deemed to authorize) Administrative Agent,
based upon the instruction of the Required Lenders, to Credit Bid and purchase
(either directly or through one or more acquisition vehicles) all or any portion
of the Collateral (and the Loan Parties shall approve Administrative Agent as a
qualified bidder and such Credit Bid as qualified bid) at any sale thereof
conducted by Administrative Agent, based upon the instruction of the Required
Lenders, under any provisions of the Uniform Commercial Code, as part of any
sale or investor solicitation process conducted by any Loan Party, any interim
receiver, receiver, receiver and manager, administrative receiver, trustee,
agent or other Person pursuant or under any insolvency laws; provided, however,
that (i) the Required Lenders may not direct Administrative Agent in any manner
that does not treat each of the Lenders equally, without preference or
discrimination, in respect of consideration received as a result of the Credit
Bid, (ii) the acquisition documents shall be commercially reasonable and contain
customary protections for minority holders, such as, among other things,
anti-dilution and tag-along rights, (iii) the exchanged debt or equity
securities must be freely transferable, without restriction (subject to
applicable securities laws) and (iv) reasonable efforts shall be made to
structure the acquisition in a manner that causes the governance documents
pertaining thereto to not impose any obligations or liabilities upon the Lenders
individually (such as indemnification obligations).

 

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For purposes of the preceding sentence, the term “Credit Bid” shall mean, an
offer submitted by Administrative Agent (on behalf of the Lender group), based
upon the instruction of the Required Lenders, to acquire the property of any
Loan Party or any portion thereof in exchange for and in full and final
satisfaction of all or a portion (as determined by Administrative Agent, based
upon the instruction of the Required Lenders) of the claims and Obligations
under this Agreement and other Loan Documents.

 

SECTION 14                                                THE AGENT.

 

14.1                        Appointment and Authorization.  Each Lender hereby
irrevocably (subject to Section 14.10) appoints, designates and authorizes
Administrative Agent (including in its capacity as Collateral Agent for all
purposes of this Section 14) to take such action on its behalf under the
provisions of this Agreement and each other Loan Document and to exercise such
powers and perform such duties as are expressly delegated to it by the terms of
this Agreement or any other Loan Document, together with such powers as are
reasonably incidental thereto.  Notwithstanding any provision to the contrary
contained elsewhere in this Agreement or in any other Loan Document,
Administrative Agent shall not have any duty or responsibility except those
expressly set forth herein, nor shall Administrative Agent have or be deemed to
have any fiduciary relationship with any Lender or participant, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or any other Loan Document or otherwise exist
against Administrative Agent.  Without limiting the generality of the foregoing
sentence, the use of the term “agent” herein and in other Loan Documents with
reference to Administrative Agent is not intended to connote any fiduciary or
other implied (or express) obligations arising under agency doctrine of any
applicable law.  Instead, such term is used merely as a matter of market custom,
and is intended to create or reflect only an administrative relationship between
independent contracting parties.

 

14.2                        Issuing Lenders.  The Issuing Lenders shall act on
behalf of the Lenders (according to their Pro Rata Shares) with respect to any
Letters of Credit issued by them and the documents associated therewith.  The
Issuing Lenders shall have all of the benefits and immunities (a) provided to
Administrative Agent in this Section 14 with respect to any acts taken or
omissions suffered by the Issuing Lenders in connection with Letters of Credit
issued by them or proposed to be issued by them and the applications and
agreements for letters of credit pertaining to such Letters of Credit as fully
as if the term “Administrative Agent”, as used in this Section 14, included the
Issuing Lenders with respect to such acts or omissions and (b) as additionally
provided in this Agreement with respect to the Issuing Lenders.

 

14.3                        Delegation of Duties.  Administrative Agent may
execute any of its duties under this Agreement or any other Loan Document by or
through agents, employees or attorneys in fact and shall be entitled to advice
of counsel and other consultants or experts concerning all matters pertaining to
such duties.  Administrative Agent shall not be responsible for the negligence
or misconduct of any agent or attorney in fact that it selects in the absence of
gross negligence or willful misconduct.

 

14.4                        Exculpation of Administrative Agent.  None of
Administrative Agent nor any of its directors, officers, employees or agents
shall (a) be liable for any action taken or omitted to be taken by any of them
under or in connection with this Agreement or any other Loan Document or the
transactions contemplated hereby (except to the extent resulting from its own
gross negligence or willful misconduct in connection with its duties expressly
set forth herein as determined by a final, nonappealable judgment by a court of
competent jurisdiction), or (b) be responsible in any manner to any Lender or
participant for any recital, statement, representation or warranty made by any
Loan Party or Affiliate of Borrower, or any officer thereof, contained in this
Agreement or in any other Loan Document, or in any certificate, report,
statement or other document referred to or provided for in, or received by
Administrative Agent under or in connection with, this Agreement or any other
Loan Document, or the validity, effectiveness,

 

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genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document (or the creation, perfection or priority of any Lien or security
interest therein), or for any failure of Borrower or any other party to any Loan
Document to perform its Obligations hereunder or thereunder.  Administrative
Agent shall not be under any obligation to any Lender to ascertain or to inquire
as to the observance or performance of any of the agreements contained in, or
conditions of, this Agreement or any other Loan Document, or to inspect the
properties, books or records of Borrower or any of Borrower’s Subsidiaries or
Affiliates.

 

14.5                        Reliance by Administrative Agent.  Administrative
Agent shall be entitled to rely, and shall be fully protected in relying, upon
any writing, communication, signature, resolution, representation, notice,
consent, certificate, electronic mail message, affidavit, letter, telegram,
facsimile, telex or telephone message, statement or other document or
conversation believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons, and upon advice and statements of
legal counsel (including counsel to Borrower), independent accountants and other
experts selected by Administrative Agent.  Administrative Agent shall be fully
justified in failing or refusing to take any action under this Agreement or any
other Loan Document unless it shall first receive such advice or concurrence of
the Required Lenders as it deems appropriate and, if it so requests,
confirmation from the Lenders of their obligation to indemnify Administrative
Agent against any and all liability and expense which may be incurred by it by
reason of taking or continuing to take any such action.  Administrative Agent
shall in all cases be fully protected in acting, or in refraining from acting,
under this Agreement or any other Loan Document in accordance with a request or
consent of the Required Lenders and such request and any action taken or failure
to act pursuant thereto shall be binding upon each Lender.  For purposes of
determining compliance with the conditions specified in Section 12, each Lender
that has signed this Agreement shall be deemed to have consented to, approved or
accepted or to be satisfied with, each document or other matter required
thereunder to be consented to or approved by or acceptable or satisfactory to a
Lender unless Administrative Agent shall have received written notice from such
Lender prior to the proposed Closing Date specifying its objection thereto.

 

14.6                        Notice of Default.  Administrative Agent shall not
be deemed to have knowledge or notice of the occurrence of any Event of Default
or Default except with respect to defaults in the payment of principal, interest
and fees required to be paid to Administrative Agent for the account of the
Lenders, unless Administrative Agent shall have received written notice from a
Lender or Borrower referring to this Agreement, describing such Event of Default
or Default and stating that such notice is a “notice of default”. 
Administrative Agent will notify the Lenders of its receipt of any such notice. 
Administrative Agent shall take such action with respect to such Event of
Default or Default as may be requested by the Required Lenders in accordance
with Section 13; provided that unless and until Administrative Agent has
received any such request, Administrative Agent may (but shall not be obligated
to) take such action, or refrain from taking such action, with respect to such
Event of Default or Default as it shall deem advisable or in the best interest
of the Lenders.

 

14.7                        Credit Decision.  Each Lender acknowledges that
Administrative Agent has not made any representation or warranty to it, and that
no act by Administrative Agent hereafter taken, including any consent and
acceptance of any assignment or review of the affairs of the Loan Parties, shall
be deemed to constitute any representation or warranty by Administrative Agent
to any Lender as to any matter, including whether Administrative Agent has
disclosed material information in its possession.  Each Lender represents to
Administrative Agent that it has, independently and without reliance upon
Administrative Agent and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other condition and
creditworthiness of the Loan Parties, and made its own decision to enter into
this Agreement and to extend credit to Borrower hereunder.  Each Lender also
represents that it will, independently and without reliance upon Administrative
Agent and based on such documents and

 

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information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Loan Documents, and to make such investigations as
it deems necessary to inform itself as to the business, prospects, operations,
property, financial and other condition and creditworthiness of Borrower. 
Except for notices, reports and other documents expressly herein required to be
furnished to the Lenders by Administrative Agent, Administrative Agent shall not
have any duty or responsibility to provide any Lender with any credit or other
information concerning the business, prospects, operations, property, financial
or other condition or creditworthiness of Borrower which may come into the
possession of Administrative Agent.

 

14.8                        Indemnification.  Whether or not the transactions
contemplated hereby are consummated, each Lender shall indemnify upon demand
Administrative Agent and its directors, officers, employees and agents (to the
extent not reimbursed by or on behalf of Borrower and without limiting the
obligation of Borrower to do so), according to its applicable Pro Rata Share,
from and against any and all Indemnified Liabilities (as hereinafter defined);
provided that no Lender shall be liable for any payment to any such Person of
any portion of the Indemnified Liabilities to the extent determined by a final,
nonappealable judgment by a court of competent jurisdiction to have resulted
from the applicable Person’s own gross negligence or willful misconduct.  No
action taken in accordance with the directions of the Required Lenders shall be
deemed to constitute gross negligence or willful misconduct for purposes of this
Section.  Without limitation of the foregoing, each Lender shall reimburse
Administrative Agent upon demand for its ratable share of any costs or out of
pocket expenses (including Attorney Costs and Taxes) incurred by Administrative
Agent in connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Loan Document, or any document
contemplated by or referred to herein, to the extent that Administrative Agent
is not reimbursed for such expenses by or on behalf of Borrower.  The
undertaking in this Section shall survive repayment of the Loans, cancellation
of the Notes, expiration or termination of the Letters of Credit, any
foreclosure under, or modification, release or discharge of, any or all of the
Collateral Documents, termination of this Agreement and the resignation or
replacement of Administrative Agent.

 

14.9                        Administrative Agent in Individual Capacity. 
PrivateBank and its Affiliates may make loans to, issue letters of credit for
the account of, accept deposits from, acquire equity interests in and generally
engage in any kind of banking, trust, financial advisory, underwriting or other
business with the Loan Parties and Affiliates as though PrivateBank were not
Administrative Agent hereunder and without notice to or consent of any Lender. 
Each Lender acknowledges that, pursuant to such activities, PrivateBank or its
Affiliates may receive information regarding Borrower or its Affiliates
(including information that may be subject to confidentiality obligations in
favor of Borrower or such Affiliate) and acknowledge that Administrative Agent
shall be under no obligation to provide such information to them.  With respect
to their Loans (if any),  PrivateBank and its Affiliates shall have the same
rights and powers under this Agreement as any other Lender and may exercise the
same as though PrivateBank were not Administrative Agent, and the terms “Lender”
and “Lenders” include PrivateBank and its Affiliates, to the extent applicable,
in their individual capacities.

 

14.10                 Successor Administrative Agent.  Administrative Agent may
resign as Administrative Agent upon 30 days’ notice to the Lenders.  If
Administrative Agent resigns under this Agreement, the Required Lenders shall,
with (so long as no Event of Default exists) the consent of Borrower (which
shall not be unreasonably withheld or delayed), appoint from among the Lenders a
successor agent for the Lenders.  If no successor agent is appointed prior to
the effective date of the resignation of Administrative Agent, Administrative
Agent may appoint, after consulting with the Lenders and Borrower, a successor
agent from among the Lenders.  Upon the acceptance of its appointment as
successor agent hereunder, such successor agent shall succeed to all the rights,
powers and duties of the retiring Administrative

 

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Agent and the term “Administrative Agent” shall mean such successor agent, and
the retiring Administrative Agent’s appointment, powers and duties as
Administrative Agent shall be terminated. After any retiring Administrative
Agent’s resignation hereunder as Administrative Agent, the provisions of this
Section 14 and Sections 15.5 and 15.16 shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Administrative Agent
under this Agreement.  If no successor agent has accepted appointment as
Administrative Agent by the date which is 30 days following a retiring
Administrative Agent’s notice of resignation, the retiring Administrative
Agent’s resignation shall nevertheless thereupon become effective and the
Lenders shall perform all of the duties of Administrative Agent hereunder until
such time, if any, as the Required Lenders appoint a successor agent as provided
for above.

 

14.11                 Collateral Matters.  Each Lender authorizes and directs
Administrative Agent to enter into the other Loan Documents for the benefit of
Lenders.  Each Lender hereby agrees that, except as otherwise set forth herein,
any action taken by Required Lenders in accordance with the provisions of this
Agreement or the other Loan Documents, and the exercise by the Required Lenders
of the powers set forth herein or therein, together with such other powers as
are reasonably incidental thereto, shall be authorized and binding upon all
Lenders.  Administrative Agent is hereby authorized on behalf of all Lenders,
without the necessity of any notice to or further consent from any Lender to
take any action with respect to any Collateral or Loan Documents which may be
necessary to perfect and maintain perfected the Liens upon the Collateral
granted pursuant to this Agreement and the other Loan Documents.  The Lenders
irrevocably authorize Administrative Agent, at its option and in its discretion,
(a) to release any Lien granted to or held by Collateral Agent under any
Collateral Document (i) upon termination of the Commitments and payment in full
of all Loans and all other obligations of Borrower hereunder and the expiration
or termination of all Letters of Credit; (ii) constituting property sold or to
be sold or disposed of as part of or in connection with any disposition
permitted hereunder (including the release of any Guarantor); or (iii) subject
to Section 15.1, if approved, authorized or ratified in writing by the Required
Lenders; or (b) to subordinate its interest in any Collateral to any holder of a
Lien on such Collateral which is permitted by Section 11.2(d)(i) or (d)(iii) (it
being understood that Administrative Agent may conclusively rely on a
certificate from Borrower in determining whether the Debt secured by any such
Lien is permitted by Section 11.1(b)).  Upon request by Administrative Agent at
any time, the Lenders will confirm in writing Collateral Agent’s authority to
release, or subordinate its interest in, particular types or items of Collateral
pursuant to this Section 14.11.  Each Lender hereby authorizes Administrative
Agent to give blockage notices in connection with any Subordinated Debt at the
direction of Required Lenders and agrees that it will not act unilaterally to
deliver such notices.

 

14.12                 Restriction on Actions by Lenders.   Each Lender agrees
that it shall not, without the express written consent of Administrative Agent,
and shall, upon the written request of Administrative Agent (to the extent it is
lawfully entitled to do so), set off against the Obligations, any amounts owing
by such Lender to a Loan Party or any deposit accounts of any Loan Party now or
hereafter maintained with such Lender.  Each of the Lenders further agrees that
it shall not, unless specifically requested to do so in writing by
Administrative Agent, take or cause to be taken, any action, including the a
commencement of any legal or equitable proceedings to foreclose any loan or
otherwise enforce any security interest in any of the Collateral or to enforce
all or any part of this Agreement or the other Loan Documents.  All enforcement
actions under this Agreement and the other Loan Documents against the Loan
Parties or any third party with respect to the Obligations or the Collateral may
only be taken by Administrative Agent (at the direction of the Required Lenders
or as otherwise permitted in this Agreement) or by its agents, including the
Collateral Agent, at the direction of Administrative Agent.

 

14.13                 Administrative Agent May File Proofs of Claim.  In case of
the pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to any Loan Party, Administrative Agent (irrespective of
whether the principal of any Loan shall then be due and payable as herein
expressed or by declaration or otherwise and irrespective of whether
Administrative Agent shall have made any demand on Borrower) shall be entitled
and empowered, by intervention in such proceeding or otherwise:

 

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(a)                                 to file and prove a claim for the whole
amount of the principal and interest owing and unpaid in respect of the Loans,
and all other Obligations that are owing and unpaid and to file such other
documents as may be necessary or advisable in order to have the claims of the
Lenders and Administrative Agent (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Lenders and
Administrative Agent and their respective agents and counsel and all other
amounts due the Lenders and Administrative Agent under Sections 5, 15.5 and
15.17) allowed in such judicial proceedings; and

 

(b)                                 to collect and receive any monies or other
property payable or deliverable on any such claims and to distribute the same;

 

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to Administrative Agent and, in the event that
Administrative Agent shall consent to the making of such payments directly to
the Lenders, to pay to Administrative Agent any amount due for the reasonable
compensation, expenses, disbursements and advances of Administrative Agent and
its agents and counsel, and any other amounts due Administrative Agent under
Sections 5, 15.5 and 15.17.

 

Nothing contained herein shall be deemed to authorize Administrative Agent to
authorize or consent to or accept or adopt on behalf of any Lender any plan of
reorganization, arrangement, adjustment or composition affecting the Obligations
or the rights of any Lender or to authorize Administrative Agent to vote in
respect of the claim of any Lender in any such proceeding.

 

14.14                 Other Agents; Arrangers and Managers.  None of the Lenders
or other Persons identified on the facing page or signature pages of this
Agreement as a “syndication agent,” “documentation agent,” “co-agent,” “book
manager,” “lead manager,” “arranger,” “lead arranger” or “co-arranger”, if any,
shall have any right, power, obligation, liability, responsibility or duty under
this Agreement other than, in the case of such Lenders, those applicable to all
Lenders as such.  Without limiting the foregoing, none of the Lenders or other
Persons so identified shall have or be deemed to have any fiduciary relationship
with any Lender.  Each Lender acknowledges that it has not relied, and will not
rely, on any of the Lenders or other Persons so identified in deciding to enter
into this Agreement or in taking or not taking action hereunder.

 

SECTION 15                                                GENERAL.

 

15.1                        Waiver; Amendments.  No delay on the part of
Administrative Agent or any Lender in the exercise of any right, power or remedy
shall operate as a waiver thereof, nor shall any single or partial exercise by
any of them of any right, power or remedy preclude other or further exercise
thereof, or the exercise of any other right, power or remedy.  No amendment,
modification or waiver of, or consent with respect to, any provision of this
Agreement or the other Loan Documents shall in any event be effective unless the
same shall be in writing and acknowledged by Lenders having an aggregate Pro
Rata Shares of not less than the aggregate Pro Rata Shares expressly designated
herein with respect thereto or, in the absence of such designation as to any
provision of this Agreement, by the Required Lenders, and then any such
amendment, modification, waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.  No amendment,
modification, waiver or consent shall (a) extend or increase the Commitment of
any Lender without the written consent of such Lender, (b) extend the date
scheduled for payment of any principal (excluding required prepayments of the
Loans) of or interest on the Loans or any fees payable hereunder without the
written consent of each Lender directly affected

 

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thereby, (c) reduce the principal amount of any Loan, the rate of interest
thereon or any fees payable hereunder, without the consent of each Lender
directly affected thereby (except for periodic adjustments of interest rates and
fees resulting from a change in the Applicable Margin as provided for in this
Agreement); or (d) release any Guarantor from its obligations under the Guaranty
and Collateral Agreement, other than as part of or in connection with any
disposition permitted hereunder, or all or any substantial part of the
Collateral granted under the Collateral Documents (except as permitted by
Section 14.11), change the definition of Required Lenders, any provision of this
Section 15.1, any provision of Section 13.3 or reduce the aggregate Pro Rata
Share required to effect an amendment, modification, waiver or consent, without,
in each case set forth in this clause (d), the written consent of all Lenders. 
No provision of Section 14 or other provision of this Agreement affecting
Administrative Agent in its capacity as such shall be amended, modified or
waived without the consent of Administrative Agent.  No provision of this
Agreement relating to the rights or duties of the Issuing Lenders in their
capacities as such shall be amended, modified or waived without the consent of
the Issuing Lenders.

 

Notwithstanding the foregoing, this agreement may be amended (or amended and
restated) with the written consent of the Required Lenders, Administrative Agent
and Borrower (a) to add one or more additional credit facilities to this
Agreement and to permit the extensions of credit from time to time outstanding
thereunder and the accrued interest and fees in respect thereof to share ratably
in the benefits of this Agreement and the other Loan Documents with the
Revolving Loans, the Revolving Commitments and the accrued interest and fees in
respect thereof and (b) to include appropriately the Lenders holding such credit
facilities in any determination of the Required Lenders.

 

If, in connection with any proposed amendment, modification, waiver or
termination requiring the consent of all Lenders, the consent of the Required
Lenders is obtained, but the consent of other Lenders whose consent is required
is not obtained (any such Lender whose consent is not obtained being referred to
as a “Non-Consenting Lender”), then, so long as Administrative Agent is not a
Non-Consenting Lender, Administrative Agent and/or a Person or Persons
reasonably acceptable to Administrative Agent shall have the right to purchase
from such Non-Consenting Lenders, and such Non-Consenting Lenders agree that
they shall, upon Administrative Agent’s request, sell and assign to
Administrative Agent and/or such Person or Persons, all of the Loans and
Revolving Commitments of such Non-Consenting Lenders for an amount equal to the
principal balance of all such Loans and Revolving Commitments held by such
Non-Consenting Lenders and all accrued interest, fees, expenses and other
amounts then due with respect thereto through the date of sale, such purchase
and sale to be consummated pursuant to an executed Assignment Agreement.

 

15.2                        Confirmations.  Borrower and each holder of a Note
agree from time to time, upon written request received by it from the other, to
confirm to the other in writing (with a copy of each such confirmation to
Administrative Agent) the aggregate unpaid principal amount of the Loans then
outstanding under such Note.

 

15.3                        Notices.  Except as otherwise provided in Sections
2.2.2 and 2.2.3, all notices hereunder shall be in writing (including facsimile
transmission) and shall be sent to the applicable party at its address shown on
Annex B or at such other address as such party may, by written notice received
by the other parties, have designated as its address for such purpose.  Notices
sent by facsimile transmission shall be deemed to have been given when sent;
notices sent by mail shall be deemed to have been given three (3) Business Days
after the date when sent by registered or certified mail, postage prepaid; and
notices sent by hand delivery or overnight courier service shall be deemed to
have been given when received.  For purposes of Sections 2.2.2 and 2.2.3,
Administrative Agent shall be entitled to rely on telephonic instructions from
any person that Administrative Agent in good faith believes is an authorized
officer or employee of Borrower, and Borrower shall hold Administrative Agent
and each other Lender harmless from any loss, cost or expense resulting from any
such reliance.

 

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15.4                        Computations.  Where the character or amount of any
asset or liability or item of income or expense is required to be determined, or
any consolidation or other accounting computation is required to be made, for
the purpose of this Agreement, such determination or calculation shall, to the
extent applicable and except as otherwise specified in this Agreement, be made
in accordance with GAAP, consistently applied; provided that if Borrower
notifies Administrative Agent that Borrower wishes to amend any covenant in
Sections 10 or 11.14 (or any related definition) to eliminate or to take into
account the effect of any change in GAAP on the operation of such covenant (or
if Administrative Agent notifies Borrower that the Required Lenders wish to
amend Sections 10 or 11.14 (or any related definition) for such purpose), then
Borrower’s compliance with such covenant shall be determined on the basis of
GAAP in effect immediately before the relevant change in GAAP became effective,
until either such notice is withdrawn or such covenant (or related definition)
is amended in a manner satisfactory to Borrower and the Required Lenders. 
Notwithstanding the foregoing, upon a change in GAAP concerning the treatment of
leases (ASC Topic 840, “Leases”) Borrower shall continue to calculate relevant
covenants on the basis of GAAP in effect immediately prior to such change and
shall provide a reconciliation of the calculations to GAAP.

 

15.5                        Costs, Expenses and Taxes.  Each Loan Party, jointly
and severally agrees to pay on demand all reasonable out-of-pocket costs and
expenses of Administrative Agent (including Attorney Costs and any Taxes) in
connection with the preparation, execution, syndication, delivery and
administration (including perfection and protection of any Collateral and the
costs of Intralinks (or other similar service), if applicable) of this
Agreement, the other Loan Documents and all other documents provided for herein
or delivered or to be delivered hereunder or in connection herewith (including
any amendment, supplement or waiver to any Loan Document), whether or not the
transactions contemplated hereby or thereby shall be consummated, and all
reasonable out-of-pocket costs and expenses (including Attorney Costs and any
Taxes) incurred by Administrative Agent and each Lender after an Event of
Default in connection with the collection of the Obligations or the enforcement
of this Agreement the other Loan Documents or any such other documents or during
any workout, restructuring or negotiations in respect thereof.  In addition,
each Loan Party agrees to pay, and to save Administrative Agent and the Lenders
harmless from all liability for, any fees of Borrower’s auditors in connection
with any reasonable exercise by Administrative Agent and the Lenders of their
rights pursuant to Section 10.2.  All Obligations provided for in this Section
15.5 shall survive repayment of the Loans, cancellation of the Notes, expiration
or termination of the Letters of Credit and termination of this Agreement.

 

15.6                        Assignments; Participations.

 

15.6.1                             Assignments.  (a) Any Lender may at any time
assign to one or more Persons (any such Person, an “Assignee”) all or any
portion of such Lender’s Loans and Commitments, with the prior written consent
of Administrative Agent, the Issuing Lenders (for an assignment of the Revolving
Loans and the Revolving Commitment) and, so long as no Event of Default exists,
Borrower (which consents shall not be unreasonably withheld or delayed and shall
not be required for an assignment by a Lender to a Lender or an Affiliate of a
Lender).  Except as Administrative Agent may otherwise agree, any such
assignment shall be in a minimum aggregate amount equal to $5,000,000 or, if
less, the remaining Commitment and Loans held by the assigning Lender.  Borrower
and Administrative Agent shall be entitled to continue to deal solely and
directly with such Lender in connection with the interests so assigned to an
Assignee until Administrative Agent shall have received and accepted an
effective assignment agreement in substantially the form of Exhibit C hereto (an
“Assignment Agreement”) executed, delivered and fully completed by the
applicable parties thereto and a processing fee of $3,500.  No assignment may be
made to any Person if at the time of such assignment Borrower would be obligated
to pay any greater amount under Sections 7.6 or 8 to the Assignee than Borrower
is then obligated to pay to the assigning Lender under such Sections (and if any
assignment is made in violation of the foregoing, Borrower will not be required
to pay such greater amounts).  Any attempted assignment

 

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not made in accordance with this Section 15.6.1 shall be treated as the sale of
a participation under Section 15.6.2.  Borrower shall be deemed to have granted
its consent to any assignment requiring its consent hereunder unless Borrower
has expressly objected to such assignment within three (3) Business Days after
notice thereof.

 

(b)           From and after the date on which the conditions described above
have been met, (i) such Assignee shall be deemed automatically to have become a
party hereto and, to the extent that rights and obligations hereunder have been
assigned to such Assignee pursuant to such Assignment Agreement, shall have the
rights and obligations of a Lender hereunder and (ii) the assigning Lender, to
the extent that rights and obligations hereunder have been assigned by it
pursuant to such Assignment Agreement, shall be released from its rights (other
than its indemnification rights) and obligations hereunder.  Upon the request of
the Assignee (and, as applicable, the assigning Lender) pursuant to an effective
Assignment Agreement, Borrower shall execute and deliver to Administrative Agent
for delivery to the Assignee (and, as applicable, the assigning Lender) a Note
in the principal amount of the Assignee’s Pro Rata Share of the Revolving
Commitment (and, as applicable, a Note in the principal amount of the Pro Rata
Share of the Revolving Commitment retained by the assigning Lender).  Each such
Note shall be dated the effective date of such assignment.  Upon receipt by
Administrative Agent of such Note(s), the assigning Lender shall return to
Borrower any prior Note held by it.

 

(c)           Any Lender may at any time pledge or assign a security interest in
all or any portion of its rights under this Agreement to secure obligations of
such Lender, including any pledge or assignment to secure obligations to a
Federal Reserve Bank, and this Section shall not apply to any such pledge or
assignment of a security interest; provided that no such pledge or assignment of
a security interest shall release a Lender from any of its obligations hereunder
or substitute any such pledgee or assignee for such Lender as a party hereto.

 

15.6.2            Participations.  Any Lender may at any time sell to one or
more Persons participating interests in its Loans, Commitments or other
interests hereunder (any such Person, a “Participant”).  In the event of a sale
by a Lender of a participating interest to a Participant, (a) such Lender’s
obligations hereunder shall remain unchanged for all purposes, (b) Borrower and
Administrative Agent shall continue to deal solely and directly with such Lender
in connection with such Lender’s rights and obligations hereunder and (c) all
amounts payable by Borrower shall be determined as if such Lender had not sold
such participation and shall be paid directly to such Lender.  No Participant
shall have any direct or indirect voting rights hereunder except with respect to
any event described in Section 15.1 expressly requiring the unanimous vote of
all Lenders or, as applicable, all affected Lenders.  Each Lender agrees to
incorporate the requirements of the preceding sentence into each participation
agreement which such Lender enters into with any Participant.  Borrower agrees
that if amounts outstanding under this Agreement are due and payable (as a
result of acceleration or otherwise), each Participant shall be deemed to have
the right of set-off in respect of its participating interest in amounts owing
under this Agreement and with respect to any Letter of Credit to the same extent
as if the amount of its participating interest were owing directly to it as a
Lender under this Agreement; provided that such right of set-off shall be
subject to the obligation of each Participant to share with the Lenders pursuant
to the terms of the Intercreditor Agreement, and the Lenders agree to share with
each Participant, as provided in Section 7.5.  Borrower also agrees that each
Participant shall be entitled to the benefits of Section 7.6 or 8 as if it were
a Lender (provided that on the date of the participation no Participant shall be
entitled to any greater compensation pursuant to Section 7.6 or 8 than would
have been paid to the participating Lender on such date if no participation had
been sold and that each Participant complies with Section 7.6(d) as if it were
an Assignee).

 

15.7                Register.  Administrative Agent shall maintain a copy of
each Assignment Agreement delivered and accepted by it and register (the
“Register”) for the recordation of names and

 

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addresses of the Lenders and the Commitment of each Lender from time to time and
whether such Lender is the original Lender or the Assignee.  No assignment shall
be effective unless and until the Assignment Agreement is accepted and
registered in the Register. All records of transfer of a Lender’s interest in
the Register shall be conclusive, absent manifest error, as to the ownership of
the interests in the Loans. Administrative Agent shall not incur any liability
of any kind with respect to any Lender with respect to the maintenance of the
Register.

 

15.8                GOVERNING LAW.  THIS AGREEMENT AND EACH NOTE SHALL BE A
CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF ILLINOIS
APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE,
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.

 

15.9                Confidentiality.  As required by federal law and
Administrative Agent’s policies and practices, Administrative Agent may need to
obtain, verify, and record certain customer identification information and
documentation in connection with opening or maintaining accounts, or
establishing or continuing to provide services.  Administrative Agent and each
Lender agree to use commercially reasonable efforts (equivalent to the efforts
Administrative Agent or such Lender applies to maintain the confidentiality of
its own confidential information) to maintain as confidential all information
provided to them by any Loan Party and designated as confidential, except that
Administrative Agent and each Lender may disclose such information (a) to
Persons employed or engaged by Administrative Agent or such Lender in
evaluating, approving, structuring or administering the Loans and the
Commitments; (b) to any assignee or participant or potential assignee or
participant that has agreed to comply with the covenant contained in this
Section 15.9 (and any such assignee or participant or potential assignee or
participant may disclose such information to Persons employed or engaged by them
as described in clause (a) above); (c) as required or requested by any federal
or state regulatory authority or examiner, or any insurance industry
association, or as reasonably believed by Administrative Agent or such Lender to
be compelled by any court decree, subpoena or legal or administrative order or
process; (d) as, on the advice of Administrative Agent’s or such Lender’s
counsel, is required by law; (e) in connection with the exercise of any right or
remedy under the Loan Documents or in connection with any litigation to which
Administrative Agent or such Lender is a party; (f) to any nationally recognized
rating agency that requires access to information about a Lender’s investment
portfolio in connection with ratings issued with respect to such Lender; (g) to
any Affiliate of Administrative Agent, the Issuing Lenders or any Lender who may
provide Bank Products to the Loan Parties; (h) to Lender’s independent auditors
and other professional advisors as to which such information has been identified
as confidential; or (i) that ceases to be confidential through no fault of
Administrative Agent or any Lender.  Notwithstanding the foregoing, Borrower
consents to the publication by Administrative Agent or any Lender of a tombstone
or similar advertising material relating to the financing transactions
contemplated by this Agreement, and Administrative Agent reserves the right to
provide to industry trade organizations information necessary and customary for
inclusion in league table measurements.  If any provision of any confidentiality
agreement, non-disclosure agreement or other similar agreement between Borrower
and Lender conflicts with or contradicts this Section 14.7 with respect to the
treatment of confidential information, this section shall supersede all such
prior or contemporaneous agreements and understandings between the parties.

 

15.10             Severability.  Whenever possible each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.  All obligations of the
Loan Parties and rights of Administrative Agent and the Lenders expressed herein
or in any other Loan Document shall be in addition to and not in limitation of
those provided by applicable law.

 

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15.11             Nature of Remedies.  All Obligations of the Loan Parties and
rights of Administrative Agent and the Lenders expressed herein or in any other
Loan Document shall be in addition to and not in limitation of those provided by
applicable law.  No failure to exercise and no delay in exercising, on the part
of Administrative Agent or any Lender, any right, remedy, power or privilege
hereunder, shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege.

 

15.12             Entire Agreement.  This Agreement, together with the other
Loan Documents, embodies the entire agreement and understanding among the
parties hereto and supersedes all prior or contemporaneous agreements and
understandings of such Persons, verbal or written, relating to the subject
matter hereof and thereof (except as relates to the fees described in
Section 5.3) and any prior arrangements made with respect to the payment by the
Loan Parties of (or any indemnification for) any fees, costs or expenses payable
to or incurred (or to be incurred) by or on behalf of Administrative Agent or
the Lenders.

 

15.13             Counterparts.  This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts and
each such counterpart shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same Agreement.  Receipt
of an executed signature page to this Agreement by facsimile or other electronic
transmission shall constitute effective delivery thereof.  Electronic records of
executed Loan Documents maintained by the Lenders shall deemed to be originals.

 

15.14             Successors and Assigns.  This Agreement shall be binding upon
Borrower, the Lenders and Administrative Agent and their respective successors
and assigns, and shall inure to the benefit of Borrower, the Lenders and
Administrative Agent and the successors and assigns of the Lenders and
Administrative Agent.  No other Person shall be a direct or indirect legal
beneficiary of, or have any direct or indirect cause of action or claim in
connection with, this Agreement or any of the other Loan Documents.  No Loan
Party may assign or transfer any of its rights or Obligations under this
Agreement without the prior written consent of Administrative Agent and each
Lender.

 

15.15             Captions.  Section captions used in this Agreement are for
convenience only and shall not affect the construction of this Agreement.

 

15.16             Customer Identification - USA Patriot Act Notice.  Each Lender
and PrivateBank (for itself and not on behalf of any other party) hereby
notifies the Loan Parties that, pursuant to the requirements of the USA Patriot
Act, Title III of Pub. L. 107-56, signed into law October 26, 2001 (the “Patriot
Act”), it is required to obtain, verify and record information that identifies
the Loan Parties, which information includes the name and address of the Loan
Parties and other information that will allow such Lender or PrivateBank, as
applicable, to identify the Loan Parties in accordance with the Act.

 

15.17             INDEMNIFICATION BY LOAN PARTIES.  IN CONSIDERATION OF THE
EXECUTION AND DELIVERY OF THIS AGREEMENT BY ADMINISTRATIVE AGENT AND THE LENDERS
AND THE AGREEMENT TO EXTEND THE COMMITMENTS PROVIDED HEREUNDER, EACH LOAN PARTY
HEREBY AGREES TO INDEMNIFY, EXONERATE AND HOLD ADMINISTRATIVE AGENT, EACH LENDER
AND EACH OF THE OFFICERS, DIRECTORS, EMPLOYEES, AFFILIATES AND
AGENTS, INCLUDING, WITHOUT LIMITATION, THE COLLATERAL AGENT,OF ADMINISTRATIVE
AGENT AND EACH LENDER (EACH A “LENDER PARTY”) FREE AND HARMLESS FROM AND AGAINST
ANY AND ALL ACTIONS, CAUSES OF ACTION, SUITS, LOSSES, LIABILITIES, DAMAGES AND
EXPENSES, INCLUDING ATTORNEY COSTS (COLLECTIVELY, THE “INDEMNIFIED

 

63

--------------------------------------------------------------------------------

 

LIABILITIES”), INCURRED BY THE LENDER PARTIES OR ANY OF THEM AS A RESULT OF, OR
ARISING OUT OF, OR RELATING TO (A) ANY TENDER OFFER, MERGER, PURCHASE OF CAPITAL
SECURITIES, PURCHASE OF ASSETS (INCLUDING THE RELATED TRANSACTIONS) OR OTHER
SIMILAR TRANSACTION FINANCED OR PROPOSED TO BE FINANCED IN WHOLE OR IN PART,
DIRECTLY OR INDIRECTLY, WITH THE PROCEEDS OF ANY OF THE LOANS, (B) THE USE,
HANDLING, RELEASE, EMISSION, DISCHARGE, TRANSPORTATION, STORAGE, TREATMENT OR
DISPOSAL OF ANY HAZARDOUS SUBSTANCE AT ANY PROPERTY OWNED OR LEASED BY ANY LOAN
PARTY, (C) ANY VIOLATION OF ANY ENVIRONMENTAL LAWS WITH RESPECT TO CONDITIONS AT
ANY PROPERTY OWNED OR LEASED BY ANY LOAN PARTY OR THE OPERATIONS CONDUCTED
THEREON, (D) THE INVESTIGATION, CLEANUP OR REMEDIATION OF OFFSITE LOCATIONS AT
WHICH ANY LOAN PARTY OR THEIR RESPECTIVE PREDECESSORS ARE ALLEGED TO HAVE
DIRECTLY OR INDIRECTLY DISPOSED OF HAZARDOUS SUBSTANCES OR (E) THE EXECUTION,
DELIVERY, PERFORMANCE OR ENFORCEMENT OF THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT BY ANY OF THE LENDER PARTIES, EXCEPT FOR ANY SUCH INDEMNIFIED
LIABILITIES ARISING ON ACCOUNT OF THE APPLICABLE LENDER PARTY’S GROSS NEGLIGENCE
OR WILLFUL MISCONDUCT AS DETERMINED BY A FINAL, NONAPPEALABLE JUDGMENT BY A
COURT OF COMPETENT JURISDICTION.  IF AND TO THE EXTENT THAT THE FOREGOING
UNDERTAKING MAY BE UNENFORCEABLE FOR ANY REASON, EACH LOAN PARTY HEREBY AGREES
TO MAKE THE MAXIMUM CONTRIBUTION TO THE PAYMENT AND SATISFACTION OF EACH OF THE
INDEMNIFIED LIABILITIES WHICH IS PERMISSIBLE UNDER APPLICABLE LAW.  ALL
OBLIGATIONS PROVIDED FOR IN THIS SECTION 15.17 SHALL SURVIVE REPAYMENT OF THE
LOANS, CANCELLATION OF THE NOTES, EXPIRATION OR TERMINATION OF THE LETTERS OF
CREDIT, ANY FORECLOSURE UNDER, OR ANY MODIFICATION, RELEASE OR DISCHARGE OF, ANY
OR ALL OF THE COLLATERAL DOCUMENTS AND TERMINATION OF THIS AGREEMENT.

 

15.18      Nonliability of Lenders.  The relationship between Borrower on the
one hand and the Lenders and Administrative Agent on the other hand shall be
solely that of borrower and lender.  Neither Administrative Agent nor any Lender
has any fiduciary relationship with or duty to any Loan Party arising out of or
in connection with this Agreement or any of the other Loan Documents, and the
relationship between the Loan Parties, on the one hand, and Administrative Agent
and the Lenders, on the other hand, in connection herewith or therewith is
solely that of debtor and creditor.  Neither Administrative Agent nor any Lender
undertakes any responsibility to any Loan Party to review or inform any Loan
Party of any matter in connection with any phase of any Loan Party’s business or
operations.  Borrower agrees, on behalf of itself and each other Loan Party,
that neither Administrative Agent nor any Lender shall have liability to any
Loan Party (whether sounding in tort, contract or otherwise) for losses suffered
by any Loan Party in connection with, arising out of, or in any way related to
the transactions contemplated and the relationship established by the Loan
Documents, or any act, omission or event occurring in connection therewith,
unless it is determined in a final non-appealable judgment by a court of
competent jurisdiction that such losses resulted from the gross negligence or
willful misconduct of the party from which recovery is sought.  NO LENDER PARTY
SHALL BE LIABLE FOR ANY DAMAGES ARISING FROM THE USE BY OTHERS OF ANY
INFORMATION OR OTHER MATERIALS OBTAINED THROUGH INTRALINKS OR OTHER SIMILAR
INFORMATION TRANSMISSION SYSTEMS IN CONNECTION WITH THIS AGREEMENT.  Each Loan
Party acknowledges that it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan Documents to which
it is a party.  No joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions contemplated hereby
among the Lenders or among the Loan Parties and the Lenders

 

64

--------------------------------------------------------------------------------

 

15.19     FORUM SELECTION AND CONSENT TO JURISDICTION.  ANY LITIGATION BASED
HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT, SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS
OF THE STATE OF ILLINOIS OR IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN
DISTRICT OF ILLINOIS; PROVIDED THAT NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR
OPERATE TO PRECLUDE ADMINISTRATIVE AGENT FROM BRINGING SUIT OR TAKING OTHER
LEGAL ACTION IN ANY OTHER JURISDICTION.  EACH LOAN PARTY HEREBY EXPRESSLY AND
IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF ILLINOIS
AND OF THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS
FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE.  EACH LOAN PARTY
FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL,
POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF
ILLINOIS.  EACH LOAN PARTY HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT
REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.

 

15.20     WAIVER OF JURY TRIAL.  EACH LOAN PARTY, ADMINISTRATIVE AGENT AND EACH
LENDER HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO
ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT, ANY NOTE, ANY OTHER LOAN
DOCUMENT AND ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH
MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR THEREWITH OR ARISING
FROM ANY LENDING RELATIONSHIP EXISTING IN CONNECTION WITH ANY OF THE FOREGOING,
AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND
NOT BEFORE A JURY.

 

15.21     WAIVER AND RELEASE OF DAMAGES.  BORROWER, ON BEHALF OF ITSELF AND EACH
OTHER LOAN PARTY, ALL LENDERS, AND ADMINISTRATIVE AGENT SHALL HAVE NO LIABILITY
WITH RESPECT TO, AND HEREBY WAIVE, RELEASE AND AGREE NOT TO SUE FOR ANY SPECIAL,
PUNITIVE, EXEMPLARY, INDIRECT OR CONSEQUENTIAL DAMAGES RELATING TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ARISING OUT OF ITS ACTIVITIES IN
CONNECTION HEREWITH OR THEREWITH (WHETHER BEFORE OR AFTER THE CLOSING DATE).

 

[signature pages follow]

 

65

--------------------------------------------------------------------------------

 

The parties hereto have caused this Agreement to be duly executed and delivered
by their duly authorized officers as of the date first set forth above.

 

 

PRIMORIS SERVICES CORPORATION

 

 

 

By:

/s/ Peter J. Moerbeek

 

 

Peter J. Moerbeek

 

Title:

CFO

 

 

Signature Page to Credit
Agreement

 

--------------------------------------------------------------------------------

 

 

THE PRIVATEBANK AND TRUST COMPANY,

 

as Administrative Agent

 

 

 

 

 

By:

/s/ Steve Trepiccione

 

 

Steve Trepiccione

 

 

Managing Director

 

Signature Page to Credit
Agreement

 

--------------------------------------------------------------------------------

 

 

THE PRIVATEBANK AND TRUST COMPANY,

 

as Collateral Agent

 

 

 

 

 

By:

/s/ Steve Trepiccione

 

 

Steve Trepiccione

 

 

Managing Director

 

Signature Page to Credit
Agreement

 

--------------------------------------------------------------------------------

 

 

THE PRIVATEBANK AND TRUST COMPANY,

 

as a Lender

 

 

 

 

 

By:

/s/ Steve Trepiccione

 

 

Steve Trepiccione

 

 

Managing Director

 

Signature Page to Credit
Agreement

 

--------------------------------------------------------------------------------

 

 

THE BANK OF THE WEST,

 

as Co- Lead Arranger and as a Lender

 

 

 

 

 

By:

/s/ David Alterman

 

 

David Alterman

 

Its:

Senior Vice President, Regional Manager

 

Signature Page to Credit
Agreement

 

--------------------------------------------------------------------------------

 

 

IBERIABANK,

 

as a Lender

 

 

 

 

 

By:

/s/ Edgar Santa Cruz

 

 

Edgar Santa Cruz

 

Its:

Senior Vice President

 

Signature Page to Credit
Agreement

 

--------------------------------------------------------------------------------

 

ANNEX A

 

LENDERS AND PRO RATA SHARES

 

Lender

 

Revolving Commitment
Amount

 

Pro Rata Share*/

 

The PrivateBank and Trust Company

 

$

35,000,000

 

0.466666666

%

The Bank of the West

 

$

25,000,000

 

0.333333333

%

IBERIABANK

 

$

15,000,000

 

0.200000000

%

TOTALS

 

$

75,000,000

 

100

%

 

--------------------------------------------------------------------------------

*/                                     Carry out to nine decimal places.

 

Annex A to Credit Agreement

 

--------------------------------------------------------------------------------

 

ANNEX B

 

ADDRESSES FOR NOTICES

 

PRIMORIS SERVICES CORPORATION, as Borrower

 

John M. Perisich

Sr. Vice President/General Counsel

26000 Commercentre Dr.

Lake Forest, CA  92630

Telephone:  (949) 454-7110

Facsimile:  (949) 595-5544 Facsimile

 

THE PRIVATEBANK AND TRUST COMPANY, as Administrative Agent, Issuing Lender and a
Lender

 

Notices of Borrowing , Conversion, Continuation and Letter of Credit Issuance

 

120 South LaSalle Street
Chicago, Illinois 60603
Attention: John M. O’Connell
Telephone: (312) 564-1239
Facsimile:  (312) 564-6888

 

All Other Notices

 

120 South LaSalle Street
Chicago, Illinois 60603
Attention: John M. O’Connell
Telephone: (312) 564-1239
Facsimile:  (312) 564-6888

 

With a Copy to:

 

James E. Carroll

Perkins Coie LLP

131 South Dearborn Street, Suite 1700

Chicago, Illinois 60603

Telephone:  (312) 324-8445

Facsimile:  (312) 324-9445

 

IBERIABANK

 

Edgar Santa Cruz

Senior Vice President

601 Poydras Street, Suite 2075

New Orleans, LA 70130

Telephone: (504) 310-7332

Facsimile: (504) 310-7322

 

Annex B to Credit Agreement

 

--------------------------------------------------------------------------------

 

With a copy to:

 

William H. Langenstein III

Chaffe McCall, LLP

1100 Poydras Street, Suite 2300

New Orleans, LA 70163

Telephone: (504) 585-7037

Facsimile: (504) 585-7075

 

BANK OF THE WEST

 

 

Primary Credit Contact

 

Secondary Credit Contact

Name:

David Alterman

 

Scott Nicholson

Company:

Bank of the West

 

Bank of the West

Title:

Senior Vice President

 

Vice President

Address:

15165 Ventura Blvd., Ste. 445

 

15165 Ventura Blvd.

 

Sherman Oaks, CA  91403

 

Sherman Oaks, CA  91403

Telephone:

818-728-3629

 

818-986-4194

Facsimile:

818-728-3611

 

818-728-3611

Email

David.Alterman@bankofthewest.com

 

M.Scott.Nicholson@bankofthewest.com

 

--------------------------------------------------------------------------------

 

EXHIBIT A

 

FORM OF NOTE

 

 

,              

$

Chicago, Illinois

 

The undersigned, for value received, promises to pay to the order of
                             (the “Lender”) at the principal office of The
PrivateBank and Trust Company (the “Administrative Agent”) in Chicago, Illinois
the aggregate unpaid amount of all Loans made to the undersigned by the Lender
pursuant to the Credit Agreement referred to below (as shown on the schedule
attached hereto (and any continuation thereof) or in the records of the Lender),
such principal amount to be payable on the dates set forth in the Credit
Agreement.

 

The undersigned further promises to pay interest on the unpaid principal amount
of each Loan from the date of such Loan until such Loan is paid in full, payable
at the rate(s) and at the time(s) set forth in the Credit Agreement.  Payments
of both principal and interest are to be made in lawful money of the United
States of America.

 

This Note evidences indebtedness incurred under, and is subject to the terms and
provisions of, the Credit Agreement, dated as of [Date of Agreement] (as
amended, restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”; terms not otherwise defined herein are used herein as
defined in the Credit Agreement), among the undersigned, certain financial
institutions (including the Lender) and Administrative Agent, to which Credit
Agreement reference is hereby made for a statement of the terms and provisions
under which this Note may or must be paid prior to its due date or its due date
accelerated.

 

This Note is made under and governed by the laws of the State of Illinois
applicable to contracts made and to be performed entirely within such State.

 

 

PRIMORIS SERVICES CORPORATION

 

 

 

 

 

By:

 

 

Title:

 

 

Exhibit A to Credit Agreement

 

--------------------------------------------------------------------------------

 

EXHIBIT B

 

FORM OF COMPLIANCE CERTIFICATE

 

To:                                                     The PrivateBank and
Trust Company, as Administrative Agent

 

Please refer to the Credit Agreement dated as of [Date of Agreement]  (as
amended, restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”) among Primoris Services Corporation (the “Borrower”),
various financial institutions and The PrivateBank and Trust Company, as
Administrative Agent.  Terms used but not otherwise defined herein are used
herein as defined in the Credit Agreement.

 

I.                                        Reports.  Enclosed herewith is a copy
of the [annual audited/quarterly/monthly] report of Borrower as at
                          ,          (the “Computation Date”), which report
fairly presents in all material respects the financial condition and results of
operations [(subject to the absence of footnotes and to normal year-end
adjustments)] of Borrower as of the Computation Date and has been prepared in
accordance with GAAP consistently applied.

 

II.                                  Financial Tests.  Borrower hereby certifies
and warrants to you that the following is a true and correct computation as at
the Computation Date of the following ratios and/or financial restrictions
contained in the Credit Agreement:

 

A.                                    Section 11.14.1 - Tangible Net Worth

 

1.

Tangible Net Worth

$

 

 

 

 

Minimum required

At Computation Period ending December 31, 2012, $100,000,000 plus the greater of
zero or 25% of Q4, 2012 Net
Income($                                                              )

 

 

 

 

 

At Computation Period ending December 31, 2013, December 31, 2012 requirement
plus the greater of zero or 25% of 2013 Net Income
($                                  )

 

 

 

 

 

At Computation Period ending December 31, 2014 and each December 31 thereafter,
the preceding year’s requirement plus the greater of zero or 25% of that year’s
Net Income  ($                                      )

 

B.                                    Calculation of Consolidated EBIT

 

1.

Consolidated operating earnings before interest and taxes

$

 

 

 

2.

Income/loss from non-consolidated entities

$

 

 

 

3.

Sum of (1) and (2) or remainder of (2) minus (1)

$

 

 

 

4.

Less income or loss from non-controlling interests

$

 

 

 

5.

Remainder of (3) minus (4)

$

 

Exhibit B to Credit Agreement

 

--------------------------------------------------------------------------------

 

C.                                    Calculation of EBITDA

 

1.

Consolidated EBIT

$

 

 

 

2.

Depreciation

$

 

 

 

3.

Amortization

$

 

 

 

4.

Other Noncash Charges

$

 

 

 

5.

Sum of (1) through (4)

$

 

D.                                    Section 11.14.2 - Minimum Fixed Charge
Coverage Ratio

 

2.

EBITDA

$

 

 

 

3.

Unfinanced Capital Expenditures

$

 

 

 

4.

Tax Expense

$

 

 

 

5.

Dividends

$

 

 

 

6.

Distributions

$

 

 

 

7.

Share Buybacks

$

 

 

 

8.

Sum of (2) through (6)

$

 

 

 

9.

Remainder of (1) minus (7)

$

 

 

 

10.

Interest Expense

$

 

 

 

11.

Required payments of principal of Funded Debt

$

 

 

 

12.

Sum of (9) and (10)

$

 

 

 

13.

Ratio of (8) to (11)

 

 

 

 

14.

Minimum Required

      1.25 to 1

 

E.                                    Section 11.14.3 - Maximum Senior Debt to
EBITDA Ratio

 

15.

Senior Debt

$

 

 

 

16.

EBITDA

$

 

(from Item B(1) above)

 

 

 

 

17.

Ratio of (1) to (2)

              to 1

 

 

 

18.

Maximum allowed

      2.25 to 1

 

--------------------------------------------------------------------------------

 

F.                                     Section 11.14.4 - Unencumbered Assets*

 

Describe Assets

 

Value

 

 

 

 

 

 

 

$

 

 

 

 

$

 

 

 

 

$

 

 

 

 

$

 

 

Total Value

 

 

 

Minimum Required Value

 

$

45,000,000

 

 

--------------------------------------------------------------------------------

*Include source of valuations for individual assets, or groups of related
assets, in excess of $                        million.

 

G.                                   List any additional Subsidiaries,
Affiliates or Investments since delivery of the last Compliance Certificate.

 

 

 

Borrower further certifies to you that no Default or Event of Default has
occurred and is continuing.

 

Borrower has caused this Certificate to be executed and delivered by its duly
authorized officer on                   ,         .

 

 

PRIMORIS SERVICES CORPORATION

 

 

 

 

 

By:

 

 

Title:

 

 

--------------------------------------------------------------------------------

 

EXHIBIT C

 

ASSIGNMENT AND ASSUMPTION

 

This Assignment and Assumption (this “Assignment and Assumption”) is dated as of
the Effective Date set forth below and is entered into by and between
[the][each]  Assignor identified in item 1 below ([the][each, an] “Assignor”)
and [the][each]  Assignee identified in item 2 below ([the][each, an]
“Assignee”).  [It is understood and agreed that the rights and obligations of
[the Assignors][the Assignees] hereunder are several and not joint.]  
Capitalized terms used but not defined herein shall have the meanings given to
them in the Credit Agreement identified below (the “Credit Agreement”), receipt
of a copy of which is hereby acknowledged by the Assignee.  The Standard Terms
and Conditions set forth in Annex 1 attached hereto are hereby agreed to and
incorporated herein by reference and made a part of this Assignment and
Assumption as if set forth herein in full.

 

For an agreed consideration, [the][each] Assignor hereby irrevocably sells and
assigns to [the Assignee][the respective Assignees], and [the][each] Assignee
hereby irrevocably purchases and assumes from [the Assignor][the respective
Assignors], subject to and in accordance with the Standard Terms and Conditions
and the Credit Agreement, as of the Effective Date inserted by Administrative
Agent as contemplated below (i) all of [the Assignor’s][the respective
Assignors’] rights and obligations in [its capacity as a Lender][their
respective capacities as Lenders] under the Credit Agreement and any other
documents or instruments delivered pursuant thereto to the extent related to the
amount and percentage interest identified below of all of such outstanding
rights and obligations of [the Assignor][the respective Assignors] under the
respective facilities identified below (including, without limitation, the
Letters of Credit included in such facilities) and (ii) to the extent permitted
to be assigned under applicable law, all claims, suits, causes of action and any
other right of [the Assignor (in its capacity as a Lender)][the respective
Assignors (in their respective capacities as Lenders)] against any Person,
whether known or unknown, arising under or in connection with the Credit
Agreement, any other documents or instruments delivered pursuant thereto or the
loan transactions governed thereby or in any way based on or related to any of
the foregoing, including, but not limited to, contract claims, tort claims,
malpractice claims, statutory claims and all other claims at law or in equity
related to the rights and obligations sold and assigned pursuant to clause
(i) above (the rights and obligations sold and assigned by [the][any] Assignor
to [the][any] Assignee pursuant to clauses (i) and (ii) above being referred to
herein collectively as [the][an] “Assigned Interest”).  Each such sale and
assignment is without recourse to [the][any] Assignor and, except as expressly
provided in this Assignment and Assumption, without representation or warranty
by [the][any] Assignor.

 

1.

Assignor[s]:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2.

Assignee[s]:

 

 

 

 

 

 

 

 

 

 

 

[for each Assignee, indicate [Affiliate][Approved Fund] of [identify Lender]]

 

 

 

3.

Borrower(s):

 

 

 

 

 

4.

Administrative Agent: The PrivateBank and Trust Company, as the administrative
agent under the Credit Agreement

 

Exhibit C to Credit Agreement

 

--------------------------------------------------------------------------------

 

5.                                      Credit
Agreement:                                             [Credit Agreement, dated
as of [                ,             ], among Primoris Services Corporation, the
Lenders from time to time party thereto, and The PrivateBank and Trust Company,
as Administrative Agent

 

6.                                      Assigned Interest:

 

Assignor[s]

 

Assignee[s]

 

Facility
Assigned

 

Aggregate
Amount of
Commitment/
Loans for all
Lenders

 

Amount of
Commitment/
Loans
Assigned

 

Percentage
Assigned of
Commitment/
Loans

 

[CUSIP
Number]

 

 

 

 

 

 

 

$

 

 

$

 

 

 

%

 

 

 

 

 

 

 

 

$

 

 

$

 

 

 

%

 

 

 

 

 

 

 

 

$

 

 

$

 

 

 

%

 

 

 

[7.                            Trade
Date:                                       ]

 

Effective Date:                                      , 20     [TO BE INSERTED BY
ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF
TRANSFER IN THE REGISTER THEREFOR.]

 

The terms set forth in this Assignment and Assumption are hereby agreed to:

 

 

ASSIGNOR

 

[NAME OF ASSIGNOR]

 

 

 

By:

 

 

 

Title:

 

 

 

 

 

ASSIGNEE

 

[NAME OF ASSIGNEE]

 

 

 

By:

 

 

 

Title:

 

 

[Consented to and] Accepted:

 

 

 

THE PRIVATEBANK AND TRUST COMPANY, as

 

 Administrative Agent

 

 

 

By:

 

 

 

Title:

 

 

--------------------------------------------------------------------------------

 

ANNEX 1 TO ASSIGNMENT AND ASSUMPTION

 

[                                      ](1)

 

STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION

 

1.                                      Representations and Warranties.

 

1.1.                            Assignor.  [The][Each] Assignor (a) represents
and warrants that (i) it is the legal and beneficial owner of [the][[the
relevant] Assigned Interest, (ii) [the][such] Assigned Interest is free and
clear of any lien, encumbrance or other adverse claim and (iii) it has full
power and authority, and has taken all action necessary, to execute and deliver
this Assignment and Assumption and to consummate the transactions contemplated
hereby; and (b) assumes no responsibility with respect to (i) any statements,
warranties or representations made in or in connection with the Credit Agreement
or any other Loan Document, (ii) the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Loan Documents or any
collateral thereunder, (iii) the financial condition of Borrower, any of its
Subsidiaries or Affiliates or any other Person obligated in respect of any Loan
Document or (iv) the performance or observance by Borrower, any of its
Subsidiaries or Affiliates or any other Person of any of their respective
obligations under any Loan Document.

 

1.2.                            Assignee.  [The][Each] Assignee (a) represents
and warrants that (i) it has full power and authority, and has taken all action
necessary, to execute and deliver this Assignment and Assumption and to
consummate the transactions contemplated hereby and to become a Lender under the
Credit Agreement, (ii) it meets all the requirements to be an assignee under the
Credit Agreement (subject to such consents, if any, as may be required under the
Credit Agreement), (iii) from and after the Effective Date, it shall be bound by
the provisions of the Credit Agreement as a Lender thereunder and, to the extent
of [the][the relevant] Assigned Interest, shall have the obligations of a Lender
thereunder, (iv) it is sophisticated with respect to decisions to acquire assets
of the type represented by [the][such] Assigned Interest and either it, or the
Person exercising discretion in making its decision to acquire [the][such]
Assigned Interest, is experienced in acquiring assets of such type, (v) it has
received a copy of the Credit Agreement, and has received or has been accorded
the opportunity to receive copies of the most recent financial statements
delivered pursuant to Section      thereof, as applicable, and such other
documents and information as it deems appropriate to make its own credit
analysis and decision to enter into this Assignment and Assumption and to
purchase [the][such] Assigned Interest, and (vi) it has, independently and
without reliance upon Administrative Agent or any other Lender and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Assignment and Assumption and to
purchase [the][such] Assigned Interest; and (b) agrees that (i) it will,
independently and without reliance upon Administrative Agent, [the][any]
Assignor or any other Lender, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Loan Documents, and (ii) it will perform
in accordance with their terms all of the obligations which by the terms of the
Loan Documents are required to be performed by it as a Lender.

 

2.                                      Payments.  From and after the Effective
Date, Administrative Agent shall make all payments in respect of [the][each]
Assigned Interest (including payments of principal, interest, fees and other
amounts) to [the][the relevant] Assignor for amounts which have accrued to but
excluding the Effective Date and to [the][the relevant] Assignee for amounts
which have accrued from and after the Effective Date.

 

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3.                                      General Provisions.  This Assignment and
Assumption shall be binding upon, and inure to the benefit of, the parties
hereto and their respective successors and assigns.  This Assignment and
Assumption may be executed in any number of counterparts, which together shall
constitute one instrument.  Delivery of an executed counterpart of a signature
page of this Assignment and Assumption by telecopy shall be effective as
delivery of a manually executed counterpart of this Assignment and Assumption. 
This Assignment and Assumption shall be governed by, and construed in accordance
with, the law of the State of Illinois.

 

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EXHIBIT D

 

FORM OF NOTICE OF BORROWING

 

To:

The PrivateBank and Trust Company, as Administrative Agent

 

120 S. LaSalle Street

 

Chicago, Illinois 60603

 

Attention:

 

Telecopier:

 

Please refer to the Credit Agreement dated as of [Date of Agreement] (as
amended, restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”) among Primoris Services Corporation (the “Borrower”),
various financial institutions and The PrivateBank and Trust Company, as
Administrative Agent.  Terms used but not otherwise defined herein are used
herein as defined in the Credit Agreement.

 

The undersigned hereby gives irrevocable notice, pursuant to Section 2.2.2 of
the Credit Agreement, of a request hereby for a borrowing as follows:

 

(i)            The requested borrowing date for the proposed borrowing (which is
a Business Day) is                             ,         .

 

(ii)           The aggregate amount of the proposed borrowing is
$                            .

 

(iii)          The type of Revolving Loans comprising the proposed borrowing are
[Base Rate] [LIBOR] Loans.

 

(iv)          The duration of the Interest Period for each LIBOR Loan made as
part of the proposed borrowing, if applicable, is                        months
(which shall be 1, 2 or 3 months).

 

The undersigned hereby certifies that on the date hereof and on the date of
borrowing set forth above, and immediately after giving effect to the borrowing
requested hereby: (i) there exists and there shall exist no Default or Event of
Default under the Credit Agreement; and (ii) each of the representations and
warranties contained in the Credit Agreement and the other Loan Documents is
true and correct as of the date hereof, except to the extent that such
representation or warranty expressly relates to another date and except for
changes therein expressly permitted or expressly contemplated by the Credit
Agreement.

 

Borrower has caused this Notice of Borrowing to be executed and delivered by its
officer thereunto duly authorized on                       ,             .

 

 

PRIMORIS SERVICES CORPORATION

 

 

 

 

 

By:

 

 

Title:

 

 

Exhibit D to Credit Agreement

 

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EXHIBIT E

 

FORM OF NOTICE OF CONVERSION/CONTINUATION

 

To:

The PrivateBank and Trust Company, as Administrative Agent

 

120 S. LaSalle Street

 

Chicago, Illinois 60603

 

Attention:

 

Telecopier:

 

Please refer to the Credit Agreement dated as of [Date of Agreement] (as
amended, restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”) among Primoris Services Corporation (the “Borrower”),
various financial institutions and The PrivateBank and Trust Company, as
Administrative Agent.  Terms used but not otherwise defined herein are used
herein as defined in the Credit Agreement.

 

The undersigned hereby gives irrevocable notice, pursuant to Section 2.2.3 of
the Credit Agreement, of its request to:

 

(a)           on [    date    ] convert $[                ]of the aggregate
outstanding principal amount of the [              ] Loan, bearing interest at
the [                ] Rate, into a(n) [                ] Loan [and, in the case
of a LIBOR Loan, having an Interest Period of [          ] month(s)];

 

[(b)        on [    date    ] continue $[                ]of the aggregate
outstanding principal amount of the [              ] Loan, bearing interest at
the LIBOR Rate, as a LIBOR Loan having an Interest Period of [          ]
month(s)].

 

The undersigned hereby represents and warrants that all of the conditions
contained in Section 12.2 of the Credit Agreement have been satisfied on and as
of the date hereof, and will continue to be satisfied on and as of the date of
the conversion/continuation requested hereby, before and after giving effect
thereto.

 

Borrower has caused this Notice of Conversion/Continuation to be executed and
delivered by its officer thereunto duly authorized on                       ,
            .

 

 

PRIMORIS SERVICES CORPORATION

 

 

 

 

 

By:

 

 

Title:

 

 

Exhibit E to Credit Agreement

 

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EXHIBIT F

 

FORM OF SUBORDINATION AGREEMENT

 

Date:                              , 20      

 

Subordination Agreement

 

Primoris Services Corporation, a Delaware corporation (“Primoris”) has received
loans, credit and other financial accommodations from The PrivateBank as
Administrative Agent for itself and other lenders and from Prudential Investment
Management, Inc. which is acting as agent for various noteholders (all such
loans and accommodations are “Superior Indebtedness”, as described below, and
such creditors’ agent or representative are herein called the “Senior
Creditors”).

 

The undersigned is a creditor (the “Subordinate Creditor”) of Primoris or one of
its subsidiaries (the “Borrower”).  In consideration of loans made or to be
made, credit given or to be given, or other financial accommodations afforded or
to be afforded to Primoris, on such terms as may be agreed upon between the
Senior Creditors (the indebtedness of Borrower to which is the “Superior
Indebtedness”) and Primoris, the Subordinate Creditor agrees that all monetary
obligations of the Borrower to the Subordinate Creditor except for (i) wages
earned and (ii) other payments (such as reimbursements and appropriate bonuses)
to be made in the ordinary course of the Borrower’s business (collectively, the
“Subordinated Indebtedness”) now existing or hereafter arising and howsoever
evidenced or acquired (the aggregate principal amount of such Subordinated
Indebtedness as of the date hereof being that amount outstanding pursuant to
that certain Promissory Note, in form attached hereto as EXHIBIT A, in the face
amount of                                      and 00/100 Dollars
($                        ) (the “Promissory Note”) of the Borrower payable to
the Subordinate Creditor) shall be and remain junior and subordinate to the
Senior Indebtedness whether now existing or hereafter arising, whether direct or
indirect, secured or unsecured, absolute or contingent, joint and several, and
howsoever owned, or acquired and whether the Borrower is or is not in
bankruptcy, receivership, liquidation or any similar insolvency proceeding.

 

Addresses for notice purposes are set forth on the signature page.

 

Without limiting the generality of the foregoing, the Subordinate Creditor
further agrees as follows:

 

1(a).        Except as provided in Section 1(c), so long as there is any default
(whether with respect to payment or otherwise), or default would result
therefrom, on any Superior Indebtedness no payment of principal or interest
(notwithstanding the expressed maturity or any time for the payment of principal
on the Promissory Note) shall be made on the Promissory Note except with the
Senior Creditors’ prior written consent and the Subordinate Creditor will take
no steps, whether by suit or otherwise to compel or enforce the collection of
the Promissory Note, nor will the Subordinate Creditor use the Promissory Note
by way of counterclaim, set off, recoupment or otherwise as to diminish,
discharge or otherwise satisfy in whole or in part any indebtedness or liability
of the Subordinate Creditor to the Borrower.

 

1(b).        The Subordinate Creditor shall not be entitled to accelerate
outstanding obligations payable by the Borrower under the Promissory Note until
180 days after the date that the default giving rise to such right to accelerate
was triggered and notice thereof was delivered to the Senior Creditors.

 

1(c).        The Borrower may, however, pay scheduled principal (including
scheduled prepayments of principal) and interest on the Promissory Note without
obtaining written consent of the Senior Creditors, so long as no event of
default on Superior Indebtedness has occurred, or will occur as a result of such
payment, and Subordinate Creditor need not give the Senior Creditors notice of
such payments.

 

Exhibit F to Credit Agreement

 

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2.             The Senior Creditors need not at any time give the Subordinate
Creditor notice of any kind of the creation or existence of any Superior
Indebtedness, nor of the amount or terms thereof, all such notice being hereby
expressly waived.  Also, the Senior Creditors may at any time from time to time,
without the consent of or notice to the Subordinate Creditor, without incurring
responsibility to the Subordinate Creditor, and without impairing or releasing
the obligation of the Subordinate Creditor under this agreement (i) renew,
refund, refinance or extend the maturity of any Superior Indebtedness, or any
part thereof, or otherwise revise, amend or alter the terms and conditions
thereof, (ii) sell, exchange, release or otherwise deal with any property by
whomsoever at any time pledged, mortgaged or otherwise hypothecated or subjected
to a lien to secure any Superior Indebtedness, and (iii) exercise or refrain
from exercising any rights against the Borrower and others, including any
guarantors or the Subordinate Creditor.

 

3.             The Subordinate Creditor without prior written consent of the
Senior Creditors will not sell, assign, transfer, pledge or hypothecate any
Subordinated Indebtedness, or any part thereof, or agree to discharge or
forgiveness of the same so long as there remains any Superior Indebtedness
except subject to and in accordance with the terms hereof and upon the agreement
of the transferee or assignee to abide by and be bound by the terms hereof.

 

4.             Upon receipt of notice of a default under the Superior
Indebtedness or, regardless of notice, upon the bankruptcy, reorganization,
receivership or liquidation of the Borrower, then until the Superior
Indebtedness has been paid in full the Subordinate Creditor shall not be
entitled to, and shall not accept any payment or distribution with respect to
the Subordinated Indebtedness and will turn over to the Agent for the benefit of
the Senior Creditors, in the form received, any such payment or other
distribution the Subordinate Creditor does receive.

 

5.             The Subordinate Creditor will cause all Subordinated Indebtedness
to be at all times evidenced by the Promissory Note or notes of the Borrower and
will cause all such notes to bear thereon a legend substantially as follows:

 

“The indebtedness evidenced by this Note is subordinate to any and all
indebtedness, obligations and liabilities of the maker hereof to certain of the
Borrower’s secured lenders and their successors and assigns in the manner and to
the extent set forth in that certain Subordination Agreement dated
                          , 20      , to which reference is hereby made for a
more full statement thereof.  The holder has agreed thereby without said
lenders’ written consent not to sell, assign, transfer, pledge or hypothecate
this Note.”

 

6.             This Subordination Agreement shall be continuing and binding
until terminated in writing by the Senior Creditors.

 

 

 

 

(“Subordinate Creditor”)

 

 

 

By:

 

 

Its:

 

 

 

 

Address:

 

 

 

 

 

 

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The PrivateBank and Trust Company

as Administrative Agent, Collateral Agent

and Lender

120 South LaSalle Street

2nd Floor

Chicago, Illinois  60603

 

Prudential Investment Management, Inc.

c/o Prudential Capital Group

2200 Ross Avenue, Suite 4200E

Dallas, Texas  75201

 

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Primoris Services Corporation hereby acknowledges receipt of a copy of the above
Subordination Agreement and agrees to be bound by the terms and provisions
thereof, to make no payment or distribution contrary to the terms thereof and to
do every other act and thing necessary or appropriate to be done or performed by
it in order to carry out the terms of the Subordination Agreement.

 

Dated:                                        ,

 

Primoris Services Corporation

 

By:

 

 

Its:

 

 

 

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