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EXECUTION COPY

 

 

STERLING CONSTRUCTION COMPANY, INC.

CREDIT AGREEMENT

DATED AS OF OCTOBER 31, 2007

COMERICA BANK
AS ADMINISTRATIVE AGENT, SYNDICATION AGENT, DOCUMENTATION AGENT AND LEAD
ARRANGER

 

 
 
 
 
 
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TABLE OF CONTENTS
Page
 
1.
DEFINITIONS.
1

 
1.1
Certain Defined Terms
1

 
2.
REVOLVING CREDIT.
23

 
2.1
Commitment
23

 
2.2
Accrual of Interest and Maturity; Evidence of Indebtedness.
23

 
2.3
Requests for and Refundings and Conversions of Advances
24

 
2.4
Disbursement of Advances.
26

 
2.5
Swing Line Advances
27

 
2.6
Interest Payments; Default Interest
33

 
2.7
Optional Prepayments.
34

 
2.8
Prime-based Advance in Absence of Election or Upon Default
35

 
2.9
Revolving Credit Facility Fee
35

2.10
Mandatory Repayment of Revolving Credit Advances.
35

2.11
Optional Reduction or Termination of Revolving Credit Aggregate Commitment
36

2.12
Use of Proceeds of Advances
37

 
3.
LETTERS OF CREDIT.
37

 
3.1
Letters of Credit
37

 
3.2
Conditions to Issuance
38

 
3.3
Notice
39

 
3.4
Letter of Credit Fees; Increased Costs
39

 
3.5
Other Fees
41

 
3.6
Drawings and Demands for Payment Under Letters of Credit.
41

 
3.7
Obligations Irrevocable
42

 
3.8
Risk Under Letters of Credit.
44

 
3.9
Indemnification
44

3.10
Right of Reimbursement
45

 
4.
INTENTIONALLY OMITTED.
46

 
5.
CONDITIONS.
46

 
5.1
Conditions of Initial Advances
46

 
5.2
Continuing Conditions
50

 
6.
REPRESENTATIONS AND WARRANTIES.
50

 
6.1
Corporate Authority
50

 
6.2
Due Authorization
50

 
6.3
Good Title; Leases; Assets; No Liens
50

 
6.4
Taxes
51

 
6.5
No Defaults
51

 
6.6
Enforceability of Agreement and Loan Documents
51

 
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6.7
Compliance with Laws
51

 
6.8
Non-contravention
52

 
6.9
Litigation
52

6.10
Consents, Approvals and Filings, Etc
52

6.11
Agreements Affecting Financial Condition
52

6.12
No Investment Company or Margin Stock
52

6.13
ERISA
53

6.14
Conditions Affecting Business or Properties
53

6.15
Environmental and Safety Matters
53

6.16
Subsidiaries
54

6.17
Intentionally Omitted
54

6.18
Intentionally Omitted
54

6.19
Franchises, Patents, Copyrights, Tradenames, etc
54

6.20
Capital Structure
54

6.21
Accuracy of Information
54

6.22
Solvency
55

6.23
Employee Matters
55

6.24
No Misrepresentation
55

6.25
Corporate Documents and Corporate Existence
55

6.26
Acquisition Documents.
56

 
7.
AFFIRMATIVE COVENANTS.
56

 
7.1
Financial Statements
57

 
7.2
Certificates; Other Information
57

 
7.3
Intentionally Omitted
59

 
7.4
Conduct of Business and Maintenance of Existence; Compliance with Laws.59

 
7.5
Maintenance of Property; Insurance
59

 
7.6
Inspection of Property; Books and Records, Discussions
59

 
7.7
Notices
60

 
7.8
Hazardous Material Laws
61

 
7.9
Financial Covenants.
62

7.10
Governmental and Other Approvals
62

7.11
Compliance with ERISA; ERISA Notices
62

7.12
Defense of Collateral
63

7.13
Future Subsidiaries; Additional Collateral.
63

7.14
Accounts
64

7.15
Use of Proceeds
64

7.16
Post-Closing Items
65

7.17
Further Assurances and Information
66

 
8.
NEGATIVE COVENANTS.
66

 
8.1
Limitation on Debt
66

 
8.2
Limitation on Liens
67

 
8.3
Acquisitions
68

 
8.4
Limitation on Mergers, Dissolution or Sale of Assets
68

 
8.5
Restricted Payments
69

 
8.6
Put and Call
70

 
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8.7
Limitation on Investments, Loans and Advances
70

 
8.8
Transactions with Affiliates
71

 
8.9
Sale-Leaseback Transactions; Sale of Accounts or Notes Receivables
71

8.10
Limitations on Other Restrictions
71

8.11
Prepayment of Debt
71

8.12
Amendment of Certain Documents
72

8.13
Modification of Certain Agreements
72

8.14
Management Fees
72

8.15
Fiscal Year
72

 
9.
DEFAULTS.
72

 
9.1
Events of Default
72

 
9.2
Exercise of Remedies
75

 
9.3
Rights Cumulative
75

 
9.4
Waiver by Borrowers of Certain Laws
76

 
9.5
Waiver of Defaults
76

 
9.6
Set Off
76

 
10.
PAYMENTS, RECOVERIES AND COLLECTIONS.
76

10.1
Payment Procedure
76

10.2
Application of Proceeds of Collateral
78

10.3
Pro-rata Recovery
78

 
11.
CHANGES IN LAW OR CIRCUMSTANCES; INCREASED COSTS.
78

11.1
Reimbursement of Prepayment Costs
79

11.2
Eurodollar Lending Office
79

11.3
Circumstances Affecting Eurodollar-based Rate Availability
79

11.4
Laws Affecting Eurodollar-based Advance Availability
80

11.5
Increased Cost of Eurodollar-based Advances
80

11.6
Capital Adequacy and Other Increased Costs
81

11.7
Right of Lenders to Fund through Branches and Affiliates
82

11.8
Margin Adjustment
82

 
12.
AGENT.
83

12.1
Appointment of Agent
83

12.2
Deposit Account with Agent
84

12.3
Scope of Agent’s Duties
84

12.4
Successor Agent
84

12.5
Credit Decisions
85

12.6
Authority of Agent to Enforce This Agreement
85

12.7
Indemnification of Agent
85

12.8
Knowledge of Default
86

12.9
Agent’s Authorization; Action by Lenders
86

12.10
Enforcement Actions by the Agent
87

12.11
Collateral Matters.
87

12.12
Agents in their Individual Capacities
88

12.13
Agent’s Fees
88

 
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12.14
Documentation Agent or other Titles
88

12.15
No Reliance on Agent’s Customer Identification Program
88

 
13.
MISCELLANEOUS.
89

13.1
Accounting Principles
89

13.2
Consent to Jurisdiction
89

13.3
Law of Texas
89

13.4
Interest
89

13.5
Closing Costs and Other Costs; Indemnification.
90

13.6
Notices
92

13.7
Further Action
93

13.8
Successors and Assigns; Participations; Assignments.
93

13.9
Counterparts; Execution
96

13.10
Amendment and Waiver
96

13.11
Confidentiality
97

13.12
Substitution of Lenders
98

13.13
Withholding Taxes
99

13.14
Taxes and Fees
99

13.15
WAIVER OF JURY TRIAL
99

13.16
Patriot Act Notice
100

13.17
Complete Agreement; Conflicts
100

13.18
Severability
100

13.19
Table of Contents and Headings; Section References
100

13.20
Construction of Certain Provisions
101

13.21
Independence of Covenants
101

13.22
Electronic Transmissions
101

13.23
Advertisements
102

13.24
Reliance on and Survival of Provisions
102

13.25
Joint and Several Liability
102

 
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EXHIBITS

A FORM OF REQUEST FOR REVOLVING CREDIT ADVANCE
B FORM OF REVOLVING CREDIT NOTE
C FORM OF SWING LINE NOTE
D FORM OF REQUEST FOR SWING LINE ADVANCE
E FORM OF NOTICE OF LETTERS OF CREDIT
F FORM OF SECURITY AGREEMENT
G FORM OF JOINDER AGREEMENT
H FORM OF ASSIGNMENT AGREEMENT
I INTENTIONALLY OMITTED
J FORM OF COVENANT COMPLIANCE REPORT
K INTENTIONALLY OMITTED
L INTENTIONALLY OMITTED
M FORM OF SWING LINE PARTICIPATION CERTIFICATE

SCHEDULES

Schedule 1.1                                Applicable Margin Grid
Schedule 1.2                                Percentages and Allocations
Schedule 1.3                                Corporate Information
Schedule 1.4                                Existing Comerica Loans
Schedule 1.5                                Existing Letters of Credit
Schedule 5.1(c)                                Jurisdictions of Organization
Schedule 5.2                                Jurisdictions where each Credit
Party is Authorized to do Business
Schedule 6.3(b)                                Owned Real Property
Schedule 6.4                                Exceptions to Tax Filings
Schedule 6.7                                Violations of Law
Schedule 6.9                                Litigation
Schedule 6.10                                           Third Party Consents
Schedule 6.13                                           Benefit Plans
Schedule 6.15                                           Environmental
Schedule 6.16                                           Subsidiaries
Schedule 6.19                                           Trade Names
Schedule 6.20                                           Equity Interests
Schedule 6.23                                           Collective Bargaining
Agreements and Grievances
Schedule 8.1                                Existing Debt
Schedule 8.1(i)                                Liberty Mutual Insurance Company
Bonds Remaining Outstanding PostClosing
Schedule 8.2                                Existing Liens
Schedule 8.7                                Existing Investments
Schedule 8.8                                Transactions with Affiliates
Schedule 13.6                                           Notices
 
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CREDIT AGREEMENT
 

 
This Credit Agreement (“Agreement”) is made as of the 31st day of October, 2007,
by and among the financial institutions from time to time signatory hereto
(individually a “Lender,” and any and all such financial institutions
collectively the “Lenders”), Comerica Bank, as Administrative Agent for the
Lenders (in such capacity, the “Agent”), Arranger, Syndication Agent and
Documentation Agent, Sterling Construction Company, Inc., a Delaware corporation
(“Sterling”), Texas Sterling Construction Co., a Delaware corporation (“TSC”)
and Oakhurst Management Corporation, a Texas corporation (“OMC” and together
with Sterling and TSC, the “Borrowers” and each a “Borrower” as more
specifically defined herein).
 
RECITALS
 
A.           Borrowers have requested that the Lenders extend to them credit and
letters of credit on the terms and conditions set forth herein.
 
B.           The Lenders are prepared to extend such credit as aforesaid, but
only on the terms and conditions set forth in this Agreement.
 
NOW THEREFORE, in consideration of the covenants contained herein, Borrowers,
the Lenders, and the Agent agree as follows:
 
 
1.DEFINITIONS.

 
1.1           Certain Defined Terms.  For the purposes of this Agreement the
following terms will have the following meanings:
 
 “Acquisition” shall mean the acquisition by Sterling of 100% of the issued and
outstanding Equity Interests of RHBI and of at least 91% of the issued and
outstanding Equity Interests of RHBL on the terms set forth in this Agreement
and the Acquisition Documents.
 
“Acquisition Documents” shall mean the Purchase Agreement dated October 31, 2007
by and among Sterling, Thomas Fisher and the Sellers (the “Purchase Agreement”)
and all documents related thereto or executed and delivered in connection
therewith, as the same may be amended, restated or otherwise modified in
compliance with this Agreement.
 
“Advance(s)” shall mean, as the context may indicate, a borrowing requested by
the Borrowers, and made by the Revolving Credit Lenders under Section 2.1 hereof
or the Swing Line Lender under Section 2.5 hereof, including without limitation
any readvance, refunding or conversion of such borrowing pursuant to Section 2.3
or 2.5 hereof, and any advance deemed to have been made in respect of a Letter
of Credit under Section 3.6(a) hereof, and shall include, as applicable, a
Eurodollar-based Advance, a Prime-based Advance and a Quoted Rate Advance.
 
“Affected Lender” shall have the meaning set forth in Section 13.12 hereof.
 
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“Affiliate” shall mean, with respect to any Person, any other Person directly or
indirectly controlling (including but not limited to all directors and officers
of such Person), controlled by, or under direct or indirect common control with
such Person. A Person shall be deemed to control another Person for the purposes
of this definition if such Person possesses, directly or indirectly, the power
(i) to vote 10% or more of the Equity Interests having ordinary voting power for
the election of directors or managers of such other Person or (ii) to direct or
cause the direction of the management and policies of such other Person, whether
through the ownership of voting securities, by contract or otherwise.
 
“Agent” shall have the meaning set forth in the preamble, and include any
successor agents appointed in accordance with Section 12.4 hereof.
 
“Agent’s Correspondent” shall mean for Eurodollar-based Advances, Agent’s Grand
Cayman Branch (or for the account of said branch office, at Agent’s main office
in Detroit, Michigan, United States).
 
“Alternate Base Rate” shall mean, for any day, an interest rate per annum equal
to the Federal Funds Effective Rate in effect on such day, plus fifty basis
points.
 
“Applicable Fee Percentage” shall mean, as of any date of determination thereof,
the applicable percentage used to calculate certain of the fees due and payable
hereunder, determined by reference to the appropriate columns in the Pricing
Matrix attached to this Agreement as Schedule 1.1.
 
“Applicable Interest Rate” shall mean, (i) with respect to each Revolving Credit
Advance, the Eurodollar-based Rate or the Prime-based Rate, and (ii) with
respect to each Swing Line Advance, the Prime-based Rate or, if made available
to the Borrowers by the Swing Line Lender at its option, the Quoted Rate, in
each case as selected by the Borrowers from time to time subject to the terms
and conditions of this Agreement.
 
“Applicable Margin” shall mean, as of any date of determination thereof, the
applicable interest rate margin, determined by reference to the appropriate
columns in the Pricing Matrix attached to this Agreement as Schedule 1.1, such
Applicable Margin to be adjusted solely as specified in Section 11.8 hereof.
 
“Applicable Measuring Period” shall mean the period of four consecutive fiscal
quarters ending on the applicable date of determination, for Sterling, TSC, OMC
and the Target as if they had combined operations as of January 1, 2007.
 
“Asset Coverage Ratio” shall mean, as of any date of determination, a ratio the
numerator of which is an amount equal to eighty percent (80%) of the orderly
liquidation value of machinery and equipment of Sterling and its Consolidated
Subsidiaries owned on the Effective Date after giving effect to the Acquisition
plus eighty percent (80%) of the Cost of new and used machinery and equipment
purchased after the Effective Date and the denominator of which is the Funded
Debt minus cash and cash equivalents and Permitted Investments of Sterling and
its Consolidated Subsidiaries, in each case as determined in accordance with
GAAP.
 
“Asset Sale” shall mean the sale, transfer or other disposition by any Credit
Party of any asset (other than the sale or transfer of less than one hundred
percent (100%) of the stock or other ownership interests of any Subsidiary) to
any Person (other than to Borrowers or a Guarantor).
 
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“Assignment Agreement” shall mean an Assignment Agreement substantially in the
form of Exhibit H hereto.
 
“Authorized Signer” shall mean each person who has been authorized by the
Borrowers to execute and deliver any requests for Advances hereunder pursuant to
a written authorization delivered to the Agent and whose signature card or
incumbency certificate has been received by the Agent.
 
“Average Total Debt” shall mean the daily average Funded Debt for any applicable
period.
 
“Balance Sheet” shall have the meaning as set forth on Section 7.2(b).
 
“Bankruptcy Code” shall mean Title 11 of the United States Code and the rules
promulgated thereunder.
 
“Bond Documents” shall mean the Surety Agreements together, in each case, with
such other documents as are related thereto as the same may be amended,
restated, or otherwise modified in compliance with this Agreement.
 
“Borrower Representative” shall mean Sterling or any other Borrower identified
as the Borrower Representative in a written notice delivered to Agent and signed
by Borrowers.
 
“Borrowers” and “Borrower” shall have the meaning set forth in the Preamble to
this Agreement, and shall include each other Subsidiary of Sterling which shall
join into this Agreement as a Borrower hereunder, including but not limited to
Road and Highway Builders, LLC, a Nevada limited liability company (“RHBL”) and
Road and Highway Builders Inc., a Nevada corporation (“RHBI” and together with
RHBL, the “Target”) following the consummation of the Acquisition.
 
“Business Day” shall mean any day other than a Saturday or a Sunday on which
commercial banks are open for domestic and international business (including
dealings in foreign exchange) in Detroit, Michigan and New York, New York, and
in the case of a Business Day which relates to a Eurodollar-based Advance, on
which dealings are carried on in the London interbank eurodollar market.
 
“Capitalized Lease” shall mean, as applied to any Person, any lease of any
property (whether real, personal or mixed) with respect to which the discounted
present value of the rental obligations of such Person as lessee thereunder, in
conformity with GAAP, is required to be capitalized on the balance sheet of that
Person.
 
“Collateral” shall mean all property or rights in which a security interest,
mortgage, lien or other encumbrance for the benefit of the Lenders is or has
been granted or arises or has arisen, under or in connection with this
Agreement, the other Loan Documents, or otherwise to secure the Indebtedness.
 
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“Collateral Access Agreement” shall mean an agreement in form and substance
satisfactory to the Agent in its sole discretion, pursuant to which a mortgagee
or lessor of real property on which Collateral is stored or otherwise located,
or a warehouseman, processor or other bailee of inventory or other property
owned by any Credit Party, that acknowledges the Liens under the Collateral
Documents and subordinates or waives any Liens held by such Person on such
property and, includes such other agreements with respect to the Collateral as
Agent may require in its sole discretion, as the same may be amended, restated
or otherwise modified from time to time.
 
“Collateral Assignment” shall mean that certain Collateral Assignment of
Purchase Agreement dated as of the date hereof executed by Sterling for the
benefit of Agent, as the same may be amended, restated or otherwise modified
from time to time.
 
“Collateral Documents” shall mean the Security Agreement, the Pledge Agreements,
the Mortgages, the Collateral Assignment, the Escrow Agreement Acknowledgement,
the Collateral Access Agreements, the Joinder Agreement and all other security
documents (and any joinders thereto) executed by any Credit Party in favor of
the Agent on or after the Effective Date, in connection with any of the
foregoing collateral documents, in each case, as such collateral documents may
be amended or otherwise modified from time to time.
 
“Comerica Bank” shall mean Comerica Bank and its successors or assigns.
 
“Comerica Debt” shall mean the term loans owed by any of the Borrowers to
Comerica Bank as set forth on Schedule 1.4.
 
“Comerica Intercreditor Agreement” shall mean that certain Intercreditor
Agreement dated as of the Effective Date between the Agent and Comerica Bank, as
the same may be amended, restated or otherwise modified from time to time.
 
“Commitment Letter” shall mean that certain Commitment Letter dated as of
October 12, 2007 by and among Comerica Bank, Sterling, TSC and OMC.
 
“Consolidated” (or “consolidated”) or “Consolidating” (or “consolidating”) shall
mean, when used with reference to any financial term in this Agreement, the
aggregate for two or more Persons of the amounts signified by such term for all
such Persons determined on a consolidated (or consolidating) basis in accordance
with GAAP, applied on a consistent basis. Unless otherwise specified herein,
“Consolidated” and “Consolidating” shall refer to Sterling and its Subsidiaries,
determined on a Consolidated or Consolidating basis.
 
“Cost” shall mean the purchase price and all other costs related to the purchase
of the machinery and equipment by the Credit Parties which are eligible to be
capitalized under GAAP, including taxes, transportation, warranties, set-up
charges, instructions, license fees and other miscellaneous amounts.
 
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“Covenant Compliance Report” shall mean the report to be furnished by Borrowers
to the Agent pursuant to Section 7.2(a) hereof, substantially in the form
attached hereto as Exhibit J and certified by a Responsible Officer of the
Borrower Representative, in which report Borrowers shall set forth the
information specified therein and which shall include a statement of then
applicable level for the Applicable Margin and Applicable Fee Percentages as
specified in Schedule 1.1 attached to this Agreement.
 
“Credit Parties” shall mean the Borrowers and their respective Subsidiaries, and
“Credit Party” shall mean any one of them, as the context indicates or otherwise
requires.
 
“Current Maturities of Long Term Debt” shall mean, at any given time, all
principal and interest payments required to be paid during the ensuing one year
period from such given time on all Debt having a maturity of greater than one
year.
 
“Debt” shall mean as to any Person, without duplication (a) all Funded Debt of a
Person, (b) all Guarantee Obligations of such Person, (c) all obligations of
such Person under conditional sale or other title retention agreements relating
to property or assets purchased by such Person, (d) all indebtedness of such
Person arising in connection with any Hedging Transaction entered into by such
Person, and (e) all recourse Debt of any partnership of which such Person is the
general partner.
 
“Default” shall mean any event that with the giving of notice or the passage of
time, or both, would constitute an Event of Default under this Agreement.
 
“Distribution” is defined in Section 8.5 hereof.
 
“Dollars” and the sign “$” shall mean lawful money of the United States of
America.
 
“Domestic Subsidiary” shall mean any Subsidiary of a Borrower incorporated or
organized under the laws of the United States of America, or any state or other
political subdivision thereof or which is considered to be a “disregarded
entity” for United States federal income tax purposes and which is not a
“controlled foreign corporation” as defined under Section 957 of the Internal
Revenue Code, in each case provided such Subsidiary is owned by a Borrower or a
Domestic Subsidiary of Borrower, and “Domestic Subsidiaries” shall mean any or
all of them.
 
“EBITDA” shall mean for any period, as determined in accordance with GAAP, Net
Income for such period plus, without duplication and only to the extent
reflected as a charge or reduction in the statement of such Net Income for such
period, the sum of (a) income tax expense, (b) interest expense, (c)
depreciation and amortization expense (including amortized debt financing
costs), (d) any extraordinary or non-recurring non-cash expenses or losses, and
any other non-cash expenses or losses approved by the Majority Lenders,
including non-cash losses on sales of assets outside the ordinary course of
business, minus, to the extent included in consolidated Net Income for such
period, any extraordinary or non-recurring non-cash gains including non-cash
gains on sales of assets outside the ordinary course of business.
 
“Effective Date” shall mean the date on which all the conditions precedent set
forth in Sections 5.1 and 5.2 have been satisfied.
 
“Electronic Transmission” shall mean each document, instruction, authorization,
file, information and any other communication transmitted, posted or otherwise
made or communicated by e-mail or E-Fax, or otherwise to or from an E-System or
other equivalent service.
 
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“Eligible Assignee” shall mean (a) a Lender; (b) an Affiliate of a Lender; (c)
any Person (other than a natural person) that is or will be engaged in the
business of making, purchasing, holding or otherwise investing in commercial
loans or similar extensions of credit in the ordinary course of its business,
provided that such Person is administered or managed by a Lender, an Affiliate
of a Lender or an entity or Affiliate of an entity that administers or manages a
Lender; or (d) any other Person (other than a natural person) approved by the
(i) Agent (and in the case of an assignment of a commitment under the Revolving
Credit, the Issuing Lender and Swing Line Lender), and (ii) unless a Event of
Default has occurred and is continuing, the Borrower Representative (each such
approval not to be unreasonably withheld or delayed); provided that
notwithstanding the foregoing, “Eligible Assignee” shall not include the
Borrowers, or any of the Borrowers’ Affiliates or Subsidiaries; and provided
further that notwithstanding clause (d)(ii) of this definition, no assignment
shall be made to an entity which is a competitor of any Credit Party without the
consent of the Borrower Representative, which consent may be withheld in its
sole discretion.
 
“Equity Interest” shall mean (i) in the case of any corporation, all capital
stock and any securities exchangeable for or convertible into capital stock,
(ii) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents of corporate stock
(however designated) in or to such association or entity, (iii) in the case of a
partnership or limited liability company, partnership or membership interests
(whether general or limited) and (iv) any other interest or participation that
confers on a Person the right to receive a share of the profits and losses of,
or distribution of assets of, the issuing Person, and including, in all of the
foregoing cases described in clauses (i), (ii), (iii) or (iv), any warrants,
rights or other options to purchase or otherwise acquire any of the interests
described in any of the foregoing cases.
 
“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended, or any successor act or code and the regulations in effect from time to
time thereunder.
 
“E-System” shall mean any electronic system and any other Internet or
extranet-based site, whether such electronic system is owned, operated or hosted
by the Agent, any of its Affiliates or any other Person, providing for access to
data protected by passcodes or other security system.
 
“Escrow Agreement Acknowledgement” shall mean that certain acknowledgment
executed and delivered by Sterling and Comerica Bank, as escrow agent for the
benefit of the Agent, acknowledging the assignment of Sterling’s rights under
that certain Escrow Agreement relating to the Acquisition.
 
“Eurodollar-based Advance” shall mean any Advance which bears interest at the
Eurodollar-based Rate.
 
“Eurodollar-based Rate” shall mean a per annum interest rate which is equal to
the sum of (a) the Applicable Margin, plus (b) the quotient of:
 
(i)           the per annum interest rate at which deposits in the relevant
eurocurrency are offered to Agent’s Eurodollar Lending Office by other prime
banks in the eurocurrency market in an amount comparable to the relevant
Eurodollar-based Advance and for a period equal to the relevant
Eurodollar-Interest Period at approximately 11:00 A.M. Detroit time two (2)
Business Days prior to the first day of such Eurodollar-Interest Period, divided
by
 
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(ii)           a percentage equal to 100% minus the maximum rate on such date at
which Agent is required to maintain reserves on ‘Eurocurrency Liabilities’ as
defined in and pursuant to Regulation D of the Board of Governors of the Federal
Reserve System or, if such regulation or definition is modified, and as long as
Agent is required to maintain reserves against a category of liabilities which
includes eurocurrency deposits or includes a category of assets which includes
eurocurrency loans, the rate at which such reserves are required to be
maintained on such category,
 
such sum to be rounded upward, if necessary, to the nearest whole multiple of
1/100th of 1%.
 
“Eurodollar-Interest Period” shall mean, for any Eurodollar-based Advance, an
Interest Period of one, two, three or six months (or any shorter or longer
periods agreed to in advance by the Borrower Representative, Agent and the
Lenders) as selected by Borrowers, for such Eurodollar-based Advance pursuant to
Section 2.3 or 4.4 hereof, as the case may be.
 
“Eurodollar Lending Office” shall mean, (a) with respect to the Agent, Agent’s
office located at its Grand Caymans Branch or such other branch of Agent,
domestic or foreign, as it may hereafter designate as its Eurodollar Lending
Office by written notice to the Borrower Representative and the Lenders and (b)
as to each of the Lenders, its office, branch or affiliate located at its
address set forth on the signature pages hereof (or identified thereon as its
Eurodollar Lending Office), or at such other office, branch or affiliate of such
Lender as it may hereafter designate as its Eurodollar Lending Office by written
notice to Borrower Representative and Agent.
 
“Event of Default” shall mean each of the Events of Default specified in Section
9.1 hereof.
 
“Existing Letters of Credit” shall mean the Letters of Credit set forth on
Schedule 1.5.
 
“Federal Funds Effective Rate” shall mean, for any day, a fluctuating interest
rate per annum equal to the weighted average of the rates on overnight Federal
funds transactions with members of the Federal Reserve System arranged by
Federal funds brokers, 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 Agent from three Federal funds brokers of recognized standing
selected by Agent, all as conclusively determined by the Agent, such sum to be
rounded upward, if necessary, to the nearest whole multiple of 1/100th of 1%.
 
“Fee Letter” shall mean the fee letter by and among Sterling, TSC, OMC and
Comerica Bank dated as of October 12, 2007 relating to the Indebtedness
hereunder, as amended, restated, replaced or otherwise modified from time to
time.
 
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“Fees” shall mean the Revolving Credit Facility Fee, the Letter of Credit Fees
and the other fees and charges (including any agency fees) payable by Borrowers
to the Lenders, the Issuing Lender or Agent hereunder or under the Fee Letter.
 
“Final Maturity Date” shall mean the Revolving Credit Maturity Date.
 
“Fiscal Year” shall mean the twelve-month period ending on each December 31.
 
“Fixed Charge Coverage Ratio” shall mean as of any date of determination a ratio
the numerator of which is EBITDA for the Applicable Measuring Period, minus cash
taxes and cash tax distributions with respect to such period and the denominator
of which is the sum of Current Maturities of Long Term Debt plus interest paid
during the trailing twelve month period, plus twenty-five percent (25%) of the
daily average total non-amortizing debt during the trailing twelve month period.
 
“Foreign Subsidiary” shall mean any Subsidiary, other than a Domestic
Subsidiary, and “Foreign Subsidiaries” shall mean any or all of them.
 
“Funded Debt” of any Person shall mean, without duplication, (a) all
indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services as of such date (other than operating leases and
trade liabilities incurred in the ordinary course of business and payable in
accordance with customary practices) or which is evidenced by a note, bond,
debenture or similar instrument, (b) the principal component of all obligations
of such Person under Capitalized Leases, (c) all reimbursement obligations
(actual, contingent or otherwise) of such Person in respect of letters of
credit, bankers acceptances or similar obligations issued or created for the
account of such Person, (d) all liabilities of the type described in (a), (b)
and (c) above that are secured by any Liens on any property owned by such Person
as of such date even though such Person has not assumed or otherwise become
liable for the payment thereof, the amount of which is determined in accordance
with GAAP but excluding accrued liabilities or deferred charges as defined under
GAAP except as specifically included in clauses (a), (b), (c) and (d) of this
definition; provided however that so long as such Person is not personally
liable for any such liability, the amount of such liability shall be deemed to
be the lesser of the fair market value at such date of the property subject to
the Lien securing such liability and the amount of the liability secured, and
(e) all Guarantee Obligations in respect of any liability which constitutes
Funded Debt; provided, however that Funded Debt shall not include any
indebtedness under any Hedging Transaction prior to the occurrence of a
termination event with respect thereto.
 
“GAAP” shall mean, as of any applicable date of determination, generally
accepted accounting principles in the United States of America, as applicable on
such date, consistently applied, as in effect from time to time.
 
“Governmental Obligations” means noncallable direct general obligations of the
United States of America or obligations the payment of principal of and interest
on which is unconditionally guaranteed by the United States of America.
 
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“Guarantee Obligation” shall mean as to any Person (the “guaranteeing person”)
any obligation of the guaranteeing Person in respect of any obligation of
another Person (the “primary obligor”) (including, without limitation, any bank
under any letter of credit), the creation of which was induced by a
reimbursement agreement, guaranty agreement, keepwell agreement, purchase
agreement, counterindemnity or similar obligation issued by the guaranteeing
person, in either case guaranteeing or in effect guaranteeing any Debt, leases,
dividends or other obligations (the “primary obligations”) of the primary
obligor in any manner, whether directly or indirectly, including, without
limitation, any obligation of the guaranteeing person, whether or not
contingent, (i) to purchase any such primary obligation or any property
constituting direct or indirect security therefor, (ii) to advance or supply
funds (1) for the purchase or payment of any such primary obligation or (2) to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor, (iii) to purchase
property, securities or services primarily for the purpose of assuring the owner
of any such primary obligation of the ability of the primary obligor to make
payment of such primary obligation or (iv) otherwise to assure or hold harmless
the owner of any such primary obligation against loss in respect thereof;
provided, however, that the term Guarantee Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business. The amount of any Guarantee Obligation of any guaranteeing person
shall be deemed to be the lower of (a) an amount equal to the stated or
determinable amount of the primary obligation in respect of which such Guarantee
Obligation is made and (b) the maximum amount for which such guaranteeing person
may be liable pursuant to the terms of the instrument embodying such Guarantee
Obligation, unless such primary obligation and the maximum amount for which such
guaranteeing person may be liable are not stated or determinable, in which case
the amount of such Guarantee Obligation shall be such guaranteeing person’s
maximum reasonably anticipated liability in respect thereof as determined by the
applicable Person in good faith.
 
“Guarantor(s)” shall mean each Subsidiary of any Borrower which has executed and
delivered to the Agent a Guaranty (or a joinder to a Guaranty), and a Security
Agreement (or a joinder to the Security Agreement).
 
“Guaranty” shall mean, collectively, any guaranty agreements executed and
delivered from time to time after the Effective Date (whether by execution of
joinder agreements or otherwise) pursuant to Section 7.13 hereof or otherwise,
as amended, restated or otherwise modified from time to time.
 
“Hazardous Material” shall mean any hazardous or toxic waste, substance or
material defined or regulated as such in or for purposes of the Hazardous
Material Laws.
 
“Hazardous Material Law(s)” shall mean all laws, codes, ordinances, rules,
regulations and other governmental restrictions and requirements issued by any
federal, state, local or other governmental or quasi-governmental authority or
body (or any agency, instrumentality or political subdivision thereof)
pertaining to any substance or material which is regulated for reasons of
health, safety or the environment and which is present or alleged to be present
on or about or used in any facilities owned, leased or operated by any Credit
Party, or any portion thereof including, without limitation, those relating to
soil, surface, subsurface ground water conditions and the condition of the
indoor and outdoor ambient air; any so-called “superfund” or “superlien” law;
and any other United States federal, state or local statute, law, ordinance,
code, rule, regulation, order or decree regulating, relating to, or imposing
liability or standards of conduct concerning, any Hazardous Material, as now or
at any time during the term of the Agreement in effect.
 
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“Hedging Agreement” shall mean any agreement relating to a Hedging Transaction
entered into between a Borrower and any Lender or an Affiliate of a Lender.
 
“Hedging Transaction” means each interest rate swap transaction, basis swap
transaction, forward rate transaction, equity transaction, equity index
transaction, foreign exchange transaction, cap transaction, floor transaction or
commodities hedge (including any option with respect to any of these
transactions and any combination of any of the foregoing).
 
“Hereof”, “hereto”, “hereunder” and similar terms shall refer to this Agreement
and not to any particular paragraph or provision of this Agreement.
 
“Income Taxes” shall mean for any period the aggregate amount of taxes based on
income or profits for such period with respect to the operations of Sterling and
its Subsidiaries (including, without limitation, all corporate franchise,
capital stock, net worth and value-added taxes assessed by state and local
governments) determined in accordance with GAAP on a Consolidated basis (to the
extent such income and profits were included in computing Consolidated Net
Income).
 
“Indebtedness” shall mean all indebtedness and liabilities (including without
limitation principal, interest (including without limitation interest accruing
at the then applicable rate provided in this Agreement or any other applicable
Loan Document after the Final Maturity Date and interest accruing at the then
applicable rate provided in this Agreement or any other applicable Loan Document
after the filing of any petition in bankruptcy, or the commencement of any
insolvency, reorganization or like proceeding, relating to the Credit Parties
whether or not a claim for post-filing or post-petition interest is allowed in
such proceeding), fees, expenses and other charges) arising under this Agreement
or any of the other Loan Documents, whether direct or indirect, absolute or
contingent, of any Credit Party to any of the Lenders or Affiliates thereof or
to the Agent, in any manner and at any time, whether arising under this
Agreement, the Guaranty or any of the other Loan Documents (including without
limitation, payment obligations under Hedging Transactions evidenced by Hedging
Agreements, provided that the payment obligations under commodities Hedging
Transactions evidenced by Hedging Agreements that are deemed “Indebtedness”
hereunder and entitled to the benefit of the Liens granted under the Collateral
Documents (the “Lender Commodities Hedging Transactions”) (a) shall not exceed
$500,000 in aggregate amount and (b) shall be provided by only one Lender at a
time, which Lender (the “Designated Lender”) shall be designated in a notice
from the Borrower Representative to the Agent, provided, further, that the
Borrowers may select a new Designated Lender from time to time upon notice to
the Agent so long as no payment obligations remain outstanding to the then
current Designated Lender under any Lender Commodities Hedging Transaction), due
or hereafter to become due, now owing or that may hereafter be incurred by any
Credit Party to any of the Lenders or Affiliates thereof or to the Agent, and
which shall be deemed to include protective advances made by Agent with respect
to the Collateral under or pursuant to the terms of any Loan Document and any
liabilities of any Credit Party to Agent or any Lender arising in connection
with any Lender Products, in each case whether or not reduced to judgment, with
interest according to the rates and terms specified, and any and all
consolidations, amendments, renewals, replacements, substitutions or extensions
of any of the foregoing; provided, however that for purposes of calculating the
Indebtedness outstanding under this Agreement or any of the other Loan
Documents, the direct and indirect and absolute and contingent obligations of
the Credit Parties (whether direct or contingent) shall be determined without
duplication.
 
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“Intercompany Note” shall mean any promissory note issued or to be issued by any
Credit Party to evidence an intercompany loan in form and substance satisfactory
to Agent.
 
“Interest Period” shall mean (a) with respect to a Eurodollar-based Advance, a
Eurodollar-Interest Period, commencing on the day a Eurodollar-based Advance is
made, or on the effective date of an election of the Eurodollar-based Rate made
under Section 2.3 or 4.4 hereof, and (b) with respect to a Swing Line Advance
carried at the Quoted Rate, an interest period of 30 days (or any lesser number
of days agreed to in advance by the Borrower Representative, Agent and the Swing
Line Lender); provided, however that (i) any Interest Period which would
otherwise end on a day which is not a Business Day shall end on the next
succeeding Business Day, except that as to an Interest Period in respect of a
Eurodollar-based Advance, if the next succeeding Business Day falls in another
calendar month, such Interest Period shall end on the next preceding Business
Day, (ii) when an Interest Period in respect of a Eurodollar-based Advance
begins on a day which has no numerically corresponding day in the calendar month
during which such Interest Period is to end, it shall end on the last Business
Day of such calendar month, and (iii) no Interest Period in respect of any
Advance shall extend beyond the Revolving Credit Maturity Date.
 
“Internal Revenue Code” shall mean the Internal Revenue Code of 1986 of the
United States of America, as amended from time to time, and the regulations
promulgated thereunder.
 
“Investment” shall mean, when used with respect to any Person, (a) any loan,
investment or advance made by such Person to any other Person (including,
without limitation, any Guarantee Obligation) in respect of any Equity Interest,
Debt, obligation or liability of such other Person and (b) any other investment
made by such Person (however acquired) in Equity Interests in any other Person,
including, without limitation, any investment made in exchange for the issuance
of Equity Interest of such Person and any investment made as a capital
contribution to such other Person.
 
“Issuing Lender” shall mean Comerica Bank in its capacity as issuer of one or
more Letters of Credit hereunder, or its successor designated by the Revolving
Credit Lenders.
 
“Issuing Office” shall mean such office as Issuing Lender shall designate as its
Issuing Office.
 
“Joinder Agreement” means that certain Joinder Agreement in the form attached
hereto as Exhibit G, executed and delivered by Target and dated as of the
Effective Date, as the same may be amended, restated or otherwise modified.
 
“Lender Products” shall mean any one or more of the following types of services
or facilities extended to the Credit Parties by any Lender: (i) credit cards,
(ii) credit card processing services, (iii) debit cards, (iv) purchase cards,
(v) Automated Clearing House (ACH) transactions, (vi) cash management, including
controlled disbursement services, and (vii) establishing and maintaining deposit
accounts.
 
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“Lenders” shall have the meaning set forth in the preamble, and shall include
the Revolving Credit Lenders, the Swing Line Lender and any assignee which
becomes a Lender pursuant to Section 13.8 hereof.
 
“Letter of Credit Agreement” shall mean, collectively, the letter of credit
application and related documentation executed and/or delivered by the Borrowers
in respect of each Letter of Credit, in each case satisfactory to the Issuing
Lender, as amended, restated or otherwise modified from time to time.
 
“Letter of Credit Documents” shall have the meaning ascribed to such term in
Section 3.7(a) hereof.
 
“Letter of Credit Fees” shall mean the fees payable in connection with Letters
of Credit pursuant to Section 3.4(a) and (b) hereof.
 
“Letter of Credit Maximum Amount” shall mean Two Million Five Hundred Thousand
Dollars ($2,500,000).
 
“Letter of Credit Obligations” shall mean at any date of determination, the sum
of (a) the aggregate undrawn amount of all Letters of Credit then outstanding,
and (b) the aggregate amount of Reimbursement Obligations which remain unpaid as
of such date.
 
“Letter of Credit Payment” shall mean any amount paid or required to be paid by
the Issuing Lender in its capacity hereunder as issuer of a Letter of Credit as
a result of a draft or other demand for payment under any Letter of Credit.
 
“Letter(s) of Credit” shall mean any standby letters of credit issued by Issuing
Lender at the request of or for the account of Borrowers (or any of them)
pursuant to Article 3 hereof, and shall include all Existing Letters of Credit,
which shall be deemed “Letters of Credit” as defined in this Agreement for all
purposes of this Agreement and the related Loan Documents, and which shall be
secured by all the Collateral Documents.
 
“Leverage Ratio” shall mean as of any date of determination, a ratio the
numerator of which is Funded Debt of Sterling and its Consolidated Subsidiaries
as of such date and the denominator of which is EBITDA for the Applicable
Measuring Period as of such date, in each case as determined in accordance with
GAAP.
 
“Liberty Mutual Indemnity Agreement” shall mean that certain General Agreement
of Indemnity by RHBL and the Sellers for the benefit of Liberty Mutual Insurance
Company, Employers Insurance Company of Wausau, Peerless Insurance Company and
any other company that is part of the Liberty Mutual Group dated as of November
15, 2006.
 
“Lien” shall mean any security interest in or lien on or against any property
arising from any pledge, assignment, hypothecation, mortgage, security interest,
deposit arrangement, trust receipt, conditional sale or title retaining
contract, sale and leaseback transaction, Capitalized Lease, consignment or
bailment for security, or any other type of lien, charge, encumbrance, title
exception, preferential or priority arrangement affecting property (including
with respect to stock, any stockholder agreements, voting rights agreements,
buy-back agreements and all similar arrangements), whether based on common law
or statute.
 
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“Loan Documents” shall mean, collectively, this Agreement, the Notes (if
issued), the Letter of Credit Agreements, the Letters of Credit, the Guaranty,
the Subordination Agreements, the Comerica Intercreditor Agreement, the
Collateral Documents, each Hedging Agreement, and any other documents,
certificates or agreements that are executed and required to be delivered
pursuant to any of the foregoing documents, as such documents may be amended,
restated or otherwise modified from time to time.
 
“Majority Lenders” shall mean at any time (a) so long as the Revolving Credit
Aggregate Commitment has not been terminated, Lenders holding more than 50.0% of
the sum of (i) the Revolving Credit Aggregate Commitment and (b) if the
Revolving Credit Aggregate Commitment has been terminated (whether by maturity,
acceleration or otherwise), Lenders holding more than 50.0% of the aggregate
principal amount then outstanding under the Revolving Credit; provided that, for
purposes of determining Majority Lenders hereunder, the Letter of Credit
Obligations and principal amount outstanding under the Swing Line shall be
allocated among the Revolving Credit Lenders based on their respective Revolving
Credit Percentages; provided further that so long as there are fewer than three
Lenders, considering any Lender and its Affiliates as a single Lender, “Majority
Lenders” shall mean all Lenders.
 
“Majority Revolving Credit Lenders” shall mean Majority Lenders.
 
“Material Adverse Effect” shall mean a material adverse effect on (a) the
condition (financial or otherwise), business, performance, operations,
properties or prospects of the Credit Parties taken as a whole, (b) the ability
of any Credit Party to perform its obligations under this Agreement, the Notes
(if issued) or any other Loan Document to which it is a party, or (c) the
validity or enforceability of this Agreement, any of the Notes (if issued) or
any of the other Loan Documents or the rights or remedies of the Agent or the
Lenders hereunder or thereunder.
 
 “Mortgages” shall mean the mortgages, deeds of trust and any other similar
documents related thereto or required thereby executed and delivered by a Credit
Party on the Effective Date pursuant to Section 5.1 hereof, if any, and executed
and delivered after the Effective Date by a Credit Party pursuant to Section
7.13 hereof or otherwise, and “Mortgage” shall mean any such document, as such
documents may be amended, restated or otherwise modified from time to time.
 
“Multiemployer Plan” shall mean a Pension Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
 
“OMC” shall have the meaning set forth in Preamble to this Agreement.
 
“Net Income” shall mean for any period of determination the net income (or loss)
of the Sterling and its Consolidated Subsidiaries for such period, as determined
in accordance with GAAP.”
 
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“Notes” shall mean the Revolving Credit Notes and the Swing Line Note.
 
“PBGC” shall mean the Pension Benefit Guaranty Corporation or any successor
thereto.
 
“Pension Plan” shall mean any plan established and maintained by a Credit Party,
or contributed to by a Credit Party, which is qualified under Section 401(a) of
the Internal Revenue Code and subject to the minimum funding standards of
Section 412 of the Internal Revenue Code.
 
“Percentage” shall mean the Revolving Credit Percentage.
 
“Permitted Acquisition” shall mean any acquisition by any Borrower or any
Guarantor of all or substantially all of the assets of another Person, or of a
division or line of business of another Person, or any Equity Interests of
another Person which satisfies and/or is conducted in accordance with the
following requirements:
 
 
(a)
Such acquisition is of a business or Person engaged in a line of business which
is compatible with, or complementary to, the business of the Borrowers or such
Guarantor;

 
 
(b)
If such acquisition is structured as an acquisition of the Equity Interests of
any Person, then the Person so acquired shall (X) become a direct Subsidiary of
a Borrower or of a Guarantor and the applicable Borrower or the applicable
Guarantor shall cause such acquired Person to comply with Section 7.13 hereof,
provided, further, that after such acquisition the Person so acquired shall be
consolidated in accordance with GAAP with Sterling and its other Consolidated
Subsidiaries or (Y) provided that the Credit Parties continue to comply with
Section 7.4(a) hereof, be merged with and into such a Borrower or such a
Guarantor (and, in the case of such a Borrower, with the applicable Borrower
being the surviving entity);

 
 
(c)
If such acquisition is structured as the acquisition of assets, such assets
shall be acquired directly by a Borrower or a Guarantor (subject to compliance
with Section 7.4(a) hereof);

 
 
(d)
Borrowers shall have delivered to Agent not less than ten (10) (or such shorter
period of time agreed to by the Agent) nor more than ninety (90) days prior to
the date of such acquisition, notice of such acquisition together with Pro Forma
Projected Financial Information, copies of all material documents relating to
such acquisition (including the acquisition agreement and any related document),
and historical financial information (including income statements, balance
sheets and cash flows) covering at least two (2) complete Fiscal Years of the
acquisition target, if available, prior to the effective date of the acquisition
or the entire credit history of the acquisition target, whichever period is
shorter, in each case in form and substance reasonably satisfactory to the
Agent;

 
 
(e)
Both immediately before and after the consummation of such acquisition and after
giving effect to the Pro Forma Projected Financial Information, no Default or
Event of Default shall have occurred and be continuing;

 
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(f)
Intentionally omitted;

 
 
(g)
The board of directors (or other Person(s) exercising similar functions) of the
seller of the assets or issuer of the Equity Interests being acquired shall not
have disapproved such transaction or recommended that such transaction be
disapproved;

 
 
(h)
All governmental, quasi-governmental, agency, regulatory or similar licenses,
authorizations, exemptions, qualifications, consents and approvals necessary
under any laws applicable to the Borrower or Guarantor that is making the
acquisition, or the acquisition target (if applicable) for or in connection with
the proposed acquisition and all necessary non-governmental and other
third-party approvals which, in each case, are material to such acquisition
shall have been obtained, and all necessary or appropriate declarations,
registrations or other filings with any court, governmental or regulatory
authority, securities exchange or any other Person, which in each case, are
material to the consummation of such acquisition or to the acquisition target,
if applicable, have been made, and evidence thereof reasonably satisfactory in
form and substance to Agent shall have been delivered, or caused to have been
delivered, by Borrowers to Agent;

 
 
(i)
There shall be no actions, suits or proceedings pending or, to the knowledge of
any Credit Party threatened against or affecting the acquisition target in any
court or before or by any governmental department, agency or instrumentality,
which could reasonably be expected to be decided adversely to the acquisition
target and which, if decided adversely, could reasonably be expected to have a
material adverse effect on the business, operations, properties or financial
condition of the acquisition target and its subsidiaries (taken as a whole) or
would materially adversely affect the ability of the acquisition target to enter
into or perform its obligations in connection with the proposed acquisition, nor
shall there be any actions, suits, or proceedings pending, or to the knowledge
of any Credit Party threatened against the Credit Party that is making the
acquisition which would materially adversely affect the ability of such Credit
Party to enter into or perform its obligations in connection with the proposed
acquisition; and

 
 
(j)
The purchase price of such proposed new acquisition, computed on the basis of
total acquisition consideration paid or incurred, or required to be paid or
incurred, with respect thereto, including the amount of Debt (such Debt being
otherwise permitted under this Agreement) assumed or to which such assets,
businesses or business or Equity Interests, or any Person so acquired is subject
and including any portion of the purchase price allocated to any non-compete
agreements, (X) is less than Five Million Dollars ($5,000,000), (Y) when added
to the purchase price for each other acquisition consummated hereunder as a
Permitted Acquisition during the same Fiscal Year as the applicable acquisition
(not including acquisitions specifically consented to which fall outside of the
terms of this definition), does not exceed Ten Million Dollars ($10,000,000) and
(Z) when added to the purchase price for each other acquisition consummated
hereunder as a Permitted Acquisition during the term of this agreement (not
including acquisitions specifically consented to which fall outside the terms of
this definition), does not exceed Ten Million Dollars ($10,000,000).

 
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“Permitted Investments” shall mean with respect to any Person:
 
 
(a)
Governmental Obligations;

 
 
(b)
Obligations of a state or commonwealth of the United States or the obligations
of the District of Columbia or any possession of the United States, or any
political subdivision of any of the foregoing, which are described in Section
103(a) of the Internal Revenue Code and are graded in any of the highest three
(3) major grades as determined by at least one Rating Agency; or secured, as to
payments of principal and interest, by a letter of credit provided by a
financial institution or insurance provided by a bond insurance company which in
each case is itself or its debt is rated in one of the highest three (3) major
grades as determined by at least one Rating Agency;

 
 
(c)
Banker’s acceptances, commercial accounts, demand deposit accounts, certificates
of deposit, other time deposits or depository receipts issued by or maintained
with any Lender or any Affiliate thereof, or any bank, trust company, savings
and loan association, savings bank or other financial institution whose deposits
are insured by the Federal Deposit Insurance Corporation and whose reported
capital and surplus equal at least $250,000,000, provided that such minimum
capital and surplus requirement shall not apply to demand deposit accounts
maintained by any Credit Party in the ordinary course of business;

 
 
(d)
Commercial paper rated at the time of purchase within the two highest
classifications established by not less than two Rating Agencies, and which
matures within 270 days after the date of issue;

 
 
(e)
Secured repurchase agreements against obligations itemized in paragraph (a)
above, and executed by a bank or trust company or by members of the association
of primary dealers or other recognized dealers in United States government
securities, the market value of which must be maintained at levels at least
equal to the amounts advanced; and

 
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(f)
Any fund or other pooling arrangement which exclusively purchases and holds the
investments itemized in (a) through (e) above.

 
“Permitted Liens” shall mean with respect to any Person:
 
 
(a)
Liens for (i) taxes or governmental assessments or charges or (ii) customs
duties in connection with the importation of goods to the extent such Liens
attach to the imported goods that are the subject of the duties, in each case
(x) to the extent not yet due, (y) as to which the period of grace, if any,
related thereto has not expired or (z) which are being contested in good faith
by appropriate proceedings, provided that in the case of any such contest, any
proceedings for the enforcement of such liens have been suspended and adequate
reserves with respect thereto are maintained on the books of such Person in
conformity with GAAP;

 
 
(b)
carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s, processor’s,
landlord’s liens or other like liens arising in the ordinary course of business
which secure obligations that are not overdue for a period of more than 30 days
or which are being contested in good faith by appropriate proceedings, provided
that in the case of any such contest, (x) any proceedings commenced for the
enforcement of such Liens have been suspended and (y) appropriate reserves with
respect thereto are maintained on the books of such Person in conformity with
GAAP;

 
 
(c)
any attachment or judgment lien that remains unpaid, unvacated, unbonded or
unstayed by appeal or otherwise for a period ending on the earlier of (i) thirty
(30) consecutive days from the date of its attachment or entry (as applicable)
or (ii) the commencement of enforcement steps with respect thereto, other than
the filing of notice thereof in the public record;

 
 
(d)
minor survey exceptions or minor encumbrances, easements or reservations, or
rights of others for rights-of-way, utilities and other similar purposes, or
zoning or other restrictions as to the use of real properties, or any interest
of any lessor or sublessor under any lease permitted hereunder which, in each
case, does not materially interfere with the business of such Person;

 
 
(e)
Liens arising in connection with worker’s compensation, unemployment insurance,
old age pensions and social security benefits and similar statutory obligations
(excluding Liens arising under ERISA), provided that no enforcement proceedings
in respect of such Liens are pending and provisions have been made for the
payment of such liens on the books of such Person as may be required by GAAP;
and

 
 
(f)
continuations of Liens that are permitted under subsections (a)-(e) hereof,
provided such continuations do not violate the specific time periods set forth
in subsections (b) and (c) and provided further that such Liens do not extend to
any additional property or assets of any Credit Party or secure any additional
obligations of any Credit Party.

 
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Regardless of the language set forth in this definition, no Lien over the Equity
Interests of any Credit Party granted to any Person other than to Agent for the
benefit of the Lenders shall be deemed a “Permitted Lien” under the terms of
this Agreement.
 
“Person” shall mean a natural person, corporation, limited liability company,
partnership, limited liability partnership, trust, incorporated or
unincorporated organization, joint venture, joint stock company, firm or
association or a government or any agency or political subdivision thereof or
other entity of any kind.
 
“Pledge Agreement(s)” shall mean any pledge agreement executed and delivered by
a Credit Party on the Effective Date pursuant to Section 5.1 hereof, if any, and
executed and delivered from time to time after the Effective Date by any Credit
Party pursuant to Section 7.13 hereof or otherwise, and any agreements,
instruments or documents related thereto, in each case in form and substance
satisfactory to Agent amended, restated or otherwise modified from time to time.
 
“Pricing Leverage Ratio” shall mean as of any date of determination, a ratio the
numerator of which is Average Total Debt of Sterling and its Consolidated
Subsidiaries as of such date minus cash and cash equivalents of Sterling and its
Consolidated Subsidiaries and the denominator of which is EBITDA for the
Applicable Measuring Period as of such date, in each case as determined in
accordance with GAAP.
 
“Prime-based Advance” shall mean an Advance which bears interest at the
Prime-based Rate.
 
“Prime-based Rate” shall mean, for any day, that rate of interest which is equal
to the sum of the Applicable Margin plus the greater of (i) the Prime Rate, and
(ii) the Alternate Base Rate.
 
“Prime Rate” shall mean the per annum rate of interest announced by the Agent,
at its main office from time to time as its “prime rate” (it being acknowledged
that such announced rate may not necessarily be the lowest rate charged by the
Agent to any of its customers), which Prime Rate shall change simultaneously
with any change in such announced rate.
 
“Pro Forma Projected Financial Information” shall mean, as to any proposed
acquisition, a statement executed by the Borrower undertaking the acquisition
(supported by reasonable detail) setting forth the total consideration to be
paid or incurred in connection with the proposed acquisition, and pro forma
combined projected financial information for the Credit Parties and the
acquisition target (if applicable), consisting of projected balance sheets as of
the proposed effective date of the acquisition and as of the end of at least the
next succeeding two (2) Fiscal Years following the acquisition and projected
statements of income and cash flows for each of those years, including
sufficient detail to permit calculation of the ratios described in Section 7.9
hereof, as projected as of the effective date of the acquisition and as of the
ends of those Fiscal Years and accompanied by (i) a statement setting forth a
calculation of the ratio so described, (ii) a statement in reasonable detail
specifying all material assumptions underlying the projections and (iii) such
other information as the Agent or the Lenders shall reasonably request.
 
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“Purchasing Lender” shall have the meaning set forth in Section 13.12.
 
“Quoted Rate” shall mean the rate of interest per annum offered by the Swing
Line Lender in its sole discretion with respect to a Swing Line Advance and
accepted by the Borrowers.
 
“Quoted Rate Advance” means any Swing Line Advance which bears interest at the
Quoted Rate.
 
“Rating Agency” shall mean Moody’s Investor Services, Inc., Standard and Poor’s
Ratings Services, their respective successors or any other nationally recognized
statistical rating organization which is acceptable to the Agent.
 
“Register” is defined in Section 13.8(g) hereof.
 
“Reimbursement Obligation(s)” shall mean the aggregate amount of all
unreimbursed drawings under all Letters of Credit (excluding for the avoidance
of doubt, reimbursement obligations that are deemed satisfied pursuant to a
deemed disbursement under Section 3.6(a)).
 
“Request for Advance” shall mean a Request for Revolving Credit Advance or a
Request for Swing Line Advance, as the context may indicate or otherwise
require.
 
“Request for Revolving Credit Advance” shall mean a request for a Revolving
Credit Advance issued by the Borrowers under Section 2.3 of this Agreement in
the form attached hereto as Exhibit A.
 
“Request for Swing Line Advance” shall mean a request for a Swing Line Advance
issued by the Borrowers under Section 2.5(b) of this Agreement in the form
attached hereto as Exhibit D.
 
“Requirement of Law” shall mean as to any Person, the certificate of
incorporation and bylaws, the partnership agreement or other organizational or
governing documents of such Person and any law, treaty, rule or regulation or
determination of an arbitration or a court or other governmental authority, in
each case applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.
 
“Responsible Officer” shall mean, with respect to any Person, the chief
executive officer, chief financial officer, treasurer, president or controller
of such Person, or with respect to compliance with financial covenants, the
chief financial officer or the treasurer of such Person, or any other officer of
such Person having substantially the same authority and responsibility.
 
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“Revolving Credit” shall mean the revolving credit loans to be advanced to
Borrowers by the applicable Revolving Credit Lenders pursuant to Article 2
hereof, in an aggregate amount (subject to the terms hereof), not to exceed, at
any one time outstanding, the Revolving Credit Aggregate Commitment.
 
“Revolving Credit Advance” shall mean a borrowing requested by Borrowers and
made by the Revolving Credit Lenders under Section 2.1 of this Agreement,
including without limitation any readvance, refunding or conversion of such
borrowing pursuant to Section 2.3 hereof and any deemed disbursement of an
Advance in respect of a Letter of Credit under Section 3.6(a) hereof, and may
include, subject to the terms hereof, Eurodollar-based Advances and Prime-based
Advances.
 
“Revolving Credit Aggregate Commitment” shall mean Seventy-Five Million Dollars
($75,000,000), subject to reduction or termination under Sections 2.11 or 9.2
hereof.
 
“Revolving Credit Commitment Amount” shall mean with respect to any Revolving
Credit Lender, (i) if the Revolving Credit Aggregate Commitment has not been
terminated, the amount specified opposite such Revolving Credit Lender’s name in
the column entitled “Revolving Credit Commitment Amount” on Schedule 1.2, as
adjusted from time to time in accordance with the terms hereof; and (ii) if the
Revolving Credit Aggregate Commitment has been terminated (whether by maturity,
acceleration or otherwise), the amount equal to its Percentage of the aggregate
principal amount outstanding under the Revolving Credit (including the
outstanding Letter of Credit Obligations and any outstanding Swing Line
Advances).
 
“Revolving Credit Facility Fee” shall mean the fee payable to Agent for
distribution to the Revolving Credit Lenders in accordance with Section 2.9
hereof.
 
“Revolving Credit Lenders” shall mean the financial institutions from time to
time parties hereto as lenders of the Revolving Credit.
 
“Revolving Credit Maturity Date” shall mean the earlier to occur of (i) October
31, 2012, and (ii) the date on which the Revolving Credit Aggregate Commitment
shall terminate in accordance with the provisions of this Agreement.
 
“Revolving Credit Notes” shall mean the revolving credit notes described in
Section 2.2 hereof, made by Borrowers to each of the Revolving Credit Lenders in
the form attached hereto as Exhibit B, as such notes may be amended or
supplemented from time to time, and any other notes issued in substitution,
replacement or renewal thereof from time to time.
 
“Revolving Credit Percentage” means, with respect to any Revolving Credit
Lender, the percentage specified opposite such Revolving Credit Lender’s name in
the column entitled “Revolving Credit Percentage” on Schedule 1.2, as adjusted
from time to time in accordance with the terms hereof.
 
“RHBL” shall have the meaning set forth in the definition of “Borrowers” in this
Agreement.
 
“RHBI” shall have the meaning set forth in the definition of “Borrowers” in this
Agreement.
 
“Security Agreement” shall mean, collectively, the security agreement(s)
executed and delivered by Borrowers and the Guarantors on the Effective Date
pursuant to Section 5.1 hereof, and any such agreements executed and delivered
after the Effective Date (whether by execution of a joinder agreement to any
existing security agreement or otherwise) pursuant to Section 7.13 hereof or
otherwise, in the form of the Security Agreement attached hereto as Exhibit F,
as amended, restated or otherwise modified from time to time.
 
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“Sellers” shall mean Mr. Richard Buenting and Fisher Sand & Gravel Co.
 
“Sterling” shall have the meaning set forth in the Preamble to this Agreement.
 
“Subordinated Debt” shall mean any Funded Debt of any Credit Party and other
obligations under the Subordinated Debt Documents and any other Funded Debt of
any Credit Party, the terms of which are acceptable to the Agent and which has
been subordinated in right of payment and priority to the Indebtedness, all on
terms and conditions satisfactory to the Agent.
 
“Subordinated Debt Documents” shall mean and include any documents evidencing
any Subordinated Debt, in each case, as the same may be amended, modified,
supplemented or otherwise modified from time to time in compliance with the
terms of this Agreement.
 
“Subordination Agreements” shall mean any subordination agreements entered into
by any Person from time to time in favor of Agent in connection with any
Subordinated Debt, the terms of which are acceptable to the Agent, in each case
as the same may be amended, restated or otherwise modified from time to time,
and “Subordination Agreement” shall mean any one of them.
 
“Subsidiary(ies)” shall mean any other corporation, association, joint stock
company, business trust, limited liability company, partnership or any other
business entity of which more than fifty percent (50%) of the outstanding voting
stock, share capital, membership, partnership or other interests, as the case
may be, is owned either directly or indirectly by any Person or one or more of
its Subsidiaries, or the management of which is otherwise controlled, directly,
or indirectly through one or more intermediaries, or both, by any Person and/or
its Subsidiaries. Unless otherwise specified to the contrary herein or the
context otherwise requires, Subsidiary(ies) shall refer to the Subsidiary(ies)
of Sterling.
 
“Surety Agreement(s)” shall mean the Travelers Indemnity Agreement, the Liberty
Mutual Indemnity Agreement, and any other surety indemnity agreement which
contains substantially similar terms and conditions as the Travelers Indemnity
Agreement and which is for the benefit of a surety company that has been rated
by A.M. Best (or another generally accepted rating company) with a financial
strength rating and issuer credit ratings comparable to or better than Travelers
Casualty and Surety Company of America and which surety company has delivered a
“comfort letter” to Agent which is substantially similar to the letter delivered
pursuant to Section 5.1(a)(iii) hereof.
 
“Sweep Agreement” means any agreement relating to the “Sweep to Loan” automated
system of the Agent or any other cash management arrangement which any Borrower
and the Agent have executed for the purposes of effecting the borrowing and
repayment of Swing Line Advances.
 
“Swing Line” shall mean the revolving credit loans to be advanced to Borrowers
by the Swing Line Lender pursuant to Section 2.5 hereof, in an aggregate amount
(subject to the terms hereof), not to exceed, at any one time outstanding, the
Swing Line Maximum Amount.
 
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“Swing Line Advance” shall mean a borrowing requested by Borrowers and made by
Swing Line Lender pursuant to Section 2.5 hereof and may include, subject to the
terms hereof, Quoted Rate-Advances and Prime-based Advances.
 
“Swing Line Lender” shall mean Comerica Bank in its capacity as lender of the
Swing Line under Section 2.5 of this Agreement, or its successor as subsequently
designated hereunder.
 
“Swing Line Maximum Amount” shall mean Seven Million Five Hundred
Thousand  Dollars ($7,500,000).
 
“Swing Line Note” shall mean the swing line note which may be issued by
Borrowers to Swing Line Lender pursuant to Section 2.5(b)(ii) hereof in the form
attached hereto as Exhibit C, as such note may be amended or supplemented from
time to time, and any note or notes issued in substitution, replacement or
renewal thereof from time to time.
 
“Swing Line Participation Certificate” shall mean the Swing Line Participation
Certificate delivered by Agent to each Revolving Credit Lender pursuant to
Section 2.5(e)(ii) hereof in the form attached hereto as Exhibit M.
 
“Tangible Net Worth” shall mean as of any date of determination, for any Person
(a) the net book value of all assets of such Person (excluding patent rights,
trademarks, tradenames, franchises, copyrights, licenses, goodwill and all other
intangible assets of such Person) after all appropriate deductions in accordance
with GAAP (including, without limitation, reserves for doubtful receivables,
obsolescence, depreciation and amortization) less (b) all the total liabilities
of such Person reported on the balance sheet of such Person under GAAP at such
time.
 
“Target” shall have the meaning set forth in the definition of “Borrowers” in
this Agreement.
 
“Travelers Indemnity Agreement” shall mean that certain General Agreement of
Indemnity by and among Sterling and certain of its Subsidiaries for the benefit
of Traveler’s Casualty and Surety Company of America dated as of January 26,
2006.
 
“TSC” shall have the meaning set forth in the Preamble to this Agreement.
 
 “Uniform Commercial Code” or “UCC” shall mean the Uniform Commercial Code as in
effect in any applicable state; provided that, unless specified otherwise or the
context otherwise requires, such terms shall refer to the Uniform Commercial
Code as in effect in the State of Texas.
 
“USA Patriot Act” is defined in Section 6.7.
 
 “Withdrawal Liability” shall mean liability to a Multiemployer Plan as a result
of a complete or partial withdrawal from such Multiemployer Plan, as such terms
are defined in Part I of Subtitle E of Title IV of ERISA.
 
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2.REVOLVING CREDIT.

 
2.1           Commitment.  Subject to the terms and conditions of this Agreement
(including without limitation Section 2.3 hereof), each Revolving Credit Lender
severally and for itself alone agrees to make Advances of the Revolving Credit
in Dollars to Borrowers from time to time on any Business Day during the period
from the Effective Date hereof until (but excluding) the Revolving Credit
Maturity Date in an aggregate amount, not to exceed at any one time outstanding
such Lender’s Revolving Credit Percentage of the Revolving Credit Aggregate
Commitment. Subject to the terms and conditions set forth herein, advances,
repayments and readvances may be made under the Revolving Credit.
 
2.2           Accrual of Interest and Maturity; Evidence of Indebtedness.
 
 
(a)
Each Borrower hereby unconditionally promises to pay, jointly and severally, to
the Agent for the account of each Revolving Credit Lender the then unpaid
principal amount of each Revolving Credit Advance (plus all accrued and unpaid
interest) of such Revolving Credit Lender to Borrowers on the Revolving Credit
Maturity Date and on such other dates and in such other amounts as may be
required from time to time pursuant to this Agreement. Subject to the terms and
conditions hereof, each Revolving Credit Advance shall, from time to time from
and after the date of such Advance (until paid), bear interest at its Applicable
Interest Rate.

 
 
(b)
Each Revolving Credit Lender shall maintain in accordance with its usual
practice an account or accounts evidencing indebtedness of Borrowers to the
appropriate lending office of such Revolving Credit Lender resulting from each
Revolving Credit Advance made by such lending office of such Revolving Credit
Lender from time to time, including the amounts of principal and interest
payable thereon and paid to such Revolving Credit Lender from time to time under
this Agreement.

 
 
(c)
The Agent shall maintain the Register pursuant to Section 13.8(g), and a
subaccount therein for each Revolving Credit Lender, in which Register and
subaccounts (taken together) shall be recorded (i) the amount of each Revolving
Credit Advance made hereunder, the type thereof and each Eurodollar-Interest
Period applicable to any Eurodollar-based Advance, (ii) the amount of any
principal or interest due and payable or to become due and payable, jointly and
severally from Borrowers to each Revolving Credit Lender hereunder in respect of
the Revolving Credit Advances and (iii) both the amount of any sum received by
the Agent hereunder from Borrower in respect of the Revolving Credit Advances
and each Revolving Credit Lender’s share thereof.

 
 
(d)
The entries made in the Register maintained pursuant to paragraph (c) of this
Section 2.2 shall, absent manifest error, to the extent permitted by applicable
law, be prima facie evidence of the existence and amounts of the obligations of
Borrowers therein recorded; provided, however, that the failure of any Revolving
Credit Lender or the Agent to maintain the Register or any account, as
applicable, or any error therein, shall not in any manner affect the obligation
of Borrowers to repay the Revolving Credit Advances (and all other amounts owing
with respect thereto) made to Borrowers by the Revolving Credit Lenders in
accordance with the terms of this Agreement.

 
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(e)
Each Borrower agrees that, upon written request to the Agent by any Revolving
Credit Lender, such Borrower will execute and deliver, to such Revolving Credit
Lender, at such Borrower’s own expense, a Revolving Credit Note evidencing the
outstanding Revolving Credit Advances owing to such Revolving Credit Lender.

 
2.3           Requests for and Refundings and Conversions of
Advances.  Borrowers may request an Advance of the Revolving Credit, a refund of
any Revolving Credit Advance in the same type of Advance or to convert any
Revolving Credit Advance to any other type of Revolving Credit Advance only by
delivery to Agent of a Request for Revolving Credit Advance executed by an
Authorized Signer for the Borrower Representative, subject to the following:
 
 
(a)
each such Request for Revolving Credit Advance shall set forth the information
required on the Request for Revolving Credit Advance, including without
limitation:

 
 
(i)
the proposed date of such Revolving Credit Advance (or the refunding or
conversion of an outstanding Revolving Credit Advance), which must be a Business
Day;

 
 
(ii)
whether such Advance is a new Revolving Credit Advance or a refunding or
conversion of an outstanding Revolving Credit Advance; and

 
 
(iii)
whether such Revolving Credit Advance is to be a Prime-based Advance or a
Eurodollar-based Advance, and, except in the case of a Prime-based Advance, the
first Eurodollar-Interest Period applicable thereto, provided, however, that the
initial Revolving Credit Advance made under this Agreement shall be a
Prime-based Advance, which may then be converted into a Eurodollar-based Advance
in compliance with this Agreement.

 
 
(b)
each such Request for Revolving Credit Advance shall be delivered to Agent by
12:00 p.m. (Detroit time) three (3) Business Days prior to the proposed date of
the Revolving Credit Advance, except in the case of a Prime-based Advance, for
which the Request for Revolving Credit Advance must be delivered by 12:00 p.m.
(Detroit time) on the proposed date for such Revolving Credit Advance;

 
 
(c)
on the proposed date of such Revolving Credit Advance, the sum of (x) the
aggregate principal amount of all Revolving Credit Advances and Swing Line
Advances outstanding on such date (including, without duplication) the Advances
that are deemed to be disbursed by Agent under Section 3.6(a) hereof in respect
of Borrowers’ Reimbursement Obligations hereunder), plus (y) the Letter of
Credit Obligations as of such date, in each case after giving effect to all
outstanding requests for Revolving Credit Advances and Swing Line Advances and
for the issuance of any Letters of Credit, shall not exceed the Revolving Credit
Aggregate Commitment;

 
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(d)
in the case of a Prime-based Advance, the principal amount of the initial
funding of such Advance, as opposed to any refunding or conversion thereof,
shall be at least $1,000,000 or the remainder available under the Revolving
Credit Aggregate Commitment if less than $1,000,000;

 
 
(e)
in the case of a Eurodollar-based Advance, the principal amount of such Advance,
plus the amount of any other outstanding Revolving Credit Advance to be then
combined therewith having the same Eurodollar-Interest Period, if any, shall be
at least $2,000,000 (or a larger integral multiple of $100,000) or the remainder
available under the Revolving Credit Aggregate Commitment if less than
$2,000,000 and at any one time there shall not be in effect more than three (3)
different Eurodollar-Interest Periods;

 
 
(f)
a Request for Revolving Credit Advance, once delivered to Agent, shall not be
revocable by Borrowers and shall constitute a certification by Borrowers as of
the date thereof that:

 
 
(v)
all conditions to the making of Revolving Credit Advances set forth in this
Agreement have been satisfied, and shall remain satisfied to the date of such
Revolving Credit Advance (both before and immediately after giving effect to
such Revolving Credit Advance);

 
 
(vi)
there is no Default or Event of Default in existence, and none will exist upon
the making of such Revolving Credit Advance (both before and immediately after
giving effect to such Revolving Credit Advance); and

 
 
(vii)
the representations and warranties of the Credit Parties contained in this
Agreement and the other Loan Documents are true and correct in all material
respects and shall be true and correct in all material respects as of the date
of the making of such Revolving Credit Advance (both before and immediately
after giving effect to such Revolving Credit Advance), other than any
representation or warranty that expressly speaks only as of a different date;

 
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Agent, acting on behalf of the Revolving Credit Lenders, may also, at its
option, lend under this Section 2.3 upon the telephone or email request of an
Authorized Signer of the Borrower Representative to make such requests and, in
the event Agent, acting on behalf of the Revolving Credit Lenders, makes any
such Advance upon a telephone or email request, an Authorized Signer shall fax
or deliver by electronic file to Agent, on the same day as such telephone or
email request, an executed Request for Revolving Credit Advance. Each Borrower
hereby authorizes Agent to disburse Advances under this Section 2.3 pursuant to
the telephone or email instructions of any person purporting to be an Authorized
Signer. Notwithstanding the foregoing, Borrowers acknowledge that Borrowers
shall bear all risk of loss resulting from disbursements made upon any telephone
or email request. Each telephone or email request for an Advance from an
Authorized Signer for the Borrower Representative shall constitute a
certification by the Borrowers of the matters set forth in the Request for
Revolving Credit Advance form as of the date of such requested Advance.
 
2.4           Disbursement of Advances.
 
(a)           Upon receiving any Request for Revolving Credit Advance from
Borrowers under Section 2.3 hereof, Agent shall promptly notify each Revolving
Credit Lender by wire, telex or telephone (confirmed by wire, telecopy or telex)
of the amount of such Advance being requested and the date such Revolving Credit
Advance is to be made by each Revolving Credit Lender in an amount equal to its
Revolving Credit Percentage of such Advance. Unless such Revolving Credit
Lender’s commitment to make Revolving Credit Advances hereunder shall have been
suspended or terminated in accordance with this Agreement, each such Revolving
Credit Lender shall make available the amount of its Revolving Credit Percentage
of each Revolving Credit Advance in immediately available funds to Agent, as
follows:
 
 
(i)
for Prime-based Advances, at the office of Agent located at One Detroit Center,
Detroit, Michigan 48226, not later than 1:00 p.m. (Detroit time) on the date of
such Advance; and

 
 
(ii)
for Eurodollar-based Advances, at the Agent’s Correspondent for the account of
the Eurodollar Lending Office of the Agent, not later than 12:00 p.m. (the time
of the Agent’s Correspondent) on the date of such Advance.

 
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(b)           Subject to submission of an executed Request for Revolving Credit
Advance by Borrowers without exceptions noted in the compliance certification
therein, Agent shall make available to Borrowers the aggregate of the amounts so
received by it from the Revolving Credit Lenders in Dollars:
 
 
(i)
for Prime-based Advances, not later than 4:00 p.m. (Detroit time) on the date of
such Revolving Credit Advance, by credit to an account of Borrowers maintained
with Agent or to such other account or third party as Borrowers may reasonably
direct in writing, provided such direction is timely given; and

 
 
(ii)
for Eurodollar-based Advances, not later than 4:00 p.m. (the time of the Agent’s
Correspondent) on the date of such Revolving Credit Advance, by credit to an
account of Borrowers maintained with Agent’s Correspondent or to such other
account or third party as Borrowers may direct, provided such direction is
timely given.

 
(c)           Agent shall deliver the documents and papers received by it for
the account of each Revolving Credit Lender to such Revolving Credit Lender.
Unless Agent shall have been notified by any Revolving Credit Lender prior to
the date of any proposed Revolving Credit Advance that such Revolving Credit
Lender does not intend to make available to Agent such Revolving Credit Lender’s
Percentage of such Advance, Agent may assume that such Revolving Credit Lender
has made such amount available to Agent on such date, as aforesaid.  Agent may,
but shall not be obligated to, make available to Borrowers the amount of such
payment in reliance on such assumption. If such amount is not in fact made
available to Agent by such Revolving Credit Lender, as aforesaid, Agent shall be
entitled to recover such amount on demand from such Revolving Credit Lender. If
such Revolving Credit Lender does not pay such amount forthwith upon Agent’s
demand therefor and the Agent has in fact made a corresponding amount available
to Borrowers, the Agent shall promptly notify Borrowers and Borrowers shall pay
such amount to Agent, if such notice is delivered to Borrowers prior to 1:00
p.m. (Detroit time) on a Business Day, on the day such notice is received, and
otherwise on the next Business Day, and such amount paid by Borrowers shall be
applied as a prepayment of the Revolving Credit (without any corresponding
reduction in the Revolving Credit Aggregate Commitment), reimbursing Agent for
having funded said amounts on behalf of such Revolving Credit Lender.  The
Borrowers shall retain their claims against such Revolving Credit Lender with
respect to the amounts repaid by it to Agent and, if such Revolving Credit
Lender subsequently makes such amounts available to Agent, Agent shall promptly
make such amounts available to the Borrowers as a Revolving Credit Advance.
Agent shall also be entitled to recover from such Revolving Credit Lender or
Borrowers, as the case may be, but without duplication, interest on such amount
in respect of each day from the date such amount was made available by Agent to
Borrowers, to the date such amount is recovered by Agent, at a rate per annum
equal to:
 
 
(i)
in the case of such Revolving Credit Lender, for the first two (2) Business Days
such amount remains unpaid, the Federal Funds Effective Rate, and thereafter, at
the rate of interest then applicable to such Revolving Credit Advances; and

 
 
(ii)
in the case of Borrowers, the rate of interest then applicable to such Advance
of the Revolving Credit.

 
Until such Revolving Credit Lender has paid Agent such amount, such Revolving
Credit Lender shall have no interest in or rights with respect to such Advance
for any purpose whatsoever.  The obligation of any Revolving Credit Lender to
make any Revolving Credit Advance hereunder shall not be affected by the failure
of any other Revolving Credit Lender to make any Advance hereunder, and no
Revolving Credit Lender shall have any liability to the Borrowers or any of
their respective Subsidiaries, the Agent, any other Revolving Credit Lender, or
any other party for another Revolving Credit Lender’s failure to make any loan
or Advance hereunder.
 
2.5           Swing Line Advances.
 
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   i) Commitment. The Swing Line Lender may, on the terms and subject to the
conditions hereinafter set forth (including without limitation Section 2.5(c)
hereof), but shall not be required to, make one or more Advances (each such
advance being a “Swing Line Advance”) to the Borrowers from time to time on any
Business Day during the period from the Effective Date hereof until (but
excluding) the Revolving Credit Maturity Date in an aggregate amount not to
exceed at any one time outstanding the Swing Line Maximum Amount. Subject to the
terms set forth herein, advances, repayments and readvances may be made under
the Swing Line.
 
(b)           Accrual of Interest and Maturity; Evidence of Indebtedness.
 
 
(i)
Swing Line Lender shall maintain in accordance with its usual practice an
account or accounts evidencing indebtedness of the Borrowers to Swing Line
Lender resulting from each Swing Line Advance from time to time, including the
amount and date of each Swing Line Advance, its Applicable Interest Rate, its
Interest Period, if any, and the amount and date of any repayment made on any
Swing Line Advance from time to time. The entries made in such account or
accounts of Swing Line Lender shall be prima facie evidence, absent manifest
error, of the existence and amounts of the obligations of the Borrowers therein
recorded; provided, however, that the failure of Swing Line Lender to maintain
such account, as applicable, or any error therein, shall not in any manner
affect the obligation of the Borrowers to repay the Swing Line Advances (and all
other amounts owing with respect thereto) in accordance with the terms of this
Agreement.

 
 
(ii)
Each Borrower agrees that, upon the written request of Swing Line Lender, the
Borrowers will execute and deliver to Swing Line Lender a Swing Line Note.

 
 
(iii)
Each Borrower unconditionally promises to pay, jointly and severally, to the
Swing Line Lender the then unpaid principal amount of such Swing Line Advance
(plus all accrued and unpaid interest) on the Revolving Credit Maturity Date and
on such other dates and in such other amounts as may be required from time to
time pursuant to this Agreement.  Subject to the terms and conditions hereof,
each Swing Line Advance shall, from time to time after the date of such Advance
(until paid), bear interest at its Applicable Interest Rate.

 
 
(c)
Requests for Swing Line Advances.  Borrowers may request a Swing Line Advance by
the delivery to Swing Line Lender of a Request for Swing Line Advance executed
by an Authorized Signer for the Borrower Representative, subject to the
following:

 
 
(i)
each such Request for Swing Line Advance shall set forth the information
required on the Request for Advance, including without limitation, (A) the
proposed date of such Swing Line Advance, which must be a Business Day, (B)
whether such Swing Line Advance is to be a Prime-based Advance or a Quoted Rate
Advance, and (C) in the case of a Quoted Rate Advance, the duration of the
Interest Period applicable thereto;

 
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(ii)
on the proposed date of such Swing Line Advance, after giving effect to all
outstanding requests for Swing Line Advances made by Borrowers as of the date of
determination, the aggregate principal amount of all Swing Line Advances
outstanding on such date shall not exceed the Swing Line Maximum Amount;

 
 
(iii)
on the proposed date of such Swing Line Advance, after giving effect to all
outstanding requests for Revolving Credit Advances and Swing Line Advances and
Letters of Credit requested by the Borrowers on such date of determination
(including, without duplication, Advances that are deemed disbursed pursuant to
Section 3.6(a) hereof in respect of the Borrowers’ Reimbursement Obligations
hereunder), the sum of (x) the aggregate principal amount of all Revolving
Credit Advances and the Swing Line Advances outstanding on such date plus (y)
the Letter of Credit Obligations on such date shall not exceed the Revolving
Credit Aggregate Commitment;

 
 
(iv)
(A) in the case of a Swing Line Advance that is a Prime-based Advance, the
principal amount of the initial funding of such Advance, as opposed to any
refunding or conversion thereof, shall be at least Two Hundred Fifty Thousand
Dollars ($250,000) or such lesser amount as may be agreed to by the Swing Line
Lender, and (B) in the case of a Swing Line Advance that is a Quoted Rate
Advance, the principal amount of such Advance, plus any other outstanding Swing
Line Advances to be then combined therewith having the same Interest Period, if
any, shall be at least Two Hundred Fifty Thousand Dollars ($250,000) or such
lesser amount as may be agreed to by the Swing Line Lender, and at any time
there shall not be in effect more than three (3) Interest Rates and Interest
Periods;

 
 
(v)
each such Request for Swing Line Advance shall be delivered to the Swing Line
Lender by 3:00 p.m. (Detroit time) on the proposed date of the Swing Line
Advance;

 
 
(vi)
each Request for Swing Line Advance, once delivered to Swing Line Lender, shall
not be revocable by Borrowers, and shall constitute and include a certification
by Borrowers as of the date thereof that:

 
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(A)
all conditions to the making of Swing Line Advances set forth in this Agreement
shall have been satisfied and shall remain satisfied to the date of such Swing
Line Advance (both before and immediately after giving effect to such Swing Line
Advance);

 
 
(B)
there is no Default or Event of Default in existence, and none will exist upon
the making of such Swing Line Advance (both before and immediately after giving
effect to such Swing Line Advance); and

 
 
(C)
the representations and warranties of the Credit Parties contained in this
Agreement and the other Loan Documents are true and correct in all material
respects and shall be true and correct in all material respect as of the date of
the making of such Swing Line Advance (both before and immediately after giving
effect to such Swing Line Advance), other than any representation or warranty
that expressly speaks only as of a different date;

 
 
(vii)
At the option of the Agent, subject to revocation by Agent at any time and from
time to time and so long as the Agent is the Swing Line Lender, Borrowers may
utilize the Agent’s “Sweep to Loan” automated system for obtaining Swing Line
Advances and making periodic repayments. At any time during which the “Sweep to
Loan” system is in effect, Swing Line Advances shall be advanced to fund
borrowing needs pursuant to the terms of the Sweep Agreement. Each time a Swing
Line Advance is made using the “Sweep to Loan” system, Borrowers shall be deemed
to have certified to the Agent and the Lenders each of the matters set forth in
clause (vi) of this Section 2.5(b).  Principal and interest on Swing Line
Advances requested, or deemed requested, pursuant to this Section shall be paid
pursuant to the terms and conditions of the Sweep Agreement without any
deduction, setoff or counterclaim whatsoever.  Unless sooner paid pursuant to
the provisions hereof or the provisions of the Sweep Agreement, the principal
amount of the Swing Loans shall be paid in full, together with accrued interest
thereon, on the Revolving Credit Maturity Date.  Agent may suspend or revoke
Borrowers’ privilege to use the “Sweep to Loan” system at any time and from time
to time for any reason and, immediately upon any such revocation, the “Sweep to
Loan” system shall no longer be available to Borrowers for the funding of Swing
Line Advances hereunder (or otherwise), and the regular procedures set forth in
this Section 2.5 for the making of Swing Line Advances shall be deemed
immediately to apply. Agent may, at its option, also elect to make Swing Line
Advances upon the Borrower Representative’s telephone requests on the basis set
forth in the last paragraph of Section 2.3, provided that the Borrowers comply
with the provisions set forth in this Section 2.5.

 
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(d)
Disbursement of Swing Line Advances.  Upon receiving any executed Request for
Swing Line Advance from the Borrowers and the satisfaction of the conditions set
forth in Section 2.5(c) hereof, Swing Line Lender shall make available to
Borrowers the amount so requested in Dollars not later than 4:00 p.m. (Detroit
time) on the date of such Advance, by credit to an account of Borrowers
maintained with Agent or to such other account or third party as the Borrowers
may reasonably direct in writing, subject to applicable law, provided such
direction is timely given. Swing Line Lender shall promptly notify Agent of any
Swing Line Advance by telephone, telex or telecopier.

 
 
(e)
Refunding of or Participation Interest in Swing Line Advances.

 
 
(i)
The Agent, at any time in its sole and absolute discretion, may, in each case on
behalf of the Borrowers (which hereby irrevocably directs the Agent to act on
their behalf) request each of the Revolving Credit Lenders (including the Swing
Line Lender in its capacity as a Revolving Credit Lender) to make an Advance of
the Revolving Credit to Borrowers, in an amount equal to such Revolving Credit
Lender’s Revolving Credit Percentage of the aggregate principal amount of the
Swing Line Advances outstanding on the date such notice is given (the “Refunded
Swing Line Advances”); provided however that the Swing Line Advances carried at
the Quoted Rate which are refunded with Revolving Credit Advances at the request
of the Swing Line Lender at a time when no Default or Event of Default has
occurred and is continuing shall not be subject to Section 11.1 and no losses,
costs or expenses may be assessed by the Swing Line Lender against the Borrowers
or the Revolving Credit Lenders as a consequence of such refunding. The
applicable Revolving Credit Advances used to refund any Swing Line Advances
shall be Prime-based Advances. In connection with the making of any such
Refunded Swing Line Advances or the purchase of a participation interest in
Swing Line Advances under Section 2.5(e)(ii) hereof, the Swing Line Lender shall
retain its claim against Borrowers for any unpaid interest or fees in respect
thereof accrued to the date of such refunding. Unless any of the events
described in Section 9.1(i) hereof shall have occurred (in which event the
procedures of Section 2.5(e)(ii) shall apply) and regardless of whether the
conditions precedent set forth in this Agreement to the making of a Revolving
Credit Advance are then satisfied (but subject to Section 2.5(e)(iii)), each
Revolving Credit Lender shall make the proceeds of its Revolving Credit Advance
available to the Agent for the benefit of the Swing Line Lender at the office of
the Agent specified in Section 2.4(a) hereof prior to 11:00 a.m. Detroit time on
the Business Day next succeeding the date such notice is given, in immediately
available funds. The proceeds of such Revolving Credit Advances shall be
immediately applied to repay the Refunded Swing Line Advances, subject to
Section 11.1 hereof.

 
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(ii)
If, prior to the making of an Advance of the Revolving Credit pursuant to
Section 2.5(e)(i) hereof, one of the events described in Section 9.1(i) hereof
shall have occurred, each Revolving Credit Lender will, on the date such Advance
of the Revolving Credit was to have been made, purchase from the Swing Line
Lender an undivided participating interest in each Swing Line Advance that was
to have been refunded in an amount equal to its Revolving Credit Percentage of
such Swing Line Advance. Each Revolving Credit Lender within the time periods
specified in Section 2.5(e)(i) hereof, as applicable, shall immediately transfer
to the Agent, for the benefit of the Swing Line Lender, in immediately available
funds, an amount equal to its Revolving Credit Percentage of the aggregate
principal amount of all Swing Line Advances outstanding as of such date.  Upon
receipt thereof, the Agent will deliver to such Revolving Credit Lender a Swing
Line Participation Certificate evidencing such participation.

 
 
(iii)
Each Revolving Credit Lender’s obligation to make Revolving Credit Advances to
refund Swing Line Advances, and to purchase participation interests, in
accordance with Section 2.5(e)(i) and (ii), respectively, shall be absolute and
unconditional and shall not be affected by any circumstance, including, without
limitation, (A) any set-off, counterclaim, recoupment, defense or other right
which such Revolving Credit Lender may have against Swing Line Lender, Borrowers
or any other Person for any reason whatsoever; (B) the occurrence or continuance
of any Default or Event of Default; (C) any adverse change in the condition
(financial or otherwise) of Borrowers or any other Person; (D) any breach of
this Agreement or any other Loan Document by Borrowers or any other Person; (E)
any inability of Borrowers to satisfy the conditions precedent to borrowing set
forth in this Agreement on the date upon which such Revolving Credit Advance is
to be made or such participating interest is to be purchased; (F) the
termination of the Revolving Credit Aggregate Commitment hereunder; or (G) any
other circumstance, happening or event whatsoever, whether or not similar to any
of the foregoing. If any Revolving Credit Lender does not make available to the
Agent the amount required pursuant to Section 2.5(e)(i) or (ii) hereof, as the
case may be, the Agent on behalf of the Swing Line Lender, shall be entitled to
recover such amount on demand from such Revolving Credit Lender, together with
interest thereon for each day from the date of non-payment until such amount is
paid in full (x) for the first two (2) Business Days such amount remains unpaid,
at the Federal Funds Effective Rate and (y) thereafter, at the rate of interest
then applicable to such Swing Line Advances. The obligation of any Revolving
Credit Lender to make available its pro rata portion of the amounts required
pursuant to Section 2.5(e)(i) or (ii) hereof shall not be affected by the
failure of any other Revolving Credit Lender to make such amounts available, and
no Revolving Credit Lender shall have any liability to any Credit Party, the
Agent, the Swing Line Lender, or any other Revolving Credit Lender or any other
party for another Revolving Credit Lender’s failure to make available the
amounts required under Section 2.5(e)(i) or (ii) hereof.

 
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(iv)
Notwithstanding the foregoing, no Revolving Credit Lender shall be required to
make any Revolving Credit Advance to refund a Swing Line Advance or to purchase
a participation in a Swing Line Advance if at least two (2) Business Days prior
to the making of such Swing Line Advance by the Swing Line Lender, the officers
of the Swing Line Lender immediately responsible for matters concerning this
Agreement shall have received written notice from Agent or any Lender that Swing
Line Advances should be suspended based on the occurrence and continuance of a
Default or Event of Default and stating that such notice is a “notice of
default”; provided, however that the obligation of  the Revolving Credit Lenders
to make such Revolving Credit Advances (or purchase such participations) shall
be reinstated upon the date on which such Default or Event of Default has been
waived by the requisite Lenders.

 
2.6           Interest Payments; Default Interest
 
(a)           Interest on the unpaid balance of all Prime-based Advances of the
Revolving Credit and the Swing Line from time to time outstanding shall accrue
from the date of such Advance to the date repaid, at a per annum interest rate
equal to the Prime-based Rate, and shall be payable in immediately available
funds commencing on December 1, and on the first day of each calendar month
thereafter. Whenever any payment under this Section 2.6(a) shall become due on a
day which is not a Business Day, the date for payment thereof shall be extended
to the next Business Day. Interest accruing at the Prime-based Rate shall be
computed on the basis of a 360 day year and assessed for the actual number of
days elapsed, and in such computation effect shall be given to any change in the
interest rate resulting from a change in the Prime-based Rate on the date of
such change in the Prime-based Rate.
 
(b)           Interest on each Eurodollar-based Advance of the Revolving Credit
shall accrue at its Eurodollar-based Rate and shall be payable in immediately
available funds on the last day of the Eurodollar-Interest Period applicable
thereto (and, if any Eurodollar-Interest Period shall exceed three months, then
on the last Business Day of the third month of such Eurodollar-Interest Period,
and at three month intervals thereafter). Interest accruing at the
Eurodollar-based Rate shall be computed on the basis of a 360 day year and
assessed for the actual number of days elapsed from the first day of the
Eurodollar-Interest Period applicable thereto to but not including the last day
thereof.
 
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(c)           Interest on each Quoted Rate Advance of the Swing Line shall
accrue at its Quoted Rate and shall be payable in immediately available funds on
the last day of the Interest Period applicable thereto. Interest accruing at the
Quoted Rate shall be computed on the basis of a 360-day year and assessed for
the actual number of days elapsed from the first day of the Interest Period
applicable thereto to, but not including, the last day thereof.
 
(d)           Notwithstanding anything to the contrary in the preceding
sections, all accrued and unpaid interest on any Revolving Credit Advance
refunded or converted pursuant to Section 2.3 hereof and any Swing Line Advance
refunded pursuant to Section 2.5(e) hereof, shall be due and payable in full on
the date such Advance is refunded or converted.
 
(e)           In the case of any Event of Default under Section 9.1(i),
immediately upon the occurrence thereof, and in the case of any other Event of
Default, immediately upon receipt by Agent of notice from the Majority Revolving
Credit Lenders, interest shall be payable on demand on all Revolving Credit
Advances and Swing Line Advances from time to time outstanding at a per annum
rate equal to the Applicable Interest Rate in respect of each such Advance plus,
in the case of Eurodollar-based Advances and Quoted Rate Advances, two percent
(2%) for the remainder of the then existing Interest Period, if any, and at all
other such times, and for all Prime-based Advances from time to time
outstanding, at a per annum rate equal to the Prime-based Rate plus two percent
(2%).
 
2.7           Optional Prepayments.
 
(a)           (i) The Borrowers may prepay all or part of the outstanding
principal of any Prime-based Advance(s) of the Revolving Credit at any time,
provided that, unless the “Sweep to Loan” system shall be in effect in respect
of the Revolving Credit, after giving effect to any partial prepayment, the
aggregate balance of Prime-based Advance(s) of the Revolving Credit remaining
outstanding shall be at least One Million Dollars ($1,000,000), and (ii) subject
to Section 2.10(c) hereof, the Borrowers may prepay all or part of the
outstanding principal of any Eurodollar-based Advance of the Revolving Credit at
any time (subject to not less than five (5) Business Day’s notice to Agent)
provided that, after giving effect to any partial prepayment, the unpaid portion
of such Advance which is to be refunded or converted under Section 2.3 hereof
shall be at least Two Million Five Hundred Thousand Dollars ($2,500,000).
 
(b)           (i) The Borrowers may prepay all or part of the outstanding
principal of any Swing Line Advance carried at the Prime-based Rate at any time,
provided that after giving effect to any partial prepayment, the aggregate
balance of such Prime-based Swing Line Advances remaining outstanding shall be
at least One Hundred Thousand Dollars ($100,000) and (ii) subject to Section
2.10(c) hereof, the Borrowers may prepay all or part of the outstanding
principal of any Swing Line Advance carried at the Quoted Rate at any time
(subject to not less than one (1) day’s notice to the Swing Line Lender)
provided that after giving effect to any partial prepayment, the aggregate
balance of such Quoted Rate Swing Line Advances remaining outstanding shall be
at least Two Hundred Fifty Thousand Dollars ($250,000).
 
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(c)           Any prepayment of a Prime-based Advance made in accordance with
this Section shall be without premium or penalty and any prepayment of any other
type of Advance shall be subject to the provisions of Section 11.1 hereof, but
otherwise without premium or penalty.
 
2.8           Prime-based Advance in Absence of Election or Upon Default.  If,
(a) as to any outstanding Eurodollar-based Advance of the Revolving Credit or
any outstanding Quoted Rate Advance of the Swing Line, Agent has not received
payment of all outstanding principal and accrued interest on the last day of the
Interest Period applicable thereto, or does not receive a timely Request for
Advance meeting the requirements of Section 2.3 or 2.5 hereof with respect to
the refunding or conversion of such Advance, or (b) if on the last day of the
applicable Interest Period a Default or an Event of Default shall have occurred
and be continuing, then, on the last day of the applicable Interest Period the
principal amount of any Eurodollar-based Advance or Quoted Rate Advance, as the
case may be, which has not been prepaid shall, absent a contrary election of the
Majority Revolving Credit Lenders, be converted automatically to a Prime-based
Advance and the Agent shall thereafter promptly notify Borrowers of said
action.  All accrued and unpaid interest on any Advance converted to a
Prime-based Advance under this Section 2.8 shall be due and payable in full on
the date such Advance is converted.
 
2.9           Revolving Credit Facility Fee.  From the Effective Date to the
Revolving Credit Maturity Date, the Borrowers shall pay, jointly and severally,
to the Agent for distribution to the Lenders pro-rata in accordance with their
respective Percentages, a Revolving Credit Facility Fee quarterly in arrears
commencing January 1, 2008 and on the first day of each calendar quarter
thereafter (in respect of the prior three months or any portion thereof). The
Revolving Credit Facility Fee payable to each Lender shall be determined by
multiplying the Applicable Fee Percentage times such Lender’s Revolving Credit
Percentage of the Revolving Credit Aggregate Commitment then in effect (whether
used or unused). The Revolving Credit Facility Fee shall be computed on the
basis of a year of three hundred sixty (360) days and assessed for the actual
number of days elapsed. Whenever any payment of the Revolving Credit Facility
Fee shall be due on a day which is not a Business Day, the date for payment
thereof shall be extended to the next Business Day. Upon receipt of such
payment, Agent shall make prompt payment to each Lender of its share of the
Revolving Credit Facility Fee based upon its respective Percentage. It is
expressly understood that the Revolving Credit Facility Fees described in this
Section are not refundable.
 
2.10           Mandatory Repayment of Revolving Credit Advances.
 
(a)           If at any time and for any reason the aggregate outstanding
principal amount of Revolving Credit Advances plus Swing Line Advances, plus the
outstanding Letter of Credit Obligations, shall exceed the Revolving Credit
Aggregate Commitment, Borrowers shall immediately reduce any pending request for
a Revolving Credit Advance on such day by the amount of such excess and, to the
extent any excess remains thereafter, repay any Revolving Credit Advances and
Swing Line Advances in an amount equal to the lesser of the outstanding amount
of such Advances and the amount of such remaining excess, with such amounts to
be applied between the Revolving Credit Advances and Swing Line Advances as
determined by the Agent and then, to the extent that any excess remains after
payment in full of all Revolving Credit Advances and Swing Line Advances, to
provide cash collateral in support of any Letter of Credit Obligations in an
amount equal to the lesser of (x) 105% of the amount of such Letter of Credit
Obligations and (y) the amount of such remaining excess, with such cash
collateral to be provided on the basis set forth in Section 9.2 hereof. Each
Borrower acknowledges that, in connection with any repayment required hereunder,
it shall also be responsible for the reimbursement of any prepayment or other
costs required under Section 11.1 hereof.  Any payments made pursuant to this
Section shall be applied first to outstanding Prime-based Advances under the
Revolving Credit, next to Swing Line Advances carried at the Prime-based Rate
and then to Eurodollar-based Advances of the Revolving Credit, and then to Swing
Line Advances carried at the Quoted Rate.
 
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(b)           Intentionally omitted.
 
(c)           To the extent that, on the date any mandatory repayment of the
Revolving Credit Advances under this Section 2.10 or payment pursuant to the
terms of any of the Loan Documents is due, the Indebtedness under the Revolving
Credit or any other Indebtedness to be prepaid is being carried, in whole or in
part, at the Eurodollar-based Rate and no Default or Event of Default has
occurred and is continuing, Borrowers may deposit the amount of such mandatory
prepayment in a cash collateral account to be held by the Agent, for and on
behalf of the Revolving Credit Lenders, on such terms and conditions as are
reasonably acceptable to Agent and upon such deposit the obligation of Borrowers
to make such mandatory prepayment shall be deemed satisfied. Subject to the
terms and conditions of said cash collateral account, sums on deposit in said
cash collateral account shall be applied (until exhausted) to reduce the
principal balance of the Revolving Credit on the last day of each
Eurodollar-Interest Period attributable to the Eurodollar-based Advances of such
Revolving Advance, thereby avoiding breakage costs under Section 11.1 hereof;
provided, however, that if a Default or Event of Default shall have occurred at
any time while sums are on deposit in the cash collateral account, Agent may, in
its sole discretion, elect to apply such sums to reduce the principal balance of
such Eurodollar-based Advances prior to the last day of the applicable
Eurodollar-Interest Period, and the Borrowers will be obligated to pay any
resulting breakage costs under Section 11.1.
 
2.11           Optional Reduction or Termination of Revolving Credit Aggregate
Commitment.  Borrowers may, upon at least five (5) Business Days’ prior written
notice to the Agent, permanently reduce the Revolving Credit Aggregate
Commitment in whole at any time, or in part from time to time, without premium
or penalty, provided that: (i) each partial reduction of the Revolving Credit
Aggregate Commitment shall be in an aggregate amount equal to One Million
Dollars ($1,000,000) or a larger integral multiple of One Hundred Thousand
Dollars ($100,000); (ii) each reduction shall be accompanied by the payment of
the Revolving Credit Facility Fee, if any, accrued and unpaid to the date of
such reduction; (iii) Borrowers shall prepay in accordance with the terms hereof
the amount, if any, by which the aggregate unpaid principal amount of Revolving
Credit Advances and Swing Line Advances (including, without duplication, any
deemed Advances made under Section 3.6 hereof) outstanding hereunder, plus the
Letter of Credit Obligations, exceeds the amount of the then applicable
Revolving Credit Aggregate Commitment as so reduced, together with interest
thereon to the date of prepayment; (iv) no reduction shall reduce the Revolving
Credit Aggregate Commitment to an amount which is less than the aggregate
undrawn amount of any Letters of Credit outstanding at such time; and (v) no
such reduction shall reduce the Swing Line Maximum Amount unless Borrowers so
elect, provided that the Swing Line Maximum Amount shall at no time be greater
than the Revolving Credit Aggregate Commitment; provided, however that if the
termination or reduction of the Revolving Credit Aggregate Commitment requires
the prepayment of a Eurodollar-based Advance or a Quoted Rate Advance and such
termination or reduction is made on a day other than the last Business Day of
the then current Interest Period applicable to such Eurodollar-based Advance or
such Quoted Rate Advance, then, pursuant to Section 11.1, Borrowers shall
compensate the Revolving Credit Lenders and/or the Swing Line Lender for any
losses or, so long as no Default or Event of Default has occurred and is
continuing, Borrowers may deposit the amount of such prepayment in a collateral
account as provided in Section 2.10(c). Reductions of the Revolving Credit
Aggregate Commitment and any accompanying prepayments of Advances of the
Revolving Credit shall be distributed by Agent to each Revolving Credit Lender
in accordance with such Revolving Credit Lender’s Revolving Percentage thereof,
and will not be available for reinstatement by or readvance to Borrowers and any
accompanying prepayments of Advances of the Swing Line shall be distributed by
Agent to the Swing Line Lender and will not be available for reinstatement by or
readvance to the Borrowers. Any reductions of the Revolving Credit Aggregate
Commitment hereunder shall reduce each Revolving Credit Lender’s portion thereof
proportionately (based on the applicable Percentages), and shall be permanent
and irrevocable. Any payments made pursuant to this Section shall be applied
first to outstanding Prime-based Advances under the Revolving Credit, next to
Swing Line Advances carried at the Prime-based Rate and then to Eurodollar-based
Advances of the Revolving Credit, and then to Swing Line Advances carried at the
Quoted Rate.
 
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2.12           Use of Proceeds of Advances.  Advances of the Revolving Credit
shall be used to finance working capital, to refinance existing Debt and to
consummate the Acquisition and other lawful corporate purposes.
 
 
3.LETTERS OF CREDIT.

 
3.1           Letters of Credit.  Subject to the terms and conditions of this
Agreement, Issuing Lender may through the Issuing Office, at any time and from
time to time from and after the date hereof until thirty (30) days prior to the
Revolving Credit Maturity Date, upon the written request of Borrowers
accompanied by a duly executed Letter of Credit Agreement and such other
documentation related to the requested Letter of Credit as the Issuing Lender
may require, issue Letters of Credit in Dollars for the account of Borrowers, in
an aggregate amount for all Letters of Credit issued hereunder at any one time
outstanding not to exceed the Letter of Credit Maximum Amount. Each Letter of
Credit shall be in a minimum face amount of One Hundred Thousand Dollars
($100,000) (or such lesser amount as may be agreed to by Issuing Lender) and
each Letter of Credit (including any renewal thereof) shall expire not later
than the first to occur of (i) thirteen months after the date of issuance
thereof and (ii) ten (10) Business Days prior to the Revolving Credit Maturity
Date in effect on the date of issuance thereof, provided, however, with the
consent of the Issuing Lender, a Letter of Credit may provide that such Letter
of Credit shall automatically renew at the end of such term unless Issuing
Lender shall have given written notice at least thirty (30) days prior to the
expiration of such Letter of Credit.  The submission of all applications in
respect of and the issuance of each Letter of Credit hereunder shall be subject
in all respects to the International Standby Practices 98, and any successor
documentation thereto and to the extent not inconsistent therewith, the laws of
the State of Michigan. In the event of any conflict between this Agreement and
any Letter of Credit Document other than any Letter of Credit, this Agreement
shall control.
 
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3.2           Conditions to Issuance.  No Letter of Credit shall be issued at
the request and for the account of Borrowers unless, as of the date of issuance
of such Letter of Credit:
 
 
(a)
(i) after giving effect to the Letter of Credit requested, the Letter of Credit
Obligations do not exceed the Letter of Credit Maximum Amount; and (ii) after
giving effect to the Letter of Credit requested, the Letter of Credit
Obligations on such date plus the aggregate amount of all Revolving Credit
Advances and Swing Line Advances (including all Advances deemed disbursed by
Agent under Section 3.6(a) hereof in respect of Borrowers’ Reimbursement
Obligations) hereunder requested or outstanding on such date do not exceed the
Revolving Credit Aggregate Commitment;

 
 
(b)
the representations and warranties of the Credit Parties contained in this
Agreement and the other Loan Documents are true and correct in all material
respects and shall be true and correct in all material respects as of date of
the issuance of such Letter of Credit (both before and immediately after the
issuance of such Letter of Credit), other than any representation or warranty
that expressly speaks only as of a different date;

 
 
(c)
there is no Default or Event of Default in existence, and none will exist upon
the issuance of such Letter of Credit;

 
 
(d)
Borrowers shall have delivered to Issuing Lender at its Issuing Office, not less
than three (3) Business Days prior to the requested date for issuance (or such
shorter time as the Issuing Lender, in its sole discretion, may permit), the
Letter of Credit Agreement related thereto, together with such other documents
and materials as may be required pursuant to the terms thereof, and the terms of
the proposed Letter of Credit shall be reasonably satisfactory to Issuing
Lender;

 
 
(e)
no order, judgment or decree of any court, arbitrator or governmental authority
shall purport by its terms to enjoin or restrain Issuing Lender from issuing the
Letter of Credit requested, or any Revolving Credit Lender from taking an
assignment of its Revolving Credit Percentage thereof pursuant to Section 3.6
hereof, and no law, rule, regulation, request or directive (whether or not
having the force of law) shall prohibit the Issuing Lender from issuing, or any
Revolving Credit Lender from taking an assignment of its Revolving Credit
Percentage of, the Letter of Credit requested or letters of credit generally;

 
 
(f)
there shall have been (i) no introduction of or change in the interpretation of
any law or regulation, (ii) no declaration of a general banking moratorium by
banking authorities in the United States, Michigan or the respective
jurisdictions in which the Revolving Credit Lenders, the Borrowers and the
beneficiary of the requested Letter of Credit are located, and (iii) no
establishment of any new restrictions by any central bank or other governmental
agency or authority on transactions involving letters of credit or on banks
generally that, in any case described in this clause (e), would make it unlawful
or unduly burdensome for the Issuing Lender to issue or any Revolving Credit
Lender to take an assignment of its Revolving Credit Percentage of the requested
Letter of Credit or letters of credit generally; and

 
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(g)
Issuing Lender shall have received the issuance fees required in connection with
the issuance of such Letter of Credit pursuant to Section 3.4 hereof.

 
Each Letter of Credit Agreement submitted to Issuing Lender pursuant hereto
shall constitute the certification by Borrowers of the matters set forth in
Sections 5.2 hereof. The Agent shall be entitled to rely on such certification
without any duty of inquiry.
 
3.3           Notice.  The Issuing Lender shall deliver to the Agent,
concurrently with or promptly following its issuance of any Letter of Credit, a
true and complete copy of each Letter of Credit. Promptly upon its receipt
thereof, Agent shall give notice, substantially in the form attached as Exhibit
E, to each Revolving Credit Lender of the issuance of each Letter of Credit,
specifying the amount thereof and the amount of such Revolving Credit Lender’s
Percentage thereof.
 
3.4           Letter of Credit Fees; Increased Costs.  (a)  Borrowers shall pay
letter of credit fees as follows:
 
 
(i)
A per annum letter of credit fee with respect to the undrawn amount of each
Letter of Credit issued pursuant hereto (based on the amount of each Letter of
Credit) in the amount of the Applicable Fee Percentage (determined with
reference to Schedule 1.1 to this Agreement) shall be paid to the Agent for
distribution to the Revolving Credit Lenders in accordance with their
Percentages.

 
 
(ii)
A letter of credit facing fee on the face amount of each Letter of Credit shall
be paid to the Agent for distribution to the Issuing Lender for its own account,
in accordance with the terms of the applicable Fee Letter.

 
 
(b)
All payments by Borrowers to the Agent for distribution to the Issuing Lender or
the Revolving Credit Lenders under this Section 3.4 shall be made in Dollars in
immediately available funds at the Issuing Office or such other office of the
Agent as may be designated from time to time by written notice to Borrowers by
the Agent. The fees described in clauses (a)(i) and (ii) above (i) shall be
nonrefundable under all circumstances, (ii) in the case of fees due under clause
(a)(i) above, shall be payable semi-annually in advance and (iii) in the case of
fees due under clause (a)(ii) above, shall be payable upon the issuance of such
Letter of Credit and upon any amendment thereto or extension thereof.  The fees
due under clause (a)(i) above shall be determined by multiplying the Applicable
Fee Percentage times the undrawn amount of the face amount of each such Letter
of Credit on the date of determination, and shall be calculated on the basis of
a 360 day year and assessed for the actual number of days from the date of the
issuance thereof to the stated expiration thereof. The parties hereto
acknowledge that, unless the Issuing Lender otherwise agrees, any material
amendment and any extension to a Letter of Credit issued hereunder shall be
treated as a new Letter of Credit for the purposes of the letter of credit
facing fee.

 
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(c)
If any change in any law or regulation or in the interpretation thereof by any
court or administrative or governmental authority charged with the
administration thereof, adopted after the date hereof, shall either (i) impose,
modify or cause to be deemed applicable any reserve, special deposit, limitation
or similar requirement against letters of credit issued or participated in by,
or assets held by, or deposits in or for the account of, Issuing Lender or any
Revolving Credit Lender or (ii) impose on Issuing Lender or any Revolving Credit
Lender any other condition regarding this Agreement, the Letters of Credit or
any participations in such Letters of Credit, and the result of any event
referred to in clause (i) or (ii) above shall be to increase the cost or expense
to Issuing Lender or such Revolving Credit Lender of issuing or maintaining or
participating in any of the Letters of Credit (which increase in cost or expense
shall be determined by the Issuing Lender’s or such Revolving Credit Lender’s
reasonable allocation of the aggregate of such cost increases and expenses
resulting from such events), then, upon demand by the Issuing Lender or such
Revolving Credit Lender, as the case may be, Borrowers shall, within thirty (30)
days following demand for payment, pay to Issuing Lender or such Revolving
Credit Lender, as the case may be, from time to time as specified by the Issuing
Lender or such Revolving Credit Lender, additional amounts which shall be
sufficient to compensate the Issuing Lender or such Revolving Credit Lender for
such increased cost and expense (together with interest on each such amount from
ten days after the date such payment is due until payment in full thereof at the
Prime-based Rate), provided that if the Issuing Lender or such Revolving Credit
Lender could take any reasonable action, without cost or administrative or other
burden or restriction to such Lender, to mitigate or eliminate such cost or
expense, it agrees to do so within a reasonable time after becoming aware of the
foregoing matters. Each demand for payment under this Section 3.4(c) shall be
accompanied by a certificate of Issuing Lender or the applicable Revolving
Credit Lender setting forth the amount of such increased cost or expense
incurred by the Issuing Lender or such Revolving Credit Lender, as the case may
be, as a result of any event mentioned in clause (i) or (ii) above, and in
reasonable detail, the methodology for calculating and the calculation of such
amount, which certificate shall be prepared in good faith and shall be
conclusive evidence, absent manifest error, as to the amount thereof.

 
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3.5           Other Fees.  In connection with the Letters of Credit, and in
addition to the Letter of Credit Fees, Borrowers shall pay, for the sole account
of the Issuing Lender, standard documentation, administration, payment and
cancellation charges assessed by Issuing Lender or the Issuing Office, at the
times, in the amounts and on the terms set forth or to be set forth from time to
time in the standard fee schedule of the Issuing Office in effect from time to
time.
 
3.6           Drawings and Demands for Payment Under Letters of Credit.
 
(a)           If the Issuing Lender shall honor a draft or other demand for
payment presented or made under any Letter of Credit, each Borrower agrees to
pay to the Issuing Lender an amount equal to the amount paid by the Issuing
Lender in respect of such draft or other demand under such Letter of Credit and
all reasonable expenses paid or incurred by the Agent relative thereto not later
than 1:00 p.m. (Detroit time), on (i) the Business Day that Borrowers receive
notice of such presentment and honor, if such notice is received prior to 11:00
a.m. (Detroit time) or (ii) the Business Day immediately following the day that
Borrowers received such notice, if such notice is received after 11:00 a.m.
(Detroit time). Unless Borrowers shall have made such payment to the Agent for
the account of the Issuing Lender on such day, the Agent shall be deemed to have
disbursed to Borrowers and to have elected to substitute for the reimbursement
obligation, with respect to the applicable Letter of Credit honored by the
Issuing Lender, a Prime-based Advance of the Revolving Credit (which Advance may
be subsequently converted at any time into a Eurodollar-based Advance pursuant
to Section 2.3 hereof) on behalf of and for the account of the Revolving Credit
Lenders in an aggregate amount equal to the amount so paid by the Issuing Lender
in respect of such draft or other demand under such Letter of Credit. Such
Prime-based Advance shall be deemed disbursed notwithstanding any failure to
satisfy any conditions for disbursement of any Advance set forth in Section 2
hereof and, to the extent of the Advances so disbursed, the reimbursement
obligation of Borrowers under this Section 3.6 shall be deemed satisfied.
 
(b)           If the Issuing Lender shall honor a draft or other demand for
payment presented or made under any Letter of Credit, the Issuing Lender shall
provide notice thereof to Borrowers on the date such draft or demand is honored,
and to each Revolving Credit Lender on such date unless Borrowers shall have
satisfied their reimbursement obligations under Section 3.6(a) hereof by payment
to the Agent (for the benefit of the Issuing Lender) on such date. The Issuing
Lender shall further use reasonable efforts to provide notice to Borrowers prior
to honoring any such draft or other demand for payment, but such notice, or the
failure to provide such notice, shall not affect the rights or obligations of
the Issuing Lender with respect to any Letter of Credit or the rights and
obligations of the parties hereto, including without limitation the obligations
of Borrowers under Section 3.6(a) hereof.
 
(c)           Upon issuance by the Issuing Lender of each Letter of Credit
hereunder, each Revolving Credit Lender shall automatically acquire a pro rata
participation interest in such Letter of Credit and each related Letter of
Credit Payment based on its respective Revolving Credit Percentage. Each
Revolving Credit Lender, on the date a draft or demand under any Letter of
Credit is honored (or the next succeeding Business Day if the notice required to
be given by Issuing Lender to the Revolving Credit Lenders under Section 3.6(b)
hereof is not given to the Revolving Credit Lenders prior to 2:00 p.m. (Detroit
time) on such date of draft or demand), shall make its Revolving Credit
Percentage of the amount paid by the Issuing Lender, and not reimbursed by
Borrowers on such day, in immediately available funds at the principal office of
the Agent for the account of Issuing Lender. If and to the extent such Revolving
Credit Lender shall not have made such pro rata portion available to the Agent,
such Revolving Credit Lender agrees to pay to the Agent for the account of the
Issuing Lender forthwith on demand such amount together with interest thereon,
for each day from the date such amount was paid by the Issuing Lender until such
amount is so made available to the Agent at the Federal Funds Rate for the first
three days and thereafter at a Prime-based Rate applicable during such period to
the related Advance deemed to have been disbursed under Section 3.6(a) in
respect of the reimbursement obligation of Borrowers.  If such Revolving Credit
Lender shall pay such amount to the Agent for the account of Issuing Lender
together with such interest, if any, such amount so paid shall be deemed to
constitute an Advance by such Revolving Credit Lender disbursed in respect of
the reimbursement obligation of Borrowers under Section 3.6(a) hereof for
purposes of this Agreement, effective as of the dates applicable under said
Section 3.6(a). The failure of any Revolving Credit Lender to make its pro rata
portion of any such amount paid by the Issuing Lender available to the Agent for
the account of Issuing Lender shall not relieve any other Revolving Credit
Lender of its obligation to make available its pro rata portion of such amount,
but no Revolving Credit Lender shall be responsible for failure of any other
Revolving Credit Lender to make such pro rata portion available to the Agent for
the account of Issuing Lender.
 
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Notwithstanding the foregoing however no Revolving Credit Lender shall be deemed
to have acquired a participation in a Letter of Credit if the officers of the
Issuing Lender immediately responsible for matters concerning this Agreement
shall have received written notice from Agent or any Lender at least two (2)
Business Days prior to the date of the issuance of such Letter of Credit that
the issuance of Letters of Credit should be suspended based on the occurrence
and continuance of a Default or Event of Default and stating that such notice is
a “notice of default”; provided, however that the Revolving Credit Lenders shall
be deemed to have acquired such a participation upon the date on which such
Default or Event of Default has been waived by the requisite Revolving Credit
Lenders, as applicable.  In the event that the Issuing Lender receives such a
notice, the Issuing Lender shall have no obligation to issue any Letter of
Credit until such notice is withdrawn by Agent or such Lender or until the
requisite Lenders have waived such Default or Event of Default in accordance
with the terms of this Agreement.
 
(d)           Nothing in this Agreement shall be construed to require or
authorize any Revolving Credit Lender to issue any Letter of Credit, it being
recognized that the Issuing Lender shall be the sole issuer of Letters of Credit
under this Agreement.
 
3.7           Obligations Irrevocable.  The obligations of Borrowers to make
payments to Agent for the account of Issuing Lender or the Revolving Credit
Lenders with respect to Letter of Credit Obligations under Section 3.6 hereof,
shall be unconditional and irrevocable and not subject to any qualification or
exception whatsoever, including, without limitation:
 
 
(a)
Any lack of validity or enforceability of any Letter of Credit, any Letter of
Credit Agreement, any other documentation relating to any Letter of Credit, this
Agreement or any of the other Loan Documents (the “Letter of Credit Documents”);

 
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(b)
Any amendment, modification, waiver, consent, or any substitution, exchange or
release of or failure to perfect any interest in collateral or security, with
respect to or under any Letter of Credit Document;

 
 
(c)
The existence of any claim, setoff, defense or other right which Borrowers may
have at any time against any beneficiary or any transferee of any Letter of
Credit (or any persons or entities for whom any such beneficiary or any such
transferee may be acting), the Agent, the Issuing Lender or any Revolving Credit
Lender or any other Person, whether in connection with this Agreement, any of
the Letter of Credit Documents, the transactions contemplated herein or therein
or any unrelated transactions;

 
 
(d)
Any draft or other statement or document presented under any Letter of Credit
proving to be forged, fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect;

 
 
(e)
Payment by the Issuing Lender to the beneficiary under any Letter of Credit
against presentation of documents which do not comply with the terms of such
Letter of Credit, including failure of any documents to bear any reference or
adequate reference to such Letter of Credit;

 
 
(f)
Any failure, omission, delay or lack on the part of the Agent, Issuing Lender or
any Revolving Credit Lender or any party to any of the Letter of Credit
Documents to enforce, assert or exercise any right, power or remedy conferred
upon the Agent, Issuing Lender, any Revolving Credit Lender or any such party
under this Agreement, any of the other Loan Documents or any of the Letter of
Credit Documents, or any other acts or omissions on the part of the Agent,
Issuing Lender, any Revolving Credit Lender or any such party; or

 
 
(g)
Any other event or circumstance that would, in the absence of this Section 3.7,
result in the release or discharge by operation of law or otherwise of Borrowers
from the performance or observance of any obligation, covenant or agreement
contained in Section 3.6 hereof.

 
No setoff, counterclaim, reduction or diminution of any obligation or any
defense of any kind or nature which any Borrower has or may have against the
beneficiary of any Letter of Credit shall be available hereunder to such
Borrower against the Agent, Issuing Lender or any Revolving Credit Lender. With
respect to any Letter of Credit, nothing contained in this Section 3.7 shall be
deemed to prevent any Borrower, after satisfaction in full of the absolute and
unconditional obligations of Borrowers hereunder with respect to such Letter of
Credit, from asserting in a separate action any claim, defense, set off or other
right which they (or any of them) may have against Agent, Issuing Lender or any
Revolving Credit Lender in connection with such Letter of Credit.
 
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3.8           Risk Under Letters of Credit.
 
(a)           In the administration and handling of Letters of Credit and any
security therefor, or any documents or instruments given in connection
therewith, Issuing Lender shall have the sole right to take or refrain from
taking any and all actions under or upon the Letters of Credit.
 
(b)           Subject to other terms and conditions of this Agreement, Issuing
Lender shall issue the Letters of Credit and shall hold the documents related
thereto in its own name and shall make all collections thereunder and otherwise
administer the Letters of Credit in accordance with Issuing Lender’s regularly
established practices and procedures and will have no further obligation with
respect thereto. In the administration of Letters of Credit, Issuing Lender
shall not be liable for any action taken or omitted on the advice of counsel,
accountants, appraisers or other experts selected by Issuing Lender with due
care and Issuing Lender may rely upon any notice, communication, certificate or
other statement from Borrowers, beneficiaries of Letters of Credit, or any other
Person which Issuing Lender believes to be authentic. Issuing Lender will, upon
request, furnish the Revolving Credit Lenders with copies of Letter of Credit
Documents related thereto.
 
(c)           In connection with the issuance and administration of Letters of
Credit and the assignments hereunder, Issuing Lender makes no representation and
shall have no responsibility with respect to (i) the obligations of Borrowers or
the validity, sufficiency or enforceability of any document or instrument given
in connection therewith, or the taking of any action with respect to same, (ii)
the financial condition of, any representations made by, or any act or omission
of Borrowers or any other Person, or (iii) any failure or delay in exercising
any rights or powers possessed by Issuing Lender in its capacity as issuer of
Letters of Credit in the absence of its gross negligence or willful misconduct.
Each of the Revolving Credit Lenders expressly acknowledges that it has made and
will continue to make its own evaluations of Borrowers’ creditworthiness without
reliance on any representation of Issuing Lender or Issuing Lender’s officers,
agents and employees.
 
(d)           If at any time Issuing Lender shall recover any part of any
unreimbursed amount for any draw or other demand for payment under a Letter of
Credit, or any interest thereon, Agent or Issuing Lender, as the case may be,
shall receive same for the pro rata benefit of the Revolving Credit Lenders in
accordance with their respective Percentages and shall promptly deliver to each
Revolving Credit Lender its share thereof, less such Revolving Credit Lender’s
pro rata share of the costs of such recovery, including court costs and
attorney’s fees. If at any time any Revolving Credit Lender shall receive from
any source whatsoever any payment on any such unreimbursed amount or interest
thereon in excess of such Revolving Credit Lender’s Percentage of such payment,
such Revolving Credit Lender will promptly pay over such excess to Agent, for
redistribution in accordance with this Agreement.
 
3.9           Indemnification.  Each Borrower hereby indemnifies and agrees to
hold harmless the Revolving Credit Lenders, the Issuing Lender and the Agent and
their respective Affiliates, and the respective officers, directors, employees
and agents of such Persons (each an “L/C Indemnified Person”), from and against
any and all claims, damages, losses, liabilities, costs or expenses of any kind
or nature whatsoever which the Revolving Credit Lenders, the Issuing Lender or
the Agent or any such Person may incur or which may be claimed against any of
them by reason of or in connection with any Letter of Credit (collectively, the
“L/C Indemnified Amounts”), and none of the Issuing Lender, any Revolving Credit
Lender or the Agent or any of their respective officers, directors, employees or
agents shall be liable or responsible for:
 
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(a)
the use which may be made of any Letter of Credit or for any acts or omissions
of any beneficiary in connection therewith;

 
 
(b)
the validity, sufficiency or genuineness of documents or of any endorsement
thereon, even if such documents should in fact prove to be in any or all
respects invalid, insufficient, fraudulent or forged;

 
 
(c)
payment by the Issuing Lender to the beneficiary under any Letter of Credit
against presentation of documents which do not strictly comply with the terms of
any Letter of Credit (unless such payment resulted from the gross negligence or
willful misconduct of the Issuing Lender), including failure of any documents to
bear any reference or adequate reference to such Letter of Credit;

 
 
(d)
any error, omission, interruption or delay in transmission, dispatch or delivery
of any message or advice, however transmitted, in connection with any Letter of
Credit; or

 
 
(e)
any other event or circumstance whatsoever arising in connection with any Letter
of Credit.

 
It is understood that in making any payment under a Letter of Credit the Issuing
Lender will rely on documents presented to it under such Letter of Credit as to
any and all matters set forth therein without further investigation and
regardless of any notice or information to the contrary.
 
With respect to subparagraphs (a) through (e) hereof, (i) no Borrower shall be
required to indemnify any L/C Indemnified Person for any L/C Indemnified Amounts
to the extent such amounts result from the gross negligence or willful
misconduct of such L/C Indemnified Person or any officer, director, employee or
agent of such L/C Indemnified Person and (ii) the Agent and the Issuing Lender
shall be liable to each Borrower to the extent, but only to the extent, of any
direct, as opposed to consequential or incidental, damages suffered by such
Borrower which were caused by the gross negligence or willful misconduct of the
Issuing Lender or any officer, director, employee or agent of the Issuing Lender
or by the Issuing Lender’s wrongful dishonor of any Letter of Credit after the
presentation to it by the beneficiary thereunder of a draft or other demand for
payment and other documentation strictly complying with the terms and conditions
of such Letter of Credit.
 
3.10           Right of Reimbursement.  Each Revolving Credit Lender agrees to
reimburse the Issuing Lender on demand, pro rata in accordance with its
respective Revolving Credit Percentage, for (i) the reasonable out-of-pocket
costs and expenses of the Issuing Lender to be reimbursed by Borrowers pursuant
to any Letter of Credit Agreement or any Letter of Credit, to the extent not
reimbursed by Borrowers or any other Credit Party and (ii) any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, fees, reasonable out-of-pocket expenses or disbursements of any kind and
nature whatsoever which may be imposed on, incurred by or asserted against
Issuing Lender in any way relating to or arising out of this Agreement
(including Section 3.6(c) hereof), any Letter of Credit, any documentation or
any transaction relating thereto, or any Letter of Credit Agreement, to the
extent not reimbursed by Borrowers, except to the extent that such liabilities,
losses, costs or expenses were incurred by Issuing Lender as a result of Issuing
Lender’s gross negligence or willful misconduct or by the Issuing Lender’s
wrongful dishonor of any Letter of Credit after the presentation to it by the
beneficiary thereunder of a draft or other demand for payment and other
documentation strictly complying with the terms and conditions of such Letter of
Credit.
 
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4.INTENTIONALLY OMITTED.

 
 
5.CONDITIONS.

 
The obligations of the Lenders to make Advances or loans pursuant to this
Agreement and the obligation of the Issuing Lender to issue Letters of Credit
are subject to the following conditions:
 
5.1           Conditions of Initial Advances.  The obligations of the Lenders to
make initial Advances or loans pursuant to this Agreement and the obligation of
the Issuing Lender to issue initial Letters of Credit, in each case, on the
Effective Date only, are subject to the following conditions:
 
(a)           This Agreement and the other Loan Documents.  Borrowers shall have
executed and delivered this Agreement; and each Credit Party shall have executed
and delivered the other Loan Documents to which such Credit Party is required to
be a party (including all schedules and other documents to be delivered pursuant
hereto); and such Notes (if any), this Agreement and the other Loan Documents
shall be in full force and effect.
 
(b)           Corporate Authority.  Agent shall have received, with a
counterpart thereof for each Lender, from each Credit Party, a certificate of
its Secretary or Assistant Secretary dated as of the Effective Date as to:
 
 
(i)
corporate resolutions (or the equivalent) of each Credit Party authorizing the
transactions contemplated by this Agreement and the other Loan Documents
approval of this Agreement and the other Loan Documents, in each case to which
such Credit Party is party, and authorizing the execution and delivery of this
Agreement and the other Loan Documents, and in the case of Borrowers,
authorizing the execution and delivery of requests for Advances and the issuance
of Letters of Credit hereunder,

 
 
(ii)
the incumbency and signature of the officers or other authorized persons of such
Credit Party executing any Loan Document and in the case of the Borrowers, the
officers who are authorized to execute any Requests for Advance, or requests for
the issuance of Letters of Credit,

 
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(iii)
a certificate of good standing or continued existence (or the equivalent
thereof) from the state of its incorporation or formation, and from every state
or other jurisdiction where such Credit Party is qualified to do business, which
jurisdictions are listed on Schedule 5.2 attached hereto, and

 
 
(iv)
copies of such Credit Party’s articles of incorporation and bylaws or other
constitutional documents, as in effect on the Effective Date.

 
(c)           Collateral Documents and other Loan Documents.  The Agent shall
have received the following documents, each in form and substance satisfactory
to Agent and fully executed by each party thereto:
 
 
(i)
The following Collateral Documents, each in form and substance acceptable to
Agent and fully executed by each party thereto and dated as of the Effective
Date:

 
 
(A)
the Security Agreement;

 
 
(B)
the Collateral Assignment;

 
 
(C)
the Escrow Agreement Acknowledgement;

 
 
(ii)
The Comerica Intercreditor Agreement in form and substance acceptable to the
Agent and fully executed by the Term Debt Lender and the Revolving Credit Agent
(in each case as defined therein and dated as of the Effective Date;

 
 
(iii)
A Letter from Travelers Indemnity and Surety Company of America to the Agent in
form and substance acceptable to the Agent and fully executed by each party
thereto and dated on or prior to the Effective Date;

 
 
(iv)
Evidence of the filing of a UCC-3 termination statement over any “all asset”
filing for the benefit of National City Bank;

 
 
(v)
Intentionally omitted;

 
 
(vi)
(A) Certified copies of uniform commercial code requests for information, or a
similar search report certified by a party acceptable to the Agent, dated a date
reasonably prior to the Effective Date, listing all effective financing
statements in the jurisdiction noted on Schedule 5.1(c) which name any Credit
Party or Target (under their present names or under any previous names used
within five (5) years prior to the date hereof) as debtors, together with (x)
copies of such financing statements, and (y) authorized Uniform Commercial Code
(Form UCC-3) Termination Statements, if any, necessary to release all Liens and
other rights of any Person in any Collateral described in the Collateral
Documents previously granted by any Person (other than Liens permitted by
Section 8.2 of this Agreement) and (B) intellectual property search reports
results from the United States Patent and Trademark Office and the United States
Copyright Office for the Credit Parties and Target dated a date reasonably prior
to the Effective Date.

 
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(vii)
Any documents (including, without limitation, financing statements, amendments
to financing statements and assignments of financing statements, stock powers
executed in blank and any endorsements) requested by Agent and reasonably
required to be provided in connection with the Collateral Documents to create,
in favor of the Agent (for and on behalf of the Lenders), a first priority
perfected security interest in the Collateral thereunder shall have been filed,
registered or recorded, or shall have been delivered to Agent in proper form for
filing, registration or recordation.

 
(c)           Acquisition.  On or before the Effective Date, the Agent shall
have received evidence satisfactory to it that (i) all conditions to
effectiveness of the Acquisition have been satisfied, other than payment of the
purchase price, on terms reasonably acceptable to the Agent and in compliance
with the Acquisition Documents delivered to the Agent (which Acquisition
Documents are in form and substance reasonably acceptable to the Agent), (ii)
that the purchase price to be paid (including any Debt assumed) in connection
with the Acquisition is not in excess of $60,000,000; (iii) any material
consents from any third party necessary to the consummation of the Acquisition
have been obtained and (iv) fully executed copies of all material Acquisition
Documents, including all schedules and exhibits thereto as in effect on the
Effective Date, certified true and correct by Sterling shall have been delivered
to the Agent.
 
(d)           Intentionally Omitted.
 
(e)           Compliance with Certain Documents and Agreements.  Each Credit
Party shall have each performed and complied in all material respects with all
agreements and conditions contained in this Agreement and the other Loan
Documents, to the extent required to be performed or complied with by such
Credit Party. No Person (other than Agent, Lenders and Issuing Lender) party to
this Agreement or any other Loan Document shall be in material default in the
performance or compliance with any of the terms or provisions of this Agreement
or the other Loan Documents or shall be in material default in the performance
or compliance with any of the material terms or material provisions of, in each
case to which such Person is a party.
 
(f)           Opinions of Counsel.  The Credit Parties shall furnish Agent prior
to the initial Advance under this Agreement, with signed copies for each Lender,
opinions of counsel to the Credit Parties, including opinions of local counsel
to the extent deemed necessary by the Agent, in each case dated the Effective
Date and covering such matters as reasonably required by and otherwise
reasonably satisfactory in form and substance to the Agent and each of the
Lenders.
 
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(g)           Payment of Fees.  Borrowers shall have paid to Comerica Bank any
fees due under the terms of the Fee Letter, along with any other fees, costs or
expenses due and outstanding to the Agent or the Lenders as of the Effective
Date (including reasonable fees, disbursements and other charges of counsel to
Agent).
 
(h)           Financial Statements.  Borrowers shall have delivered to the
Lenders and the Agent, in form and substance satisfactory to Agent: (a) any
updates of the pro forma unaudited combined consolidated balance sheet as of
June 30, 2007 and statements of operations for the year ended December 31, 2006
and the six months ended June 30, 2007 of the Credit Parties, and forecasts
through December 31, 2008, which statements shall evidence no material adverse
change from the information provided to the Agent prior to the execution and
delivery of the Commitment Letter.
 
(i)           Appraisals; Due Diligence.  Agent and Lenders shall have received,
in each case in form and substance satisfactory to the Agent, (a) appraisals of
all material machinery and equipment of the Credit Parties performed by an
appraiser and using appraisal methodology satisfactory to the Agent and which
establish an aggregate value of such property on an orderly liquidation value
basis in amounts satisfactory to the Agent, and (b) such other reports or due
diligence materials as Agent and the Majority Lenders may reasonably request,
including such due diligence materials as Agent and the Majority Banks may
request in connection with the Acquisition, including any new environmental
reports obtained for the real estate acquired in the Acquisition.
 
(j)           Intentionally Omitted.
 
(k)           Bond Documents.  Agent shall have received copies of the Travelers
Indemnity Agreement and the Liberty Mutual Indemnity Agreement in effect as of
the date hereof.
 
(l)           Governmental and Other Approvals.  Agent shall have received
copies of all authorizations, consents, approvals, licenses, qualifications or
formal exemptions, filings, declarations and registrations with, any court,
governmental agency or regulatory authority or any securities exchange or any
other person or party (whether or not governmental) received by any Credit Party
in connection with the transactions contemplated by the Loan Documents to occur
on the Effective Date.
 
(m)           Closing Certificate.  The Agent shall have received, with a signed
counterpart for each Lender, a certificate of a Responsible Officer of Borrower
Representative dated the Effective Date (or, if different, the date of the
initial Advance hereunder), stating that to the best of his or her respective
knowledge after due inquiry, (a) the conditions set forth in this Section 5 have
been satisfied to the extent required to be satisfied by any Credit Party; (b)
the representations and warranties made by the Credit Parties in this Agreement
or any of the other Loan Documents, as applicable, are true and correct in all
material respects; (c) no Default or Event of Default shall have occurred and be
continuing; (d) since June 30, 2007, nothing shall have occurred which has had,
or could reasonably be expected to have, a material adverse change on the
business, results of operations, conditions, property or prospects (financial or
otherwise) of Borrowers or any other Credit Party; and (e) there shall have been
no material adverse change to the pro forma financial information and
projections delivered to Agent prior to the execution and delivery of the
Commitment Letter.
 
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5.2           Continuing Conditions.  The obligations of each Lender to make
Advances (including the initial Advance) under this Agreement and the obligation
of the Issuing Lender to issue any Letters of Credit shall be subject to the
continuing conditions that:
 
(a)           No Default or Event of Default shall exist as of the date of the
Advance or the request for the Letter of Credit, as the case may be; and
 
(b)           Each of the representations and warranties contained in this
Agreement and in each of the other Loan Documents shall be true and correct in
all material respects as of the date of the Advance or Letter of Credit (as the
case may be) as if made on and as of such date (other than any representation or
warranty that expressly speaks only as of a different date).
 
 
6.REPRESENTATIONS AND WARRANTIES.

 
Each Borrower represents and warrants to the Agent, the Lenders, the Swing Line
Lender and the Issuing Lender as follows:
 
6.1           Corporate Authority.  Each Credit Party is a corporation (or other
business entity) duly organized and existing in good standing under the laws of
the state or jurisdiction of its incorporation or formation, as applicable, and
each Credit Party is duly qualified and authorized to do business as a foreign
corporation in each jurisdiction where the character of its assets or the nature
of its activities makes such qualification and authorization necessary except
where failure to be so qualified or be in good standing could not reasonably be
expected to have a Material Adverse Effect. Each Credit Party has all requisite
corporate, limited liability or partnership power and authority to own all its
property (whether real, personal, tangible or intangible or of any kind
whatsoever) and to carry on its business.
 
6.2           Due Authorization.  Execution, delivery and performance of this
Agreement, and the other Loan Documents, to which each Credit Party is party,
and the issuance of the Notes by Borrowers (if requested) are within such
Person’s corporate, limited liability or partnership power, have been duly
authorized, are not in contravention of any law applicable to such Credit Party
or the terms of such Credit Party’s organizational documents and, except as have
been previously obtained or as referred to in Section 6.10, below, do not
require the consent or approval of any governmental body, agency or authority or
any other third party except to the extent that such consent or approval is not
material to the transactions contemplated by the Loan Documents.
 
6.3           Good Title; Leases; Assets; No Liens.  (a)  Each Credit Party, to
the extent applicable, has good and valid title (or, in the case of real
property, good and marketable title) to all assets owned by it, subject only to
the Liens permitted under section 8.2 hereof, and each Credit Party has a valid
leasehold or interest as a lessee or a licensee in all of its leased real
property;
 
(b)           Schedule 6.3(b) hereof identifies all of the real property owned
by the Credit Parties on the Effective Date;
 
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(c)           The Credit Parties will collectively own or collectively have a
valid leasehold interest in all assets that were owned or leased (as lessee) by
the Credit Parties immediately prior to the Effective Date to the extent that
such assets are necessary for the continued operation of the Credit Parties’
businesses in substantially the manner as such businesses were operated
immediately prior to the Effective Date;
 
(d)           Each Credit Party owns or has a valid leasehold interest in all
real property necessary for its continued operations and, to the best knowledge
of Borrowers, no material condemnation, eminent domain or expropriation action
has been commenced or threatened against any such owned or leased real property;
and
 
(e)           There are no Liens on and no financing statements on file with
respect to any of the assets owned by the Credit Parties, except for the Liens
permitted pursuant to Section 8.2 of this Agreement.
 
6.4           Taxes.  Except as set forth on Schedule 6.4 hereof, each Credit
Party has filed on or before their respective due dates or within the applicable
grace periods, all United States federal, state, local and other tax returns
which are required to be filed or has obtained extensions for filing such tax
returns and is not delinquent in filing such returns in accordance with such
extensions and has paid all material taxes which have become due pursuant to
those returns or pursuant to any assessments received by any such Credit Party,
as the case may be, to the extent such taxes have become due, except to the
extent such taxes are being contested in good faith by appropriate proceedings
diligently conducted and with respect to which adequate provision has been made
on the books of such Credit Party as may be required by GAAP.
 
6.5           No Defaults.  No Credit Party is in default under or with respect
to any agreement, instrument or undertaking to which it is a party or by which
it or any of its property is bound which would cause or would reasonably be
expected to cause a Material Adverse Effect.
 
6.6           Enforceability of Agreement and Loan Documents.  This Agreement
and each of the other Loan Documents to which any Credit Party is a party
(including without limitation, each Request for Advance), have each been duly
executed and delivered by its duly authorized officers and constitute the valid
and binding obligations of such Credit Party, enforceable against such Credit
Party in accordance with their respective terms, except as enforcement thereof
may be limited by applicable bankruptcy, reorganization, insolvency, fraudulent
conveyance, moratorium or similar laws affecting the enforcement of creditor’s
rights, generally and by general principles of equity (regardless of whether
enforcement is considered in a proceeding in law or equity).
 
6.7           Compliance with Laws.  (a) Except as disclosed on Schedule 6.7,
each Credit Party has complied with all applicable federal, state and local
laws, ordinances, codes, rules, regulations and guidelines (including consent
decrees and administrative orders) including but not limited to Hazardous
Material Laws, and is in compliance with any Requirement of Law, except to the
extent that failure to comply therewith could not reasonably be expected to have
a Material Adverse Effect; and (b) neither the extension of credit made pursuant
to this Agreement or the use of the proceeds thereof by the Credit Parties will
violate the Trading with the Enemy Act, as amended, or any of the foreign assets
control regulations of the United States Treasury Department (31 CFR, Subtitle
B, Chapter V, as amended) or any enabling legislation or executive order
relating thereto, or The United and Strengthening America by providing
appropriate Tools Required to Intercept and Obstruct Terrorism (“USA Patriot
Act”) Act of 2001, Public Law 10756, October 26, 2001 or  Executive Order 13224
of September 23, 2001 issued by the President of the United States (66 Fed. Reg.
49049 (2001)).
 
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6.8           Non-contravention.  The execution, delivery and performance of
this Agreement and the other Loan Documents (including each Request for Advance)
to which each Credit Party is a party are not in contravention of the terms of
any indenture, agreement or undertaking to which such Credit Party is a party or
by which it or its properties are bound where such violation could reasonably be
expected to have a Material Adverse Effect.
 
6.9           Litigation.  Except as set forth on Schedule 6.9 hereof, there is
no suit, action, proceeding, including, without limitation, any bankruptcy
proceeding or governmental investigation pending against or to the knowledge of
Borrowers, threatened against any Credit Party (other than any suit, action or
proceeding in which a Credit Party is the plaintiff and in which no counterclaim
or cross-claim against such Credit Party has been filed), or any judgment,
decree, injunction, rule, or order of any court, government, department,
commission, agency, instrumentality or arbitrator outstanding against any Credit
Party, nor is any Credit Party in violation of any applicable law, regulation,
ordinance, order, injunction, decree or requirement of any governmental body or
court which could in any of the foregoing events reasonably be expected to have
a Material Adverse Effect.
 
6.10           Consents, Approvals and Filings, Etc.  Except as set forth on
Schedule 6.10 hereof, no material authorization, consent, approval, license,
qualification or formal exemption from, nor any filing, declaration or
registration with, any court, governmental agency or regulatory authority or any
securities exchange or any other Person (whether or not governmental) is
required in connection with the execution, delivery and performance: (a) by any
Credit Party of this Agreement and any of the other Loan Documents or
Acquisition Documents to which such Credit Party is a party or (b) by the Credit
Parties of the grant of Liens granted, conveyed or otherwise established (or to
be granted, conveyed or otherwise established) by or under this Agreement or the
other Loan Documents, as applicable, except in each case for (i) such matters
which have been previously obtained, and (ii) such filings to be made
concurrently herewith or promptly following the Effective Date as are required
by the Collateral Documents to perfect Liens in favor of the Agent. All such
material authorizations, consents, approvals, licenses, qualifications,
exemptions, filings, declarations and registrations which have previously been
obtained or made, as the case may be, are in full force and effect and, to the
best knowledge of Borrowers, are not the subject of any attack or threatened
attack (in each case in any material respect) by appeal or direct proceeding or
otherwise.
 
6.11           Agreements Affecting Financial Condition.  No Credit Party is
party to any agreement or instrument or subject to any charter or other
corporate restriction which could reasonably be expected to have a Material
Adverse Effect.
 
6.12           No Investment Company or Margin Stock.  No Credit Party is an
“investment company” within the meaning of the Investment Company Act of 1940,
as amended. No Credit Party is engaged principally, or as one of its important
activities, directly or indirectly, in the business of extending credit for the
purpose of purchasing or carrying margin stock. None of the proceeds of any of
the Advances will be used by any Credit Party to purchase or carry margin stock.
Terms for which meanings are provided in Regulation U of the Board of Governors
of the Federal Reserve System or any regulations substituted therefore, as from
time to time in effect, are used in this paragraph with such meanings.
 
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6.13           ERISA.  No Credit Party maintains or contributes to any Pension
Plan subject to Title IV of ERISA, except as set forth on Schedule 6.13 hereto
or otherwise disclosed to the Agent in writing.  There is no accumulated funding
deficiency within the meaning of Section 412 of the Internal Revenue Code or
Section 302 of ERISA, or any outstanding liability with respect to any Pension
Plans owed to the PBGC other than future premiums due and owing pursuant to
Section 4007 of ERISA, and no “reportable event” as defined in Section 4043(c)
of ERISA has occurred with respect to any Pension Plan other than an event for
which the notice requirement has been waived by the PBGC.  None of the Credit
Parties has engaged in a prohibited transaction with respect to any Pension
Plan, other than a prohibited transaction for which an exemption is available
and has been obtained, which could subject such Credit Parties to a material tax
or penalty imposed by Section 4975 of the Internal Revenue Code or Section
502(i) of ERISA.  Each Pension Plan is being maintained and funded in accordance
with its terms and is in material compliance with the requirements of the
Internal Revenue Code and ERISA.  No Credit Party has had a complete or partial
withdrawal from any Multiemployer Plan that has resulted or could reasonably be
expected to have resulted in any Withdrawal Liability and, except as notified to
Agent in writing following the Effective Date, no such Multiemployer Plan is in
reorganization (within the meaning of Section 4241 of ERISA) or insolvent
(within the meaning of Section 4245 of ERISA).
 
6.14           Conditions Affecting Business or Properties.  Neither the
respective businesses nor the properties of any Credit Party is affected by any
fire, explosion, accident, strike, lockout or other dispute, drought, storm,
hail, earthquake, embargo, Act of God, or other casualty (except to the extent
such event is covered by insurance sufficient to ensure that upon application of
the proceeds thereof, no Material Adverse Effect could reasonably be expected to
occur) which could reasonably be expected to have a Material Adverse Effect.
 
6.15           Environmental and Safety Matters.  Except as set forth in
Schedules 6.9, 6.10 and 6.15:
 
 
(a)
all facilities and property owned or leased by the Credit Parties are in
compliance with all Hazardous Material Laws in all material respects;

 
 
(b)
to the best knowledge of Borrowers, there have been no unresolved and
outstanding past, and there are no pending or threatened:

 
 
(i)
claims, complaints, notices or requests for information received by any Credit
Party with respect to any alleged violation of any Hazardous Material Law which,
if adversely determined, could reasonably be expected to have a Material Adverse
Effect, or

 
 
(ii)
written complaints, notices or inquiries to any Credit Party regarding potential
liability of any Credit Parties under any Hazardous Material Law which, if
adversely determined, could reasonably be expected to have a Material Adverse
Effect; and

 
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(c)
to the best knowledge of Borrowers, no conditions exist at, on or under any
property now or previously owned or leased by any Credit Party which, with the
passage of time, or the giving of notice or both, are reasonably likely to give
rise to liability under any Hazardous Material Law which solely or together with
any other such conditions could reasonably be expected to have a Material
Adverse Effect.

 
6.16           Subsidiaries.  Except as disclosed on Schedule 6.16 hereto as of
the Effective Date, and thereafter, except as disclosed to the Agent in writing
from time to time, no Credit Party has any Subsidiaries.
 
6.17           Intentionally Omitted.
 
6.18           Intentionally Omitted.
 
6.19           Franchises, Patents, Copyrights, Tradenames, etc.  The Credit
Parties possess all franchises, patents, copyrights, trademarks, trade names,
licenses and permits, and rights in respect of the foregoing, adequate for the
conduct of their business substantially as now conducted without known conflict
with any rights of others except where the failure to possess such rights could
not reasonably be expected to have a Material Adverse Effect.  Schedule 6.19
contains a true and accurate list of all trade names and any and all other names
used by any Credit Party during the five-year period ending as of the Effective
Date.
 
6.20           Capital Structure.  Schedule 6.20 attached hereto sets forth all
issued and outstanding Equity Interests of each Credit Party, including the
number of authorized, issued and outstanding Equity Interests of each Credit
Party, the par value of such Equity Interests and, other than for Sterling, the
holders of such Equity Interests, all on and as of the Effective Date. All
issued and outstanding Equity Interests of each Credit Party are duly authorized
and validly issued, fully paid, nonassessable, and, except for the Equity
Interests of Sterling, free and clear of all Liens (except for the benefit of
Agent) and such Equity Interests were issued in compliance with all applicable
state, federal and foreign laws concerning the issuance of securities.  Except
as disclosed on Schedule 6.20, there are no preemptive or other outstanding
rights, options, warrants, conversion rights or similar agreements or
understandings for the purchase or acquisition from any Credit Party, of any
Equity Interests of any Credit Party.
 
6.21           Accuracy of Information.  (a)  The audited financial statements
for the Fiscal Year ended December 31, 2006, furnished to Agent and the Lenders
prior to the Effective Date fairly present in all material respects the
financial condition of Sterling and its Subsidiaries covered thereby and the
results of their operations for the periods covered thereby, and have been
prepared in accordance with GAAP. The projections and the other pro forma
financial information delivered to the Agent prior to the Effective Date are
based upon good faith estimates and assumptions believed by management of the
Borrowers to be accurate and reasonable at the time made, it being recognized by
the Lenders that such financial information as it relates to future events is
not to be viewed as fact and that actual results during the period or periods
covered by such financial information may differ from the projected results set
forth therein.
 
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(b)           From June 30, 2007 through the Effective Date, there has been no
material adverse change in the business, operations, condition, property or
prospects (financial or otherwise) of the Credit Parties, taken as a whole.
 
(c)           To the best knowledge of the Credit Parties, as of the Effective
Date, (i) the Credit Parties do not have any material contingent obligations
(including any liability for taxes) not disclosed by or reserved against in the
opening balance sheet to be delivered hereunder and (ii) there are no unrealized
or anticipated losses from any present commitment of the Credit Parties which
contingent obligations and losses in the aggregate could reasonably be expected
to have a Material Adverse Effect.
 
6.22           Solvency.  After giving effect to the consummation of the
transactions contemplated by this Agreement and other Loan Documents and the
Acquisition Documents, each Credit Party will be solvent, able to pay its
indebtedness as it matures and will have capital sufficient to carry on its
businesses and all business in which it is about to engage. This Agreement is
being executed and delivered by the Borrowers to Agent and the Lenders in good
faith and in exchange for fair, equivalent consideration. The Credit Parties do
not intend to nor does management of the Credit Parties believe the Credit
Parties will incur debts beyond their ability to pay as they mature. No Credit
Party contemplates filing a petition in bankruptcy or for an arrangement or
reorganization under the Bankruptcy Code or any similar law of any jurisdiction
now or hereafter in effect relating to any Credit Party, nor does any Credit
Party have any knowledge of any threatened bankruptcy or insolvency proceedings
against a Credit Party.
 
6.23           Employee Matters.  Except as set forth on Schedule 6.23, there
are no strikes, slowdowns, work stoppages, unfair labor practice complaints,
grievances, arbitration proceedings or controversies pending or, to the best
knowledge of the Borrowers, threatened against any Credit Party by any employees
of any Credit Party, other than non-material employee grievances or
controversies arising in the ordinary course of business. Set forth on Schedule
6.23 are all union contracts or agreements to which any Credit Party is party as
of the Effective Date and the related expiration dates of each such contract.
 
6.24           No Misrepresentation.  Neither this Agreement nor any other Loan
Document, certificate, information or report furnished or to be furnished by or
on behalf of a Credit Party to Agent or any Lender in connection with any of the
transactions contemplated hereby or thereby, contains a misstatement of material
fact, or omits to state a material fact required to be stated in order to make
the statements contained herein or therein, taken as a whole, not misleading in
the light of the circumstances under which such statements were made.  There is
no fact, other than information known to the public generally, known to any
Credit Party after diligent inquiry, that could reasonably be expect to have a
Material Adverse Effect that has not expressly been disclosed to Agent in
writing.
 
6.25           Corporate Documents and Corporate Existence.  As to each Credit
Party, (a) it is an organization as described on Schedule 1.3 hereto and has
provided the Agent and the Lenders with complete and correct copies of its
articles of incorporation, by-laws and all other applicable charter and other
organizational documents, and, if applicable, a good standing certificate and
(b) its correct legal name, business address, type of organization and
jurisdiction of organization, tax identification number and other relevant
identification numbers are set forth on Schedule 1.3 hereto.
 
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6.26           Acquisition Documents.
 
 
(a)
Each Acquisition Document to which any Credit Party is a party has been duly
authorized and validly executed, constitutes the valid and binding obligation of
such Credit Party and is enforceable against such Credit Party in accordance
with its terms except as enforcement thereof may be limited by applicable
bankruptcy, reorganization, insolvency, fraudulent conveyance, moratorium or
similar laws affecting the enforcement of creditor’s rights, generally and by
general principles of equity (regardless of whether enforcement is considered in
a proceeding in law or equity).  No Acquisition Document to which any Credit
Party is a party has been modified, amended, altered or changed in any manner
except in compliance with this Agreement, and there are no unwaived defaults,
other than such defaults which, either singly or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect, existing under the
Acquisition Documents by any Credit Party that is a party thereto, or, to the
best of the knowledge of any Credit Party, by any other party thereto;

 
 
(b)
The Credit Parties will keep and perform or cause to be kept and performed all
of their respective material obligations under the Acquisition Documents;

 
 
(c)
No Credit Party shall have granted a collateral assignment of, or a security
interest over the Acquisition Documents (other than in favor of Agent for the
benefit of the Lenders) and, no Credit Party shall have sold, transferred or
assigned any Acquisition Document to any Person (other than to or in favor of
Agent) without the consent of the Agent; and

 
 
(d)
Upon the consummation of the Acquisition, the Borrowers and Sellers shall have
obtained all material third party consents reasonably deemed necessary by Agent
or otherwise required in connection with the Acquisition and shall have
delivered copies to Agent of all additional assignment or assumption agreements
entered into in connection therewith, except to the extent waived or extended
pursuant to the terms hereof and thereof.

 
 
7.AFFIRMATIVE COVENANTS.

 
Each Borrower covenants and agrees, so long as any Lender has any commitment to
extend credit hereunder, or any of the Indebtedness remains outstanding and
unpaid, that it will, and, as applicable, it will cause each of its Subsidiaries
to:
 
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7.1           Financial Statements.  Furnish to the Agent, in form and detail
satisfactory to Agent, with sufficient copies for each Lender, the following
documents:
 
 
(a)
as soon as available, but in any event within one hundred twenty (120) days
after the end of each Fiscal Year, a copy of the audited Consolidated and
unaudited Consolidating financial statements of the Sterling and its
Consolidated Subsidiaries as at the end of such Fiscal Year and the related
audited Consolidated and unaudited Consolidating statements of income,
stockholders equity, and cash flows of Sterling and its Consolidated
Subsidiaries for such Fiscal Year or partial Fiscal Year and underlying
assumptions, setting forth in each case in comparative form the figures for the
previous Fiscal Year, certified as being fairly stated in all material respects
by an independent, nationally recognized certified public accounting firm
reasonably satisfactory to the Agent; and

 
 
(b)
as soon as available, but in any event within forty-five (45) days after the end
of each fiscal quarter of Sterling (except the last quarter of each Fiscal
Year), Borrower prepared unaudited Consolidated and Consolidating balance sheets
of Sterling and its Consolidated Subsidiaries as at the end of such quarter and
the related stockholders equity and cash flows, jobs-in-progress report, backlog
report, and accounts receivable and payable statements, and a statement of the
Average Total Debt for the Applicable Measuring Period of Sterling and its
Consolidated Subsidiaries for the portion of the Fiscal Year through the end of
such quarter, setting forth in each case in comparative form the figures for the
corresponding periods in the previous Fiscal Year, and certified by a
Responsible Officer of the Borrower Representative as being fairly stated in all
material respects;

 
all such financial statements to be complete and correct in all material
respects and to be prepared in reasonable detail and in accordance with GAAP
throughout the periods reflected therein and with prior periods (except as
approved by a Responsible Officer of the Borrower Representative and disclosed
therein), provided however that the financial statements delivered pursuant to
clause (b) hereof will not be required to include footnotes and will be subject
to change from audit and year-end adjustments.
 
7.2           Certificates; Other Information.  Furnish to the Agent, in form
and detail acceptable to Agent, with sufficient copies for each Lender, the
following documents:
 
 
(a)
Concurrently with the delivery of the financial statements described in Sections
7.1(a) and 7.1(b) of this Agreement for each fiscal year-end and fiscal
quarter-end, respectively, a Covenant Compliance Report duly executed by a
Responsible Officer of the Borrower Representative and, as required by the
Security Agreement, all original vehicle titles for vehicles acquired by any
Credit Party during the prior fiscal quarter;

 
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(b)
Deliver (i) no later than November 15, 2007, a pro forma opening balance sheet
for Sterling and its Consolidated Subsidiaries (including the Target) and (ii)
no later than December 15, 2007, an actual opening balance sheet (the “Balance
Sheet”) for Sterling and its Consolidated Subsidiaries (including Target), each
such balance sheet to be in form and substance reasonably acceptable to the
Agent;

 
 
(c)
Promptly upon receipt thereof, copies of all significant reports submitted by
the Credit Parties’ firm(s) of certified public accountants in connection with
each annual, interim or special audit or review of any type of the financial
statements or related internal control systems of the Credit Parties made by
such accountants, including any comment letter submitted by such accountants to
management in connection with their services;

 
 
(d)
Any financial reports, statements, press releases, other material information or
written notices delivered to the holders of the Subordinated Debt pursuant to
any applicable Subordinated Debt Documents (to the extent not otherwise required
hereunder), as and when delivered to such Persons;

 
 
(e)
Within sixty (60) days after the end of each Fiscal Year, projections for the
Credit Parties for the next succeeding Fiscal Year, substantially in the form
provided to the Agent prior to Effective Date, except as otherwise requested by
or agreed to by the Agent, such projections certified by a Responsible Officer
of the Borrower Representative as being based on reasonable estimates and
assumptions taking into account all facts and information known (or reasonably
available to any Credit Party) by a Responsible Officer of the Borrower
Representative;

 
 
(f)
Promptly upon the filing thereof, any 10-K or 10-Q filings made with the
Securities and Exchange Commission or any national securities exchange;

 
 
(g)
Any additional information as required by any Loan Document, and such additional
schedules, certificates and reports respecting all or any of the Collateral, the
items or amounts received by the Credit Parties in full or partial payment
thereof, and any goods (the sale or lease of which shall have given rise to any
of the Collateral) possession of which has been obtained by the Credit Parties,
all to such extent as Agent may reasonably request from time to time, any such
schedule, certificate or report to be certified as true and correct in all
material respects by a Responsible Officer of the applicable Credit Party and
shall be in such form and detail as Agent may reasonably specify; and

 
 
(h)
Such additional financial and/or other information as Agent or any Lender may
from time to time reasonably request, promptly following such request.

 
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7.3           Intentionally Omitted.
 
7.4           Conduct of Business and Maintenance of Existence; Compliance with
Laws.
 
(a)           Not engage in any business that is substantially different from
the business conducted by the Credit Parties immediately prior to the Effective
Date and businesses reasonably related or complementary thereto;
 
(b)           Preserve, renew and keep in full force and effect its existence
and maintain its qualifications to do business in each jurisdiction where such
qualifications are necessary for its operations, except as otherwise permitted
pursuant to Section 8.4;
 
(c)           Take all action it deems necessary in its reasonable business
judgment to maintain all rights, privileges and franchises necessary for the
normal conduct of its business except where the failure to so maintain such
rights, privileges or franchises could not, either singly or in the aggregate,
reasonably be expected to have a Material Adverse Effect;
 
(d)           Comply with all Requirements of Law, except to the extent that
failure to comply therewith could not, either singly or in the aggregate,
reasonably be expected to have a Material Adverse Effect; and
 
(e)           (i) Continue to be a Person whose property or interests in
property is not blocked or subject to blocking pursuant to Section 1 of
Executive Order 13224 of September 23, 2001 Blocking Property and Prohibiting
Transactions With Persons Who Commit, Threaten to Commit or Support Terrorism
(66 Fed. Reg. 49079 (2001)) (the “Order”), (ii) not engage in the transactions
prohibited by Section 2 of that Order or become associated with Persons such
that a violation of Section 2 of the Order would arise, and (iii) not become a
Person on the list of Specially Designated National and Blocked Persons, or (iv)
otherwise not become subject to the limitation of any OFAC regulation or
executive order.
 
7.5           Maintenance of Property; Insurance.  (a)  Keep all material
property it deems, in its reasonable business judgment, useful and necessary in
its business in working order (ordinary wear and tear excepted); (b) maintain
insurance coverage with financially sound and reputable insurance companies on
physical assets and against other business risks in such amounts and of such
types as are customarily carried by companies similar in size and nature
(including without limitation casualty and public liability and property damage
insurance), and in the event of acquisition of additional property, real or
personal, or of the incurrence of additional risks of any nature, increase such
insurance coverage in such manner and to such extent as prudent business
judgment and present practice or any applicable Requirements of Law would
dictate; (c) in the case of all insurance policies covering any Collateral, such
insurance policies shall provide that the loss payable thereunder shall be
payable to the applicable Credit Party, and to the Agent (as mortgagee, or, in
the case of personal property interests, lender loss payee) as their respective
interests may appear; (d) in the case of all  public liability insurance
policies, such policies shall list the Agent as an additional insured, as Agent
may reasonably request; and (e) if requested by Agent, certificates evidencing
such policies, including all endorsements thereto, to be deposited with Agent,
such certificates being in form and substance reasonably acceptable to Agent.
 
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7.6           Inspection of Property; Books and Records, Discussions.  Permit
Agent and each Lender, through their authorized attorneys, accountants and
representatives (a) at all reasonable times during normal business hours, upon
the request of Agent or such Lender, to examine each Credit Party’s books,
accounts, records, ledgers and assets and properties; (b) from time to time,
during normal business hours, upon the request of the Agent, to conduct
appraisals of all or a portion of the material fixed assets of the Credit
Parties, such appraisals to be completed by an appraiser as may be selected by
Agent and consented to by the Borrower Representative (such consent not to be
unreasonably withheld), with all reasonable costs and expenses of such
appraisals to be reimbursed by the Credit Parties, provided that so long as no
Event of Default or Default exists, Borrowers shall not be required to reimburse
Agent for such audits or appraisals more frequently than once each Fiscal Year;
(c) during normal business hours and at their own risk, to enter onto the real
property owned or leased by any Credit Party to conduct inspections,
investigations or other reviews of such real property; and (d) at reasonable
times during normal business hours and at reasonable intervals, to visit all of
the Credit Parties’ offices, discuss each Credit Party’s respective financial
matters with their respective officers, as applicable, and, by this provision,
each Borrower authorizes, and will cause each of their respective Subsidiaries
to authorize, its independent certified or chartered public accountants to
discuss the finances and affairs of any Credit Party and examine any of such
Credit Party’s books, reports or records held by such accountants.
 
7.7           Notices.  Promptly give written notice to the Agent of:
 
 
(a)
the occurrence of any Default or Event of Default of which any Credit Party has
knowledge;

 
 
(b)
any (i) litigation or proceeding existing at any time between any Credit Party
and any Governmental Authority or other third party, or any investigation of any
Credit Party conducted by any Governmental Authority, which in any case if
adversely determined would have a Material Adverse Effect or (ii) any material
adverse change in the financial condition of any Credit Party since the date of
the last audited financial statements delivered pursuant to Section 7.1(a)
hereof;

 
 
(c)
the occurrence of any event which any Credit Party believes could reasonably be
expected to have a Material Adverse Effect, promptly after concluding that such
event could reasonably be expected to have such a Material Adverse Effect;

 
 
(d)
promptly after becoming aware thereof, the taking by the Internal Revenue
Service or any foreign taxing jurisdiction of a written tax position (or any
such tax position taken by any Credit Party in a filing with the Internal
Revenue Service or any foreign taxing jurisdiction) which could reasonably be
expected to have a Material Adverse Effect, setting forth the details of such
position and the financial impact thereof;

 
 
(e)
(i) all jurisdictions in which any Credit Party proposes to become qualified
after the Effective Date to transact business, (ii) the acquisition or creation
of any new Subsidiaries, (iii) any material change after the Effective Date in
the authorized and issued Equity Interests of any Credit Party or any other
material amendment to any Credit Party’s charter, by-laws or other
organizational documents, such notice, in each case, to identify the applicable
jurisdictions, capital structures or amendments as applicable, provided that
such notice shall be given not less than ten (10) Business Days prior to the
proposed effectiveness of such changes, acquisition or creation, as the case may
be (or such shorter period to which Agent may consent);

 
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(f)
not less than fifteen (15) Business Days (or such other shorter period to which
Agent may agree) prior to the proposed effective date thereof, any proposed
material amendments, restatements or other modifications to any Subordinated
Debt Documents; and

 
 
(g)
any default or event of default by any Person under any Subordinated Debt
Document, Acquisition Document or Bond Document concurrently with delivery or
promptly after receipt (as the case may be) of any notice of default or event of
default under the applicable document, as the case may be.

 
Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer of the Borrower Representative setting forth details of the
occurrence referred to therein and, in the case of notices referred to in
clauses (a), (b), (c), (d) and (g) hereof stating what action the applicable
Credit Party has taken or proposes to take with respect thereto.
 
7.8           Hazardous Material Laws.
 
(a)           Use and operate all of its facilities and properties in material
compliance with all applicable Hazardous Material Laws, keep all material
required permits, approvals, certificates, licenses and other authorizations
required under such Hazardous Material Laws in effect and remain in compliance
therewith, and handle all Hazardous Materials in material compliance with all
applicable Hazardous Material Laws;
 
(b)           (i) Promptly notify Agent and provide copies upon receipt of all
written claims, complaints, notices or inquiries received by any Credit Party
relating to its facilities and properties or compliance with Hazardous Material
Laws which, if adversely determined, could reasonably be expected to have a
Material Adverse Effect and (ii) promptly cure and have dismissed with prejudice
to the reasonable satisfaction of Agent and the Majority Lenders any material
actions and proceedings relating to compliance with Hazardous Material Laws to
which any Credit Party is named a party, other than such actions or proceedings
being contested in good faith and with the establishment of reasonable reserves;
 
(c)           To the extent necessary to comply in all material respects with
Hazardous Material Laws, remediate or monitor contamination arising from a
release or disposal of Hazardous Material, which solely, or together with other
releases or disposals of Hazardous Materials could reasonably be expected to
have a Material Adverse Effect;
 
(d)           Provide such information and certifications which Agent or any
Lender may reasonably request from time to time to evidence compliance with this
Section 7.8.
 
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7.9           Financial Covenants.
 
(a)           Commencing with the fiscal quarter ending December 31, 2007,
maintain as of the end of each fiscal quarter a Fixed Charge Coverage Ratio of
not less than 1.25 to 1.00.
 
(b)           Commencing with the fiscal quarter ending December 31, 2007,
maintain as of the end of each fiscal quarter a Leverage Ratio of not more (i)
than 2.25 to 1.00 for the fiscal quarters ending December 31, 2007 and March 31,
2008 and (ii) 2.00 to 1.00 for each fiscal quarter thereafter:
 
(c)           Commencing on the Effective Date (after giving effect to the
Acquisition), maintain a Tangible Net Worth of Sterling and its Consolidated
Subsidiaries equal to (i) the Tangible Net Worth of Sterling and its
Consolidated Subsidiaries as calculated based on the Balance Sheet less
$3,000,000 plus (ii) 50% of each subsequent fiscal quarter’s positive Net
Income, without reduction for losses.
 
(d)           Commencing on the Effective Date (after giving effect to the
Acquisition), maintain an Asset Coverage Ratio of at least 1.25 to 1.00.
 
(e)           At no time shall Sterling and its Consolidated Subsidiaries have
Net Income for any two consecutive fiscal quarters which is less than ($500,000)
in the aggregate for such two consecutive fiscal quarters.
 
7.10           Governmental and Other Approvals.  Apply for, obtain and/or
maintain in effect, as applicable, all authorizations, consents, approvals,
licenses, qualifications, exemptions, filings, declarations and registrations
(whether with any court, governmental agency, regulatory authority, securities
exchange or otherwise) which are necessary or reasonably requested by Agent in
connection with the execution, delivery and performance by any Credit Party of,
as applicable, this Agreement, the other Loan Documents, the Subordinated Debt
Documents or any other documents or instruments to be executed and/or delivered
by any Credit Party, as applicable in connection therewith or herewith, except
where the failure to so apply for, obtain or maintain could not reasonably be
expected to have a Material Adverse Effect.
 
7.11           Compliance with ERISA; ERISA Notices.  (a)  Comply in all
material respects with all material requirements imposed by ERISA and the
Internal Revenue Code, including, but not limited to, the minimum funding
requirements for any Pension Plan, except to the extent that any noncompliance
could not reasonably be expected to have a Material Adverse Effect.
 
(b)           Promptly notify Agent upon the occurrence of any of the following
events in writing: (i) the termination, other than a standard termination, as
defined in ERISA, of any Pension Plan subject to Subtitle C of Title IV of ERISA
by any Credit Party; (ii) the appointment of a trustee by a United States
District Court to administer any Pension Plan subject to Title IV of ERISA;
(iii) the commencement by the PBGC, of any proceeding to terminate any Pension
Plan subject to Title IV of ERISA; (iv) the failure of any Credit Party to make
any payment in respect of any Pension Plan required under Section 412 of the
Internal Revenue Code or Section 302 of ERISA; (v) the withdrawal of any Credit
Party from any Multiemployer Plan if any Credit Party reasonably believes that
such withdrawal would give rise to the imposition of Withdrawal Liability with
respect thereto; or (vi) the occurrence of (x) a “reportable event” which is
required to be reported by a Credit Party under Section 4043 of ERISA other than
any event for which the reporting requirement has been waived by the PBGC or (y)
a “prohibited transaction” as defined in Section 406 of ERISA or Section 4975 of
the Internal Revenue Code other than a transaction for which a statutory
exemption is available or an administrative exemption has been obtained.
 
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7.12           Defense of Collateral.  Defend the Collateral from any Liens
other than Liens permitted by Section 8.2.
 
7.13           Future Subsidiaries; Additional Collateral.
 
(a)           With respect to each Person which becomes a Domestic Subsidiary of
a Borrower (directly or indirectly) subsequent to the Effective Date, whether by
Permitted Acquisition or otherwise, cause such new Domestic Subsidiary to
execute and deliver to the Agent, for and on behalf of each of the Lenders
(unless waived by Agent):
 
 
(i)
Within thirty (30) days after the date such Person becomes a Domestic Subsidiary
(or such longer time period as the Agent may determine), a joinder agreement to
this Agreement, whereby such Domestic Subsidiary shall become a co-Borrower
hereunder; and

 
 
(ii)
within thirty (30) days after the date such Person becomes a Domestic Subsidiary
(or such longer time period as the Agent may determine), a joinder agreement to
the Security Agreement whereby such Domestic Subsidiary grants a Lien over its
assets (other than Equity Interests which should be governed by (b) of this
Section 7.13) as set forth in the Security Agreement, and such Domestic
Subsidiary shall take such additional actions as may be necessary to ensure a
valid first priority perfected Lien over such assets of such Domestic Subsidiary
as are specified in the Security Agreement, subject only to the other Liens
permitted pursuant to Section 8.2 of this Agreement;

 
 
(iii)
within the time period specified in and to the extent required under clause (c)
of this Section 7.13, any Mortgage, Collateral Access Agreements and/or other
documents required to be delivered in connection therewith;

 
(b)           With respect to the Equity Interests of each Person which becomes
(whether by Permitted Acquisition or otherwise) (i) a Domestic Subsidiary
subsequent to the Effective Date, cause the Credit Party that holds such Equity
Interests to execute and deliver such Pledge Agreements, and take such actions
as may be necessary to ensure a valid first priority perfected Lien over one
hundred percent (100%) of the Equity Interests of such Domestic Subsidiary held
by a Credit Party, such Pledge Agreements to be executed and delivered (unless
waived by Agent) within thirty (30) days after the date such Person becomes a
Domestic Subsidiary (or such longer time period as Agent may determine); and
(ii) a Foreign Subsidiary subsequent to the Effective Date, the Equity Interests
of which is held directly by a Borrower or one of its Domestic Subsidiaries,
cause the Credit Party that holds such Equity Interests to execute and deliver
such Pledge Agreements and take such actions as may be necessary to ensure a
valid first priority perfected Lien over sixty-five percent (65%) of the Equity
Interests of such Subsidiary, such Pledge Agreements to be executed and
delivered (unless waived by Agent) within thirty (30) days after the date such
Person becomes a Foreign Subsidiary (or such longer time period as Agent may
determine); and
 
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(c)           (i) With respect to the acquisition of a fee interest in real
property by any Credit Party after the Effective Date (whether by Permitted
Acquisition or otherwise) where the fair market value of such real property is
in excess of $1,000,000 or the fair market value of such real property, together
with all other real property owned by the Credit Parties and not encumbered by a
lien in the name of the Agent for the benefit of the Lenders is in excess of
$2,500,000, not later than thirty (30) days after the acquisition is consummated
or the owner of such property becomes a Domestic Subsidiary (or such longer time
period as Agent may determine), such Credit Party shall execute or cause to be
executed (unless waived by Agent), a Mortgage (or an amendment to an existing
mortgage, where appropriate) covering such real property, together with such
additional real estate documentation, environmental reports, title policies and
surveys as may be reasonably required by Agent; and (ii) with respect to the
acquisition of any leasehold interest in real property by any Credit Party after
the Effective Date (whether by Permitted Acquisition or otherwise), not later
than thirty (30) days after the acquisition is consummated or the owner of the
applicable leasehold interest becomes a Domestic Subsidiary (or such longer time
period as Agent may determine), the applicable Credit Party shall deliver to the
Agent a copy of the applicable lease agreement and shall execute or cause to be
executed, at Agent’s option, unless otherwise waived by Agent, a Collateral
Access Agreement in form and substance reasonably acceptable to Agent together
with such other documentation as may be reasonably required by Agent, provided,
however the requirement of delivering such Collateral Access Agreements shall
only apply to permanent leased facilities, and not to any temporary leased
locations relating solely to jobs-in-progress;
 
in each case in form reasonably satisfactory to the Agent, in its reasonable
discretion, together with such supporting documentation, including without
limitation corporate authority items, certificates and opinions of counsel, as
reasonably required by the Agent.  Upon the Agent’s request, Credit Parties
shall take, or cause to be taken, such additional steps as are necessary or
advisable under applicable law to perfect and ensure the validity and priority
of the Liens granted under this Section 7.13.
 
7.14           Accounts.  Maintain all deposit accounts and securities accounts
of any Credit Party with Agent, provided, however that the Credit Parties may
maintain other deposit accounts with a bank other than Agent provided that the
aggregate amount held in such other deposit accounts at any time shall not
exceed $250,000.
 
7.15           Use of Proceeds.  Use all Advances of the Revolving Credit as set
forth in Section 2.12 hereof. No Borrower shall use any portion of the proceeds
of any such advances for the purpose of purchasing or carrying any “margin
stock” (as defined in Regulation U of the Board of Governors of the Federal
Reserve System) in any manner which violates the provisions of Regulation T, U
or X of said Board of Governors or for any other purpose in violation of any
applicable statute or regulation.
 
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7.16           Post-Closing Items.  Within  the time periods specified below
(unless such time period is otherwise extended by the Agent in its sole
discretion), the Borrowers shall provide the following materials to the Agent:
 
 
(a)
Within thirty (30) days of the Effective Date, execute and deliver Mortgages, in
form and substance reasonably acceptable to the Agent for that certain real
property located at (i) 20810 Fernbush Lane, Houston, Texas 77073, (ii) Loop
21050 Loop 494, New Caney, Montgomery County, Texas, (iii) 64.839 acres on Bauer
Road, Cypress, Harris County, Texas, (iv) 50.7 acres on St. Hedwig Street
(FM1346), San Antonio, Bexar County, Texas; (v) 4.466 acres at 5001 West Rock
Island Road (CR 274), Grand Prairie, Dallas County, Texas and (vi) 5.0 acres at
20505 Essman, Houston, Harris County, Texas, together with all related
documentation as Agent may request.

 
 
(b)
On the Effective Date, (i) the Joinder Agreement executed by Target; (ii) for
any Lender requesting them, Revolving Credit Notes and for the Swing Line
Lender, the Swing Note, executed by the Borrowers; (iii) officers’ certificates
of the Target in the form required by Section 5.1(b) hereof; (iv) that certain
Comerica Bank Merger Acknowledgment, executed by the Borrowers; (v) that certain
Agreement re: No Oral Agreements, executed by the Borrowers; (vi) that certain
Acknowledgment of Pledge executed by RHBL and (vii) that certain Acknowledgment
of the Borrowers to the Comerica Intercreditor Agreement.

 
 
(c)
Within thirty (30) days of the Effective Date, amend the loan documents relating
to the Comerica Debt in form and substance reasonably acceptable to the Agent;

 
 
(d)
Within fifteen (15) days of the Effective Date, deliver certificates of foreign
qualification for OMC in the Commonwealth of Massachusetts, and for TSC in the
State of Arizona;

 
 
(e)
Within fifteen (15) days of the Effective Date, deliver casualty and liability
insurance certificates in form and substance reasonably acceptable to the Agent;

 
 
(f)
Within fifteen (15) days of the Effective Date, deliver an opinion as to the
Target from counsel to the Borrowers in the State of Nevada, in form and
substance reasonably acceptable to the Agent;

 
 
(g)
Within fifteen (15) days of the Effective Date, to the extent there is any
outstanding intercompany Debt among any Credit Parties, execute Intercompany
Notes evidencing such Debt and deliver such Intercompany Notes to the Agent;

 
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(h)
Unless within sixty (60) days of the Effective Date, any investment accounts
held with Comerica Securities, Inc. have been closed, the applicable Credit
Parties shall, upon the request of the Agent, execute and deliver an account
control agreement regarding such accounts in form and substance reasonably
acceptable to the Agent together with such other documents related thereto as
Agent may reasonably request; and

 
 
(i)
Within thirty (30) days of the Effective Date, all vehicle titles for vehicles
owned by the Borrowers.

 
7.17           Further Assurances and Information
 
.  (a)  Take such actions as the Agent or Majority Lenders may from time to time
reasonably request to establish and maintain first priority perfected security
interests in and Liens on all of the Collateral, subject only to those Liens
permitted under Section 8.2 hereof, including executing and delivering such
additional pledges, assignments, mortgages, lien instruments or other security
instruments covering any or all of the Credit Parties’ assets as Agent may
reasonably require, such documentation to be in form and substance reasonably
acceptable to Agent, and prepared at the expense of the Borrowers; and
 
(b)           Execute and deliver or cause to be executed and delivered to Agent
within a reasonable time following Agent’s request, and at the expense of the
Borrowers, such other documents or instruments as Agent may reasonably require
to effectuate more fully the purposes of this Agreement or the other Loan
Documents.
 
(c)           Provide the Agent and the Lenders with any other information
required by Section 326 of the Patriot Act or necessary for the Agent and the
Lenders to verify the identity of any Credit Party as required by Section 326 of
the Patriot Act.
 
 
8.NEGATIVE COVENANTS.

 
Each Borrower covenants and agrees that, so long as any Lender has any
commitment to extend credit hereunder, or any of the Indebtedness remains
outstanding and unpaid, it will not, and, as applicable, it will not permit any
of its Subsidiaries to:
 
8.1           Limitation on Debt.  Create, incur, assume or suffer to exist any
Debt, except:
 
 
(a)
Indebtedness of any Credit Party to Agent and the Lenders under this Agreement
and/or the other Loan Documents;

 
 
(b)
any Debt existing on the Effective Date and set forth in Schedule 8.1 attached
hereto and any renewals or refinancing of such Debt (provided that (i) the
aggregate principal amount of such renewed or refinanced Debt shall not exceed
the aggregate principal amount of the original Debt outstanding on the Effective
Date (less any principal payments and the amount of any commitment reductions
made thereon on or prior to such renewal or refinancing), (ii) the renewal or
refinancing of such Debt shall be on substantially the same or better terms as
in effect with respect to such Debt on the Effective Date, and shall  otherwise
be in compliance with this Agreement, and (iii) at the time of such renewal or
refinancing no Default or Event of Default has occurred and is continuing or
would result from the renewal or refinancing of such Debt;

 
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(c)
any Debt of Borrowers or any Subsidiary incurred to finance the acquisition of
fixed or capital assets, whether pursuant to a loan or a Capitalized Lease
provided that both at the time of and immediately after giving effect to the
incurrence thereof (i) no Default or Event of Default shall have occurred and be
continuing, and (ii) the aggregate amount of all such Debt at any one time
outstanding (including, without limitation, any Debt of the type described in
this clause (c) which is set forth on Schedule 8.1 hereof) shall not exceed
$5,000,000, and any renewals or refinancings of such Debt on terms substantially
the same or better than those in effect at the time of the original incurrence
of such Debt;

 
 
(d)
Debt under any Hedging Transactions, provided that such transaction is entered
into for risk management purposes and not for speculative purposes;

 
 
(e)
Debt arising from judgments or decrees not deemed to be a Default or Event of
Default under subsection (g) of Section 9.1;

 
 
(f)
Debt owing to a Person that is a Credit Party, but only to the extent permitted
under Section 8.7 hereof;

 
 
(g)
the Comerica Debt and the Subordinated Debt;

 
 
(h)
Debt arising under the Surety Agreements, provided that the Borrowers shall
promptly terminate the Liberty Mutual Indemnity Agreement and any other Bond
Documents related thereto following the completion of the construction projects
set forth on Schedule 8.1(i);

 
 
(i)
additional unsecured Debt not otherwise described above, provided that both at
the time of and immediately after giving effect to the incurrence thereof (i) no
Default or Event of Default shall have occurred and be continuing or result
therefrom and (ii) the aggregate amount of all such Debt shall not exceed
$1,000,000 at any one time outstanding.

 
8.2           Limitation on Liens.  Create, incur, assume or suffer to exist any
Lien upon any of its property, assets or revenues, whether now owned or
hereafter acquired, except for:
 
 
(a)
Permitted Liens;

 
 
(b)
Liens securing Debt permitted by Section 8.1(c), provided that (i) such Liens
are created upon fixed or capital assets acquired by the applicable Credit
Party, (ii) any such Lien is created solely for the purpose of securing
indebtedness representing or incurred to finance the cost of the acquisition of
the item of property subject thereto, (iii) the principal amount of the Debt
secured by any such Lien shall at no time exceed 100% of the sum of the purchase
price or cost of the applicable property, equipment or improvements and the
related costs and charges imposed by the vendors thereof and (iv) the Lien does
not cover any property other than the fixed or capital asset acquired; provided,
however, that no such Lien shall be created over any owned real property of any
Credit Party for which Agent has received a Mortgage or for which such Credit
Party is required to execute a Mortgage pursuant to the terms of this Agreement;

 
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(c)
Liens created pursuant to the Loan Documents;

 
 
(d)
Liens securing the Comerica Debt, as in effect on the Effective Date, and
subject to the terms of the Comerica Intercreditor Agreement;

 
 
(e)
Liens arising under the Surety Agreements, provided that (i) no public filing of
such Lien has been made, (ii) no action has been taken or threatened to be taken
to perfect or enforce such Lien; and (iii) none of the surety companies party to
the Surety Agreements have required that any Credit Party establish a cash
collateral account or otherwise put cash on deposit for their benefit;

 
 
(f)
other Liens, existing on the Effective Date, set forth on Schedule 8.2 and
renewals, refinancings and extensions thereof on substantially the same or
better terms as in effect on the Effective Date and otherwise in compliance with
this Agreement.

 
Regardless of the provisions of this Section 8.2, no Lien over the Equity
Interests of Borrowers (other than Sterling) or any Subsidiary of any Borrower
(except for those Liens for the benefit of Agent and the Lenders) shall be
permitted under the terms of this Agreement.
 
8.3           Acquisitions.  Except for the Acquisition, Permitted Acquisitions
and acquisitions permitted under Section 8.7, if any, purchase or otherwise
acquire or become obligated for the purchase of all or substantially all or any
material portion of the assets or business interests or a division or other
business unit of any Person, or any Equity Interest of any Person, or any
business or going concern.
 
8.4           Limitation on Mergers, Dissolution or Sale of Assets.  Enter into
any merger or consolidation or convey, sell, lease, assign, transfer or
otherwise dispose of any of its property, business or assets (including, without
limitation, Equity Interests, receivables and leasehold interests), whether now
owned or hereafter acquired or liquidate, wind up or dissolve, except:
 
 
(a)
inventory leased or sold in the ordinary course of business;

 
 
(b)
obsolete, damaged, uneconomic or worn out machinery, parts, property or
equipment, or property or equipment no longer used or useful in the conduct of
the applicable Credit Party’s business;

 
 
(c)
Permitted Acquisitions;

 
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(d)
mergers or consolidations of any Subsidiary of a Borrower with or into a
Borrower or any Guarantor so long as such Borrower or such Guarantor shall be
the continuing or surviving entity; provided that at the time of each such
merger or consolidation, both before and after giving effect thereto, no Default
or Event of Default shall have occurred and be continuing or result from such
merger or consolidation;

 
 
(e)
any Subsidiary of a Borrower may liquidate or dissolve into a Borrower or a
Guarantor if such Borrower determines in good faith that such liquidation or
dissolution is in the best interests of such Borrower, so long as no Default or
Event of Default has occurred and is continuing or would result therefrom;

 
 
(f)
sales or transfers, including without limitation upon voluntary liquidation from
any Credit Party to a Borrower or a Guarantor, provided that the applicable
Borrower or Guarantor takes such actions as Agent may reasonably request to
ensure the perfection and priority of the Liens in favor of the Lenders over
such transferred assets;

 
 
(g)
(i) Asset Sales (exclusive of asset sales permitted pursuant to all other
subsections of this Section 8.4) in which the sales price is at least equal to
the fair market value of the assets sold and the consideration received is cash
or cash equivalents or Debt of any Credit Party being assumed by the purchaser,
provided that, (A) for Asset Sales for assets other than real property, the
aggregate amount of such Asset Sales does not exceed $2,000,000 in any Fiscal
Year and (B) no Default or Event of Default has occurred and is continuing at
the time of each such sale (both before and after giving effect to such Asset
Sale), and (ii) other Asset Sales approved by the Majority Lenders in their sole
discretion;

 
 
(h)
the sale or disposition of Permitted Investments and other cash equivalents in
the ordinary course of business; and

 
 
(i)
dispositions of owned or leased vehicles in the ordinary course of business.

 

The Lenders hereby consent and agree to the release by Agent of any and all
Liens on the property sold or otherwise disposed of in compliance with this
Section 8.4.
 
8.5           Restricted Payments.  Declare or make any distributions, dividend,
payment or other distribution of assets, properties, cash, rights, obligations
or securities (collectively, “Distributions”) on account of any of its Equity
Interests, as applicable, or purchase, redeem or otherwise acquire for value any
of its Equity Interests, as applicable, or any warrants, rights or options to
acquire any of its Equity Interests, now or hereafter outstanding (collectively,
“Purchases”), except that:
 
 
(a)
each Credit Party may pay cash Distributions to the Borrowers;

 
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(b)
each Credit Party may declare and make Distributions payable in the Equity
Interests of such Credit Party, provided that the issuance of such Equity
Interests does not otherwise violate the terms of this Agreement and no Default
or Event of Default has occurred and is continuing at the time of making such
Distribution or would result from the making of such Distribution; and

 
 
(c)
RBHL may make cash Distributions to Mr. Richard Buenting at the times and in the
amounts set forth in the Purchase Agreement as in effect on the date hereof,
provided that no Default or Event of Default has occurred and is continuing or
could reasonably be expected to result therefrom.

 
8.6           Put and Call.  Make any payments to Richard Buenting in respect of
the Put (as defined in the Acquisition Documents) or otherwise exercise the Call
(as defined in the Purchase Agreement) if a Default or Event of Default has
occurred and is continuing or could reasonably be expected to result therefrom.
 
8.7           Limitation on Investments, Loans and Advances.  Make or allow to
remain outstanding any Investment in, or any loans or advances to, any Person
other than:
 
 
(a)
Permitted Investments;

 
 
(b)
Investments existing on the Effective Date and listed on Schedule 8.7 hereof;

 
 
(c)
sales on open account in the ordinary course of business;

 
 
(d)
intercompany loans or intercompany Investments made amongst the Borrowers,
provided, further, that in each case, no Default or Event of Default shall have
occurred and be continuing at the time of making such intercompany loan or
intercompany Investment or result from such intercompany loan or intercompany
Investment being made and that any intercompany loans shall be evidenced by and
funded under an Intercompany Note pledged to the Agent under the appropriate
Collateral Documents;

 
 
(e)
Investments in respect of Hedging Transactions provided that such transaction is
entered into for risk management purposes and not for speculative purposes;

 
 
(f)
loans and advances to employees, officers and directors of any Credit Party for
moving, entertainment, travel and other similar expenses in the ordinary course
of business not in excess of $250,000 in the aggregate amount at any time
outstanding;

 
 
(g)
Permitted Acquisitions and Investments in any Person acquired pursuant to a
Permitted Acquisition;

 
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(h)
Investments constituting deposits made in connection with the purchase of goods
or services in the ordinary course of business in an aggregate amount for such
deposits not to exceed $3,000,000 at any one time outstanding;

 
 
(i)
other Investments not described above provided that both at the time of and
immediately after giving effect to any such Investment (i) no Default or Event
of Default shall have occurred and be continuing or shall result from the making
of such Investment and (ii) the aggregate amount of all such Investments shall
not exceed $250,000 at any time outstanding.

 
In valuing any Investments for the purpose of applying the limitations set forth
in this Section 8.7 (except as otherwise expressly provided herein), such
Investment shall be taken at the original cost thereof, without allowance for
any subsequent write-offs or appreciation or depreciation, but less any amount
repaid or recovered on account of capital or principal.
 
8.8           Transactions with Affiliates.  Except as set forth in Schedule
8.8, enter into any transaction, including, without limitation, any purchase,
sale, lease or exchange of property or the rendering of any service, with any
Affiliates of the Credit Parties except: (a) transactions with Affiliates that
are the Borrowers or Guarantors; (b) transactions otherwise permitted under this
Agreement; and (c) transactions in the ordinary course of a Credit Party’s
business and upon fair and reasonable terms no less favorable to such Credit
Party than it would obtain in a comparable arms length transaction from
unrelated third parties.
 
8.9           Sale-Leaseback Transactions; Sale of Accounts or Notes
Receivables; Synthetic Leases.  Enter into any arrangement with any Person
providing for (a) the leasing by a Credit Party of real or personal property
which has been or is to be sold or transferred by such Credit Party to such
Person or to any other Person to whom funds have been or are to be advanced by
such Person on the security of such property or rental obligations of such
Credit Party, as the case may be, (b) sell any accounts or notes receivable or
(c) enter into any synthetic lease (being an operating lease which has been
structured so that it is not recorded as a liability on the balance sheet of any
of the Credit Parties).
 
8.10           Limitations on Other Restrictions.  Except for this Agreement or
any other Loan Document, enter into any agreement, document or instrument which
would (i) restrict the ability of any Subsidiary of the Borrowers to pay or make
dividends or distributions in cash or kind to Borrowers or any Guarantor, to
make loans, advances or other payments of whatever nature to any Credit Party,
or to make transfers or distributions of all or any part of its assets to any
Credit Party; or (ii) restrict or prevent any Credit Party from granting Agent
on behalf of Lenders Liens upon, security interests in and pledges of their
respective assets, except to the extent such restrictions exist in documents
creating Liens permitted by Section 8.2(b) hereunder.
 
8.11           Prepayment of Debt.  Make any prepayment (whether optional or
mandatory), repurchase, redemption, defeasance or any other payment in respect
of any Subordinated Debt, provided, however, that the applicable Credit Party
may make certain payments in respect of the Subordinated Debt but only to the
extent permitted under the applicable Subordinated Debt Documents and the
applicable Subordination Agreement.
 
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8.12           Amendment of Certain Documents.  Amend, modify or otherwise alter
(or suffer to be amended, modified or altered) the Subordinated Debt Documents,
the Acquisition Documents or the Surety Agreements except as permitted in the
applicable Subordinated Debt Documents and Subordination Agreements, or if no
such restrictions exist in the applicable Subordinated Debt Documents or
Subordination Agreements, without the prior written consent of the Agent.
 
8.13           Modification of Certain Agreements.  Make, permit or consent to
any amendment or other modification to the constitutional documents of any
Credit Party or any of the Bond Documents (other than the Surety Agreements
which are subject to Section 8.12 above) except to the extent that any such
amendment or modification (i) does not violate the terms and conditions of this
Agreement or any of the other Loan Documents, (ii) does not materially adversely
affect the interest of the Lenders as creditors and/or secured parties under any
Loan Document and (iii) could not reasonably be expected to have a Material
Adverse Effect.
 
8.14           Management Fees.  Pay or otherwise advance, directly or
indirectly, any management, consulting or other fees to an Affiliate (other than
an Affiliate which is a Borrower or a Guarantor), other than fees not in excess
of $250,000 in the aggregate amount in any year.
 
8.15           Fiscal Year.  Permit the Fiscal Year of any Credit Party to end
on a day other than December 31.
 
 
9.DEFAULTS.

 
9.1           Events of Default.  The occurrence of any of the following events
shall constitute an Event of Default hereunder:
 
 
(a)
non-payment when due of (i) the principal or interest on the Indebtedness under
the Revolving Credit (including the Swing Line) or (ii) any Reimbursement
Obligation;

 
 
(b)
non-payment of any other amounts due and owing by any Borrower under this
Agreement or by any Credit Party under any of the other Loan Documents to which
it is a party, other than as set forth in subsection (a) above, within three (3)
Business Days after the same is due and payable;

 
 
(c)
default in the observance or performance of any of the conditions, covenants or
agreements of any Borrower set forth in Sections 7.1, 7.2, 7.4(a) and (e), 7.5
(provided, however, if Credit Parties’ failure to comply with Section 7.5 arises
from the Agent’s determination that the Credit Parties’ insurance is not of the
kind customarily carried by similar companies, a failure to comply with Section
7.5 hereof shall not be an Event of Default until 30 days following Agent’s
notification to the Borrower Representative that the Credit Parties’ insurance
is not adequate), 7.6, 7.7, 7.9, 7.13, 7.14, 7.15, 7.16, 7.17 or Article 8 in
its entirety, provided that an Event of Default arising from a breach of
Sections 7.1 or 7.2 shall be deemed to have been cured upon delivery of the
required item; and provided further that any Event of Default arising solely due
to a breach of Section 7.7(a) shall be deemed cured upon the earlier of (x) the
giving of the notice required by Section 7.7(a) and (y) the date upon which the
Default or Event of Default giving rise to the notice obligation is cured or
waived;

 
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(d)
default in the observance or performance of any of the other conditions,
covenants or agreements set forth in this Agreement or any of the other Loan
Documents by any Credit Party  and continuance thereof for a period of thirty
(30) consecutive days; ;

 
 
(e)
any representation or warranty made by any Credit Party herein or in any
certificate, instrument or other document submitted pursuant hereto proves
untrue or misleading in any material adverse respect when made;

 
 
(f)
(i) default by any Credit Party in the payment of any indebtedness for borrowed
money, whether under a direct obligation or guaranty (other than Indebtedness
hereunder) of any Credit Party in excess of One Million Dollars ($1,000,000) (or
the equivalent thereof in any currency other than Dollars) individually or in
the aggregate when due and continuance thereof beyond any applicable period of
cure and or (ii) failure to comply with the terms of any other obligation of any
Credit Party with respect to any indebtedness for borrowed money (other than
Indebtedness hereunder) in excess of One Million Dollars ($1,000,000) (or the
equivalent thereof in any currency other than Dollars) individually or in the
aggregate, which continues beyond any applicable period of cure and which would
permit the holder or holders thereto to accelerate such other indebtedness for
borrowed money, or require the prepayment, repurchase, redemption or defeasance
of such indebtedness;

 
 
(g)
the rendering of any judgment(s) (not covered by adequate insurance from a
solvent carrier which is defending such action without reservation of rights)
for the payment of money in excess of the sum of One Million
Dollars ($1,000,000) (or the equivalent thereof in any currency other than
Dollars) individually or in the aggregate against any Credit Party, and such
judgments shall remain unpaid, unvacated, unbonded or unstayed by appeal or
otherwise for a period of forty-five (45) consecutive days from the date of its
entry;

 
 
(h)
the occurrence of (i) a “reportable event”, as defined in ERISA, which is
determined by the PBGC to constitute grounds for a distress termination of any
Pension Plan subject to Title IV of ERISA maintained or contributed to by or on
behalf of any Credit Party for the benefit of any of its employees or for the
appointment by the appropriate United States District Court of a trustee to
administer such Pension Plan and such reportable event is not corrected and such
determination is not revoked within sixty (60) days after notice thereof has
been given to the plan administrator of such Pension Plan (without limiting any
of Agent’s or any Lender’s other rights or remedies hereunder), or (ii) the
termination or the institution of proceedings by the PBGC to terminate any such
Pension Plan, or (iii) the appointment of a trustee by the appropriate United
States District Court to administer any such Pension Plan, or (iv) the
reorganization (within the meaning of Section 4241 of ERISA) or insolvency
(within the meaning of Section 4245 of ERISA) of any Multiemployer Plan, or
receipt of notice from any Multiemployer Plan that it is in reorganization or
insolvency, or the complete or partial withdrawal by any Credit Party from any
Multiemployer Plan, which in the case of any of the foregoing, could reasonably
be expected to have a Material Adverse Effect;

 
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(i)
except as expressly permitted under this Agreement, any Credit Party shall be
dissolved (other than a dissolution of a Subsidiary of a Borrower which is not a
Guarantor or a Borrower) or liquidated (or any judgment, order or decree
therefor shall be entered) except as otherwise permitted herein; or if a
creditors’ committee shall have been appointed for the business of any Credit
Party; or if any Credit Party shall have made a general assignment for the
benefit of creditors or shall have been adjudicated bankrupt and if not an
adjudication based on a filing by a Credit Party, it shall not have been
dismissed within sixty (60) days, or shall have filed a voluntary petition in
bankruptcy or for reorganization or to effect a plan or arrangement with
creditors or shall fail to pay its debts generally as such debts become due in
the ordinary course of business (except as contested in good faith and for which
adequate reserves are made in such party’s financial statements); or shall file
an answer to a creditor’s petition or other petition filed against it, admitting
the material allegations thereof for an adjudication in bankruptcy or for
reorganization; or shall have applied for or permitted the appointment of a
receiver or trustee or custodian for any of its property or assets; or such
receiver, trustee or custodian shall have been appointed for any of its property
or assets (otherwise than upon application or consent of a Credit Party ) and
shall not have been removed within sixty (60) days; or if an order shall be
entered approving any petition for reorganization of any Credit Party and shall
not have been reversed or dismissed within sixty (60) days;

 
 
(j)
(i) any Person either alone or together with any of its Subsidiaries, shall
acquire more than fifty percent (50%) of the issued and outstanding Equity
Interests of Sterling, (ii) Sterling shall directly or indirectly cease to hold
one hundred percent (100%) (or in the case of RHBL, at least 91%) of the issued
and outstanding Equity Interests of any other Borrower or any Guarantor; (iii)
any Person either alone or together with any of its Affiliates shall have the
ability to elect a controlling majority of the Board of Directors of Sterling or
(iv) any “change of control” or “change in control” occurs as defined in any
Subordinated Debt Documents;

 
 
(k)
A default or event of default shall have occurred under any Bond Documents; or

 
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(l)
any Loan Document shall at any time for any reason cease to be in full force and
effect (other than in accordance with the terms thereof or the terms of any
other Loan Document), as applicable, or the validity, binding effect or
enforceability thereof shall be contested by any party thereto (other than any
Lender, Agent, Issuing Lender or Swing Line Lender), or any Person shall deny
that it has any or further liability or obligation under any Loan Document, or
any such Loan Document shall be terminated (other than in accordance with the
terms thereof or the terms of any other Loan Document), invalidated, revoked or
set aside or in any way cease to give or provide to the Lenders and the Agent
the benefits purported to be created thereby, or any Loan Document purporting to
grant a Lien to secure any Indebtedness shall, at any time after the delivery of
such Loan Document, fail to create a valid and enforceable Lien on any
Collateral purported to be covered thereby or such Lien shall fail to cease to
be a perfected Lien with the priority required in the relevant Loan Document.

 
9.2           Exercise of Remedies.  If an Event of Default has occurred and is
continuing hereunder: (a) the Agent may, and shall, upon being directed to do so
by the Majority Revolving Credit Lenders, declare the Revolving Credit Aggregate
Commitment terminated; (b) the Agent may, and shall, upon being directed to do
so by the Majority Lenders, upon notice to the Borrower Representative, declare
the entire unpaid principal Indebtedness, including the Notes, immediately due
and payable, without presentment, notice (other than as set forth in this
Section) or demand, all of which are hereby expressly waived by the Borrowers;
(c) upon the occurrence of any Event of Default specified in Section 9.1(i) and
notwithstanding the lack of any declaration by Agent under preceding clauses (a)
or (b), the entire unpaid principal Indebtedness shall become automatically and
immediately due and payable, and the Revolving Credit Aggregate Commitment shall
be automatically and immediately terminated; (d) the Agent shall, upon being
directed to do so by the Majority Revolving Credit Lenders, demand immediate
delivery of cash collateral, and each Borrower agrees to deliver such cash
collateral upon demand, in an amount equal to 105% of the maximum amount that
may be available to be drawn at any time prior to the stated expiry of all
outstanding Letters of Credit, for deposit into an account controlled by the
Agent; (e) the Agent may, and shall, upon being directed to do so by the
Majority Lenders, notify Borrowers or any Credit Party that interest shall be
payable on demand on all Indebtedness (other than Revolving Credit Advances and
Swing Line Advances with respect to which Sections 2.6 hereof shall govern)
owing from time to time to the Agent or any Lender, at a per annum rate equal to
the then applicable Prime-based Rate plus two percent (2%); and (f) the Agent
may, and shall, upon being directed to do so by the Majority Lenders or the
Lenders, as applicable (subject to the terms hereof), exercise any remedy
permitted by this Agreement, the other Loan Documents or law.
 
9.3           Rights Cumulative.  No delay or failure of Agent and/or Lenders in
exercising any right, power or privilege hereunder shall affect such right,
power or privilege, nor shall any single or partial exercise thereof preclude
any further exercise thereof, or the exercise of any other power, right or
privilege. The rights of Agent and Lenders under this Agreement are cumulative
and not exclusive of any right or remedies which Lenders would otherwise have.
 
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9.4           Waiver by Borrowers of Certain Laws.  To the extent permitted by
applicable law, each Borrower hereby agrees to waive, and does hereby absolutely
and irrevocably waive and relinquish the benefit and advantage of any valuation,
stay, appraisement, extension or redemption laws now existing or which may
hereafter exist, which, but for this provision, might be applicable to any sale
made under the judgment, order or decree of any court, on any claim for interest
on the Notes, or any security interest or mortgage contemplated by or granted
under or in connection with this Agreement. These waivers have been voluntarily
given, with full knowledge of the consequences thereof.
 
9.5           Waiver of Defaults.  No Event of Default shall be waived by the
Lenders except in a writing signed by an officer of the Agent in accordance with
Section 13.10 hereof. No single or partial exercise of any right, power or
privilege hereunder, nor any delay in the exercise thereof, shall preclude other
or further exercise of their rights by Agent or the Lenders. No waiver of any
Event of Default shall extend to any other or further Event of Default. No
forbearance on the part of the Agent or the Lenders in enforcing any of their
rights shall constitute a waiver of any of their rights. Each Borrower expressly
agrees that this Section may not be waived or modified by the Lenders or Agent
by course of performance, estoppel or otherwise.
 
9.6           Set Off.  Upon the occurrence and during the continuance of any
Event of Default, each Lender may at any time and from time to time, without
notice to Borrowers but subject to the provisions of Section 10.3 hereof (any
requirement for such notice being expressly waived by Borrowers), setoff and
apply against any and all of the obligations of Borrowers now or hereafter
existing under this Agreement, whether owing to such Lender, any Affiliate of
such Lender or any other Lender or the Agent, any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by such Lender to or for the credit or the
account of Borrowers and any property of Borrowers from time to time in
possession of such Lender, irrespective of whether or not such deposits held or
indebtedness owing by such Lender may be contingent and unmatured and regardless
of whether any Collateral then held by Agent or any Lender is adequate to cover
the Indebtedness. Promptly following any such setoff, such Lender shall give
written notice to Agent and Borrowers of the occurrence thereof. Each Borrower
hereby grants to the Lenders and the Agent a lien on and security interest in
all such deposits, indebtedness and property as collateral security for the
payment and performance of all of the obligations of Borrowers under this
Agreement. The rights of each Lender under this Section 9.6 are in addition to
the other rights and remedies (including, without limitation, other rights of
setoff) which such Lender may have.
 
 
10.PAYMENTS, RECOVERIES AND COLLECTIONS.

 
10.1           Payment Procedure.
 
(a)           All payments to be made by Borrowers shall be made without
condition or deduction for any counterclaim, defense, recoupment or
setoff.  Except as otherwise provided herein, all payments made by the Borrowers
of principal, interest or fees hereunder shall be made without setoff or
counterclaim on the date specified for payment under this Agreement and must be
received by Agent not later than 1:00 p.m. (Detroit time) on the date such
payment is required or intended to be made in Dollars in immediately available
funds to Agent at Agent’s office located at One Detroit Center, Detroit,
Michigan 48226-3289 for the ratable benefit of the Revolving Credit Lenders in
the case of payments in respect of the Revolving Credit and any Letter of Credit
Obligations. Any payment received by the Agent after 1:00 p.m. (Detroit time)
shall be deemed received on the next succeeding Business Day and any applicable
interest or fee shall continue to accrue.  Upon receipt of each such payment,
the Agent shall make prompt payment to each applicable Lender, or, in respect of
Eurodollar-based Advances, such Lender’s Eurodollar Lending Office, in like
funds and currencies, of all amounts received by it for the account of such
Lender.
 
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(b)           Unless the Agent shall have been notified in writing by Borrowers
at least two (2) Business Days prior to the date on which any payment to be made
by Borrowers is due that no Borrower intends to remit such payment, the Agent
may, in its sole discretion and without obligation to do so, assume that
Borrowers have remitted such payment when so due and the Agent may, in reliance
upon such assumption, make available to each Revolving Credit Lender, on such
payment date an amount equal to such Lender’s share of such assumed payment. If
Borrowers have not in fact remitted such payment to the Agent, each Lender shall
forthwith on demand repay to the Agent the amount of such assumed payment made
available or transferred to such Lender, together with the interest thereon, in
respect of each day from and including the date such amount was made available
by the Agent to such Lender to the date such amount is repaid to the Agent at a
rate per annum equal to the Federal Funds Effective Rate for the first two (2)
Business Days that such amount remains unpaid, and thereafter at a rate of
interest then applicable to such Revolving Credit Advances.
 
(c)           Subject to the definition of “Interest Period” in Section 1 of
this Agreement, whenever any payment to be made hereunder shall otherwise be due
on a day which is not a Business Day, such payment shall be made on the next
succeeding Business Day and such extension of time shall be included in
computing interest, if any, in connection with such payment.
 
(d)           All payments to be made by Borrowers under this Agreement or any
of the Notes (including without limitation payments under the Swing Line and/or
Swing Line Note) shall be made without setoff or counterclaim, as aforesaid,
and, subject to full compliance by each Lender (and each assignee and
participant pursuant to Section 13.8) with Section 13.13, without deduction for
or on account of any present or future withholding or other taxes of any nature
imposed by any governmental authority or of any political subdivision thereof or
any federation or organization of which such governmental authority may at the
time of payment be a member (other than any taxes on the overall income, net
income, net profits or net receipts or similar taxes (or any franchise taxes
imposed in lieu of such taxes) on the Agent or any Lender (or any branch
maintained by Agent or a Lender) as a result of a present or former connection
between the Agent or such Lender and the governmental authority, political
subdivision, federation or organization imposing such taxes), unless Borrowers
are compelled by law to make payment subject to such tax. In such event,
Borrowers shall:
 
 
(i)
pay to the Agent for Agent’s own account and/or, as the case may be, for the
account of the Lenders such additional amounts as may be necessary to ensure
that the Agent and/or such Lender or Lenders (including the Swing Line Lender)
receive a net amount equal to the full amount which would have been receivable
had payment not been made subject to such tax; and

 
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(ii)
remit such tax to the relevant taxing authorities according to applicable law,
and send to the Agent or the applicable Lender or Lenders (including the Swing
Line Lender), as the case may be, such certificates or certified copy receipts
as the Agent or such Lender or Lenders shall reasonably require as proof of the
payment by Borrowers of any such taxes payable by Borrowers.

 
As used herein, the terms “tax”, “taxes” and “taxation” include all taxes,
levies, imposts, duties, fees, deductions and withholdings or similar charges
together with interest (and any taxes payable upon the amounts paid or payable
pursuant to this Section 10.1) thereon. Each Borrower shall be reimbursed by the
applicable Lender for any payment made by such Borrower under this Section 10.1
if the applicable Lender is not in compliance with its obligations under Section
13.13 at the time of such Borrower’s payment.
 
10.2           Application of Proceeds of Collateral.  Notwithstanding anything
to the contrary in this Agreement, in the case of any Event of Default under
Section 9.1(i), immediately following the occurrence thereof, and in the case of
any other Event of Default, upon the termination of the Revolving Credit
Aggregate Commitment, the acceleration of any Indebtedness arising under this
Agreement and/or the exercise of any other remedy in each case by the requisite
Lenders under Section 9.2 hereof, the Agent shall apply the proceeds of any
Collateral, together with any offsets, voluntary payments by any Credit Party or
others and any other sums received or collected in respect of the Indebtedness
first, to pay all incurred and unpaid fees and expenses of the Agent under the
Loan Documents and any protective advances made by Agent with respect to the
Collateral under or pursuant to the terms of any Loan Document, next, to pay any
fees and expenses owed to the Issuing Lender hereunder, next, to the
Indebtedness under the Revolving Credit (including the Swing Line and any
Reimbursement Obligations), any obligations owing by any Credit party under any
Hedging Agreements or in connection with any Lender Products on a pro rata
basis, next, to any other Indebtedness on a pro rata basis, and then, if there
is any excess, to the Credit Parties or as otherwise required under applicable
law, as the case may be.
 
10.3           Pro-rata Recovery.  If any Lender shall obtain any payment or
other recovery (whether voluntary, involuntary, by application of setoff or
otherwise) on account of principal of, or interest on, any of the Advances made
by it, or the participations in Letter of Credit Obligations or Swing Line
Advances held by it in excess of its pro rata share of payments then or
thereafter obtained by all Lenders upon principal of and interest on all such
Indebtedness, such Lender shall purchase from the other Lenders such
participations in the Revolving Credit and/or the Letter of Credit Obligation
held by them as shall be necessary to cause such purchasing Lender to share the
excess payment or other recovery ratably in accordance with the applicable
Percentages of the Lenders; provided, however, that if all or any portion of the
excess payment or other recovery is thereafter recovered from such purchasing
holder, the purchase shall be rescinded and the purchase price restored to the
extent of such recovery, but without interest.
 
 
11.CHANGES IN LAW OR CIRCUMSTANCES; INCREASED COSTS.

 
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11.1           Reimbursement of Prepayment Costs.  If (i) Borrowers make any
payment of principal with respect to any Eurodollar-based Advance or Quoted Rate
Advance on any day other than the last day of the Interest Period applicable
thereto (whether voluntarily, pursuant to any mandatory provisions hereof, by
acceleration, or otherwise); (ii) Borrowers convert or refund (or attempt to
convert or refund) any such Advance on any day other than the last day of the
Interest Period applicable thereto (except as described in Section 2.5(e));
(iii) Borrowers fail to borrow, refund or convert any Eurodollar-based Advance
or Quoted Rate Advance after notice has been given by Borrowers to Agent in
accordance with the terms hereof requesting such Advance; or (iv) or if the
Borrowers fail to make any payment of principal in respect of a Eurodollar-based
Advance or Quoted Rate Advance when due, the Borrowers shall jointly and
severally reimburse Agent for itself and/or on behalf of any Lender, as the case
may be, within ten (10) Business Days of written demand therefor for any
resulting loss, cost or expense incurred (excluding the loss of any Applicable
Margin) by Agent and Lenders, as the case may be, as a result thereof,
including, without limitation, any such loss, cost or expense incurred in
obtaining, liquidating, employing or redeploying deposits from third parties,
whether or not Agent and Lenders, as the case may be, shall have funded or
committed to fund such Advance. The amount payable hereunder by Borrowers
(jointly and severally) and to Agent for itself and/or on behalf of any Lender,
as the case may be, shall be deemed to equal an amount equal to the excess, if
any, of (a) the amount of interest which would have accrued on the amount so
prepaid, or not so borrowed, refunded or converted, for the period from the date
of such prepayment or of such failure to borrow, refund or convert, through the
last day of the relevant Interest Period, at the applicable rate of interest for
said Advance(s) provided under this Agreement, over (b) the amount of interest
(as reasonably determined by Agent and Lenders, as the case may be) which would
have accrued to Agent and Lenders, as the case may be, on such amount by placing
such amount on deposit for a comparable period with leading banks in the
interbank eurocurrency market. Calculation of any amounts payable to any Lender
under this paragraph shall be made as though such Lender shall have actually
funded or committed to fund the relevant Advance through the purchase of an
underlying deposit in an amount equal to the amount of such Advance and having a
maturity comparable to the relevant Interest Period; provided, however, that any
Lender may fund any Eurodollar-based Advance or Quoted Rate Advance, as the case
may be, in any manner it deems fit and the foregoing assumptions shall be
utilized only for the purpose of the calculation of amounts payable under this
paragraph. Upon the written request of Borrower Representative, Agent and
Lenders shall deliver to Borrower Representative a certificate setting forth the
basis for determining such losses, costs and expenses, which certificate shall
be conclusively presumed correct, absent manifest error.
 
11.2           Eurodollar Lending Office.  For any Eurodollar Advance, if Agent
or a Lender, as applicable, shall designate a Eurodollar Lending Office which
maintains books separate from those of the rest of Agent or such Lender, Agent
or such Lender, as the case may be, shall have the option of maintaining and
carrying the relevant Advance on the books of such Eurodollar Lending Office.
 
11.3           Circumstances Affecting Eurodollar-based Rate Availability.  If,
with respect to any Eurodollar-Interest Period, Agent or the Majority Lenders
(after consultation with Agent) shall determine in good faith that, by reason of
circumstances affecting the foreign exchange and interbank markets generally,
deposits in eurodollars in the applicable amounts are not being offered to the
Agent or such Lenders for such Eurodollar-Interest Period, then Agent shall
forthwith give notice thereof to Borrower Representative. Thereafter, until
Agent notifies the Borrower Representative that such circumstances no longer
exist, (i) the obligation of Lenders to make Eurodollar-based Advances, and the
right of Borrowers to convert an Advance to or refund an Advance as a
Eurodollar-based Advance, as the case may be, shall be suspended, and (ii)
effective upon the last day of each Eurodollar-Interest Period related to any
existing Eurodollar-based Advance, each such Eurodollar-based Advance shall
automatically be converted into a Prime-based Advance (without regard to
satisfaction of any conditions to conversion contained elsewhere herein).
 
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11.4           Laws Affecting Eurodollar-based Advance Availability.  If, after
the date of this Agreement, the adoption or introduction of, or any change in,
any applicable law, rule or regulation or in the interpretation or
administration thereof by any governmental authority charged with the
interpretation or administration thereof, or compliance by any of the Lenders
(or any of their respective Eurodollar Lending Offices) with any request or
directive (whether or not having the force of law) of any such authority, shall
make it unlawful or impossible for any of the Lenders (or any of their
respective Eurodollar Lending Offices) to honor its obligations hereunder to
make or maintain any Advance with interest at the Eurodollar-based Rate, such
Lender shall forthwith give notice thereof to Borrower Representative and to
Agent. Thereafter, (a) the obligations of the applicable Lenders to make
Eurodollar-based Advances and the right of Borrowers to convert an Advance into
or refund an Advance as a Eurodollar-based Advance shall be suspended and
thereafter Borrowers may select as Applicable Interest Rates only those which
remain available and which are permitted to be selected hereunder, and (b) if
any of the Lenders may not lawfully continue to maintain an Advance to the end
of the then current Eurodollar-Interest Period applicable thereto as a
Eurodollar-based Advance, the applicable Advance shall immediately be converted
to a Prime-based Advance and the Prime-based Rate shall be applicable thereto
for the remainder of such Eurodollar-Interest Period. For purposes of this
Section, a change in law, rule, regulation, interpretation or administration
shall include, without limitation, any change made or which becomes effective on
the basis of a law, rule, regulation, interpretation or administration presently
in force, the effective date of which change is delayed by the terms of such
law, rule, regulation, interpretation or administration.
 
11.5           Increased Cost of Eurodollar-based Advances.  If, after the date
of this Agreement, the adoption or introduction of, or any change in, any
applicable law, rule or regulation or in the interpretation or administration
thereof by any governmental authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by any of the
Lenders (or any of their respective Eurodollar Lending Offices) with any request
or directive (whether or not having the force of law) of any such authority,
central bank or comparable agency:
 
 
(a)
shall subject any of the Lenders (or any of their respective Eurodollar Lending
Offices) to any tax, duty or other charge with respect to any Advance or shall
change the basis of taxation of payments to any of the Lenders (or any of their
respective Eurodollar Lending Offices) of the principal of or interest on any
Advance or any other amounts due under this Agreement in respect thereof (except
for changes in the rate of tax on the overall net income of any of the Lenders
or any of their respective Eurodollar Lending Offices); or

 
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(b)
shall impose, modify or deem applicable any reserve (including, without
limitation, any imposed by the Board of Governors of the Federal Reserve
System), special deposit or similar requirement against assets of, deposits with
or for the account of, or credit extended by, any of the Lenders (or any of
their respective Eurodollar Lending Offices) or shall impose on any of the
Lenders (or any of their respective Eurodollar Lending Offices) or the foreign
exchange and interbank markets any other condition affecting any Advance;

 
and the result of any of the foregoing matters is to increase the costs to any
of the Lenders of maintaining any part of the Indebtedness hereunder as a
Eurodollar-based Advance or to reduce the amount of any sum received or
receivable by any of the Lenders under this Agreement in respect of a
Eurodollar-based Advance, then such Lender shall promptly notify Agent, and
Agent shall promptly notify Borrower Representative of such fact and demand
compensation therefor and, within ten (10) Business Days after such notice,
Borrowers jointly and severally agree to pay to such Lender or Lenders such
additional amount or amounts as will compensate such Lender or Lenders for such
increased cost or reduction, provided that each Lender agrees to take any
reasonable action, to the extent such action could be taken without cost or
administrative or other burden or restriction to such Lender, to mitigate or
eliminate such cost or reduction, within a reasonable time after becoming aware
of the foregoing matters. Agent will promptly notify Borrower Representative of
any event of which it has knowledge which will entitle Lenders to compensation
pursuant to this Section, or which will cause Borrowers to incur additional
liability under Section 11.1 hereof, provided that Agent shall incur no
liability whatsoever to the Lenders or Borrowers in the event it fails to do so.
A certificate of Agent (or such Lender, if applicable) setting forth the basis
for determining such additional amount or amounts necessary to compensate such
Lender or Lenders shall accompany such demand and shall be conclusively presumed
to be correct absent manifest error.
 
11.6           Capital Adequacy and Other Increased Costs.
 
 
(a)
If, after the date of this Agreement, the adoption or introduction of, or any
change in any applicable law, treaty, rule or regulation (whether domestic or
foreign) now or hereafter in effect and whether or not presently applicable to
any Lender or Agent, or any interpretation or administration thereof by any
governmental authority charged with the interpretation or administration
thereof, or compliance by any Lender or Agent with any guideline, request or
directive of any such authority (whether or not having the force of law),
including any risk based capital guidelines, affects or would affect the amount
of capital required to be maintained by such Lender or Agent (or any corporation
controlling such Lender or Agent) and such Lender or Agent, as the case may be,
determines that the amount of such capital is increased by or based upon the
existence of such Lender’s or Agent’s obligations or Advances hereunder and such
increase has the effect of reducing the rate of return on such Lender’s or
Agent’s (or such controlling corporation’s) capital as a consequence of such
obligations or Advances hereunder to a level below that which such Lender or
Agent (or such controlling corporation) could have achieved but for such
circumstances (taking into consideration its policies with respect to capital
adequacy) by an amount deemed by such Lender or Agent to be material
(collectively, “Increased Costs”), then Agent or such Lender shall notify the
Borrower Representative, and thereafter Borrowers shall pay, jointly and
severally, to such Lender or Agent, as the case may be, within ten (10) Business
Days of written demand therefor from such Lender or Agent, additional amounts
sufficient to compensate such Lender or Agent (or such controlling corporation)
for any increase in the amount of capital and reduced rate of return which such
Lender or Agent reasonably determines to be allocable to the existence of such
Lender’s or Agent’s obligations or Advances hereunder. A statement setting forth
the amount of such compensation, the methodology for the calculation and the
calculation thereof which shall also be prepared in good faith and in reasonable
detail by such Lender or Agent, as the case may be, shall be submitted by such
Lender or by Agent to Borrower Representative, reasonably promptly after
becoming aware of any event described in this Section 11.6(a) and shall be
conclusively presumed to be correct, absent manifest error.

 
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(b)
Notwithstanding the foregoing, however, Borrowers shall not be required to pay
any increased costs under Sections 11.5, 11.6 or 3.4(c) for any period ending
prior to the date that is 180 days prior to the making of a Lender’s initial
request for such additional amounts unless the applicable change in law or other
event resulting in such increased costs is effective retroactively to a date
more than 180 days prior to the date of such request, in which case a Lender’s
request for such additional amounts relating to the period more than 180 days
prior to the making of the request must be given not more than 180 days after
such Lender becomes aware of the applicable change in law or other event
resulting in such increased costs.

 
11.7           Right of Lenders to Fund through Branches and Affiliates.  Each
Lender (including without limitation the Swing Line Lender) may, if it so
elects, fulfill its commitment as to any Advance hereunder by designating a
branch or Affiliate of such Lender to make such Advance; provided that (a) such
Lender shall remain solely responsible for the performances of its obligations
hereunder and (b) no such designation shall result in any material increased
costs to Borrowers.
 
11.8           Margin Adjustment.  Adjustments to the Applicable Margins and the
Applicable Fee Percentages, based on Schedule 1.1, shall be implemented on a
quarterly basis as follows:
 
 
(a)
Such adjustments shall be given prospective effect only, effective as to all
Advances outstanding hereunder, the Applicable Fee Percentage and the Letter of
Credit Fee, upon the date of delivery of the financial statements under Sections
7.1(a) and 7.1(b) hereunder and the Covenant Compliance Report under Section
7.2(a) hereof, in each case establishing applicability of the appropriate
adjustment and in each case with no retroactivity or claw-back. In the event
Borrowers shall fail timely to deliver such financial statements or the Covenant
Compliance Report and such failure continues for three (3) days, then (but
without affecting the Event of Default resulting therefrom) from the date
delivery of such financial statements and report was required until such
financial statements and report are delivered, the Applicable Margins and
Applicable Fee Percentages shall be at the highest level on the Pricing Matrix
attached to this Agreement as Schedule 1.1.

 
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(b)
From the Effective Date until the required date of delivery (or, if earlier,
delivery) of the financial statements under Section 7.1(a) or 7.1(b) hereof, as
applicable, and the Covenant Compliance Report under Section 7.2(a) hereof, for
the fiscal quarter ending December 31, 2007, the Applicable Margins and
Applicable Fee Percentages shall be those set forth under the Level II column of
the pricing matrix attached to this Agreement as Schedule 1.1. Thereafter,
Applicable Margins and Applicable Fee Percentages shall be based upon the
quarterly financial statements and Covenant Compliance Reports, subject to
recalculation as provided in Section 11.8(a) above.

 
 
(c)
Notwithstanding the foregoing, however, if, prior to the payment and discharge
in full (in cash) of the Indebtedness and the termination of any and all
commitments hereunder, as a result of any restatement of or adjustment to the
financial statements of Sterling and any of its Subsidiaries (relating to the
current or any prior fiscal period) or for any other miscalculation or error,
Agent determines that the Applicable Margin and/or the Applicable Fee
Percentages as calculated by Borrowers as of any applicable date of
determination were inaccurate in any respect and a proper calculation thereof
would have resulted in different pricing for any fiscal period, then (x) if the
proper calculation thereof would have resulted in higher pricing for any such
period, Borrowers shall automatically and retroactively be jointly and severally
obligated to pay to Agent, promptly upon demand by Agent or the Majority
Lenders, an amount equal to the excess of the amount of interest and fees that
should have been paid for such period over the amount of interest and fees
actually paid for such period and, if the current fiscal period is affected
thereby, the Applicable Margin and/or the Applicable Fee Percentages for the
current period shall be adjusted based on such recalculation; and (y) if the
proper calculation thereof would have resulted in lower pricing for such period,
Agent and Lenders shall have no obligation to recalculate such interest or fees
or to repay any interest or fees to the Borrowers.

 
 
12.AGENT.

 
12.1           Appointment of Agent.  Each Lender and the holder of each Note
(if issued) irrevocably appoints and authorizes the Agent to act on behalf of
such Lender or holder under this Agreement and the other Loan Documents and to
exercise such powers hereunder and thereunder as are specifically delegated to
Agent by the terms hereof and thereof, together with such powers as may be
reasonably incidental thereto, including without limitation the power to execute
or authorize the execution of financing or similar statements or notices, and
other documents. In performing its functions and duties under this Agreement,
the Agent shall act solely as agent of the Lenders and does not assume and shall
not be deemed to have assumed any obligation towards or relationship of agency
or trust with or for any Credit Party.
 
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12.2           Deposit Account with Agent.  Each Borrower authorizes Agent, in
Agent’s sole discretion, upon notice to the Borrower Representative to charge
its general deposit account(s), if any, maintained with the Agent for the amount
of any principal, interest, or other amounts or costs due under this Agreement
when the same become due and payable under the terms of this Agreement or the
Notes.
 
12.3           Scope of Agent’s Duties.  The Agent shall have no duties or
responsibilities except those expressly set forth herein, and shall not, by
reason of this Agreement or otherwise, have a fiduciary relationship with any
Lender (and no implied covenants or other obligations shall be read into this
Agreement against the Agent). None of Agent, its Affiliates nor any of their
respective directors, officers, employees or agents shall be liable to any
Lender for any action taken or omitted to be taken by it or them under this
Agreement or any document executed pursuant hereto, or in connection herewith or
therewith with the consent or at the request of the Majority Lenders (or all of
the Lenders for those acts requiring consent of all of the Lenders) (except for
its or their own willful misconduct or gross negligence), nor be responsible for
or have any duties to ascertain, inquire into or verify (a) any recitals or
warranties made by the Credit Parties or any Affiliate of the Credit Parties, or
any officer thereof contained herein or therein, (b) the effectiveness,
enforceability, validity or due execution of this Agreement or any document
executed pursuant hereto or any security thereunder, (c) the performance by the
Credit Parties of their respective obligations hereunder or thereunder, or (d)
the satisfaction of any condition hereunder or thereunder, including without
limitation in connection with the making of any Advance or the issuance of any
Letter of Credit. Agent and its Affiliates shall be entitled to rely upon any
certificate, notice, document or other communication (including any cable,
telegraph, telex, facsimile transmission or oral communication) believed by it
to be genuine and correct and to have been sent or given by or on behalf of a
proper person. Agent may treat the payee of any Note as the holder thereof.
Agent may employ agents and may consult with legal counsel, independent public
accountants and other experts selected by it and shall not be liable to the
Lenders (except as to money or property received by them or their authorized
agents), for the negligence or misconduct of any such agent selected by it with
reasonable care or for any action taken or omitted to be taken by it in good
faith in accordance with the advice of such counsel, accountants or experts.
 
12.4           Successor Agent.  Agent may resign as such at any time upon at
least thirty (30) days prior notice to Borrower Representative and each of the
Lenders. If Agent at any time shall resign or if the office of Agent shall
become vacant for any other reason, Majority Lenders shall, by written
instrument,  appoint successor agent(s) (“Successor Agent”) satisfactory to such
Majority Lenders and, so long as no Default or Event of Default has occurred and
is continuing, to Borrower Representative (which approval shall not be
unreasonably withheld or delayed); provided, however that any such successor
Agent shall be a bank or a trust company or other financial institution which
maintains an office in the United States, or a commercial bank organized under
the laws of the United States or any state thereof, or any Affiliate of such
bank or trust company or other financial institution which is engaged in the
banking business, and shall have a combined capital and surplus of at least
$500,000,000. Such Successor Agent shall thereupon become the Agent hereunder,
as applicable, and Agent shall deliver or cause to be delivered to any successor
agent such documents of transfer and assignment as such Successor Agent may
reasonably request. If a Successor Agent is not so appointed or does not accept
such appointment before the resigning Agent’s resignation becomes effective, the
resigning Agent may appoint a temporary successor to act until such appointment
by the Majority Lenders and, if applicable, Borrower Representative, is made and
accepted, or if no such temporary successor is appointed as provided above by
the resigning Agent, the Majority Lenders shall thereafter perform all of the
duties of the resigning Agent hereunder until such appointment by the Majority
Lenders and, if applicable, Borrower Representative, is made and accepted. Such
Successor Agent shall succeed to all of the rights and obligations of the
resigning Agent as if originally named. The resigning Agent shall duly assign,
transfer and deliver to such Successor Agent all moneys at the time held by the
resigning Agent hereunder after deducting therefrom its expenses for which it is
entitled to be reimbursed hereunder. Upon such succession of any such Successor
Agent, the resigning Agent shall be discharged from its duties and obligations,
in its capacity as Agent hereunder, except for its gross negligence or willful
misconduct arising prior to its resignation hereunder, and the provisions of
this Article 12 shall continue in effect for the benefit of the resigning Agent
in respect of any actions taken or omitted to be taken by it while it was acting
as Agent.
 
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12.5           Credit Decisions.  Each Lender acknowledges that it has,
independently of Agent and each other Lender and based on the financial
statements of Borrowers and such other documents, information and investigations
as it has deemed appropriate, made its own credit decision to extend credit
hereunder from time to time. Each Lender also acknowledges that it will,
independently of Agent and each other Lender and based on such other documents,
information and investigations as it shall deem appropriate at any time,
continue to make its own credit decisions as to exercising or not exercising
from time to time any rights and privileges available to it under this
Agreement, any Loan Document or any other document executed pursuant hereto.
 
12.6           Authority of Agent to Enforce This Agreement.  Each Lender,
subject to the terms and conditions of this Agreement, grants the Agent full
power and authority as attorney-in-fact to institute and maintain actions, suits
or proceedings for the collection and enforcement of any Indebtedness
outstanding under this Agreement or any other Loan Document and to file such
proofs of debt or other documents as may be necessary to have the claims of the
Lenders allowed in any proceeding relative to any Credit Party, or their
respective creditors or affecting their respective properties, and to take such
other actions which Agent considers to be necessary or desirable for the
protection, collection and enforcement of the Notes, this Agreement or the other
Loan Documents.
 
12.7           Indemnification of Agent.  The Lenders agree (which agreement
shall survive the expiration or termination of this Agreement) to indemnify the
Agent and its Affiliates (to the extent not reimbursed by Borrowers, but without
limiting any obligation of Borrowers to make such reimbursement), ratably
according to their respective Percentages, from and against any and all claims,
damages, losses, liabilities, costs or expenses of any kind or nature whatsoever
(including, without limitation, reasonable fees and expenses of house and
outside counsel) which may be imposed on, incurred by, or asserted against the
Agent and its Affiliates in any way relating to or arising out of this
Agreement, any of the other Loan Documents or the transactions contemplated
hereby or any action taken or omitted by the Agent and its Affiliates under this
Agreement or any of the Loan Documents; provided, however, that no Lender shall
be liable for any portion of such claims, damages, losses, liabilities, costs or
expenses resulting from the Agent’s or its Affiliate’s gross negligence or
willful misconduct. Without limitation of the foregoing, each Lender agrees to
reimburse the Agent and its Affiliates promptly upon demand for its ratable
share of any reasonable out-of-pocket expenses (including, without limitation,
reasonable fees and expenses of house and outside counsel) incurred by the Agent
and its Affiliates 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 or any of the other Loan
Documents, to the extent that the Agent and its Affiliates are not reimbursed
for such expenses by Borrowers, but without limiting the obligation of Borrowers
to make such reimbursement. Each Lender agrees to reimburse the Agent and its
Affiliates promptly upon demand for its ratable share of any amounts owing to
the Agent and its Affiliates by the Lenders pursuant to this Section, provided
that, if the Agent or its Affiliates are subsequently reimbursed by Borrowers
for such amounts, they shall refund to the Lenders on a pro rata basis the
amount of any excess reimbursement. If the indemnity furnished to the Agent and
its Affiliates under this Section shall become impaired as determined in the
Agent’s reasonable judgment or Agent shall elect in its sole discretion to have
such indemnity confirmed by the Lenders (as to specific matters or otherwise),
Agent shall give notice thereof to each Lender and, until such additional
indemnity is provided or such existing indemnity is confirmed, the Agent may
cease, or not commence, to take any action. Any amounts paid by the Lenders
hereunder to the Agent or its Affiliates shall be deemed to constitute part of
the Indebtedness hereunder.
 
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12.8           Knowledge of Default.  It is expressly understood and agreed that
the Agent shall be entitled to assume that no Default or Event of Default has
occurred and is continuing, unless the officers of the Agent immediately
responsible for matters concerning this Agreement shall have received a written
notice from a Lender or a Borrower specifying such Default or Event of Default
and stating that such notice is a “notice of default”. Upon receiving such a
notice, the Agent shall promptly notify each Lender of such Default or Event of
Default and provide each Lender with a copy of such notice and shall endeavor to
provide such notice to the Lenders within three (3) Business Days (but without
any liability whatsoever in the event of its failure to do so).
 
12.9           Agent’s Authorization; Action by Lenders.  Except as otherwise
expressly provided herein, whenever the Agent is authorized and empowered
hereunder on behalf of the Lenders to give any approval or consent, or to make
any request, or to take any other action on behalf of the Lenders (including
without limitation the exercise of any right or remedy hereunder or under the
other Loan Documents), the Agent shall be required to give such approval or
consent, or to make such request or to take such other action only when so
requested in writing by the Majority Lenders or the Lenders, as applicable
hereunder. Action that may be taken by the Majority Lenders, any other specified
Percentage of the Lenders or all of the Lenders, as the case may be (as provided
for hereunder) may be taken (i) pursuant to a vote of the requisite percentages
of the Lenders as required hereunder at a meeting (which may be held by
telephone conference call), provided that Agent exercises good faith, diligent
efforts to give all of the Lenders reasonable advance notice of the meeting, or
(ii) pursuant to the written consent of the requisite percentages of the Lenders
as required hereunder, provided that all of the Lenders are given reasonable
advance notice of the requests for such consent.
 
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12.10           Enforcement Actions by the Agent.  Except as otherwise expressly
provided under this Agreement or in any of the other Loan Documents and subject
to the terms hereof, Agent will take such action, assert such rights and pursue
such remedies under this Agreement and the other Loan Documents as the Majority
Lenders or all of the Lenders, as the case may be (as provided for hereunder),
shall direct; provided, however, that the Agent shall not be required to act or
omit to act if, in the reasonable judgment of the Agent, such action or omission
may expose the Agent to personal liability for which Agent has not been
satisfactorily indemnified hereunder or is contrary to this Agreement, any of
the Loan Documents or applicable law. Except as expressly provided above or
elsewhere in this Agreement or the other Loan Documents, no Lender (other than
the Agent, acting in its capacity as agent) shall be entitled to take any
enforcement action of any kind under this Agreement or any of the other Loan
Documents.
 
12.11           Collateral Matters.
 
(a)           The Agent is authorized on behalf of all the Lenders, without the
necessity of any notice to or further consent from the Lenders, from time to
time to take any action with respect to any Collateral or the Collateral
Documents which may be necessary to perfect and maintain a perfected security
interest in and Liens upon the Collateral granted pursuant to the Loan
Documents.
 
(b)           The Lenders irrevocably authorize the Agent, in its reasonable
discretion, to the full extent set forth in the post-amble to Section 13.10
hereof, (1) to release or terminate any Lien granted to or held by the Agent
upon any Collateral (a) upon termination of the Revolving Credit Aggregate
Commitment and payment in full of all Indebtedness payable under this Agreement
and under any other Loan Document; (b) constituting property (including, without
limitation, Equity Interests in any Person) sold or to be sold or disposed of as
part of or in connection with any disposition (whether by sale, by merger or by
any other form of transaction and including the property of any Subsidiary that
is disposed of as permitted hereby) permitted in accordance with the terms of
this Agreement; (c) constituting property in which a Credit Party owned no
interest at the time the Lien was granted or at any time thereafter; or (d) if
approved, authorized or ratified in writing by the Majority Lenders, or all the
Lenders, as the case may be, as provided in Section 13.10; (2) to subordinate
the Lien granted to or held by Agent on any Collateral to any other holder of a
Lien on such Collateral which is permitted by Section 8.2(b) hereof; and (3) if
all of the Equity Interests held by the Credit Parties in any Person are sold or
otherwise transferred to any transferee other than a Borrower or a Subsidiary of
a Borrower as part of or in connection with any disposition (whether by sale, by
merger or by any other form of transaction) permitted in accordance with the
terms of this Agreement, to release such Person from all of its obligations
under the Loan Documents (including, without limitation, under any Guaranty).
Upon request by the Agent at any time, the Lenders will confirm in writing the
Agent’s authority to release particular types or items of Collateral pursuant to
this Section 12.11(b).
 
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12.12           Agents in their Individual Capacities.  Comerica Bank and its
Affiliates, successors and assigns shall each have the same rights and powers
hereunder as any other Lender and may exercise or refrain from exercising the
same as though such Lender were not the Agent. Comerica Bank and its Affiliates
may (without having to account therefor to any Lender) accept deposits from,
lend money to, and generally engage in any kind of banking, trust, financial
advisory or other business with the Credit Parties as if such Lender were not
acting as the Agent hereunder, and may accept fees and other consideration
therefor without having to account for the same to the Lenders.
 
12.13           Agent’s Fees.  Until the Indebtedness has been repaid and
discharged in full and no commitment to extend any credit hereunder is
outstanding, Borrowers are obligated, on a joint and several basis to pay to the
Agent, as applicable, any agency or other fee(s) set forth (or to be set forth
from time to time) in the applicable Fee Letter on the terms set forth therein.
The agency fees referred to in this Section 12.13 shall not be refundable under
any circumstances.
 
12.14           Documentation Agent or other Titles.  Any Lender identified on
the facing page or signature page of this Agreement or in any amendment hereto
or as designated with consent of the Agent in any assignment agreement as Lead
Arranger, Documentation Agent, Syndications Agent or any similar titles, shall
not have any right, power, obligation, liability, responsibility or duty under
this Agreement as a result of such title other than those applicable to all
Lenders as such. Without limiting the foregoing, the Lenders so identified shall
not have or be deemed to have any fiduciary relationship with any Lender as a
result of such title. Each Lender acknowledges that it has not relied, and will
not rely, on the Lender so identified in deciding to enter into this Agreement
or in taking or not taking action hereunder.
 
12.15           No Reliance on Agent’s Customer Identification Program.
 
(a)           Each Lender acknowledges and agrees that neither such Lender, nor
any of its Affiliates, participants or assignees, may relay on the Agent to
carry out such Lender’s, Affiliate’s, participant’s or assignee’s customer
identification program, or other obligations required or imposed under or
pursuant to the Patriot Act or the regulations thereunder, including the
regulations contained in 31 CFR 103.121 (as hereafter amended or replaced, the
“CIP Regulations”), or any other Anti-Terrorism Law, including any programs
involving any of the following items relating to or in connection with Borrowers
or any of their Subsidiaries, any of their respective Affiliates or agents, the
Loan Documents or the transactions hereunder: (i) any identify verification
procedures, (ii) any record keeping, (iii) any comparisons with government
lists, (iv) any customer notices or (v) any other procedures required under the
CIP Regulations or such other laws.
 
(b)           Each Lender or assignee or participant of a Lender that is not
organized under the laws of the United States or a state thereof (and is not
excepted from the certification requirement contained in Section 313 of the USA
Patriot Act and the applicable regulations because it is both (i) an affiliate
of a depository institution or foreign bank that maintains a physical presence
in the United States or foreign country, and (ii) subject to provision by a
banking authority regulating such affiliated depository institution or foreign
bank) shall deliver to the Administrative Agent the certification, or, if
applicable, recertification, certifying that such Lender is not a “shell” and
certifying to other matters as required by Section 313 of the Patriot Act and
the applicable regulations: (x) within 10 days after the Effective Date, and (y)
at such other times as are required under the Patriot Act.
 
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13.MISCELLANEOUS.

 
13.1           Accounting Principles.  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
purposes of this Agreement, it shall be done, unless otherwise specified herein,
in accordance with GAAP.
 
13.2           Consent to Jurisdiction.  The Borrowers, the Agent and Lenders
hereby irrevocably submit to the non-exclusive jurisdiction of any United States
Federal Court or Texas state court sitting in Dallas, Texas in any action or
proceeding arising out of or relating to this Agreement or any of the Loan
Documents and the Borrowers, Agent and Lenders hereby irrevocably agree that all
claims in respect of such action or proceeding may be heard and determined in
any such United States Federal Court or Texas state court. Chapter 346 of the
Texas Finance Code (which regulates certain revolving credit loan accounts and
revolving tri-party accounts) does not apply to this Agreement or the Notes.
Each Borrower irrevocably consents to the service of any and all process in any
such action or proceeding brought in any court in or of the State of Texas by
the delivery of copies of such process to it at the applicable addresses
specified on the signature page hereto or by certified mail directed to such
address or such other address as may be designated by it in a notice to the
other parties that complies as to delivery with the terms of Section 13.6.
Nothing in this Section shall affect the right of the Lenders and the Agent to
serve process in any other manner permitted by law or limit the right of the
Lenders or the Agent (or any of them) to bring any such action or proceeding
against any Credit Party or any of their property in the courts with subject
matter jurisdiction of any other jurisdiction. Each Borrower irrevocably waives
any objection to the laying of venue of any such suit or proceeding in the above
described courts.
 
13.3           Law of Texas.  This Agreement, the Notes and, the other Loan
Documents shall be governed by and construed and enforced in accordance with the
laws of the State of Texas. 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.
 
13.4           Interest.  Agent, Lenders, Borrowers and any other parties to the
Loan Documents intend to contract in strict compliance with applicable usury law
from time to time in effect.  In furtherance thereof such Persons stipulate and
agree that none of the terms and provisions contained in the Loan Documents
shall ever be construed to create a contract to pay, for the use, forbearance or
detention of money, interest in excess of the maximum amount of interest
permitted to be charged by applicable law from time to time in effect.  Neither
Borrowers, any other party to the Loan Documents nor any present or future
guarantors, endorsers, or other Persons hereafter becoming liable for payment of
any Indebtedness shall ever be liable for unearned interest thereon or shall
ever be required to pay interest thereon in excess of the maximum amount that
may be lawfully contracted for, charged, or received under applicable law from
time to time in effect, and the provisions of this section shall control over
all other provisions of the Loan Documents which may be in conflict or apparent
conflict herewith.  Agent and Lenders expressly disavow any intention to
contract for, charge, or collect excessive unearned interest or finance charges
in the event the maturity of any Indebtedness is accelerated.  If  (a) the
maturity of any Indebtedness is accelerated for any reason, (b) any Indebtedness
is prepaid and as a result any amounts held to constitute interest are
determined to be in excess of the legal maximum, or (c) Agent or any Lender or
any other holder of any or all of the Indebtedness shall otherwise collect
moneys which are determined to constitute interest which would otherwise
increase the interest on any or all of the Indebtedness to an amount in excess
of that permitted to be charged by applicable law then in effect, then all sums
determined to constitute interest in excess of such legal limit shall, without
penalty, be promptly applied to reduce the then outstanding principal of the
related Indebtedness or, at such Lender’s or holder’s option, promptly returned
to Borrower or the other payor thereof upon such determination.  In determining
whether or not the interest paid or payable, under any specific circumstance,
exceeds the maximum amount permitted under applicable law, Agent, Lenders,
Borrowers (and any other payors thereof) shall to the greatest extent permitted
under applicable Law, (i) characterize any non-principal payment as an expense,
fee or premium rather than as interest, (ii) exclude voluntary prepayments and
the effects thereof, and (iii) amortize, prorate, allocate, and spread the total
amount of interest throughout the entire contemplated term of the instruments
evidencing the Obligations in accordance with the amounts outstanding from time
to time thereunder and the maximum legal rate of interest from time to time in
effect under applicable law in order to lawfully contract for, charge, or
receive the maximum amount of interest permitted under applicable Law.  In the
event applicable Law provides for an interest ceiling under Chapter 303 of the
Texas Finance Code (the “Texas Finance Code”) as amended, for that day, the
ceiling shall be the “weekly ceiling” as defined in the Texas Finance Code,
provided that if any applicable Law permits greater interest, the Law permitting
the greatest interest shall apply. As used in this section the term “applicable
law” means the laws of the State of Texas or the laws of the United States of
America, whichever laws allow the greater interest, as such laws now exist or
may be changed or amended or come into effect in the future.
 
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13.5           Closing Costs and Other Costs;
Indemnification.(a)           Borrowers shall pay or reimburse, on a joint and
several basis, (a) Agent and its Affiliates for payment of, on demand, all
reasonable costs and expenses, including, by way of description and not
limitation, reasonable in-house and outside attorney fees and advances,
appraisal and accounting fees, lien search fees, and required travel costs,
incurred by Agent and its Affiliates in connection with the commitment,
consummation and closing of the loans contemplated hereby, or in connection with
the administration or enforcement of this Agreement or the other Loan Documents
(including the obtaining of legal advice regarding the rights and
responsibilities of the parties hereto) or any refinancing or restructuring of
the loans or Advances provided under this Agreement or the other Loan Documents,
or any amendment or modification thereof requested by Borrowers, and (b) Agent
and its Affiliates and each of the Lenders, as the case may be, for all stamp
and other taxes and duties payable or determined to be payable in connection
with the execution, delivery, filing or recording of this Agreement and the
other Loan Documents and the consummation of the transactions contemplated
hereby, and any and all liabilities with respect to or resulting from any delay
in paying or omitting to pay such taxes or duties. Furthermore, all reasonable
costs and expenses, including without limitation attorney fees, incurred by
Agent and its Affiliates and, after the occurrence and during the continuance of
an Event of Default, by the Lenders in revising, preserving, protecting,
exercising or enforcing any of its or any of the Lenders’ rights against
Borrowers or any other Credit Party, or otherwise incurred by Agent and its
Affiliates and the Lenders in connection with any Event of Default or the
enforcement of the loans (whether incurred through negotiations, legal
proceedings or otherwise), including by way of description and not limitation,
such charges in any court or bankruptcy proceedings or arising out of any claim
or action by any person against Agent, its Affiliates, or any Lender which would
not have been asserted were it not for Agent’s or such Affiliate’s or Lender’s
relationship with Borrowers hereunder or otherwise, shall also be paid, on a
joint and several basis, by Borrowers. All of said amounts required to be paid
by Borrowers hereunder and not paid forthwith upon demand, as aforesaid, shall
bear interest, from the date incurred to the date payment is received by Agent,
at the Prime-based Rate, plus two percent (2%).
 
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(b)           Borrowers jointly and severally agree to indemnify and hold Agent
and each of the Lenders (and their respective Affiliates) harmless from all
loss, cost, damage, liability or expenses, including reasonable house and
outside attorneys’ fees and disbursements (but without duplication of such fees
and disbursements for the same services), incurred by Agent and each of the
Lenders by reason of an Event of Default, or enforcing the obligations of any
Credit Party under this Agreement or any of the other Loan Documents, as
applicable, or in the prosecution or defense of any action or proceeding
concerning any matter growing out of or connected with this Agreement or any of
the Loan Documents, excluding, however, any loss, cost, damage, liability or
expenses to the extent arising as a result of the gross negligence or willful
misconduct of the party seeking to be indemnified under this Section 13.5(b),
provided that, the Borrowers shall be obligated to reimburse Agent and the
Lenders for only a single financial consultant selected by Agent in consultation
with the Lenders.
 
(c)           The Borrowers agree on a joint and several basis to defend,
indemnify and hold harmless Agent and each Lender (and their respective
Affiliates), and their respective employees, agents, officers and directors from
and against any and all claims, demands, penalties, fines, liabilities,
settlements, damages, costs or expenses of whatever kind or nature (including
without limitation, reasonable attorneys and consultants fees, investigation and
laboratory fees, environmental studies required by Agent or any Lender in
connection with the violation of Hazardous Material Laws), court costs and
litigation expenses, arising out of or related to (i) the presence, use,
disposal, release or threatened release of any Hazardous Materials on, from or
affecting any premises owned or occupied by any Credit Party in violation of or
the non-compliance with applicable Hazardous Material Laws, (ii) any personal
injury (including wrongful death) or property damage (real or personal) arising
out of or related to such Hazardous Materials, (iii) any lawsuit or other
proceeding brought or threatened, settlement reached or governmental order or
decree relating to such Hazardous Materials, and/or (iv) complying or coming
into compliance with all Hazardous Material Laws (including the cost of any
remediation or monitoring required in connection therewith) or any other
Requirement of Law; provided, however, that the Borrowers shall have no
obligations under this Section 13.5(c) with respect to claims, demands,
penalties, fines, liabilities, settlements, damages, costs or expenses to the
extent arising as a result of the gross negligence or willful misconduct of the
Agent or such Lender, as the case may be. The obligations of Borrowers under
this Section 13.5(c) shall be in addition to any and all other obligations and
liabilities Borrowers may have to Agent or any of the Lenders at common law or
pursuant to any other agreement.
 
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13.6           Notices.
 
 
(a)
Except as expressly provided otherwise in this Agreement (and except as provided
in clause (b) below), all notices and other communications provided to any party
hereto under this Agreement or any other Loan Document shall be in writing and
shall be given by personal delivery, by mail, by reputable overnight courier or
by facsimile and addressed or delivered to it at its address set forth on
Schedule 13.6 or at such other address as may be designated by such party in a
notice to the other parties that complies as to delivery with the terms of this
Section 13.6 or posted to an E-System set up by or at the direction of Agent (as
set forth below). Any notice, if personally delivered or if mailed and properly
addressed with postage prepaid and sent by registered or certified mail, shall
be deemed given when received or when delivery is refused; any notice, if given
to a reputable overnight courier and properly addressed, shall be deemed given
two (2) Business Days after the date on which it was sent, unless it is actually
received sooner by the named addressee; and any notice, if transmitted by
facsimile, shall be deemed given when received. The Agent may, but, except as
specifically provided herein, shall not be required to, take any action on the
basis of any notice given to it by telephone, but the giver of any such notice
shall promptly confirm such notice in writing, by facsimile, and such notice
will not be deemed to have been received until such confirmation is deemed
received in accordance with the provisions of this Section set forth above. If
such telephonic notice conflicts with any such confirmation, the terms of such
telephonic notice shall control. Any notice given by the Agent or any Lender to
the Borrower Representative shall be deemed to be a notice to all of the Credit
Parties.

 
 
(b)
Notices and other communications provided to the Agent and the Lenders party
hereto under this Agreement or any other Loan Document may be delivered or
furnished by electronic communication (including email and Internet or intranet
websites) pursuant to procedures approved by the Agent.  The Agent or any
Borrower may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications (including email and
any E-System) pursuant to procedures approved by it.  Unless otherwise agreed to
in a writing by and among the parties to a particular communication, (i) notices
and other communications sent to an email address shall be deemed received upon
the sender’s receipt of an acknowledgment from the intended recipient (such as
by the “return receipt requested” function, return email, or other written
acknowledgment) and (ii) notices and other communications posted to any E-System
shall be deemed received upon the deemed receipt by the intended recipient at
its email address as described in the foregoing clause (i) of notification that
such notice or other communication is available and identifying the website
address therefore.

 
13.7           Further Action.  Borrowers, from time to time, upon written
request of Agent will make, execute, acknowledge and deliver or cause to be
made, executed, acknowledged and delivered, all such further and additional
instruments, and take all such further action as may reasonably be required to
carry out the intent and purpose of this Agreement or the Loan Documents, and to
provide for Advances under and payment of the Notes, according to the intent and
purpose herein and therein expressed.
 
13.8           Successors and Assigns; Participations; Assignments.
 
(a)           This Agreement shall be binding upon and shall inure to the
benefit of the Borrowers and the Lenders and their respective successors and
assigns.
 
(b)           The foregoing shall not authorize any assignment by any Borrower
of its rights or duties hereunder, and, except as otherwise provided herein, no
such assignment shall be made (or be effective) without the prior written
approval of the Lenders.
 
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(c)           No Lenders may at any time assign or grant participations in such
Lender’s rights and obligations hereunder and under the other Loan Documents
except (i) by way of assignment to any Eligible Assignee in accordance with
clause (d) of this Section, (ii) by way of a participation in accordance with
the provisions of clause (e) of this Section or (iii) by way of a pledge or
assignment of a security interest subject to the restrictions of clause (f) of
this Section (and any other attempted assignment or transfer by any Lender shall
be deemed to be null and void).
 
(d)           Each assignment by a Lender of all or any portion of its rights
and obligations hereunder and under the other Loan Documents, shall be subject
to the following terms and conditions:
 
 
(i)
each such assignment shall be made on a pro rata basis, and shall be in a
minimum amount of the lesser of (x) Five Million Dollars ($5,000,000) or such
lesser amount as the Agent shall agree and (y) the entire remaining amount of
assigning Lender’s aggregate interest in the Revolving Credit (and
participations in any outstanding Letters of Credit); provided however that,
after giving effect to such assignment, in no event shall the entire remaining
amount (if any) of assigning Lender’s aggregate interest in the Revolving Credit
(and participations in any outstanding Letters of Credit) be less than
$5,000,000; and

 
 
(ii)
the parties to any assignment shall execute and deliver to Agent an Assignment
Agreement substantially (as determined by Agent) in the form attached hereto as
Exhibit H (with appropriate insertions acceptable to Agent), together with a
processing and recordation fee in the amount, if any, required as set forth in
the Assignment Agreement (provided however that such Lender need not deliver an
Assignment Agreement in connection with assignments to such Lender’s Affiliates
or to a Federal Reserve Bank).

 
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Until the Assignment Agreement becomes effective in accordance with its terms,
and Agent has confirmed that the assignment satisfies the requirements of this
Section 13.8, the Borrowers and the Agent shall be entitled to continue to deal
solely and directly with the assigning Lender in connection with the interest so
assigned.  From and after the effective date of each Assignment Agreement that
satisfies the requirements of this Section 13.8, the assignee thereunder shall
be deemed to be a party to this Agreement, such assignee shall have the rights
and obligations of a Lender under this Agreement and the other Loan Documents
(including without limitation the right to receive fees payable hereunder in
respect of the period following such assignment) and the assigning Lender shall
relinquish its rights and be released from its obligations under this Agreement
and the other Loan Documents.
 
Upon request, Borrowers shall execute and deliver to the Agent, new Note(s)
payable to the order of the assignee in an amount equal to the amount assigned
to the assigning Lender pursuant to such Assignment Agreement, and with respect
to the portion of the Indebtedness retained by the assigning Lender, to the
extent applicable, new Note(s) payable to the order of the assigning Lender in
an amount equal to the amount retained by such Lender hereunder. The Agent, the
Lenders and each Borrower acknowledges and agrees that any such new Note(s)
shall be given in renewal and replacement of the Notes issued to the assigning
lender prior to such assignment and shall not effect or constitute a novation or
discharge of the Indebtedness evidenced by such prior Note, and each such new
Note may contain a provision confirming such agreement.
 
(e)           The Borrowers and the Agent acknowledge that each of the Lenders
may at any time and from time to time, subject to the terms and conditions
hereof, grant participations in such Lender’s rights and obligations hereunder
(on a pro rata basis only) and under the other Loan Documents to any Person
(other than a natural person or to any Borrower or any of Borrower’s Affiliates
or Subsidiaries); provided that any participation permitted hereunder shall
comply with all applicable laws and shall be subject to a participation
agreement that incorporates the following restrictions:
 
 
(i)
such Lender shall remain the holder of its Notes hereunder (if such Notes are
issued), notwithstanding any such participation;

 
 
(ii)
a participant shall not reassign or transfer, or grant any sub-participations in
its participation interest hereunder or any part thereof; and

 
 
(iii)
such Lender shall retain the sole right and responsibility to enforce the
obligations of the Credit Parties relating to the Notes and the other Loan
Documents, including, without limitation, the right to proceed against any
Guarantors, or cause the Agent to do so (subject to the terms and conditions
hereof), and the right to approve any amendment, modification or waiver of any
provision of this Agreement without the consent of the participant (unless such
participant is an Affiliate of such Lender), except for those matters covered by
Section 13.10(a) through (e) hereof (provided that a participant may exercise
any of the approval rights granted above in this clause (iii) only on an
indirect basis, acting through such Lender and the Credit Parties, Agent and the
other Lenders may continue to deal directly with such Lender in connection with
such Lender’s rights and duties hereunder). Notwithstanding the foregoing,
however, in the case of any participation granted by any Lender hereunder, the
participant shall not have any rights under this Agreement or any of the other
Loan Documents against the Agent, any other Lender or any Credit Party;
provided, however that the participant may have rights against such Lender in
respect of such participation as may be set forth in the applicable
participation agreement and all amounts payable by the Credit Parties hereunder
shall be determined as if such Lender had not sold such
participation.  Each  such participant shall be entitled to the benefits of
Article 11 of this Agreement to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to clause (d) of this Section,
provided that no participant shall be entitled to receive any greater amount
pursuant to such the provisions of Article 11 than the issuing Lender would have
been entitled to receive in respect of the amount of the participation
transferred by such issuing Lender to such participant had no such transfer
occurred and each such participant shall also be entitled to the benefits of
Section 9.6 hereof as though it were a Lender, provided that such participant
agrees to be subject to Section 10.3 hereof as though it were a Lender.

 
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(f)           Any Lender may at any time pledge or assign a security interest in
all or any portion of its rights under this Agreement (including its Notes, if
any) to secure obligations of such Lender, including any pledge or assignment to
secure obligations to a Federal Reserve Bank; provided that no such pledge or
assignment shall release such Lender from any of its obligations hereunder or
substitute any such pledge or assignee for such Lender as a party hereto.
 
(g)           The Agent shall maintain at its principal office a copy of each
Assignment Agreement delivered to it and a register (the “Register”) for the
recordation of the names and addresses of the Lenders, the Percentages of such
Lenders and the principal amount of each type of Advance owing to each such
Lender from time to time. The entries in the Register shall be conclusive
evidence, absent manifest error, and the Borrowers, the Agent, and the Lenders
may treat each Person whose name is recorded in the Register as the owner of the
Advances recorded therein for all purposes of this Agreement. The Register shall
be available for inspection by the Borrowers or any Lender upon reasonable
notice to the Agent and a copy of such information shall be provided to any such
party on their prior written request. The Agent shall give prompt written notice
to the Borrower Representative of the making of any entry in the Register or any
change in such entry.
 
(h)           Each Borrower authorizes each Lender to disclose to any
prospective assignee or participant which has satisfied the requirements
hereunder, any and all financial information in such Lender’s possession
concerning the Credit Parties which has been delivered to such Lender pursuant
to this Agreement, provided that each such prospective assignee or participant
shall execute a confidentiality agreement consistent with the terms of Section
13.11 hereof or shall otherwise agree to be bound by the terms thereof.
 
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(i)           Nothing in this Agreement, the Notes or the other Loan Documents,
expressed or implied, is intended to or shall confer on any Person other than
the respective parties hereto and thereto and their successors and assignees and
participants permitted hereunder and thereunder any benefit or any legal or
equitable right, remedy or other claim under this Agreement, the Notes or the
other Loan Documents.
 
13.9           Counterparts; Execution.  This Agreement may be executed in
several counterparts, and each executed copy shall constitute an original
instrument, but such counterparts shall together constitute but one and the same
instrument.  This Agreement (and each other Loan Document) may be delivered by
facsimile or electronic (e.g., .pdf or .tif file) transmission with the same
effect as if an originally executed version of this Agreement (or such other
Loan Document) had been personally delivered to each of the parties hereto,
whether or not an original remains in existence.
 
13.10           Amendment and Waiver.  No amendment or waiver of any provision
of this Agreement or any other Loan Document, nor consent to any departure by
any Credit Party therefrom, shall in any event be effective unless the same
shall be in writing and signed by the Agent and the Majority Lenders (or by the
Agent at the written request of the Majority Lenders) or, if this Agreement
expressly so requires with respect to the subject matter thereof, by all Lenders
(and, with respect to any amendments to this Agreement or the other Loan
Documents, by any Credit Party or the Guarantors that are signatories thereto),
and then such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given; provided, however, that no
amendment, waiver or consent shall, unless in writing and signed by the Lender
or Lenders affected thereby, do any of the following: (a) increase the stated
amount of such Lender’s commitment hereunder, (b) reduce the principal of, or
interest on, any outstanding Indebtedness or any Fees or other amounts payable
hereunder, (c) postpone any date fixed for any payment of principal of, or
interest on, any outstanding Indebtedness or any Fees or other amounts payable
hereunder, (d) except as expressly permitted hereunder or under the Collateral
Documents, release all or substantially all of the Collateral (provided that
neither Agent nor any Lender shall be prohibited thereby from proposing or
participating in a consensual or nonconsensual debtor-in-possession or similar
financing), or release any material guaranty provided by any Person in favor of
Agent and the Lenders, provided however that Agent shall be entitled, without
notice to or any further action or consent of the Lenders, to release any
Collateral which any Credit Party is permitted to sell, assign or otherwise
transfer in compliance with this Agreement or the other Loan Documents or
release any guaranty to the extent expressly permitted in this Agreement or any
of the other Loan Documents (whether in connection with the sale, transfer or
other disposition of the applicable Guarantor or otherwise), (e) terminate or
modify any indemnity provided to the Lenders hereunder or under the other Loan
Documents, except as shall be otherwise expressly provided in this Agreement or
any other Loan Document, or (f) change the definitions of “Revolving Credit
Percentage”, “Percentage”, “Interest Periods”, “Majority Lenders”, “Majority
Revolving Credit Lenders”, Sections 10.2 or 10.3 hereof or this Section 13.10;
provided, further, that notwithstanding the foregoing, the Revolving Credit
Maturity Date may be postponed or extended, only with the consent of all of the
Revolving Credit Lenders, and provided further, that no amendment, waiver or
consent shall, unless in a writing signed by the Swing Line Lender, do any of
the following: (x) reduce the principal of, or interest on, the Swing Line Note
(y) postpone any date fixed for any payment of principal of, or interest on, the
Swing Line Note or (z) alter the rights and duties of the Swing Line Lender
hereunder and provided further, that no amendment, waiver or consent shall,
unless in a writing signed by Issuing Lender affect the rights or duties of
Issuing Lender under this Agreement or any of the other Loan Documents and no
amendment, waiver, or consent shall, unless in a writing signed by the Agent
affect the rights or duties of the Agent under this Agreement or any other Loan
Document. All references in this Agreement to “Lenders” or “the Lenders” shall
refer to all Lenders, unless expressly stated to refer to Majority Lenders (or
the like).
 
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The Agent shall, upon the written request of the Borrower Representative,
execute and deliver to the Credit Parties such documents as may be necessary to
evidence (1) the release of any Lien granted to or held by the Agent upon any
Collateral: (a) upon termination of the Revolving Credit Aggregate Commitment
and payment in full of all Indebtedness payable under this Agreement and under
any other Loan Document; (b) which constitutes property (including, without
limitation, Equity Interests in any Person) sold or to be sold or disposed of as
part of or in connection with any disposition (whether by sale, by merger or by
any other form of transaction and including the property of any Subsidiary that
is disposed of as permitted hereby) permitted in accordance with the terms of
this Agreement; (c) which constitutes property in which a Credit Party owned no
interest at the time the Lien was granted or at any time thereafter; or (d) if
approved, authorized or ratified in writing by the Majority Lenders, or all the
Lenders, as the case may be, as provided in this Section 13.10; or (2) the
release of any Person from its obligations under the Loan Documents (including
without limitation the Guaranty) if all of the Equity Interests of such Person
that were held by a Credit Party are sold or otherwise transferred to any
transferee other than a Borrower or a Subsidiary of a Borrower as part of or in
connection with any disposition (whether by sale, by merger or by any other form
of transaction) permitted in accordance with the terms of this Agreement;
provided that (i) Agent shall not be required to execute any such release or
subordination agreement under clauses (1) or (2) above on terms which, in the
Agent’s opinion, would expose the Agent to liability or create any obligation or
entail any consequence other than the release of such Liens without recourse or
warranty or such release shall not in any manner discharge, affect or impair the
Indebtedness or any Liens upon any Collateral retained by any Credit Party,
including (without limitation) the proceeds of the sale or other disposition,
all of which shall constitute and remain part of the Collateral.
 
13.11           Confidentiality.  Each Lender agrees that it will not disclose
without the prior consent of the Borrower Representative (other than to its
employees, its Subsidiaries, another Lender, an Affiliate of a Lender or to its
auditors or counsel) any information with respect to the Credit Parties which is
furnished pursuant to this Agreement or any of the other Loan Documents;
provided that any Lender may disclose any such information (a) as has become
generally available to the public or has been lawfully obtained by such Lender
from any third party under no duty of confidentiality to any Credit Party, (b)
as may be required or appropriate in any report, statement or testimony
submitted to, or in respect to any inquiry, by, any municipal, state or federal
regulatory body having or claiming to have jurisdiction over such Lender,
including the Board of Governors of the Federal Reserve System of the United
States, the Office of the Comptroller of the Currency or the Federal Deposit
Insurance Corporation or similar organizations (whether in the United States or
elsewhere) or their successors, (c) as may be required or appropriate in respect
to any summons or subpoena or in connection with any litigation, (d) in order to
comply with any law, order, regulation, ruling or other requirement of law
applicable to such Lender, and (e) to any prospective assignee or participant in
accordance with Section 13.8(f) hereof.
 
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13.12           Substitution of Lenders.  If (a) any Lender has failed to fund
its Revolving Credit Percentage of any Revolving Credit Advance, or to fund a
Revolving Credit Advance to repay a Swing Line Advance or any Reimbursement
Obligations, (b) the obligation of any Lender to make Eurodollar-based Advances
has been suspended pursuant to Section 11.3 or 11.4, (c) any Lender has demanded
compensation under Section 3.4(c), 11.5 or 11.6 or (d) any Lender has not
approved an amendment, waiver or other modification of this Agreement, if such
amendment or waiver has been approved by the Majority Lenders and the consent of
such Lender is required (in each case, an “Affected Lender”), then the Agent or
the Borrowers shall have the right to make written demand on the Affected Lender
(with a copy to the Borrower Representative in the case of a demand by the Agent
or with a copy to the Agent in the case of a demand by the Borrowers) to assign
and the Affected Lender shall assign, to one or more financial institutions that
comply with the provisions of Section 13.8 hereof (the “Purchasing Lender” or
“Purchasing Lenders”) to purchase the Advances of the Revolving Credit and/or
Swing Line, as the case may be, of such Affected Lender (including, without
limitation, its participating interests in outstanding Swing Line Advances and
Letters of Credit) and assume the commitment of the Affected Lender to extend
credit under the Revolving Credit (including without limitation its obligation
to purchase participations interest in Swing Line Advances and Letters of
Credit) under this Agreement. The Affected Lender shall be obligated to sell its
Advances of the Revolving Credit and/or Swing Line, as the case may be, and
assign its commitment to extend credit under the Revolving Credit (including
without limitation its obligations to purchase participations in Swing Line
Advances and Letters of Credit) to such Purchasing Lender or Purchasing Lenders
within ten (10) days after receiving notice from the Borrowers requiring it to
do so, at an aggregate price equal to the outstanding principal amount thereof,
plus unpaid interest accrued thereon up to but excluding the date of the sale.
In connection with any such sale, and as a condition thereof, the Borrowers
shall pay to the Affected Lender all fees accrued for its account hereunder to
but excluding the date of such sale, plus, if demanded by the Affected Lender
within ten (10) Business Days after such sale, (i) the amount of any
compensation which would be due to the Affected Lender under Section 11.1 if the
Borrowers had prepaid the outstanding Eurodollar-based Advances of the Affected
Lender on the date of such sale and (ii) any additional compensation accrued for
its account under Sections 3.4(c), 11.5 and 11.6 to but excluding said date.
Upon such sale, the Purchasing Lender or Purchasing Lenders shall assume the
Affected Lender’s commitment, and the Affected Lender shall be released from its
obligations hereunder to a corresponding extent. If any Purchasing Lender is not
already one of the Lenders, the Affected Lender, as assignor, such Purchasing
Lender, as assignee, the Borrower Representative and the Agent, shall enter into
an Assignment Agreement pursuant to Section 13.8 hereof, whereupon such
Purchasing Lender shall be a Lender party to this Agreement, shall be deemed to
be an assignee hereunder and shall have all the rights and obligations of a
Lender with a Revolving Credit Percentage equal to its ratable share of the then
applicable Revolving Credit Aggregate Commitment of the Affected Lender. In
connection with any assignment pursuant to this Section 13.12, the Borrowers or
the Purchasing Lender shall pay to the Agent the administrative fee for
processing such assignment referred to in Section 13.8.
 
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13.13           Withholding Taxes.  If any Lender is not a “united states
person” within the meaning of Section 7701(a)(30) of the Internal Revenue Code,
such Lender shall promptly (but in any event prior to the initial payment of
interest hereunder or prior to its accepting any assignment under Section 13.8
hereof, as applicable) deliver to the Agent two executed copies of (i) Internal
Revenue Service Form W-8BEN or any successor form specifying the applicable tax
treaty between the United States and the jurisdiction of such Lender’s domicile
which provides for the exemption from withholding on interest payments to such
Lender, (ii) Internal Revenue Service Form W-8ECI or any successor form
evidencing that the income to be received by such Lender hereunder is
effectively connected with the conduct of a trade or business in the United
States or (iii) other evidence satisfactory to the Agent that such Lender is
exempt from United States income tax withholding with respect to such income;
provided, however, that such Lender shall not be required to deliver to Agent
the aforesaid forms or other evidence with respect to Advances to Borrowers, if
such Lender has assigned its entire interest hereunder (including its Revolving
Credit Commitment Amount, any outstanding Advances hereunder and participations
in Letters of Credit issued hereunder and any Notes issued to it by Borrowers),
to an Affiliate which is incorporated under the laws of the United States or a
state thereof, and so notifies the Agent. Such Lender shall amend or supplement
any such form or evidence as required to insure that it is accurate, complete
and non-misleading at all times. Promptly upon notice from the Agent of any
determination by the Internal Revenue Service that any payments previously made
to such Lender hereunder were subject to United States income tax withholding
when made, such Lender shall pay to the Agent the excess of the aggregate amount
required to be withheld from such payments over the aggregate amount actually
withheld by the Agent. In addition, from time to time upon the reasonable
request and the sole expense of Borrower, each Lender and the Agent shall (to
the extent it is able to do so based upon applicable facts and circumstances),
complete and provide Borrowers with such forms, certificates or other documents
as may be reasonably necessary to allow Borrowers, as applicable, to make any
payment under this Agreement or the other Loan Documents without any withholding
for or on the account of any tax under Section 10.1(d) hereof (or with such
withholding at a reduced rate), provided that the execution and delivery of such
forms, certificates or other documents does not adversely affect or otherwise
restrict the rights and benefits (including without limitation economic
benefits) available to such Lender or the Agent, as the case may be, under this
Agreement or any of the other Loan Documents, or under or in connection with any
transactions not related to the transactions contemplated hereby.
 
13.14           Taxes and Fees.  Should any tax (other than as a result of a
Lender’s failure to comply with Section 13.13 or a tax based upon the net income
or capitalization of any Lender or the Agent by any jurisdiction where a Lender
or the Agent is or has been located), or recording or filing fee become payable
in respect of this Agreement or any of the other Loan Documents or any
amendment, modification or supplement hereof or thereof, Borrowers agrees to pay
the same, together with any interest or penalties thereon arising from any
Borrower’s actions or omissions, and agrees to hold the Agent and the Lenders
harmless with respect thereto provided, however, that Borrowers shall not be
responsible for any such interest or penalties which were incurred prior to the
date that notice is given to the Credit Parties of such tax or
fees. Notwithstanding the foregoing, nothing contained in this Section 13.14
shall affect or reduce the rights of any Lender or the Agent under Section 11.5
hereof.
 
13.15           WAIVER OF JURY TRIAL.  THE LENDERS, THE AGENT AND THE BORROWERS
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT ANY OF THEM MAY HAVE TO
A TRIAL BY JURY IN ANY LITIGATION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR
ANY RELATED INSTRUMENT OR AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED BY
THIS AGREEMENT OR ANY COURSE OF CONDUCT, DEALING, STATEMENTS (WHETHER ORAL OR
WRITTEN) OR ACTION OF ANY OF THEM. NEITHER THE LENDERS, THE AGENT NOR THE
BORROWERS SHALL SEEK TO CONSOLIDATE, BY COUNTERCLAIM OR OTHERWISE, ANY SUCH
ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A
JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. THESE PROVISIONS SHALL NOT BE
DEEMED TO HAVE BEEN MODIFIED IN ANY RESPECT OR RELINQUISHED BY THE LENDERS AND
THE AGENT OR THE BORROWER EXCEPT BY A WRITTEN INSTRUMENT EXECUTED BY ALL OF
THEM.
 
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13.16           Patriot Act Notice.   Pursuant to Section 326 of the USA Patriot
Act, the Agent and the Lenders hereby notify the Credit Parties that if they or
any of their Subsidiaries open an account, including any loan, deposit account,
treasury management account, or other extension of credit with Agent or any
Lender, the Agent or the applicable Lender will request the applicable Person’s
name, tax identification number, business address and other information
necessary to identify such Person (and may request such Person’s organizational
documents or other identifying documents) to the extent necessary for the Agent
and the applicable Lender to comply with the USA Patriot Act.
 
13.17           Complete Agreement; Conflicts.  THIS AGREEMENT AND THE OTHER
“LOAN AGREEMENTS” (AS DEFINED IN SECTION 26.02(A)(2) OF THE TEXAS BUSINESS &
COMMERCE CODE, AS AMENDED) REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES,
AND THIS AGREEMENT AND THE OTHER WRITTEN LOAN AGREEMENTS MAY NOT BE CONTRADICTED
BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS BETWEEN THE
PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.  In the
event of any conflict between the terms of this Agreement and the other Loan
Documents, this Agreement shall govern.
 
13.18           Severability.  In case any one or more of the obligations of the
Credit Parties under this Agreement, the Notes or any of the other Loan
Documents shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining obligations of the Credit
Parties shall not in any way be affected or impaired thereby, and such
invalidity, illegality or unenforceability in one jurisdiction shall not affect
the validity, legality or enforceability of the obligations of the Credit
Parties under this Agreement, the Notes or any of the other Loan Documents in
any other jurisdiction.
 
13.19           Table of Contents and Headings; Section References.  The table
of contents and the headings of the various subdivisions hereof are for
convenience of reference only and shall in no way modify or affect any of the
terms or provisions hereof and references herein to “sections,” “subsections,”
“clauses,” “paragraphs,” “subparagraphs,” “exhibits” and “schedules” shall be to
sections, subsections, clauses, paragraphs, subparagraphs, exhibits and
schedules, respectively, of this Agreement unless otherwise specifically
provided herein or unless the context otherwise clearly indicates.
 
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13.20           Construction of Certain Provisions.  If any provision of this
Agreement or any of the Loan Documents refers to any action to be taken by any
Person, or which such Person is prohibited from taking, such provision shall be
applicable whether such action is taken directly or indirectly by such Person,
whether or not expressly specified in such provision.
 
13.21           Independence of Covenants.  Each covenant hereunder shall be
given independent effect (subject to any exceptions stated in such covenant) so
that if a particular action or condition is not permitted by any such covenant
(taking into account any such stated exception), the fact that it would be
permitted by an exception to, or would be otherwise within the limitations of,
another covenant shall not avoid the occurrence of a Default or an Event of
Default.
 
13.22           Electronic Transmissions.
 
 
(a)
Each of the Agent, the Credit Parties, the Lenders, and each of their Affiliates
is authorized (but not required) to transmit, post or otherwise make or
communicate, in its sole discretion, Electronic Transmissions in connection with
any Loan Document and the transactions contemplated therein.  Each Borrower and
each other Credit Party hereby acknowledges and agrees that the use of
Electronic Transmissions is not necessarily secure and that there are risks
associated with such use, including risks of interception, disclosure and abuse
and each indicates it assumes and accepts such risks by hereby authorizing the
transmission of Electronic Transmissions.

 
 
(b)
All uses of an E-System shall be governed by and subject to, in addition to
Section 13.6 and this Section 13.22, separate terms and conditions posted or
referenced in such E-System and related contractual obligations executed by the
Agent, the Credit Parties and the Lenders in connection with the use of such
E-System.

 
 
(c)
All E-Systems and Electronic Transmissions shall be provided “as is” and “as
available”.  None of the Agent or any of its Affiliates warrants the accuracy,
adequacy or completeness of any E-Systems or Electronic Transmission, and each
disclaims all liability for errors or omissions therein.  No warranty of any
kind is made by the Agent or any of its Affiliates in connection with any E
Systems or Electronic Transmission, including any warranty of merchantability,
fitness for a particular purpose, non-infringement of third-party rights or
freedom from viruses or other code defects.  The Agent, the Credit Parties and
the Lenders agree that the Agent has no responsibility for maintaining or
providing any equipment, software, services or any testing required in
connection with any Electronic Transmission or otherwise required for any
E-System.

 
 
(d)
Notwithstanding the foregoing, any notice of Default, Event of Default or
acceleration must be transmitted to the Borrower Representative either by mail,
by reputable overnight courier, by facsimile or by email in accordance with
Section 13.6.

 
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13.23           Advertisements.  The Agent and the Lenders may disclose the
names of the Credit Parties and the existence of the Indebtedness in general
advertisements and trade publications.
 
13.24           Reliance on and Survival of Provisions.  All terms, covenants,
agreements, representations and warranties of the Credit Parties to any of the
Loan Documents made herein or in any of the Loan Documents or in any
certificate, report, financial statement or other document furnished by or on
behalf of any Credit Party in connection with this Agreement or any of the Loan
Documents shall be deemed to have been relied upon by the Lenders,
notwithstanding any investigation heretofore or hereafter made by any Lender or
on such Lender’s behalf, and those covenants and agreements of the Borrowers set
forth in Section 13.5 hereof (together with any other indemnities of any Credit
Party contained elsewhere in this Agreement or in any of the other Loan
Documents) and of Lenders set forth in Section 12.7 hereof shall survive the
repayment in full of the Indebtedness and the termination of any commitment to
extend credit.
 
13.25           Joint and Several Liability.
 
 
(a)
Each of the Borrowers acknowledges and agrees that it is the intent of the
parties that each such Borrower be primarily liable for the obligations as a
joint and several obligor. It is the intention of the parties that with respect
to liability of any Borrower hereunder arising solely by reason of its being
jointly and severally liable for Advances and other extensions of credit taken
by Borrower, the obligations of such Borrower shall be absolute, unconditional
and irrevocable irrespective of:

 
 
(i)
any lack of validity, legality or enforceability of this Agreement or any Note
as to any Borrower, as the case may be;

 
 
(ii)
the failure of any Lender or any holder of any Note:

 
(a)             to enforce any right or remedy against any Borrower, as the case
may be, or any other Person (including any Guarantor) under the provisions of
this Agreement, such Note, or otherwise, or
 
(b)             to exercise any right or remedy against any guarantor of, or
collateral securing, any obligations;
 
 
(iii)
any change in the time, manner or place of payment of, or in any other term of,
all or any of the Indebtedness, or any other extension, compromise or renewal of
any Indebtedness;

 
 
(iv)
any reduction, limitation, impairment or termination of any Indebtedness with
respect to any Borrower, as the case may be, for any reason, including any claim
of waiver, release, surrender, alteration or compromise, and shall not be
subject to (and each of the Borrowers hereby waives any right to or claim of)
any defense (other than the defense of payment in full of the Indebtedness) or
setoff, counterclaim, recoupment or termination whatsoever by reason of the
invalidity, illegality, nongenuineness, irregularity, compromise,
unenforceability of, or any other event or occurrence affecting, any
Indebtedness with respect to any Borrower, as the case may be;

 
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(v)
any addition, exchange, release, surrender or nonperfection of any collateral,
or any amendment to or waiver or release or addition of, or consent to departure
from, any guaranty, held by any Lender or any holder of the Notes securing any
of the Indebtedness; or

 
 
(vi)
any other circumstance which might otherwise constitute a defense (other than
the defense of payment in full of the Indebtedness) available to, or a legal or
equitable discharge of, any Borrower, as the case may be, any surety or any
guarantor.

 
 
(b)
Each of the Borrowers agrees that its joint and several liability hereunder
shall continue to be effective or be reinstated, as the case may be, if at any
time any payment (in whole or in part) of any of the Indebtedness is rescinded
or must be restored by any Lender or any holder of any Note, upon the
insolvency, bankruptcy or reorganization of any Borrower, as the case may be, as
though such payment had not been made;

 
 
(c)
Each of the Borrowers hereby expressly waives: (i) notice of the Lenders’
acceptance of this Agreement; (ii) notice of the existence or creation or non
payment of all or any of the Indebtedness other than notices expressly provided
for in this Agreement; (iii) presentment, demand, notice of dishonor, protest,
and all other notices whatsoever other than notices expressly provided for in
this Agreement; (iv) any claim or defense based on an election of remedies; and
(v) all diligence in collection or protection of or realization upon the
Indebtedness or any part thereof, any obligation hereunder, or any security for
or guaranty of any of the foregoing.

 
 
(d)
No delay on any of the Lenders part in the exercise of any right or remedy shall
operate as a waiver thereof, and no single or partial exercise by any of the
Lenders of any right or remedy shall preclude other or further exercise thereof
or the exercise of any other right or remedy. No action of any of the Lenders
permitted hereunder shall in any way affect or impair any such Lenders’ rights
or any Borrower’s Indebtedness under this Agreement.

 
 
(e)
Each of the Borrowers hereby represents and warrants to each of the Lenders that
it now has and will continue to have independent means of obtaining information
concerning the Borrowers’ affairs, financial condition and business. Lenders
shall not have any duty or responsibility to provide any Borrower with any
credit or other information concerning such Borrower’s affairs, financial
condition or business which may come into the Lenders’ possession.

 
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(f)
Each of the Borrowers represents and warrants (i) that the business operations
of the Borrowers are interrelated and that the business operations of the
Borrowers complement one another, and such entities have a common business
purpose, and (ii) that, to permit their uninterrupted and continuous operations,
such entities now require and will from time to time hereafter require funds and
credit accommodations for general business purposes and that (iii) the proceeds
of advances under the Revolving Credit, the Swing Line, and the other credit
facilities extended hereunder will directly or indirectly benefit the Borrowers
hereunder, severally and jointly, regardless of which Borrower receives part or
all of the proceeds of such Advances.

 
 
(g)
Notwithstanding anything to the contrary contained herein, it is the intention
of the Borrowers, Agent and the Lenders that the amount of the respective
Borrowers’ obligations hereunder shall be in, but not in excess of, the maximum
amount thereof not subject to avoidance or recovery by operation of applicable
law governing bankruptcy, reorganization, arrangement, adjustment of debts,
relief of debtors, dissolution, insolvency, fraudulent transfers or conveyances
or other similar laws (collectively, “Applicable Insolvency Laws”). To that end,
but only in the event and to the extent that the Borrowers’ respective
obligations hereunder or any payment made pursuant thereto would, but for the
operation of the foregoing proviso, be subject to avoidance or recovery under
Applicable Insolvency Laws, the amount of the Borrowers’ respective obligations
hereunder shall be limited to the largest amount which, after giving effect
thereto, would not, under Applicable Insolvency Laws, render the Borrower’s
respective obligations hereunder unenforceable or avoidable or subject to
recovery under Applicable Insolvency Laws. To the extent any payment actually
made hereunder exceeds the limitation contained in this Section 13.25(g), then
the amount of such excess shall, from and after the time of payment by the
Borrowers (or any of them), be reimbursed by the Lenders upon demand by such
Borrowers. The foregoing proviso is intended solely to preserve the rights of
the Agent and the Lenders hereunder against the Borrowers to the maximum extent
permitted by Applicable Insolvency Laws and neither any Borrower nor any
Guarantor nor any other Person shall have any right or claim under this Section
13.25(g) that would not otherwise be available under Applicable Insolvency Laws.

 
[Signatures Follow On Succeeding Page]

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WITNESS the due execution hereof as of the day and year first above written.
 

COMERICA BANK,
as Administrative Agent

By:                                                                

Its:                                                                
 
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STERLING CONSTRUCTION
COMPANY, INC.

By:                                                                

Its:                                                                

TEXAS STERLING CONSTRUCTION CO.

By:                                                                

Its:                                                                

OAKHURST MANAGEMENT CORPORATION

By:                                                                

Its:                                                            
 
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COMERICA BANK,
as a Lender, as Issuing Lender
and as Swing Line Lender

By:                                                                

Its:                                                                
 
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EXHIBIT A
 
FORM OF REQUEST FOR REVOLVING CREDIT ADVANCE
 

No.________________ Dated:  ____________, 2007
 
TO:           Comerica Bank (“Agent”)
 
RE:
Credit Agreement made as of October 31, 2007, (as amended, restated or otherwise
modified from time to time, the “Credit Agreement”) by and among the financial
institutions from time to time signatory thereto (individually a “Lender,” and
any and all such financial institutions collectively the “Lenders”), Comerica
Bank as Administrative Agent for the Lenders (in such capacity, the “Agent”),
Arranger, Syndication Agent and Documentation Agent, Sterling Construction
Company, Inc. (“Sterling”) and certain Subsidiaries of Sterling (together with
Sterling, the “Borrowers” and each of them a “Borrower”).

 
Pursuant to the terms and conditions of the Credit Agreement, Borrowers hereby
request an Advance from the Lenders, as described herein:
 
(A)
Date of Advance: _____________________________

 
(B)
0 (check if applicable)

 
 
This Advance is or includes a whole or partial refunding/conversion of:

 
Advance No(s).
 

 
(C)
Type of Advance (check only one):

 
 
0 Prime-based Advance

 
 
0 Eurodollar-based Advance

 
(D)
Amount of Advance:

 
 
$_____________________________

 
(E)
Interest Period (applicable to Eurodollar-based Advances)

 
 
________ months (insert 1,2,3 or 6)

 
(F)
Disbursement Instructions

 
0  Comerica Bank Account No.
 

 
0  Other:
 

 
 
 

 
Borrowers certify to the matters specified in Section 2.3(f) of the Credit
Agreement.
 
Capitalized terms used herein, except as defined to the contrary, have the
meanings given them in the Credit Agreement.
 
The undersigned by execution of this document agrees that any copy of this
document signed by it and transmitted by facsimile or email, or any other method
for delivery shall be admissible in evidence as the original itself in any
judicial or administrative proceeding, whether or not the original is in
existence.
 
STERLING CONSTRUCTION COMPANY,
 
INC., as Borrower Representative
 

 

 
By:
 
Its:      
 

Agent Approval:                                                                
 
 
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EXHIBIT B
 

 
FORM OF REVOLVING CREDIT NOTE
 
$                       ______________,2007

On or before the Revolving Credit Maturity Date, FOR VALUE RECEIVED, Sterling
Construction Company, Inc. (“Sterling”), Texas Sterling Construction Co.
(“TSC”), Oakhurst Management Corporation (“OMC”), Road and Highway Builders, LLC
(“RHBL”) and Road and Highway Builders Inc. (“RHBI”) (together the “Borrowers”
and each of them a “Borrower”) jointly and severally promise to pay to the order
of [insert name of applicable financial institution] (“Payee”) at Detroit,
Michigan, care of the Agent, in lawful money of the United States of America, so
much of the sum of ____________ Million Dollars ($ ,000,000), as may from time
to time have been advanced by Payee and then be outstanding hereunder pursuant
to the Credit Agreement dated as of October 31, 2007, by and among the financial
institutions from time to time signatory thereto (individually a “Lender,” and
any and all such financial institutions collectively the “Lenders”), Comerica
Bank as Administrative Agent for the Lenders (in such capacity, the “Agent”),
Arranger, Syndication Agent and Documentation Agent, and Borrowers, as amended,
restated or otherwise modified from time to time (the “Credit Agreement”).  Each
of the Revolving Credit Advances made hereunder shall bear interest at the
Applicable Interest Rate from time to time applicable thereto under the Credit
Agreement or as otherwise determined thereunder, and interest shall be computed,
assessed and payable on the unpaid principal amount of each Revolving Credit
Advance made by the Payee from the date of such Revolving Credit Advance until
paid at the rate and at the times set forth in the Credit Agreement.
 
This Note is a Revolving Credit Note under which Revolving Credit Advances
(including refundings and conversions), repayments and readvances may be made
from time to time, but only in accordance with the terms and conditions of the
Credit Agreement.  This Note evidences borrowings under, is subject to, is
secured in accordance with, and may be accelerated or matured under, the terms
of the Credit Agreement, to which reference is hereby made. Capitalized terms
used herein, except as defined to the contrary, shall have the meanings given
them in the Credit Agreement.
 
This Note shall be interpreted and the rights of the parties hereunder shall be
determined under the laws of, and enforceable in, the State of Texas.
 
Borrowers hereby waive, to the extent permitted by applicable law, presentment
for payment, demand, protest and notice of dishonor and nonpayment of this Note
and agree that no obligation hereunder shall be discharged by reason of any
extension, indulgence, release, or forbearance granted by any holder of this
Note to any party now or hereafter liable hereon or any present or subsequent
owner of any property, real or personal, which is now or hereafter security for
this Note.
 
Nothing herein shall limit any right granted Payee by any other instrument or by
law.
 
 
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STERLING CONSTRUCTION COMPANY, INC.
 
By:                                                                           
 

 
Its:      
 
TEXAS STERLING CONSTRUCTION CO.
 
By:                                                                           
 

 
Its:      
 
OAKHURST MANAGEMENT CORPORATION
 
By:                                                                           
 

 
Its:      
 
ROAD AND HIGHWAY BUILDERS, LLC
 
By:                                                                           
 

 
Its:      
 
ROAD AND HIGHWAY BUILDERS INC.
 
By:                                                                           
 

 
Its:      
 
 
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EXHIBIT C
 
FORM OF SWING LINE NOTE
 
$7,500,000 __________, 2007

On or before the Revolving Credit Maturity Date, FOR VALUE RECEIVED, Sterling
Construction Company, Inc. (“Sterling”), Texas Sterling Construction Co.
(“TSC”), Oakhurst Management Corporation (“OMC”), Road and Highway Builders, LLC
(“RHBL”) and Road and Highway Builders Inc. (“RHBI”) (together the “Borrowers”
and each of them a “Borrower”), jointly and severally promise to pay to the
order of Comerica Bank (“Swing Line Lender”) at Detroit, Michigan in lawful
money of the United States of America, so much of the sum of Seven Million Five
Hundred Thousand Dollars ($7,500,000), as may from time to time have been
advanced to the Borrowers by the Swing Line Lender and then be outstanding
hereunder pursuant to the Credit Agreement dated as of October 31, 2007, by and
among the financial institutions from time to time signatory thereto
(individually a “Lender,” and any and all such financial institutions
collectively the “Lenders”), Comerica Bank as Administrative Agent for the
Lenders (in such capacity, the “Agent”), Arranger, Syndication Agent and
Documentation Agent, and Borrowers, as amended, restated or otherwise modified
from time to time (the “Credit Agreement”), together with interest thereon as
hereinafter set forth.
 
Each of the Swing Line Advances made hereunder shall bear interest at the
Applicable Interest Rate from time to time applicable thereto under the Credit
Agreement or as otherwise determined thereunder, and interest shall be computed,
assessed and payable on the unpaid principal amount of each Swing Line Advance
made by the Swing Line Lender from the date of such Swing Line Advance until
paid at the rates and at the times set forth in the Credit Agreement.
 
This Note is a Swing Line Note under which Swing Line Advances (including
refundings and conversions), repayments and readvances may be made from time to
time by the Swing Line Lender, but only in accordance with the terms and
conditions of the Credit Agreement (including any applicable sublimits). This
Note evidences borrowings under, is subject to, is secured in accordance with,
and may be accelerated or matured under, the terms of the Credit Agreement to
which reference is hereby made.  Capitalized terms used herein, except as
defined to the contrary, shall have the meanings given them in the Credit
Agreement.
 
This Note shall be interpreted and the rights of the parties hereunder shall be
determined under the laws of, and enforceable in, the State of Texas.
 
Borrowers hereby waive, to the extent permitted by applicable law, presentment
for payment, demand, protest and notice of dishonor and nonpayment of this Note
and agree that no obligation hereunder shall be discharged by reason of any
extension, indulgence, release, or forbearance granted by any holder of this
Note to any party now or hereafter liable hereon or any present or subsequent
owner of any property, real or personal, which is now or hereafter security for
this Note.
 
Nothing herein shall limit any right granted Swing Line Lender by any other
instrument or by law.
 
STERLING CONSTRUCTION COMPANY, INC.
 

 

 
By:                                                                           
 

 
Its:      
 
TEXAS STERLING CONSTRUCTION CO.
 

 

 
By:                                                                           
 

 
Its:                                                                           
 
OAKHURST MANAGEMENT CORPORATION
 

 

 
By:                                                                           
 

 
Its:      
 
ROAD AND HIGHWAY BUILDERS, LLC
 

 

 
By:                                                                           
 

 
Its:      
 
ROAD AND HIGHWAY BUILDERS INC.
 

 

 
By:                                                                           
 

 
Its:      
 
 
111

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EXHIBIT D
 

 
FORM OF REQUEST FOR SWING LINE ADVANCE
 
No. ______________ Dated: ___________, 2007

TO:           Comerica Bank (“Swing Line Lender”)
 
RE:
Credit Agreement made as of October 31, 2007, (as amended, restated or otherwise
modified from time to time, the “Credit Agreement”) by and among the financial
institutions from time to time signatory thereto (individually a “Lender,” and
any and all such financial institutions collectively the “Lenders”), Comerica
Bank as Administrative Agent for the Lenders (in such capacity, the “Agent”),
Arranger, Syndication Agent and Documentation Agent, Sterling Construction
Company, Inc. (“Sterling”) and certain Subsidiaries of Sterling (together with
Sterling, the “Borrowers” and each of them a “Borrower”).

 
Pursuant to the terms and conditions of the Credit Agreement, Borrowers hereby
request an Advance from the Swing Line Lender, as described herein:
 
(A)           Date of Advance: _____________________________
 
(B)           0 (check if applicable)
 
This Advance is or includes a whole or partial refunding/conversion of:
 
Advance No(s). __________________________________
 
(C)           Type of Advance (check only one):--
 
0  Prime-based Advance
 
0  Quoted Rate Advance
 
(D)           Amount of Advance:
 
$_______________________________
 
(E)           Interest Period (applicable to Quoted Rate Advances)
 
 months
 
(F)           Disbursement Instructions
 
0 Comerica Bank Account
No.                                                                                     
 
0
Other:                                                                                     
 

 
Borrowers certify to the matters specified in Section 2.5(c)(vi) of the Credit
Agreement.
 
Capitalized terms used herein, except as defined to the contrary, have the
meanings given them in the Credit Agreement.
 
The undersigned by execution of this document agrees that any copy of this
document signed by it and transmitted by facsimile or email, or any other method
for delivery shall be admissible in evidence as the original itself in any
judicial or administrative proceeding, whether or not the original is in
existence.
 
STERLING CONSTRUCTION COMPANY,
 
INC., as Borrower Representative
 

 

 
By:                                                                           
 

 
Its:      
 
 
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EXHIBIT E
 

 
FORM OF NOTICE OF ISSUANCE OF LETTER OF CREDIT
 
TO:           Revolving Credit Lenders

RE:
Issuance of Letter of Credit pursuant to Article 3 of the Credit Agreement made
as of October 31, 2007, (as amended, restated or otherwise modified from time to
time, the “Credit Agreement”) by and among the financial institutions from time
to time signatory thereto (individually a “Lender,” and any and all such
financial institutions collectively the “Lenders”), Comerica Bank as
Administrative Agent for the Lenders (in such capacity, the “Agent”), Arranger,
Syndication Agent and Documentation Agent, Sterling Construction Company, Inc.
(“Sterling”) and certain Subsidiaries of Sterling (together with Sterling, the
“Borrowers” and each of them a “Borrower”).

 
On ________________, 2007,1 the Agent, in accordance with Article 3 of the
Credit Agreement, issued its Letter of Credit number ______________, in favor of
__________ ____________2 for the account of
________________________________.3  The face amount of such Letter of Credit is
__________.  The amount of each Revolving Credit Lender’s participation in such
Letter of Credit is as follows:4
 
[Lender]                                           $                                
[Lender]                                           $                                
[Lender]                                           $                                
[Lender]                                           $                                

This notification is delivered this _____ day of _____________, 2007, pursuant
to Section 3.3 of the Credit Agreement.  Except as otherwise defined,
capitalized terms used herein have the meanings given them in the Credit
Agreement.
 
* * *

[SIGNATURES FOLLOW ON SUCCEEDING PAGE]

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

 
 
1 Date of Issuance

 
 
 
2 Beneficiary

 
 
 
3 Name of applicable Borrower

 
 
 
4 Amounts based on Percentages

 
[This form of Letter of Credit Notice (including footnotes) is subject in all
respects to the terms and conditions of the Credit Agreement which shall govern
in the event of any inconsistencies or omissions.]

 
113

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Signed:
 

 
COMERICA BANK, as Agent
 

 

 
By:                                                                           
 

 
Its:      
 
 
114

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EXHIBIT F
 

 
FORM OF SECURITY AGREEMENT
 

 
(see attached)
 
 
115

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SECURITY AGREEMENT
 
THIS SECURITY AGREEMENT (the “Agreement”) dated as of October 31, 2007, is
entered into by and among the Borrowers (as defined below) and such other
entities which from time to time become parties hereto (collectively, the
“Debtors” and each individually a “Debtor”) and Comerica Bank (“Comerica”), as
Administrative Agent for and on behalf of the Lenders (as defined below) (in
such capacity, the “Agent”).  The addresses for the Debtors and the Agent, as of
the date hereof, are set forth on the signature pages attached hereto.
 
R E C I T A L S:
 
A.  Sterling Construction Company, Inc., Texas Sterling Construction Co., and
Oakhurst Management Corporation (collectively, the “Borrowers” and each a
“Borrower”) have entered into that certain Credit Agreement dated as of October
31, 2007 (as amended, supplemented, amended and restated or otherwise modified
from time to time the “Credit Agreement”) with each of the financial
institutions party thereto (collectively, including their respective successors
and permitted assigns, the “Lenders”) and the Agent pursuant to which the
Lenders have agreed, subject to the satisfaction of certain terms and
conditions, to extend or to continue to extend financial accommodations to the
Borrowers, as provided therein. Upon consummation of the Acquisition (as defined
in the Credit Agreement), Road and Highway Builders, LLC and Road and Highway
Builders Inc. (collectively, the “Target”) shall, by execution and delivery of
that certain Joinder Agreement dated as of the date hereof, join into the Credit
Agreement as a Borrower thereunder, and join into this Agreement as a Debtor
hereunder.
 
B.  Pursuant to the Credit Agreement, the Lenders have required that each of the
Debtors grant (or cause to be granted) certain Liens to the Agent, for the
benefit of the Lenders, all to secure the obligations of the Borrowers or any
Debtor under the Credit Agreement or any related Loan Document (including any
Guaranty).
 
C.  The Debtors have directly and indirectly benefited and will directly and
indirectly benefit from the transactions evidenced by and contemplated in the
Credit Agreement and the other Loan Documents.
 
D.  The Agent is acting as Agent for the Lenders pursuant to the terms and
conditions of Section 12 of the Credit Agreement.
 
NOW, THEREFORE, in consideration of the premises and for other good and valuable
consideration, the adequacy, receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
 
 
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ARTICLE 1
 
Definitions
 
Section 1.1  Definitions.  As used in this Agreement, capitalized terms not
otherwise defined herein have the meanings provided for such terms in the Credit
Agreement.  References to “Sections,” “subsections,” “Exhibits” and “Schedules”
shall be to Sections, subsections, Exhibits and Schedules, respectively, of this
Agreement unless otherwise specifically provided. All references to statutes and
regulations shall include any amendments of the same and any successor statutes
and regulations.  References to particular sections of the UCC should be read to
refer also to parallel sections of the Uniform Commercial Code as enacted in
each state or other jurisdiction which may be applicable to the grant and
perfection of the Liens held by the Agent for the benefit of the Lenders
pursuant to this Agreement.
 
The following terms have the meanings indicated below, all such definitions to
be equally applicable to the singular and plural forms of the terms defined:
 
“Chattel Paper” means any “chattel paper,” as such term is defined in Article or
Chapter 9 of the UCC, now owned or hereafter acquired by a Debtor, and shall
include both electronic Chattel Paper and tangible Chattel Paper.
 
“Collateral” has the meaning specified in Section 2.1 of this Agreement.
 
“Computer Records” means any computer records now owned or hereafter acquired by
any Debtor.
 
“Copyright Collateral” shall mean all Copyrights and Copyright Licenses of the
Debtors.
 
“Copyright Licenses” shall mean all license agreements with any other Person in
connection with any of the Copyrights or such other Person’s copyrights, whether
a Debtor is a licensor or a licensee under any such license agreement,
including, without limitation, the license agreements listed on Schedule
1.1 hereto and made a part hereof, subject, in each case, to the terms of such
license agreements and the right to prepare for sale, sell and advertise for
sale, all inventory now or hereafter covered by such licenses.
 
“Copyrights” shall mean all copyrights and mask works, whether or not
registered, and all applications for registration of all copyrights and mask
works, including, but not limited to all copyrights and mask works, and all
applications for registration of all copyrights and mask works identified on
Schedule 1.1 attached hereto and made a part hereof, and including without
limitation (a) the right to sue or otherwise recover for any and all past,
present and future infringements and misappropriations thereof; (b) all income,
royalties, damages and other payments now and hereafter due and/or payable with
respect thereto (including, without limitation, payments under all Copyright
Licenses entered into in connection therewith, and damages and payments for past
or future infringements thereof); and (c) all rights corresponding thereto and
all modifications, adaptations, translations, enhancements and derivative works,
renewals thereof, and all other rights of any kind whatsoever of a Debtor
accruing thereunder or pertaining thereto.
 
“Deposit Account” shall mean a demand, time, savings, passbook, or similar
account maintained with a bank.  The term does not include investment property,
investment accounts or accounts evidenced by an instrument.
 
“Document” means any “document,” as such term is defined in Article or Chapter 9
of the UCC, now owned or hereafter acquired by any Debtor, including, without
limitation, all documents of title and all receipts covering, evidencing or
representing goods now owned or hereafter acquired by a Debtor.
 
“Equipment” means any “equipment,” as such term is defined in Article or Chapter
9 of the UCC, now owned or hereafter acquired by a Debtor and, in any event,
shall include, without limitation, all machinery, manufacturing equipment,
office furniture, trade fixtures, tractors, trailers, rolling stock, vessels,
aircraft and Vehicles now owned or hereafter acquired by such Debtor and any and
all additions, substitutions and replacements of any of the foregoing, wherever
located, together with all attachments, components, parts, equipment and
accessories installed thereon or affixed thereto.
 
“General Intangibles” means any “general intangibles,” as such term is defined
in Article or Chapter 9 of the UCC, now owned or hereafter acquired by a Debtor
and, in any event, shall include, without limitation, each of the following,
whether now owned or hereafter acquired by such Debtor:  (a) all of such
Debtor’s Intellectual Property Collateral; (b) all of such Debtor’s books,
records, data, plans, manuals, computer software, computer tapes, computer
disks, computer programs, source codes, object codes and all rights of such
Debtor to retrieve data and other information from third parties; (c) all of
such Debtor’s contract rights, commercial tort claims, partnership interests,
membership interests, joint venture interests, securities, deposit accounts,
investment accounts and certificates of deposit; (d) all rights of such Debtor
to payment under chattel paper, documents, instruments and similar agreements;
(e) letters of credit, letters of credit rights supporting obligations and
rights to payment for money or funds advanced or sold of such Debtor; (f) all
tax refunds and tax refund claims of such Debtor; (g) all choses in action and
causes of action of such Debtor (whether arising in contract, tort or otherwise
and whether or not currently in litigation) and all judgments in favor of such
Debtor; (h) all rights and claims of such Debtor under warranties and
indemnities, (i) all health care receivables; and (j) all rights of such Debtor
under any insurance, surety or similar contract or arrangement.
 
 
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“Governmental Authority” shall mean any nation or government, any state,
province or other political subdivision thereof, any central bank (or similar
monetary or regulatory authority) thereof, any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, and any corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.
 
“Instrument” shall mean any “instrument,” as such term is defined in Article or
Chapter 9 of the UCC, now owned or hereafter acquired by any Debtor, and, in any
event, shall include all promissory notes (including without limitation, any
Intercompany Notes held by such Debtor), drafts, bills of exchange and trade
acceptances, whether now owned or hereafter acquired.
 
“Intellectual Property Collateral” shall mean Patents, Patent Licenses,
Copyrights, Copyright Licenses, Trademarks, Trademark Licenses, trade secrets,
registrations, goodwill, franchises, permits, proprietary information, customer
lists, designs, inventions and all other intellectual property and proprietary
rights, including without limitation those described on Schedule 1.1 attached
hereto and incorporated herein by reference.
 
“Inventory” means any “inventory,” as such term is defined in Article or Chapter
9 of the UCC, now owned or hereafter acquired by a Debtor, and, in any event,
shall include, without limitation, each of the following, whether now owned or
hereafter acquired by such Debtor: (a) all goods and other Personal property of
such Debtor that are held for sale or lease or to be furnished under any
contract of service; (b) all raw materials, work-in-process, finished goods,
supplies and materials of such Debtor; (c) all wrapping, packaging, advertising
and shipping materials of such Debtor; (d) all goods that have been returned to,
repossessed by or stopped in transit by such Debtor; (e) rental equipment
inventory and (f) all Documents evidencing any of the foregoing.
 
“Investment Property” means any “investment property” as such term is defined in
Article or Chapter 9 of the UCC, now owned or hereafter acquired by a Debtor,
and in any event, shall include without limitation all shares of stock and other
equity, partnership or membership interests constituting securities, of the
Domestic Subsidiaries of such Debtor from time to time owned or acquired by such
Debtor in any manner (including, without limitation, the Pledged Shares), and
the certificates and all dividends, cash, instruments, rights and other property
from time to time received, receivable or otherwise distributed or distributable
in respect of or in exchange for any or all of such shares, but excluding any
shares of stock or other equity, partnership or membership interests in any
Foreign Subsidiaries of such Debtor.
 
“Patent Collateral” shall mean all Patents and Patent Licenses of the Debtors.
 
“Patent Licenses” shall mean all license agreements with any other Person in
connection with any of the Patents or such other Person’s patents, whether a
Debtor is a licensor or a licensee under any such license agreement, including,
without limitation, the license agreements listed on Schedule 1.1 hereto and
made a part hereof, subject, in each case, to the terms of such license
agreements and the right to prepare for sale, sell and advertise for sale, all
inventory now or hereafter covered by such licenses.
 
“Patents” shall mean all letters patent, patent applications and patentable
inventions, including, without limitation, all patents and patent applications
identified on Schedule 1.1 attached hereto and made a part hereof, and including
without limitation, (a) all inventions and improvements described and claimed
therein, and patentable inventions, (b) the right to sue or otherwise recover
for any and all past, present and future infringements and misappropriations
thereof, (c) all income, royalties, damages and other payments now and hereafter
due and/or payable with respect thereto (including, without limitation, payments
under all Patent Licenses entered into in connection therewith, and damages and
payments for past or future infringements thereof), and (d) all rights
corresponding thereto and all reissues, divisions, continuations,
continuations-in-part, substitutes, renewals, and extensions thereof, all
improvements thereon, and all other rights of any kind whatsoever of a Debtor
accruing thereunder or pertaining thereto.
 
“Permitted Liens” means any Liens permitted under the terms of the Credit
Agreement.
 
“Pledged Shares” means the shares of capital stock or other equity, partnership
or membership interests described on Schedule 1.2 attached hereto and
incorporated herein by reference, and all other shares of capital stock or other
equity, partnership or membership interests (other than in an entity which is a
Foreign Subsidiary) acquired by any Debtor after the date hereof.
 
“Proceeds” means any “proceeds,” as such term is defined in Article or Chapter 9
of the UCC and, in any event, shall include, but not be limited to, (a) any and
all proceeds of any insurance, indemnity, warranty or guaranty payable to a
Debtor from time to time with respect to any of the Collateral, (b) any and all
payments (in any form whatsoever) made or due and payable to a Debtor from time
to time in connection with any requisition, confiscation, condemnation, seizure
or forfeiture of all or any part of the Collateral by any Governmental Authority
(or any Person acting, or purporting to act, for or on behalf of any
Governmental Authority), and (c) any and all other amounts from time to time
paid or payable under or in connection with any of the Collateral.
 
“Records” are defined in Section 3.2 of this Agreement.
 
 
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“Software” means all (i) computer programs and supporting information provided
in connection with a transaction relating to the program, and (ii) computer
programs embedded in goods and any supporting information provided in connection
with a transaction relating to the program whether or not the program is
associated with the goods in such a manner that it customarily is considered
part of the goods, and whether or not, by becoming the owner of the goods, a
Person acquires a right to use the program in connection with the goods, and
whether or not the program is embedded in goods that consist solely of the
medium in which the program is embedded.
 
“Trademark Collateral” shall mean all Trademarks and Trademark Licenses of the
Debtors.
 
“Trademark Licenses” shall mean all license agreements with any other Person in
connection with any of the Trademarks or such other Person’s names or
trademarks, whether a Debtor is a licensor or a licensee under any such license
agreement, including, without limitation, the license agreements listed on
Schedule 1.1 hereto and made a part hereof, subject, in each case, to the terms
of such license agreements, and the right to prepare for sale, and to sell and
advertise for sale, all inventory now or hereafter covered by such licenses.
 
“Trademarks” shall mean all trademarks, service marks, trade names, trade dress
or other indicia of trade origin, trademark and service mark registrations, and
applications for trademark or service mark registrations (except for “intent to
use” applications for trademark or service mark registrations filed pursuant to
Section 1(b) of the Lanham Act, unless and until an Amendment to Allege Use or a
Statement of Use under Sections 1(c) and 1(d) of said Act has been filed), and
any renewals thereof, including, without limitation, each registration and
application identified on Schedule 1.1 attached hereto and made a part hereof,
and including without limitation (a) the right to sue or otherwise recover for
any and all past, present and future infringements and misappropriations
thereof, (b) all income, royalties, damages and other payments now and hereafter
due and/or payable with respect thereto (including, without limitation, payments
under all Trademark Licenses entered into in connection therewith, and damages
and payments for past or future infringements thereof and (c) all rights
corresponding thereto and all other rights of any kind whatsoever of a Debtor
accruing thereunder or pertaining thereto, together in each case with the
goodwill of the business connected with the use of, and symbolized by, each such
trademark, service mark, trade name, trade dress or other indicia of trade
origin.
 
“UCC” means the Uniform Commercial Code as in effect in the State of Michigan;
provided, that if, by applicable law, the perfection or effect of perfection or
non-perfection of the security interest created hereunder in any Collateral is
governed by the Uniform Commercial Code as in effect on or after the date hereof
in any other jurisdiction, “UCC” means the Uniform Commercial Code as in effect
in such other jurisdiction for purposes of the provisions hereof relating to
such perfection or the effect of perfection or non-perfection.
 
“Vehicles” means all cars, trucks, trailers, construction and earth moving
equipment and other vehicles covered by a certificate of title law of any state
and all tires and other appurtenances to any of the foregoing.
 
ARTICLE 2
 
Security Interest
 
Section 2.1  Grant of Security Interest.  As collateral security for the prompt
payment and performance in full when due of the Indebtedness (whether at stated
maturity, by acceleration or otherwise), each Debtor hereby pledges,
collaterally assigns, transfers and conveys to the Agent as collateral, and
grants the Agent a continuing Lien on and security interest in, all of such
Debtor’s right, title and interest in and to the following, whether now owned or
hereafter arising or acquired and wherever located (collectively, the
“Collateral”):
 
(a)           all Chattel Paper;
 
(b)           all General Intangibles;
 
(c)           all Equipment;
 
(d)           all Inventory;
 
(e)           all Documents;
 
(f)           all Instruments;
 
 
(g)
all Deposit Accounts and any other cash collateral, deposit or investment
accounts including all cash collateral, deposit or investment accounts
established or maintained pursuant to the terms of this Agreement or the other
Loan Documents and all interest, cash and proceeds thereof;

 
 
(h)
all Computer Records and Software, whether relating to the foregoing Collateral
or otherwise, but in the case of such Software, subject to the rights of any
nonaffiliated licensee of software;

 
 
(i)
all Investment Property; and

 
 
(j)
the Proceeds, in cash or otherwise (including insurance proceeds), of any of the
property described in the foregoing clauses (a) through (i), and all Liens,
security, rights, remedies and claims of such Debtor with respect thereto
(provided that the grant of a security interest in Proceeds set forth is in this
subsection (j) shall not be deemed to give the applicable Debtor any right to
dispose of any of the Collateral, except as may otherwise be permitted pursuant
to the terms of the Credit Agreement).

 
 
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Section 2.2  Debtors Remain Liable.  Notwithstanding anything to the contrary
contained herein, (a) the Debtors shall remain liable under the contracts,
agreements, documents and instruments included in the Collateral to the extent
set forth therein to perform all of its duties and obligations thereunder to the
same extent as if this Agreement had not been executed, (b) the exercise by the
Agent or any Lender of any of their respective rights or remedies hereunder
shall not release the Debtors from any of their duties or obligations under the
contracts, agreements, documents and instruments included in the Collateral, and
(c) neither the Agent nor any of the Lenders shall have any indebtedness,
liability or obligation (by assumption or otherwise) under any of the contracts,
agreements, documents and instruments included in the Collateral by reason of
this Agreement, and none of them shall be obligated to perform any of the
obligations or duties of the Debtors thereunder or to take any action to collect
or enforce any claim for payment assigned hereunder.
 
ARTICLE 3
 
Representations and Warranties
 
To induce the Agent to enter into this Agreement and the Agent and the Lenders
to enter into the Credit Agreement, each Debtor represents and warrants to the
Agent and to each Lender as of the Effective Date and while the Credit Agreement
remains in effect:
 
Section 3.1  Title.  Such Debtor is, and with respect to the Collateral acquired
after the date hereof such Debtor will be, the legal and beneficial owner of or
otherwise has the rights it purports to have in the Collateral free and clear of
any Lien or other encumbrance, except for the Permitted Liens, provided that,
other than the Lien established under this Agreement, no Lien on any Pledged
Shares shall constitute a Permitted Lien.
 
Section 3.2  Change in Form or Jurisdiction; Successor by Merger; Location of
Books and Records.  As of the date hereof, each Debtor (a) is duly organized and
validly existing as a corporation or limited liability company (or other
business organization) under the laws of its jurisdiction of organization; (b)
is formed in the jurisdiction of organization and has the registration number
and tax identification number set forth on Schedule 3.2 attached hereto; (c) has
not changed its respective corporate form or its jurisdiction of organization at
any time during the five years immediately prior to the date hereof, except as
set forth on such Schedule 3.2; (d) except as set forth on such Schedule
3.2 attached hereto, no Debtor has, at any time during the five years
immediately prior to the date hereof, become the successor by merger,
consolidation, acquisition, change in form, nature or jurisdiction of
organization or otherwise of any other Person, and (e) keeps true and accurate
books and records regarding the Collateral (the “Records”) in the office
indicated on such Schedule 3.2
 
Section 3.3  Representations and Warranties Regarding Certain Types of
Collateral.
 
 
(a)
Intentionally Omitted.

 
 
(b)
Account Information.  As of the date hereof, all Deposit Accounts, cash
collateral accounts or investment accounts of each Debtor (except for those
Deposit Accounts located with the Agent) are located at the banks specified on
Schedule 3.3(b) attached hereto which Schedule sets forth the true and correct
name of each bank where such accounts are located, such bank’s address, the type
of account and the account number.

 
 
(c)
Documents.  As of the date hereof, except as set forth on Schedule 3.3(c), none
of the material Inventory or Equipment of such Debtor (other than trailers,
rolling stock, vessels, aircraft and Vehicles) is evidenced by a Document
(including, without limitation, a negotiable document of title).

 
 
(d)
Intellectual Property.  Set forth on Schedule 1.1 (as the same may be amended
from time to time) is a true and correct list of the registered Patents, Patent
Licenses, registered Trademarks, Trademark Licenses, registered Copyrights and
Copyright Licenses owned by the Debtors (including, in the case of the Patents,
Trademarks and Copyrights, the applicable name, date of registration (or of
application if registration not completed) and application or registration
number), excluding any Patent Licenses, Trademark Licenses or Copyright Licenses
relating to shrink-wrapped software and similar items.

 
 
Section 3.4  Pledged Shares.

 
 
(a)
Duly Authorized and Validly Issued.  The Pledged Shares that are shares of a
corporation have been duly authorized and validly issued and are fully paid and
nonassessable, and the Pledged Shares that are membership interests or
partnership units (if any) have been validly granted, under the laws of the
jurisdiction of organization of the issuers thereof, and, to the extent
applicable, are fully paid and nonassessable.

 
 
(b)
Valid Title; No Liens; No Restrictions.  Each Debtor is the legal and beneficial
owner of the Pledged Shares, free and clear of any Lien (other than the Liens
created by this Agreement), and such Debtor has not sold, granted any option
with respect to, assigned, transferred or otherwise disposed of any of its
rights or interest in or to the Pledged Shares.  None of the Pledged Shares are
subject to any contractual or other restrictions upon the pledge or other
transfer of such Pledged Shares, other than those imposed by securities laws
generally.  No issuer of Pledged Shares is party to any agreement granting
“control” (as defined in Section 8-106 of the UCC) of such Debtor’s Pledged
Shares to any third party. All such Pledged Shares are held by each Debtor
directly and not through any securities intermediary.

 
 
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(c)
Description of Pledged Shares; Ownership.  The Pledged Shares constitute the
percentage of the issued and outstanding shares of stock, partnership units or
membership interests of the issuers thereof indicated on Schedule 1.2 (as the
same may be amended from time to time) and such Schedule contains a description
of all shares of capital stock, membership interests and other equity interests
of or in any Subsidiaries owned by such Debtor.

 
 
Section 3.5  Intellectual Property.

 
 
(a)
Filings and Recordation.  Except to the extent not reasonably expected to have a
Material Adverse Effect, each Debtor has made all reasonably necessary filings
and recordations to protect and maintain its interest in the Trademarks, Patents
and Copyrights set forth on Schedule 1.1 (as the same may be amended from time
to time), including, without limitation, all necessary filings and recordings,
and payments of all maintenance fees, in the United States Patent and Trademark
Office and United States Copyright Office to the extent such Trademarks, Patents
and Copyrights are material to such Debtor’s business.

 
 
(b)
Intellectual Property Collateral Valid.  Except to the extent not reasonably
expected to have a Material Adverse Effect, (i) each Trademark of the Debtors
set forth on Schedule 1.1 (as the same may be amended from time to time) is
subsisting and has not been adjudged invalid, unregisterable or unenforceable,
in whole or in part, and, to the Debtors’ knowledge, is valid, registrable and
enforceable, (ii) each Patent of the Debtors set forth on Schedule 1.1 (as the
same may be amended from time to time) is subsisting and has not been adjudged
invalid, unpatentable or unenforceable, in whole or in part, and, to the
Debtors’ knowledge, is valid, patentable and enforceable except as otherwise set
forth on Schedule 1.1 (as the same may be amended from time to time) and (iii)
each Copyright of the Debtors set forth on Schedule 1.1 (as the same may be
amended from time to time) is subsisting and has not been adjudged invalid,
uncopyrightable or unenforceable, in whole or in part, and, to the Debtors’
knowledge, is valid, copyrightable and enforceable.

 
 
(c)
Other Rights.  Except for the Trademark Licenses, Patent Licenses and Copyright
Licenses listed on Schedule 1.1 hereto under which a Debtor is a licensee, no
Debtor has knowledge of the existence of any right or any claim (other than as
provided by this Agreement) that is likely to be made under or against any item
of Intellectual Property Collateral contained on Schedule 1.1 to the extent such
claim could reasonably be expected to have a Material Adverse Effect.

 
 
(d)
No Claims.  Except as set forth on Schedule 1.1 or as otherwise disclosed to the
Agent in writing, no material claim has been made and is continuing or, to any
Debtor’s knowledge, threatened that the use by any Debtor of any material item
of Intellectual Property Collateral is invalid or unenforceable or that the use
by any Debtor of any Intellectual Property Collateral does or may violate the
rights of any Person. To the Debtors’ knowledge, there is no infringement or
unauthorized use of any item of Intellectual Property Collateral contained on
Schedule 1.1 or as otherwise disclosed to the Agent in writing.

 
 
(e)
No Consent.  Except as disclosed in writing to the Agent, no consent of any
party (other than such Debtor) to any Patent License, Copyright License or
Trademark License constituting Intellectual Property Collateral is required, or
purports to be required, to be obtained by or on behalf of such Debtor in
connection with the execution, delivery and performance of this Agreement that
has not been obtained. Each Patent License, Copyright License and Trademark
License constituting Intellectual Property Collateral is in full force and
effect and constitutes a valid and legally enforceable obligation of the
applicable Debtor and (to the knowledge of the Debtors) each other party thereto
except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditor’s rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).

 
Section 3.6  Priority.  No financing statement, security agreement or other Lien
instrument covering all or any part of the Collateral is on file in any public
office with respect to any outstanding obligation of such Debtor except (i) as
may have been filed in favor of the Agent pursuant to this Agreement and the
other Loan Documents and (ii) financing statements filed to perfect Permitted
Liens (which shall not, in any event, grant a Lien over the Pledged Shares).
 
Section 3.7  Perfection.  Upon (a) the filing of Uniform Commercial Code
financing statements in the jurisdictions listed on Schedule 3.7 attached
hereto, and (b) if any Intellectual Property Collateral is owned by any Debtor,
the recording of this Agreement in the United States Patent and Trademark Office
and the United States Copyright Office, the security interest in favor of the
Agent created herein will constitute a valid and perfected Lien upon and
security interest in the Collateral which may be created and perfected either
under the UCC by filing financing statements or by a filing with the United
States Patent and Trademark Office and the United States Copyright Office.
 
 
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ARTICLE 4
 
Covenants
 
Each Debtor covenants and agrees with the Agent, until termination of this
Agreement in accordance with the provisions of Section 7.12 hereof, as follows:
 
Section 4.1  Covenants Regarding Certain Kinds of Collateral.
 
(a)           Promissory Notes and Tangible Chattel Paper.  If Debtors, now or
at any time hereafter, collectively hold or acquire any promissory notes or
tangible Chattel Paper for which the principal amount thereof or the obligations
evidenced thereunder are, in the aggregate, in excess of $500,000, the
applicable Debtors shall promptly notify the Agent in writing thereof and
forthwith endorse, collaterally assign and deliver the same to the Agent,
accompanied by such instruments of transfer or assignment duly executed in blank
as the Agent may from time to time reasonably specify, and cause all such
Chattel Paper to bear a legend reasonably acceptable to the Agent indicating
that the Agent has a security interest in such Chattel Paper.
 
(b)           Electronic Chattel Paper and Transferable Records.  If Debtors,
now or at any time hereafter, collectively hold or acquire an interest in any
electronic Chattel Paper or any “transferable record,” as that term is defined
in the federal Electronic Signatures in Global and National Commerce Act, or in
the Uniform Electronic Transactions Act as in effect in any relevant
jurisdiction, worth, in the aggregate, in excess of $500,000, the applicable
Debtors shall promptly notify the Agent thereof and, at the reasonable request
and option of the Agent, shall take such action as the Agent may reasonably
request to vest in the Agent control, under Section 9-105 of the UCC, of such
electronic chattel paper or control under the federal Electronic Signatures in
Global and National Commerce Act, or the Uniform Electronic Transactions Act, as
so in effect in such jurisdiction, of such transferable record.
 
(c)           Letter-of-Credit Rights.  If Debtors, now or at any time
hereafter, collectively are or become beneficiaries under letters of credit,
with an aggregate face amount in excess of $500,000, the applicable Debtors
shall promptly notify the Agent thereof and, at the request of the Agent, the
applicable Debtors shall, pursuant to an agreement in form and substance
reasonably satisfactory to the Agent either arrange (i) for the issuer and any
confirmer of such letters of credit to consent to an assignment to the Agent of
the proceeds of the letters of credit or (ii) for the Agent to become the
transferee beneficiary of the letters of credit, together with, in each case,
any such other actions as reasonably requested by the Agent to perfect its first
priority Lien in such letter of credit rights. The applicable Debtor shall
retain the proceeds of the applicable letters of credit until an Event of
Default has occurred and is continuing whereupon the proceeds are to be
delivered to the Agent and applied as set forth in the Credit Agreement.
 
(d)           Commercial Tort Claims.  If Debtors, now or at any time hereafter,
collectively hold or acquire any commercial tort claims, which, the reasonably
estimated value of which are in aggregate excess of $500,000, the applicable
Debtors shall immediately notify the Agent in a writing signed by such Debtors
of the particulars thereof and grant to the Agent in such writing a security
interest therein and in the proceeds thereof, all upon the terms of this
Agreement, with such writing to be in form and substance reasonably satisfactory
to the Agent.
 
(e)           Pledged Shares.  All certificates or instruments representing or
evidencing the Pledged Shares or any Debtor’s rights therein shall be delivered
to the Agent promptly upon Debtor gaining any rights therein, in suitable form
for transfer by delivery or accompanied by duly executed stock powers or
instruments of transfer or assignments in blank, all in form and substance
reasonably acceptable to the Agent.
 
(f)           Intentionally Omitted.
 
(g)           Intellectual Property.
 
 
(i)
Trademarks.  Each Debtor agrees to take all reasonably necessary steps,
including, without limitation, in the United States Patent and Trademark Office
or in any court, to (x) defend, enforce, preserve the validity and ownership of,
and maintain each Trademark registration and each Trademark License identified
on Schedule 1.1 hereto, and (y) pursue each trademark application now or
hereafter identified on Schedule 1.1 hereto, including, without limitation, the
filing of responses to office actions issued by the United States Patent and
Trademark Office, the filing of applications for renewal, the filing of
affidavits under Sections 8 and 15 of the United States Trademark Act, and the
participation in opposition, cancellation, infringement and misappropriation
proceedings, except, in each case in which the Debtors have determined, using
their commercially reasonable judgment, that any of the foregoing is not of
material economic value to them. Each Debtor agrees to take corresponding steps
with respect to each new or acquired Trademark registration, Trademark
application or any rights obtained under any Trademark License, in each case,
which it is now or later becomes entitled, except in each case in which such
Debtor has determined, using its commercially reasonable judgment, that any of
the foregoing is not of material economic value to it. Any expenses incurred in
connection with such activities shall be borne by the Debtors.

 
 
(ii)
Patents.  Each Debtor to take all reasonably necessary steps, including, without
limitation, in the United States Patent and Trademark Office or in any court, to
(x) defend, enforce, preserve the validity and ownership of, and maintain each
Patent and each Patent License identified on Schedule

 
 
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1.1 hereto, and (y) pursue each patent application, now or hereafter identified
on Schedule 1.1 hereto, including, without limitation, the filing of divisional,
continuation, continuation-in-part and substitute applications, the filing of
applications for reissue, renewal or extensions, the payment of maintenance
fees, and the participation in interference, reexamination, opposition,
infringement and misappropriation proceedings, except in each case in which the
Debtors have determined, using their commercially reasonable judgment, that any
of the foregoing is not of material economic value to them. Each Debtor agrees
to take corresponding steps with respect to each new or acquired Patent, patent
application, or any rights obtained under any Patent License, in each case,
which it is now or later becomes entitled, except in each case in which the
Debtors have determined, using their commercially reasonable judgment, that any
of the foregoing is not of material economic value to them. Any expenses
incurred in connection with such activities shall be borne by the Debtors.

 
 
(iii)
Copyrights.  Each Debtor agrees to take all reasonably necessary steps,
including, without limitation, in the United States Copyright Office or in any
court, to (x) defend, enforce, and preserve the validity and ownership of each
Copyright and each Copyright License identified on Schedule 1.1 hereto, and (y)
pursue each Copyright and mask work application, now or hereafter identified on
Schedule 1.1 hereto, including, without limitation, the payment of applicable
fees, and the participation in infringement and misappropriation proceedings,
except in each case in which the Debtors have determined, using their
commercially reasonable judgment, that any of the foregoing is not of material
economic value to them.  Each Debtor agrees to take corresponding steps with
respect to each new or acquired Copyright, Copyright and mask work application,
or any rights obtained under any Copyright License, in each case, which it is
now or later becomes entitled, except in each case in which the Debtors have
determined, using their commercially reasonable judgment, that any of the
foregoing is not of material economic value to them. Any expenses incurred in
connection with such activities shall be borne by the Debtors.

 
 
(iv)
No Abandonment.  The Debtors shall not abandon any Intellectual Property
Collateral, without the written consent of the Agent, unless the Debtors shall
have previously determined, using their commercially reasonable judgment, that
such use or the pursuit or maintenance of such Trademark registration, Patent,
Copyright registration or pending Trademark, Copyright, mask work or Patent
application is not of material economic value to it.

 
 
(v)
No Infringement.  In the event that a Debtor becomes aware that any item of the
Intellectual Property Collateral which such Debtor has determined, using its
commercially reasonable judgment, to be material to its business is infringed or
misappropriated by a third party, such Debtor shall promptly notify the Agent
promptly and in writing, in reasonable detail, and shall take such actions as
such Debtor or the Agent deems reasonably appropriate under the circumstances to
protect such Intellectual Property Collateral, including, without limitation,
suing for infringement or misappropriation and for an injunction against such
infringement or misappropriation. Any expense incurred in connection with such
activities shall be borne by the Debtors. Each Debtor will advise the Agent
promptly and in writing, in reasonable detail, of any adverse determination or
the institution of any proceeding (including, without limitation, the
institution of any proceeding in the United States Patent and Trademark Office,
the United States Copyright Office or any court) regarding any material item of
the Intellectual Property Collateral.

 
 
(h)
Vehicles.  Concurrently with the delivery of each Covenant Compliance Report as
required under the Credit Agreement, deliver to the Agent the Vehicle titles for
all Vehicles acquired during the previous quarter; and execute and deliver, or
take such other actions as may be reasonably required by Agent for the Agent to
record its Lien on such Vehicle titles.

 
 
(i)
Aircraft and Vessels.  Notwithstanding any other provision of this Agreement, no
Debtor shall be required to make any filings as may be reasonably necessary to
perfect the Agent’s Lien on its aircraft and vessels, unless (i) a Default or an
Event of Default has occurred and is continuing, whereupon the Agent may require
such filings be made or (ii) such Debtor, either singly, or together with the
other Debtors, owns aircraft and vessels which have a fair market value of at
least $________, in aggregate amount, whereupon the applicable Debtors shall
provide prompt notice to the Agent, and the Agent, at its option and request,
may require the applicable Debtors to execute such agreements and make such
filings as may be reasonably necessary to perfect the Agent’s Lien for the
benefit of the Lenders and ensure the priority thereof on the applicable
aircraft and vessels.

 
Section 4.2  Encumbrances.  Each Debtor shall not create, permit or suffer to
exist, and shall defend the Collateral against any Lien (other than the
Permitted Liens, provided that no Lien, other than the Lien created hereunder,
shall exist over the Pledged Shares) or any restriction upon the pledge or other
transfer thereof (other than as specifically permitted in the Credit Agreement),
and shall defend such Debtor’s title to and other rights in the Collateral and
the Agent’s pledge and collateral assignment of and security interest in the
Collateral against the claims and demands of all Persons.  Except to the extent
permitted by the Credit Agreement or in connection with any release of the
Collateral or any portion thereof under Section 7.13 hereof (but only to the
extent of any Collateral so released), such Debtor shall do nothing to impair
the rights of the Agent in the Collateral.
 
Section 4.3  Disposition of Collateral.  Except as otherwise permitted under the
Credit Agreement, no Debtor shall enter into or consummate any transfer or other
disposition of Collateral.
 
 
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Section 4.4  Intentionally Omitted.
 
Section 4.5  Corporate Changes; Books and Records; Inspection Rights.  (a) Each
Debtor shall not change its respective name, identity, corporate structure or
jurisdiction of organization, or identification number in any manner that might
make any financing statement filed in connection with this Agreement seriously
misleading within the meaning of Section 9-506 of the UCC unless such Debtor
shall have given the Agent fifteen (15) days prior written notice with respect
to any change in such Debtor’s corporate structure, jurisdiction of
organization, name or identity and shall have taken all action deemed reasonably
necessary by the Agent under the circumstances to protect its Liens and the
perfection and priority thereof, (b) each Debtor shall keep the Records at the
location specified on Schedule 3.2 as the location of such books and records or
as otherwise specified in writing to the Agent and (c) the Debtors shall permit
the Agent, the Lenders, and their respective agents and representatives to
conduct inspections, discussion and audits of the Collateral in accordance with
the terms of the Credit Agreement.
 
Section 4.6  Notification of Lien; Continuing Disclosure.  Each Debtor shall
promptly notify the Agent in writing of any Lien (other than a Permitted Lien,
to the extent not otherwise subject to any notice requirements under the Credit
Agreement) that has attached to or been made or asserted against any of the
Collateral upon becoming aware of the existence of such Lien.
 
Section 4.7  Covenants Regarding Pledged Shares
 
(a)           Voting Rights and Distributions.
 
 
(i)
So long as no Event of Default shall have occurred and be continuing (both
before and after giving effect to any of the actions or other matters described
in clauses (A) or (B) of this subparagraph):

 
(A)
Each Debtor shall be entitled to exercise any and all voting and other
consensual rights (including, without limitation, the right to give consents,
waivers and ratifications) pertaining to any of the Pledged Shares or any part
thereof; provided, however, that no vote shall be cast or consent, waiver or
ratification given or action taken without the prior written consent of the
Agent which would violate any provision of this Agreement or the Credit
Agreement; and

 
(B)
Except as otherwise provided by the Credit Agreement, such Debtor shall be
entitled to receive and retain any and all dividends, distributions and interest
paid in respect to any of the Pledged Shares.

 
(C)
No provision of this Agreement shall prohibit distributions to pay accrued taxes
of limited liability company members attributable to any Equity Interests held
by such Persons provided that such distributions are permitted under the Credit
Agreement.

 
(ii)
Upon the occurrence and during the continuance of an Event of Default:

 
(A)
The Agent may, without notice to such Debtor, transfer or register in the name
of the Agent or any of its nominees, for the equal and ratable benefit of the
Lenders, any or all of the Pledged Shares and the Proceeds thereof (in cash or
otherwise) held by the Agent hereunder, and the Agent or its nominee may
thereafter, after delivery of notice to such Debtor, exercise all voting and
corporate rights at any meeting of any corporation issuing any of the Pledged
Shares and any and all rights of conversion, exchange, subscription or any other
rights, privileges or options pertaining to any of the Pledged Shares as if the
Agent were the absolute owner thereof, including, without limitation, the right
to exchange, at its discretion, any and all of the Pledged Shares upon the
merger, consolidation, reorganization, recapitalization or other readjustment of
any corporation issuing any of such Pledged Shares or upon the exercise by any
such issuer or the Agent of any right, privilege or option pertaining to any of
the Pledged Shares, and in connection therewith, to deposit and deliver any and
all of the Pledged Shares with any committee, depositary, transfer agent,
registrar or other designated agency upon such terms and conditions as the Agent
may determine, all without liability except to account for property actually
received by it, but the Agent shall have no duty to exercise any of the
aforesaid rights, privileges or options, and the Agent shall not be responsible
for any failure to do so or delay in so doing.

 
(B)
All rights of such Debtor to (i) exercise the voting and other consensual rights
which it would otherwise be entitled to exercise pursuant to Section
4.7(a)(i)(A) and (ii) to receive the dividends, interest and other distributions
which it would otherwise be authorized to receive and retain pursuant to Section
4.7(a)(i)(B) shall be suspended until such Event of Default shall no longer
exist (and in the case of the rights described in clause (i) herein, upon notice
from the Agent of a suspension of such rights), and all such rights shall, until
such Event of Default shall no longer exist, thereupon become vested in the
Agent which shall thereupon have the sole right to exercise such voting and
other consensual rights and to receive, hold and dispose of as Pledged Shares
such dividends, interest and other distributions.

 
(C)
All dividends, interest and other distributions which are received by such
Debtor contrary to the provisions of this Section 4.7(a)(ii) shall be received
in trust for the benefit of the Agent, shall be segregated from other funds of
such Debtor and shall be forthwith paid over to the Agent as Collateral in the
same form as so received (with any necessary endorsement).

 
(D)
Each Debtor shall execute and deliver (or cause to be executed and delivered) to
the Agent all such proxies and other instruments as the Agent may reasonably
request for the purpose of enabling the Agent to exercise the voting and other
rights which it is entitled to exercise pursuant to this Section 4.7(a)(ii) and
to receive the dividends, interest and other distributions which it is entitled
to receive and retain pursuant to this Section 4.7(a)(ii). The foregoing shall
not in any way limit the Agent’s power and authority granted pursuant to the
other provisions of this Agreement.

 
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(b)           Possession; Reasonable Care.  Regardless of whether a Default or
an Event of Default has occurred or is continuing, the Agent shall have the
right to hold in its possession all Pledged Shares pledged, collaterally
assigned or transferred hereunder and from time to time constituting a portion
of the Collateral.  The Agent may appoint one or more agents (which in no case
shall be a Debtor or an affiliate of a Debtor) to hold physical custody, for the
account of the Agent, of any or all of the Collateral.  The Agent shall be
deemed to have exercised reasonable care in the custody and preservation of the
Collateral in its possession if the Collateral is accorded treatment
substantially equal to that which the Agent accords its own property, it being
understood that the Agent shall not have any responsibility for (i) ascertaining
or taking action with respect to calls, conversions, exchanges, maturities,
tenders or other matters relative to any Collateral, whether or not the Agent
has or is deemed to have knowledge of such matters, or (ii) taking any necessary
steps to preserve rights against any parties with respect to any Collateral,
except, subject to the terms hereof, upon the written instructions of the
Lenders.  Following the occurrence and continuance of an Event of Default, the
Agent shall be entitled to take ownership of the Collateral in accordance with
the UCC.
 
Section 4.8  New Subsidiaries; Additional Collateral
 
 
(a)
With respect to each Person which becomes a Subsidiary of a Debtor subsequent to
the date hereof, execute and deliver such joinders or security agreements or
other pledge documents as are required by the Credit Agreement, within the time
periods set forth therein.

 
 
(b)
Each Debtor agrees that, (i) except with the written consent of the Agent, it
will not permit any Domestic Subsidiary (whether now existing or formed after
the date hereof) to issue to such Debtor or any of such Debtor’s other
Subsidiaries any shares of stock, membership interests, partnership units, notes
or other securities or instruments (including without limitation the Pledged
Shares) in addition to or in substitution for any of the Collateral, unless,
concurrently with each issuance thereof, any and all such shares of stock,
membership interests, partnership units, notes or instruments are encumbered in
favor of the Agent under this Agreement or otherwise (it being understood and
agreed that all such shares of stock, membership interests, partnership units,
notes or instruments issued to such Debtor shall, without further action by such
Debtor or the Agent, be automatically encumbered by this Agreement as Pledged
Shares) and (ii) it will promptly following the issuance thereof deliver to the
Agent (A) an amendment, duly executed by such Debtor, in substantially the form
of Exhibit A hereto in respect of such shares of stock, membership interests,
partnership units, notes or instruments issued to Debtor or (B) if reasonably
required by the Lenders, a new stock pledge, duly executed by the applicable
Debtor, in substantially the form of this Agreement (a “New Pledge”), in respect
of such shares of stock, membership interests, partnership units, notes or
instruments issued to any Debtor granting to the Agent, for the benefit of the
Lenders, a first priority security interest, pledge and Lien thereon, together
in each case with all certificates, notes or other instruments representing or
evidencing the same, together with such other documentation as the Agent may
reasonably request. Such Debtor hereby (x) authorizes the Agent to attach each
such amendment to this Agreement, (y) agrees that all such shares of stock,
membership interests, partnership units, notes or instruments listed in any such
amendment delivered to the Agent shall for all purposes hereunder constitute
Pledged Shares, and (z) is deemed to have made, upon the delivery of each such
amendment, the representations and warranties contained in Section 3.4 of this
Agreement with respect to the Collateral covered thereby.

 
 
(c)
With respect to any Intellectual Property Collateral owned, licensed or
otherwise acquired by any Debtor after the date hereof, and with respect to any
Patent, Trademark or Copyright which is not registered or filed with the U.S.
Patent and Trademark Office and/or the U.S. Copyright Office at the time such
Collateral is pledged by a Debtor to the Agent pursuant to this Security
Agreement, and which is subsequently registered or filed by such Debtor in the
appropriate office and which is material to such Debtor’s business, such Debtor
shall promptly after the acquisition or registration thereof execute or cause to
be executed and delivered to the Agent, (i) an amendment, duly executed by such
Debtor, in substantially the form of Exhibit A hereto, in respect of such
additional or newly registered collateral or (ii) at the Agent’s option, a new
security agreement, duly executed by the applicable Debtor, in substantially the
form of this Agreement, in respect of such additional or newly registered
collateral, granting to the Agent, for the benefit of the Lenders, a first
priority security interest, pledge and Lien thereon (subject only to the
Permitted Liens), together in each case with all certificates, notes or other
instruments representing or evidencing the same, and shall, upon the Agent’s
reasonable request, execute or cause to be executed any financing statement or
other document (including without limitation, filings required by the U.S.
Patent and Trademark Office and/or the U.S. Copyright Office in connection with
any such additional or newly registered collateral) granting or otherwise
evidencing a Lien over such new Intellectual Property Collateral. Each Debtor
hereby (x) authorizes the Agent to attach each amendment to this Agreement,
(y) agrees that all such additional collateral listed in any amendment delivered
to the Agent shall for all purposes hereunder constitute Collateral, and (z) is
deemed to have made, upon the delivery of each such Amendment, the
representations and warranties contained in Section 3.3(d) and Section 3.5 of
this Agreement with respect to the Collateral covered thereby.

 
Section 4.9  Further Assurances  (a) At any time and from time to time, upon the
reasonable request of the Agent, and at the sole expense of the Debtors, each
Debtor shall promptly execute and deliver all such further agreements, documents
and instruments and take such further action as the Agent may reasonably deem
necessary or appropriate to (i) preserve, ensure the priority, effectiveness and
validity of and perfect the Agent’s security interest in and pledge and
collateral assignment of the Collateral (including causing the Agent’s name to
be noted as secured party on any certificate of title for a titled good if such
notation is a condition of the Agent’s ability to enforce its security interest
in such Collateral), unless such actions are specifically waived under the terms
of this Agreement and the other Loan Documents, (ii) carry out the provisions
and purposes of this Agreement and (iii) to enable the Agent to exercise and
enforce its rights and remedies hereunder with respect to any of the Collateral.
Except as otherwise expressly permitted by the terms of the Credit Agreement
relating to disposition of assets and except for Permitted Liens (except for
Pledged Shares, over which the only Lien shall be that Lien established under
this Agreement), each Debtor agrees to maintain and preserve the Agent’s
security interest in and pledge and collateral assignment of the Collateral
hereunder and the priority thereof.  Notwithstanding anything contained herein
to the contrary, the Agent need not require the creation or perfection of
pledges of or security interests in particular assets if and for so long as, in
the reasonable judgment of the Agent, the cost of creating or perfecting such
pledges or security interests in such assets shall be excessive in view of the
benefits to be obtained by the Agent therefrom.  The Agent may, in its sole
discretion, grant extensions of time for the perfection of security interests in
particular assets (including extensions beyond the Effective Date for the
perfection of security interests in the assets of the Debtors on such date)
where it reasonably determines, in consultation with the Debtors, that
perfection cannot be accomplished without undue effort or expense by the time or
times at which it would otherwise be required by this Agreement or the other
Loan Documents.
 
(b)           Each Debtor hereby irrevocably authorizes the Agent (until the
termination of this Agreement in accordance with the provisions of this
Agreement) at any time and from time to time to file in any filing office in any
jurisdiction any initial financing statements and amendments thereto that (i)
indicate any or all of the Collateral upon which the Debtors have granted a Lien
(including, without limitation, the filing of a financing statement describing
the Collateral as “all assets in which Debtor now owns or hereafter acquires
rights”, “all assets”, “all personal property” or words of similar import), and
(ii) provide any other information required by Part 5 of Article 9 of the UCC,
including organizational information and in the case of a fixture filing or a
filing for Collateral consisting of as-extracted collateral or timber to be cut,
a sufficient description of real property to which the Collateral relates.  Each
Debtor agrees to furnish any such information required by the preceding
paragraph to the Agent promptly upon request.
 
 
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ARTICLE 5
 
Rights of the Agent
 
Section 5.1  Power of Attorney.  Each Debtor hereby irrevocably constitutes and
appoints the Agent and any officer or agent thereof (until the termination of
this Agreement in accordance with the provisions of Section 7.12 of this
Agreement), with full power of substitution, as its true and lawful
attorney-in-fact with full irrevocable power and authority in the name of such
Debtor or in its own name, to take, after the occurrence and during the
continuance of an Event of Default, any and all actions, and to execute any and
all documents and instruments which the Agent at any time and from time to time
deems necessary, to accomplish the purposes of this Agreement and, without
limiting the generality of the foregoing, such Debtor hereby gives the Agent the
power and right on behalf of such Debtor and in its own name to do any of the
following after the occurrence and during the continuance of an Event of
Default, without notice to or the consent of such Debtor:
 
 
(a)
to demand, sue for, collect or receive, in the name of such Debtor or in its own
name, any money or property at any time payable or receivable on account of or
in exchange for any of the Collateral and, in connection therewith, endorse
checks, notes, drafts, acceptances, money orders, documents of title or any
other instruments for the payment of money under the Collateral or any policy of
insurance;

 
 
(b)
to pay or discharge taxes, Liens (other than Permitted Liens) or other
encumbrances levied or placed on or threatened against the Collateral;

 
 
(c)
(i) to direct account debtors and any other parties liable for any payment under
any of the Collateral to make payment of any and all monies due and to become
due thereunder directly to the Agent or as the Agent shall reasonably direct;
(ii) to receive payment of and receipt for any and all monies, claims and other
amounts due and to become due at any time in respect of or arising out of any
Collateral; (iii) to sign and endorse any invoices, freight or express bills,
bills of lading, storage or warehouse receipts, drafts against debtors,
assignments, proxies, stock powers, verifications and notices in connection with
accounts and other documents relating to the Collateral; (iv) to commence and
prosecute any suit, action or proceeding at law or in equity in any court of
competent jurisdiction to collect the Collateral or any part thereof and to
enforce any other right in respect of any Collateral; (v) to defend any suit,
action or proceeding brought against such Debtor with respect to any Collateral;
(vi) to settle, compromise or adjust any suit, action or proceeding described
above and, in connection therewith, to give such discharges or releases as the
Agent may reasonably deem appropriate; (vii) to exchange any of the Collateral
for other property upon any merger, consolidation, reorganization,
recapitalization or other readjustment of the issuer thereof and, in connection
therewith, deposit any of the Collateral with any committee, depositary,
transfer agent, registrar or other designated agency upon such terms as the
Agent may reasonably determine; (viii) to add or release any guarantor,
indorser, surety or other party to any of the Collateral; (ix) to renew, extend
or otherwise change the terms and conditions of any of the Collateral; (x) to
make, settle, compromise or adjust any claim under or pertaining to any of the
Collateral (including claims under any policy of insurance); (xi) subject to any
pre-existing rights or licenses, to assign any Patent, Copyright or Trademark
constituting Intellectual Property Collateral (along with the goodwill of the
business to which any such Patent, Copyright or Trademark pertains), for such
term or terms, on such conditions and in such manner, as the Agent shall in its
sole discretion reasonably determine, and (xii) to sell, transfer, pledge,
convey, make any agreement with respect to, or otherwise deal with, any of the
Collateral as fully and completely as though the Agent were the absolute owner
thereof for all purposes, and to do, at the Agent’s option and such Debtor’s
expense, at any time, or from time to time, all acts and things which the Agent
reasonably deems necessary to protect, preserve, maintain, or realize upon the
Collateral and the Agent’s security interest therein.

 
This power of attorney is a power coupled with an interest and shall be
irrevocable.  The Agent shall be under no duty to exercise or withhold the
exercise of any of the rights, powers, privileges and options expressly or
implicitly granted to the Agent in this Agreement, and shall not be liable for
any failure to do so or any delay in doing so.  This power of attorney is
conferred on the Agent solely to protect, preserve, maintain and realize upon
its security interest in the Collateral.  The Agent shall not be responsible for
any decline in the value of the Collateral and shall not be required to take any
steps to preserve rights against prior parties or to protect, preserve or
maintain any Lien given to secure the Collateral.
 
Section 5.2  Setoff.  In addition to and not in limitation of any rights of any
Lenders under applicable law, the Agent and each Lender shall, upon the
occurrence and continuance of an Event of Default, without notice or demand of
any kind, have the right to appropriate and apply to the payment of the
Indebtedness owing to it (whether or not then due) any and all balances,
credits, deposits, accounts or moneys of Debtors then or thereafter on deposit
with such Lenders; provided, however, that any such amount so applied by any
Lender on any of the Indebtedness owing to it shall be subject to the provisions
of the Credit Agreement.
 
Section 5.3  Assignment by the Agent.  The Agent may at any time assign or
otherwise transfer all or any portion of its rights and obligations as the Agent
under this Agreement and the other Loan Documents (including, without
limitation, the Indebtedness) to any other Person, to the extent permitted by,
and upon the conditions contained in, the Credit Agreement and such Person shall
thereupon become vested with all the benefits and obligations thereof granted to
the Agent herein or otherwise.
 
Section 5.4  Performance by the Agent.  If any Debtor shall fail to perform any
covenant or agreement contained in this Agreement after demand from Agent to so
perform, the Agent may (but shall not be obligated to) perform or attempt to
perform such covenant or agreement on behalf of the Debtors, in which case Agent
shall exercise good faith and make diligent efforts to give Debtors prompt prior
written notice of such performance or attempted performance. In such event, the
Debtors shall, at the request of the Agent, promptly pay any reasonable amount
expended by the Agent in connection with such performance or attempted
performance to the Agent, together with interest thereon at the interest rate
set forth in the Credit Agreement, from and including the date of such
expenditure to but excluding the date such expenditure is paid in
full.  Notwithstanding the foregoing, it is expressly agreed that the Agent
shall not have any liability or responsibility for the performance (or
non-performance) of any obligation of the Debtors under this Agreement.
 
 
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Section 5.5  Certain Costs and Expenses.  The Debtors shall pay or reimburse the
Agent within five (5) Business Days after demand for all reasonable costs and
expenses (including reasonable attorney’s and paralegal fees) incurred by it in
connection with the enforcement, attempted enforcement, or preservation of any
rights or remedies under this Agreement or any other Loan Document during the
existence of an Event of Default or after acceleration of any of the
Indebtedness (including in connection with any “workout” or restructuring
regarding the Indebtedness, and including in any insolvency proceeding or
appellate proceeding).  The agreements in this Section 5.5 shall survive the
payment in full of the Indebtedness.  Notwithstanding the foregoing, the
reimbursement of any fees and expenses incurred by the Lenders shall be governed
by the terms and conditions of the applicable Credit Agreement.
 
Section 5.6  Indemnification.  Each of the Debtors agrees to indemnify and hold
Agent and each of the Lenders (and their respective Affiliates) and their
respective employees, agents, officers, directors, counsel, and
attorneys-in-fact harmless from all loss, cost, damage, liability or expenses,
including reasonable house and outside attorneys’ and paralegals’ fees and
disbursements (but without duplication of such fees and disbursements for the
same services), incurred by Agent and each of the Lenders by reason of a Default
or an Event of Default, or enforcing the obligations of any Debtor under this
Agreement or any of the other Loan Documents, or as a result of any actual or
claimed violation of law, as applicable, or in the prosecution or defense of any
action or proceeding concerning any matter growing out of or connected with this
Agreement or any of the Loan Documents, INCLUDING CLAIMS, DAMAGES, FINES,
EXPENSES, LIABILITIES OR CAUSES OF ACTION OF WHATEVER KIND RESULTING FROM THE
AGENT’S OR ANY LENDER’S OWN NEGLIGENCE except to the extent (but only to the
extent) caused by Agent’s or any Lender’s gross negligence or willful
misconduct.  The agreements in this Section 5.6 shall survive payment of all
other Indebtedness.
 
ARTICLE 6
 
Default
 
Section 6.1  Rights and Remedies.  If an Event of Default shall have occurred
and be continuing, the Agent shall have the following rights and remedies
subject to the direction and/or consent of the Lenders as required under the
Credit Agreement:
 
 
(a)
The Agent may exercise any of the rights and remedies set forth in this
Agreement (including, without limitation, Article 5 hereof), in the Credit
Agreement, or in any other Loan Document, or as provided by applicable law.

 
 
(b)
In addition to all other rights and remedies granted to the Agent in this
Agreement, the Credit Agreement or by applicable law, the Agent shall have all
of the rights and remedies of a secured party under the UCC (whether or not the
UCC applies to the affected Collateral) and the Agent may also, without previous
demand or notice except as specified below or in the Credit Agreement, sell the
Collateral or any part thereof in one or more parcels at public or private sale,
at any exchange, broker’s board or at any of the Agent’s offices or elsewhere,
for cash, on credit or for future delivery, and upon such other terms as the
Agent may, in its reasonable discretion, deem commercially reasonable or
otherwise as may be permitted by law.  Without limiting the generality of the
foregoing, the Agent may (i) without demand or notice to the Debtors (except as
required under the Credit Agreement or applicable law), collect, receive or take
possession of the Collateral or any part thereof, and for that purpose the Agent
(and/or its Agents, servicers or other independent contractors) may enter upon
any premises on which the Collateral is located and remove the Collateral
therefrom or render it inoperable, and/or (ii) sell, lease or otherwise dispose
of the Collateral, or any part thereof, in one or more parcels at public or
private sale or sales, at the Agent’s offices or elsewhere, for cash, on credit
or for future delivery, and upon such other terms as the Agent may, in its
reasonable discretion, deem commercially reasonable or otherwise as may be
permitted by law.  The Agent and, subject to the terms of the Credit Agreement,
each of the Lenders shall have the right at any public sale or sales, and, to
the extent permitted by applicable law, at any private sale or sales, to bid
(which bid may be, in whole or in part, in the form of cancellation of
indebtedness) and become a purchaser of the Collateral or any part thereof free
of any right of redemption on the part of the Debtors, which right of redemption
is hereby expressly waived and released by the Debtors to the extent permitted
by applicable law.  The Agent may require the Debtors to assemble the Collateral
and make it available to the Agent at any place designated by the Agent to allow
the Agent to take possession or dispose of such Collateral.  The Debtors agree
that the Agent shall not be obligated to give more than five (5) days prior
written notice of the time and place of any public sale or of the time after
which any private sale may take place and that such notice shall constitute
reasonable notice of such matters.  The foregoing shall not require notice if
none is required by applicable law.  The Agent shall not be obligated to make
any sale of Collateral if, in the exercise of its reasonable discretion, it
shall determine not to do so, regardless of the fact that notice of sale of
Collateral may have been given.  The Agent may, without notice or publication
(except as required by applicable law), adjourn any public or private sale or
cause the same to be adjourned from time to time by announcement at the time and
place fixed for sale, and such sale may, without further notice, be made at the
time and place to which the same was so adjourned.  The Debtors shall be liable
for all reasonable expenses of retaking, holding, preparing for sale or the
like, and all reasonable attorneys’ fees, legal expenses and other costs and
expenses incurred by the Agent in connection with the collection of the
Indebtedness and the enforcement of the Agent’s rights under this Agreement and
the Credit Agreement.  The Debtors shall, to the extent permitted by applicable
law, remain liable for any deficiency if the proceeds of any such sale or other
disposition of the Collateral (conducted in conformity with this clause (ii) and
applicable law) applied to the Indebtedness are insufficient to pay the
Indebtedness in full (other than contingent liabilities pursuant to any
indemnity, including without limitation Section 5.5 and Section 5.6 hereof, for
claims which have not been asserted, or which have not yet accrued).  The Agent
shall apply the proceeds from the sale of the Collateral hereunder against the
Indebtedness in such order and manner as provided in the Credit Agreement.

 
 
(c)
The Agent may cause any or all of the Collateral held by it to be transferred
into the name of the Agent or the name or names of the Agent’s nominee or
nominees.

 
 
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(d)
The Agent may exercise any and all rights and remedies of the Debtors under or
in respect of the Collateral, including, without limitation, any and all rights
of the Debtors to demand or otherwise require payment of any amount under, or
performance of any provision of any of the Collateral and any and all voting
rights and corporate powers in respect of the Collateral.

 
 
(e)
On any sale of the Collateral, the Agent is hereby authorized to comply with any
limitation or restriction with which compliance is necessary (based on a
reasoned opinion of the Agent’s counsel) in order to avoid any violation of
applicable law or in order to obtain any required approval of the purchaser or
purchasers by any applicable Governmental Authority.

 
 
(f)
The Agent may direct account debtors and any other parties liable for any
payment under any of the Collateral to make payment of any and all monies due
and to become due thereunder directly to the Agent or as the Agent shall direct.

 
 
(g)
In the event of any sale, assignment or other disposition of the Intellectual
Property Collateral, the goodwill of the business connected with and symbolized
by any Collateral subject to such disposition shall be included, and the Debtors
shall supply to the Agent or its designee the Debtors’ know-how and expertise
related to the Intellectual Property Collateral subject to such disposition, and
the Debtors’ notebooks, studies, reports, records, documents and things
embodying the same or relating to the inventions, processes or ideas covered by
and to the manufacture of any products under or in connection with the
Intellectual Property Collateral subject to such disposition.

 
 
(h)
For purposes of enabling the Agent to exercise its rights and remedies under
this Section 6.1 and enabling the Agent and its successors and permitted assigns
to enjoy the full benefits of the Collateral, the Debtors hereby grant (until
the termination of this Agreement in accordance with the provisions of Section
7.12 of this Agreement) to the Agent an irrevocable, nonexclusive license
(exercisable without payment of royalty or other compensation to the Debtors) to
use, assign, license or sublicense any of the Intellectual Property Collateral,
Computer Records or Software (including in such license reasonable access to all
media in which any of the licensed items may be recorded or stored and all
computer programs used for the completion or printout thereof), exercisable upon
the occurrence and during the continuance of an Event of Default (and thereafter
if Agent succeeds to any of the Collateral pursuant to an enforcement proceeding
or voluntary arrangement with Debtor), except as may be prohibited by any
licensing agreement relating to such Computer Records or Software.  This license
shall also inure to the benefit of all successors, permitted assigns,
transferees of and purchasers from the Agent.

 
 
Section 6.2  Private Sales.

 
 
(a)
In view of the fact that applicable securities laws may impose certain
restrictions on the method by which a sale of the Pledged Shares may be effected
after an Event of Default, Debtors agree that upon the occurrence and during the
continuance of an Event of Default, the Agent may from time to time attempt to
sell all or any part of the Pledged Shares by a private sale in the nature of a
private placement, restricting the bidders and prospective purchasers to those
who will represent and agree that they are “accredited investors” within the
meaning of Regulation D promulgated pursuant to the Securities Act of 1933, as
amended (the “Securities Act”), and are purchasing for investment only and not
for distribution.  In so doing, the Agent may solicit offers for the Pledged
Shares, or any part thereof, from a limited number of investors who might be
interested in purchasing the Pledged Shares. Without limiting the methods or
manner of disposition which could be determined to be commercially reasonable,
if the Agent hires a firm of regional or national reputation that is engaged in
the business of rendering investment banking and brokerage services to solicit
such offers and facilitate the sale of the Pledged Shares, then the Agent’s
acceptance of the highest offer (including its own offer, or the offer of any of
the Lenders at any such sale) obtained through such efforts of such firm shall
be deemed to be a commercially reasonable method of disposition of such Pledged
Shares. The Agent shall not be under any obligation to delay a sale of any of
the Pledged Shares for the period of time necessary to permit the issuer of such
securities to register such securities under the laws of any jurisdiction
outside the United States, under the Securities Act or under any applicable
state securities laws, even if such issuer would agree to do so.

 
 
(b)
The Debtors further agree to do or cause to be done, to the extent that the
Debtors may do so under applicable law, all such other reasonable acts and
things as may be reasonably necessary to make such sales or resales of any
portion or all of the Collateral valid and binding and in compliance with any
and all applicable laws, regulations, orders, writs, injunctions, decrees or
awards of any and all courts, arbitrators or governmental instrumentalities,
domestic or foreign, having jurisdiction over any such sale or sales, all at the
Debtors’ expense.

 
Section 6.3  Intentionally Omitted.
 
Section 6.4  Default Under Credit Agreement.  Subject to any applicable notice
and cure provisions contained in the Credit Agreement, the occurrence of any
Event of Default (as defined in the Credit Agreement), including without limit a
breach of any of the provisions of this Agreement, shall be deemed to be an
Event of Default under this Agreement. This Section 6.4 shall not limit the
Events of Default set forth in the Credit Agreement.
 
 
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ARTICLE 7
 
Miscellaneous
 
Section 7.1  No Waiver; Cumulative Remedies. No failure on the part of the Agent
to exercise and no delay in exercising, and no course of dealing with respect
to, any right, power or privilege under this Agreement shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, power or
privilege under this Agreement preclude any other or further exercise thereof or
the exercise of any other right, power, or privilege.  The rights and remedies
provided for in this Agreement are cumulative and not exclusive of any rights
and remedies provided by law.
 
Section 7.2  Successors and Assigns. Subject to the terms and conditions of the
Credit Agreement, this Agreement shall be binding upon and inure to the benefit
of the Debtors and the Agent and their respective heirs, successors and
permitted assigns, except that the Debtors may not assign any of their rights or
obligations under this Agreement without the prior written consent of the Agent.
 
Section 7.3  AMENDMENT; ENTIRE AGREEMENT.  THIS WRITTEN LOAN AGREEMENT (AS
DEFINED BY SECTION 26.02 OF THE TEXAS BUSINESS AND COMMERCE CODE) REPRESENTS THE
FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.  THERE ARE
NO ORAL AGREEMENTS AMONG THE PARTIES HERETO.  The provisions of this Agreement
may be amended or waived only by an instrument in writing signed by the parties
hereto.
 
Section 7.4  Notices. All notices, requests, consents, approvals, waivers and
other communications hereunder shall be in writing (including, by facsimile
transmission) and mailed, faxed or delivered to the address or facsimile number
specified for notices on signature pages hereto; or, as directed to the Debtors
or the Agent, to such other address or number as shall be designated by such
party in a written notice to the other.  All such notices, requests and
communications shall, when sent by overnight delivery, or faxed, be effective
when delivered for overnight (next business day) delivery, or transmitted in
legible form by facsimile machine (with electronic confirmation of receipt),
respectively, or if mailed, upon the third Business Day after the date deposited
into the U.S. mail, or if otherwise delivered, upon delivery; except that
notices to the Agent shall not be effective until actually received by the
Agent.
 
Section 7.5  GOVERNING LAW; SUBMISSION TO JURISDICTION;
 
SERVICE OF PROCESS.
 
 
(a)
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF TEXAS.

 
 
(b)
ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF TEXAS OR OF THE UNITED
STATES FOR THE NORTHERN DISTRICT OF TEXAS, AND BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, EACH OF THE DEBTOR AND THE AGENT CONSENTS, FOR ITSELF AND IN RESPECT
OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS.  EACH OF THE
DEBTOR AND THE AGENT IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION
TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT
MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH
JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY LOAN DOCUMENT.

 
Section 7.6  Headings.  The headings, captions, and arrangements used in this
Agreement are for convenience only and shall not affect the interpretation of
this Agreement.
 
Section 7.7  Survival of Representations and Warranties.  All representations
and warranties made in this Agreement or in any certificate delivered pursuant
hereto shall survive the execution and delivery of this Agreement, and no
investigation by the Agent shall affect the representations and warranties or
the right of the Agent or the Lenders to rely upon them.
 
Section 7.8  Counterparts; Execution.  This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.  Each of the
undersigned by execution of this Agreement agrees that any copy of this document
signed by it and transmitted by facsimile or email, or any other method for
delivery shall be admissible in evidence as the original itself in any judicial
or administrative proceeding, whether or not the original is in existence.
 
 
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Section 7.9  Waiver of Bond.  In the event the Agent seeks to take possession of
any or all of the Collateral by judicial process, the Debtors hereby irrevocably
waive (to the extent permitted by applicable law) any bonds and any surety or
security relating thereto that may be required by applicable law as an incident
to such possession, and waives (to the extent permitted by applicable law) any
demand for possession prior to the commencement of any such suit or action.
 
Section 7.10  Severability.  Any provision of this Agreement which is determined
by a court of competent jurisdiction to be prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions of this Agreement, and any such prohibition or unenforceability in
any jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction.
 
Section 7.11  Construction.  Each Debtor and the Agent acknowledge that each of
them has had the benefit of legal counsel of its own choice and has been
afforded an opportunity to review this Agreement with its legal counsel and that
this Agreement shall be construed as if jointly drafted by the Debtors and the
Agent.
 
Section 7.12  Termination.  If all of the Indebtedness (other than contingent
liabilities pursuant to any indemnity, including without limitation Section 5.5
and Section 5.6 hereof, for claims which have not been asserted, or which have
not yet accrued) shall have been paid in full (in cash) and all commitments to
extend credit or other credit accommodations under the Credit Agreement have
been terminated, the Agent shall, upon the written request of the Debtors,
execute and deliver to the Debtors a proper instrument or instruments
acknowledging the release and termination of the security interests created by
this Agreement, and shall duly assign and deliver to the Debtors (without
recourse and without any representation or warranty) such of the Collateral as
may be in the possession of the Agent and has not previously been sold or
otherwise applied pursuant to this Agreement.
 
Section 7.13  Release of Collateral.  The Agent shall, upon the written request
of the Debtors, execute and deliver to the Debtors a proper instrument or
instruments acknowledging the release of the security interest and Liens
established hereby on any Collateral (other than the Pledged Shares): (a) if the
sale or other disposition of such Collateral is permitted under the terms of the
Credit Agreement and, at the time of such proposed release, both before and
after giving effect thereto, no Default or Event of Default has occurred and is
continuing, (b) if the sale or other disposition of such Collateral is not
permitted under the terms of the Credit Agreement, provided that the requisite
Lenders under such Credit Agreement shall have consented to such sale or
disposition in accordance with the terms thereof, or (c) if such release has
been approved by the requisite Lenders in accordance with Section 12.11 of the
Credit Agreement.
 
Section 7.14  WAIVER OF JURY TRIAL.  EACH DEBTOR AND THE AGENT ACKNOWLEDGES ITS
RIGHT TO A TRIAL BY JURY IS A CONSTITUTIONAL ONE, AND WAIVES ITS RIGHTS TO A
TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR
RELATED TO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF
ANY TYPE BROUGHT BY EITHER SUCH PARTY AGAINST THE OTHER, WHETHER WITH RESPECT TO
CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE.  EACH DEBTOR AND THE AGENT AGREE
THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A
JURY.  WITHOUT LIMITING THE FOREGOING, EACH SUCH PARTY FURTHER AGREES THAT ITS
RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY
ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO
CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER LOAN
DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF.  THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.
 
Section 7.15  Consistent Application.  The rights and duties created by this
Agreement shall, in all cases, be interpreted consistently with, and shall be in
addition to (and not in lieu of), the rights and duties created by the Credit
Agreement or the other Loan Documents.  In the event that any provision of this
Agreement shall be inconsistent with any provision of the Credit Agreement, such
provision of the Credit Agreement shall govern.
 
Section 7.16  Continuing Lien.  The security interest granted under this
Security Agreement shall be a continuing security interest in every respect
(whether or not the outstanding balance of the Indebtedness is from time to time
temporarily reduced to zero) and the Agent’s security interest in the Collateral
as granted herein shall continue in full force and effect for the entire
duration that the Credit Agreement remains in effect and until all of the
Indebtedness are repaid and discharged in full (other than contingent
liabilities pursuant to any indemnity, including without limitation Section 5.5
and Section 5.6 hereof, for claims which have not been asserted, or which have
not yet accrued), and no commitment (whether optional or obligatory) to extend
any credit under the Credit Agreement remain outstanding.
 
Section 7.17  Determination of Value of Collateral.
 
The following shall be the basis of any finder of fact’s determination of the
value of any Collateral which is the subject matter of a disposition giving rise
to a calculation of any surplus or deficiency under Section 9.615(f) of the
UCC:  (a) the Collateral which is the subject matter of the disposition shall be
valued in an “as is” condition as of the date of the disposition, without nay
assumption or expectation that such Collateral will be repaired or improved in
any matter; (b) the valuation shall be based upon an assumption that the
transferee of such Collateral desires a resale of the Collateral for cash
promptly (but no later than 30 days) following the disposition; (c) all
reasonable closing costs customarily borne by the seller in commercial sales
transactions relating to property similar to such Collateral shall be deducted,
including, without limitation, brokerage commissions, tax prorations, attorneys’
fees, whether in-house or outside counsel is used, and marketing costs, (d) the
value of the collateral which is the subject matter of the disposition shall be
further discounted to account for any estimated holding costs associated with
maintaining such Collateral pending sale (to the extent not accounted for in (c)
above) and other maintenance, operational and ownership expenses and (e) any
expert opinion testimony given or considered in connection with a determination
of the value of such Collateral must be given by persons having at least 5 years
experience in appraising property similar to the Collateral and who have
conducted and prepared a complete written appraisal of such Collateral taking
into consideration the factors set forth above.  The “value” of any such
Collateral shall be a factor in determining the amount of proceeds which would
have been realized in a disposition to a transferee other than the Agent or a
Lender, a Person related to the Agent or a Lender, or a secondary obligor under
Section 9-615(f) of the UCC.
 
 
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year first written above.
 
DEBTORS:
 

 
STERLING CONSTRUCTION COMPANY,
 
INC.
 

 
By:                                                                           
 
Name:                                                                           
 
Title                                                                           
 
Address for Notices:
 

 

 
Fax No.:
 
Telephone No.:
 
Attention:
 
TEXAS STERLING CONSTRUCTION CO.
 

 
By:                                                                           
 
Name:                                                                           
 
Title                                                                           
 
Address for Notices:
 

 

 
Fax No.:
 
Telephone No.:
 
Attention:
 
OAKHURST MANAGEMENT
 
CORPORATION
 

 
By:                                                                           
 
Name:                                                                           
 
Title                                                                           
 
Address for Notices:
 

 

 
Fax No.:
 
Telephone No.:
 
Attention:
 
 
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AGENT:
 
 
 
 
COMERICA BANK, as Agent
 

 

 
By:                                                                           
 
Name:                                                                           
 
Title                                                                           
 
Address for Notices:
 

 

 
Fax No.:
 
Telephone No.:
 
Attention:
 
 
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EXHIBIT A
 
TO
 
SECURITY AGREEMENT
 

 
FORM OF AMENDMENT
 
This Amendment to Security Agreement (“Amendment”), dated__________________,
20___, is delivered pursuant to Section 4.8[(b)/(c)] of the Security Agreement
referred to below. The undersigned hereby agrees that this Amendment may be
attached to the Security Agreement dated as of October 31, 2007, between the
undersigned and Comerica Bank, a Michigan banking corporation, as the Agent for
the benefit of the Lenders referred to therein (the “Security Agreement”), and
(a) [that the intellectual property listed on Schedule A]/[that the shares of
stock, membership interests, partnership units, notes or other instruments
listed on Schedule A] annexed hereto shall be and become part of the Collateral
referred to in the Security Agreement and shall secure payment and performance
of all Indebtedness as provided in the Security Agreement and (b) that Schedule
A shall be deemed to amend [Schedule 1.1 /Schedule 1.2] by supplementing the
information provided on such Schedule with the information set forth on Schedule
A.
 
This Amendment may be executed in any number of counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.  Each of the undersigned by execution of this Amendment
agrees that any copy of this Amendment signed by it and transmitted by facsimile
or email, or any other method for delivery shall be admissible in evidence as
the original itself in any judicial or administrative proceeding, whether or not
the original is in existence.
 
Capitalized terms used herein but not defined herein shall have the meanings
therefor provided in the Security Agreement.
 
STERLING CONSTRUCTION COMPANY, INC.
 

 

 
By:                                                                           
 

 
Its:      
 
TEXAS STERLING CONSTRUCTION CO.
 

 

 
By:                                                                           
 

 
Its:      
 
OAKHURST MANAGEMENT
 
CORPORATION
 

 

 
By:                                                                           
 

 
Its:      
 
ROAD AND HIGHWAY BUILDERS, LLC
 

 

 
By:                                                                           
 

 
Its:      
 
ROAD AND HIGHWAY BUILDERS INC.
 

 

 
By:                                                                           
 

 
Its:      
 
COMERICA BANK, as Agent
 

 

 
By:                                                                           
 

 
Its:      
 
 
133

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EXHIBIT B
 

 
JOINDER AGREEMENT
 
(Security Agreement)
 
THIS JOINDER AGREEMENT (the “Joinder Agreement”) is dated as of _______________,
____ by _______________, a __________ (“New Debtor”).
 
WHEREAS, pursuant to Section 7.13 of that certain Credit Agreement dated as of
October 31, 2007 (as amended or otherwise modified from time to time, the
“Credit Agreement”) by and among Sterling Construction Company, Inc., a Delaware
corporation (“Ster1ing”), and certain of its Subsidiaries (collectively, with
Sterling, the “Borrowers”), the financial institutions signatory thereto from
time to time (the “Lenders”) and Comerica Bank, a Michigan banking corporation,
as Agent for the Lenders (in such capacity, “Agent”), the New Debtor is required
to execute and deliver a joinder agreement to the Security Agreement.
 
WHEREAS, in order to comply with the Credit Agreement, New Debtor executes and
delivers this Joinder Agreement in accordance therewith.
 
NOW THEREFORE, as a further inducement to Lenders to continue to provide credit
accommodations to the Borrowers, New Debtor hereby covenants and agrees as
follows:
 
A.           All capitalized terms used herein shall have the meanings assigned
to them in the Credit Agreement unless expressly defined to the contrary.
 
B.           New Debtor hereby enters into this Joinder Agreement in order to
comply with Section 7.13 of the Credit Agreement and does so in consideration of
the Advances made or to be made from time to time under the Credit Agreement and
the other Loan Documents.
 
C.           Schedule [insert appropriate Schedule] attached to this Joinder
Agreement is intended to supplement Schedule [insert appropriate Schedule] of
the Security Agreement with the respective information applicable to New Debtor.
 
D.           New Debtor shall be considered, and deemed to be, for all purposes
of the Credit Agreement, the Security Agreement and the other Loan Documents, a
Debtor under the Security Agreement as fully as though New Debtor had executed
and delivered the Security Agreement at the time originally executed and
delivered under the Credit Agreement and hereby ratifies and confirms its
obligations under the Security Agreement, all in accordance with the terms
thereof and shall be deemed to have made each representation and warranty set
forth in the Security Agreement.
 
E.           No Default or Event of Default (each such term being defined in the
Credit Agreement) has occurred and is continuing under the Credit Agreement.
 
F.           This Joinder Agreement shall be governed by the laws of the State
of Texas and shall be binding upon New Debtor and its successors and assigns.
 
G.           This Joinder Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.  Each of the undersigned
by execution of this Joinder Agreement agrees that any copy of this Joinder
Agreement signed by it and transmitted by facsimile or email, or any other
method for delivery shall be admissible in evidence as the original itself in
any judicial or administrative proceeding, whether or not the original is in
existence.
 
IN WITNESS WHEREOF, the undersigned New Debtor has executed and delivered this
Joinder Agreement as of ___________________, _____.
 
[NEW DEBTOR]
 

 

 

 
By:                                                                           
 

 
Its:      
 
Accepted:

COMERICA BANK, as Agent

By:                                                      

Its:                                                      

 
134

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EXHIBIT G
 

 
JOINDER AGREEMENT
 
This Joinder Agreement (this “Joinder Agreement”) is executed and delivered as
of the 31st day of October, 2007 by each of the undersigned
 
WHEREAS, Sterling Construction Company, Inc., Texas Sterling Construction Co.
and Oakhurst Management Corporation and Comerica Bank as Administrative Agent
(“Agent”) and the other financial institutions party thereto from time to time
(the “Lenders”) have executed and delivered that certain Sterling Construction
Company, Inc. Credit Agreement dated as of October 31, 2007 (as the same may be
amended, restated or otherwise modified from time to time, the “Credit
Agreement”; capitalized terms not otherwise defined herein shall have the
meanings set forth in the Credit Agreement), pursuant to which the Lenders have
made and has agreed to make certain Advances pursuant to the terms and
conditions set forth therein; and
 
WHEREAS, each of the undersigned have requested that they also be able to
request Advances and receive extensions of credit under the Credit Agreement,
and the Lenders have agreed to such request;
 
NOW, THEREFORE, in consideration of the provisions contained herein and in the
Credit Agreement, each of the undersigned hereby agrees as follows:
 
1.           By execution and delivery of this Joinder Agreement, each of the
undersigned shall, and does hereby, become a Borrower under the Credit Agreement
and a Debtor under the Security Agreement, in each case as if an original
signatory thereto, and agrees to execute and deliver any such additional
agreements, documents and instruments in connection therewith as Agent shall
reasonably request.
 
2.           Each of the undersigned (a) acknowledges and agrees that the
undersigned has completely read and understands the Credit Agreement, the
Security Agreement and any other Loan Documents; (b) consents to and agrees to
be bound by all of the provisions of the Credit Agreement, the Security
Agreement and any other Loan Documents executed in connection therewith relating
to undersigned; (c) represents and warrants that (i) all of the representations
and warranties set forth in the Credit Agreement, the Security Agreement and any
other Loan Documents are, as to the undersigned, true and correct in all
material respects as of the date hereof and (ii) the Acquisition has been
consummated on the terms set forth in the Credit Agreement, and (d) acknowledges
and agrees that this Agreement, the Credit Agreement, the Security Agreement and
the other Loan Documents to which such undersigned is a party have been freely
executed without duress and after an opportunity was provided to the undersigned
for review by competent legal counsel of the undersigned’s choice.
 
3.           Each of the undersigned acknowledges and agrees that it shall be
jointly and severally liable with the other Borrowers for all of the loans and
advances made by Agent and any of the Lenders and all of the indebtedness,
obligations and liabilities to Agent and the Lenders under and pursuant to the
terms of the Credit Agreement, the Security Agreement or any of the other Loan
Documents, together with all of the Borrowers’ other indebtedness, obligations
and liabilities whatsoever to Agent or any other Lender arising under or in
connection with the Credit Agreement, the Security Agreement or any other Loan
Documents, whether matured or unmatured, liquidated or unliquidated, direct or
indirect, absolute or contingent, joint or several, due or to become due, now
existing or hereafter arising.
 
4.           This Joinder Agreement may be executed in counterparts which, taken
together, shall constitute an original.  This Joinder Agreement may be delivered
by facsimile or electronic (e.g., .pdf or .tif file) transmission with the same
effect as if an originally executed version of this Fee Letter had been
personally delivered to each of the parties hereto, whether or not an original
remains in existence.
 
 
135

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ROAD AND HIGHWAY BUILDERS, INC.
 

 

 
By:                                                                           
 

 
Its:      
 
ROAD AND HIGHWAY BUILDERS, LLC
 

 
By: Sterling Construction Company, Inc., its sole
 
       manager
 
By:                                                                           
 

 
Its:                                                                        
 
 
136

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EXHIBIT H
 

 
FORM OF ASSIGNMENT AGREEMENT
 

 Date: _____________,2007

To:           Borrowers

and

Comerica Bank, as the Agent

Re:
Credit Agreement made as of October 31, 2007, (as amended, restated or otherwise
modified from time to time, the “Credit Agreement”) by and among the financial
institutions from time to time signatory thereto (individually a “Lender,” and
any and all such financial institutions collectively the “Lenders”), Comerica
Bank as Administrative Agent for the Lenders (in such capacity, the “Agent”),
Arranger, Syndication Agent and Documentation Agent, Sterling Construction
Company, Inc. (“Sterling”) and certain Subsidiaries of Sterling (together with
Sterling, the “Borrowers” and each of them a “Borrower”).

 
Ladies and Gentlemen:

Reference is made to Section 13.8 of the Credit Agreement. Unless otherwise
defined herein or the context otherwise requires, all initially capitalized
terms used herein without definition shall have the meanings specified in the
Credit Agreement.
 
This Assignment Agreement (“Agreement”) constitutes notice to each of you of the
proposed assignment and delegation by [insert name of assignor] (the “Assignor”)
to [insert name of assignee] (the “Assignee”), and, subject to the terms and
conditions of the Credit Agreement, the Assignor hereby sells, assigns and
transfers to the Assignee, and the Assignee hereby purchases, assumes and
accepts from the Assignor, effective on the “Effective Date” (as hereafter
defined) that undivided interest in each of Assignor’s rights and obligations
under the Credit Agreement and the other Loan Documents in the amounts as set
forth on the attached Schedule 1, such that, after giving effect to the
foregoing assignment and assumption, and the concurrent assignment by Assignor
to Assignee on the date hereof, the Assignee’s interest in the Revolving Credit
(and participations in any outstanding Letters of Credit and Swing Line
Advances) shall be as set forth in the attached Schedule 2 with respect to the
Assignee.
 
The Assignor hereby instructs the Agent to make all payments from and including
the Effective Date hereof in respect of the interest assigned hereby, directly
to the Assignee.  The Assignor and the Assignee agree that all interest and fees
accrued up to, but not including, the Effective Date of the assignment and
delegation being made hereby are the property of the Assignor, and not the
Assignee.  The Assignee agrees that, upon receipt of any such interest or fees
accrued up to the Effective Date, the Assignee will promptly remit the same to
the Assignor.
 
The Assignee hereby confirms that it has received a copy of the Credit Agreement
and the exhibits and schedules referred to therein, and all other Loan Documents
which it considers necessary, together with copies of the other documents which
were required to be delivered under the Credit Agreement as a condition to the
making of the loans thereunder.  The Assignee acknowledges and agrees that
it:  (a) has made and will continue to make such inquiries and has taken and
will take such care on its own behalf as would have been the case had its
Percentage been granted and its loans been made directly by such Assignee to
Borrowers without the intervention of the Agent, the Assignor or any other
Lender; and (b) has made and will continue to make, independently and without
reliance upon the Agent, the Assignor or any other Lender, and based on such
documents and information as it has deemed appropriate, its own credit analysis
and decisions relating to the Credit Agreement.  The Assignee further
acknowledges and agrees that neither the Agent, nor the Assignor has made any
representations or warranties about the creditworthiness of Borrowers or any
other party to the Credit Agreement or any other of the Loan Documents, or with
respect to the legality, validity, sufficiency or enforceability of the Credit
Agreement, or any other of the Loan Documents.  This assignment shall be made
without recourse to or warranty by the Assignor, except as set forth herein.
 
Assignee represents and warrants that (i) it is a Person to which assignments
are permitted pursuant to Section 13.8 of the Credit Agreement; (ii) it has full
power and authority and has taken all action necessary to execute and deliver
this Agreement and any and all other documents required or permitted to be
executed or delivered by it in connection with this Agreement and to fulfill its
obligations under and to consummate the transactions contemplated by this
Agreement and no governmental authorizations or other authorizations are
required in connection therewith; and (iii) this Agreement constitutes the
legal, valid and binding obligation of the Assignee.
 
Except as otherwise provided in the Credit Agreement, effective as of the
Effective Date:
 
 
(a)
the Assignee: (i) shall be deemed automatically to have become a party to the
Credit Agreement and the other Loan Documents, to have assumed all of the
Assignor’s obligations thereunder to the extent of the Assignee’s percentage
referred to in the second paragraph of this Agreement, and to have all the
rights and obligations of a party to the Credit Agreement and the other Loan
Documents, as if it were an original signatory thereto to the extent specified
in the second paragraph hereof; and (ii) agrees to be bound by the terms and
conditions set forth in the Credit Agreement and the other Loan Documents as if
it were an original signatory thereto; and

 
 
(b)
the Assignor’s obligations under the Credit Agreement and the other Loan
Documents shall be reduced by the Percentage referred to in the second paragraph
of this Agreement.

 
As used herein, the term “Effective Date” means the date on which all of the
following have occurred or have been completed or waived by Agent, as reasonably
determined by the Agent:
 
 
(1)
the delivery to the Agent of this Agreement executed by the Assignor and the
Assignee;

 
 
(2)
the payment to the Agent, of all accrued fees, expenses and other items for
which reimbursement is then owing under the Credit Agreement;

 
 
(3)
the payment to the Agent of the $5,000 processing fee referred to in Section
13.8(d)(ii) of the Credit Agreement; and

 
 
(4)
all other restrictions and items noted in Section 13.8 of the Credit Agreement
have been completed.

 
The Agent shall notify the Assignor and the Assignee, along with Borrowers, of
the Effective Date.
 
The Assignee hereby advises each of you of the following administrative details
with respect to the assigned loans:
 
 
(A)
Address for Notices:

 

 
 
Institution Name:

 

 
 
Address:

 

 
 
Attention:

 

 
 
Telephone:

 

 
 
Facsimile:

 
 
(B)
Payment Instructions:

 
 
(C)
Proposed effective date of assignment.

 
The Assignee has delivered to the Agent (or is delivering to the Agent
concurrently herewith) the tax forms referred to in Section 13.13 of the Credit
Agreement to the extent required thereunder, and other forms reasonably
requested by the Agent. The Assignor has delivered to the Agent (or shall
promptly deliver to Agent following the execution hereof), the original of each
Note held by the Assignor under the Credit Agreement.
 
The laws of the State of Texas shall govern the validity, interpretation and
enforcement of this Agreement (without giving effect to internal principles of
conflict of law).
 
This Agreement may be executed in any number of counterparts, each of which when
so executed and delivered shall be deemed to be an original and all of which
counterparts of this Agreement, when taken together, shall constitute but one
and the same instrument.  The undersigned by execution of this Agreement agrees
that any copy of this document signed by it and transmitted by facsimile or
email, or any other method for delivery shall be admissible in evidence as the
original itself in any judicial or administrative proceeding, whether or not the
original is in existence.
 
*  *  *
 
[SIGNATURES FOLLOW ON SUCCEEDING PAGE]
 
 
137

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

 

Please evidence your consent to and acceptance of the proposed assignment and
delegation set forth herein by signing and returning counterparts hereof to the
Assignor and the Assignee.
 
[ASSIGNOR]
 

 

 
By:                                                                           
 

 
Its:      
 
[ASSIGNEE]
 

 

 
By:                                                                           
 

 
Its:      
 
ASSIGNMENT AGREEMENT ACCEPTED AND CONSENTED TO
this ____ day of __________, 20___ BY:

COMERICA BANK, as Agent

By:           

Its:           

STERLING CONSTRUCTION COMPANY, INC.,
as Borrower Representative

By:           

Its:           

[*Borrower Representative consent will be required except as specified in the
Credit Agreement.]

[This form of Assignment Agreement (including footnotes) is subject in all
respects to the terms and conditions of the Credit Agreement which shall govern
in the event of any inconsistencies or omissions.]
 
 
138

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

 

EXHIBIT I
 

 
Intentionally Omitted
 

 
139

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

 

EXHIBIT J
 

 
FORM OF COVENANT COMPLIANCE REPORT
 
TO:           Comerica Bank, as Agent

RE:           Credit Agreement made as of October 31, 2007, (as amended,
restated or otherwise modified from time to time, the “Credit Agreement”) by and
among the financial institutions from time to time signatory thereto
(individually a “Lender,” and any and all such financial institutions
collectively the “Lenders”), Comerica Bank as Administrative Agent for the
Lenders (in such capacity, the “Agent”), Arranger, Syndication Agent and
Documentation Agent, Sterling Construction Company, Inc. (“Sterling”), and
certain Subsidiaries of Sterling (together with Sterling, the “Borrowers” and
each of them a “Borrower”).

This Covenant Compliance Report (“Report”) is furnished pursuant to Section
7.2(a) of the Credit Agreement and sets forth various information as of
________________, ______ (the “Computation Date”).

1.
Fixed Charge Coverage Ratio (Section 7.9(a)).  On the Computation Date, the
Fixed Charge Coverage Ratio, which is required to be not less than 1.25 to 1.00
was ____ to 1.00, as computed in the supporting documents attached hereto as
Schedule 1.

2.
Leverage Ratio (Section 7.9(b)).  On the Computation Date, the Leverage Ratio,
which is required to be not more than _____ to 1.00 was _____ to 1.00, as
computed in the supporting documents attached hereto as Schedule 2.

3.
Minimum Tangible Net Worth (Section 7.9(c)).  On the Computation Date, the
Minimum Tangible Net Worth, which is required to be not less than $___________
was $_________, as computed in the supporting documents attached hereto as
Schedule 3.

4.
Asset Coverage Ratio (7.9(d)).  On the Computation Date, the Asset Coverage
Ratio, which is required to be not less than 1.25 to 1.00 was ______ to 1.00, as
computed in the supporting documents attached hereto as Schedule 4.

5.
Losses (7.9(e)).  On the Computation Date, Sterling and its Consolidated
Subsidiaries have Net Income for the prior two consecutive fiscal quarters then
ending of $________.

6.
Pricing Leverage Ratio.  On the Computation Date, the Pricing Leverage Ratio was
_____ to 1.00, as computed in the supporting documents attached hereto as
Schedule 6.

The undersigned Responsible Officer of the Borrower Representative hereby
certifies, solely in the capacity as a Responsible Officer of Borrower
Representative and not in an individual capacity, that:
 
A.           To the best of my knowledge, all of the information set forth in
this Report (and in any Schedule attached hereto) is true and correct in all
material respects.
 
B.           To the best of my knowledge, the representations and warranties of
the Credit Parties contained in the Credit Agreement and in the Loan Documents
are true and correct in all material respects with the same effect as though
such representations and warranties had been made on and at the date hereof
except to the extent that such representations and warranties expressly relate
to an earlier specific date, in which case such representations and warranties
were true and correct in all material respects as of the date when made.
 
C.           I have reviewed the Credit Agreement and this Report is based on an
examination sufficient to assure that this Report is accurate.
 
D.           To the best of my knowledge, except as stated in Schedule 7 hereto
(which shall describe any existing Default or Event of Default and the notice
and period of existence thereof and any action taken with respect thereto or
contemplated to be taken by Borrowers or any other Credit Party), no Default or
Event of Default has occurred and is continuing on the date of this Report.
 
Capitalized terms used in this Report and in the Schedules hereto, unless
specifically defined to the contrary, have the meanings given to them in the
Credit Agreement.
 
The undersigned by execution of this document agrees that any copy of this
document signed by it and transmitted by facsimile or email, or any other method
for delivery shall be admissible in evidence as the original itself in any
judicial or administrative proceeding, whether or not the original is in
existence
 
IN WITNESS WHEREOF, the Borrower Representative has caused this Report to be
executed and delivered by a Responsible Officer of the Borrower Representative
this ______ day of ________________, ______.
 
STERLING CONSTRUCTION COMPANY,
 
INC., as Borrower Representative
 

 

 
By:                                                                           
 

 
Its:      

 
140

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EXHIBIT K
 

 
Intentionally Omitted
 

 
141

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

 

EXHIBIT L
 

 
Intentionally Omitted
 

 
142

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EXHIBIT M
 

 
FORM OF SWING LINE PARTICIPATION CERTIFICATE
 
 ___________________,2007

[Name of Lender]

Re:
Credit Agreement made as of October 31, 2007, (as amended, restated or otherwise
modified from time to time, the “Credit Agreement”) by and among the financial
institutions from time to time signatory thereto (individually a “Lender,” and
any and all such financial institutions collectively the “Lenders”), Comerica
Bank as Administrative Agent for the Lenders (in such capacity, the “Agent”),
Arranger, Syndication Agent and Documentation Agent, Sterling Construction
Company, Inc. (“Sterling”) and certain Subsidiaries of Sterling (together with
Sterling, the “Borrowers” and each of them a “Borrower”).

 
Ladies and Gentlemen:

Pursuant to Section 2.5(e)(ii) of the Credit Agreement, the undersigned hereby
acknowledges receipt from you of $_____________________ as payment for a
participating interest in the following Swing Line Loan:
 
Date of Swing Line Loan:_______________________________
 
Principal Amount of Swing Line Loan:________________________
 
The participation evidenced by this certificate shall be subject to the terms
and conditions of the
Credit Agreement including without limitation Section 2.5(e) thereof.
Capitalized terms used
herein, except as defined to the contrary, shall have the meanings given them in
the Credit
Agreement.

*  *  *

[SIGNATURES FOLLOW ON SUCCEEDING PAGE]

 
143

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Very truly yours,
 

 
COMERICA BANK, as Agent
 

 

 
By:                                                                           
 

 
Its:      
 
Detroit_801261_9
 
144

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Schedule 1.1
 
Applicable Margin Grid
 
Credit Agreement
 
(basis points per annum)
 

Basis for Pricing
Level I
Level II
Level III
Pricing Leverage Ratio*
<1.00
>1.00 but <1.75
>1.75
Revolving Credit Eurodollar Margin
125.00
175.00
225.00
Revolving Credit Prime-Based Rate Margin
0.00
25.00
50.00
Revolving Credit Facility Fee
25.00
25.00
25.00
Letter of Credit Fees (exclusive of facing fees)
125.00
175.00
225.00

* Definition as set forth in the Credit Agreement.
** Level II pricing shall be in effect until the delivery of the financial
statements for the quarter ending December 31, 2007, after which time the
pricing grid shall govern.

Detroit_801261_9
 
145

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Schedule 1.2
Percentages and Allocations
Credit Agreement

 
LENDERS
 
REVOLVING CREDIT
PERCENTAGE
REVOLVING CREDIT ALLOCATIONS
 
Comerica Bank
100%
$75,000,000
 
TOTALS
100%
$75,000,000
 

 
Detroit_801261_9
 
146

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Schedule 1.3
Compliance Information
 
Correct Legal Name
 
 
Address
 
Type of Organization
 
Jurisdiction of Organization
 
Tax identification number and other identification numbers
                             

 
Detroit_801261_9
 
147

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Schedule Number 1.4
 
Existing Comerica Loans
 
Term Loan maturing May 28, 2008 with a principal balance of $ 37,463.00
 
Term Loan maturing June 18, 2016 with a principal balance of $ 635,555.64
 
Term Loan (un-drawn) for $1,500,000
 
$35 Million Revolving Credit Facility:
 
No amounts are outstanding under, and no further draws will be made on, this
facility.
__________________
 
Detroit_801261_9
 
148

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Schedule Number 1.5
 
List of Existing Letters of Credit
 
Standby letter of Credit benefiting Hartford Fire Insurance Company
Expiring April 1, 2008 in the amount of $1,484,000
 
____________________
 
Detroit_801261_9
 
149

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Schedule Number 5.1(c)
 
Credit Parties' jurisdiction of organization
 
See Schedule 1.3

Detroit_801261_9
 
150

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Schedule Number 5.2
 
Jurisdictions where each Credit Party is authorized to do business
 
Credit Party
Jurisdiction
Sterling Construction Company, Inc.
2751 Centerville Road — Suite 3131
Wilmington, Delaware 19803
Delaware
Oakhurst Management Corporation
20810 Fernbush Lane
Houston Texas 77073
Texas & Massachusetts
Texas Sterling Construction Co.
20810 Fernbush Lane
Houston Texas 77073
Delaware & Texas &
Arizona (sub nom. Texas Sterling Construction, L.P.)
Road and Highway Builders, LLC
96 Glen Carran Circle — Suite # 106
Sparks, Nevada   89431
 
Nevada
Road and Highway Builders Inc.
96 Glen Carran Circle — Suite # 106
Sparks, Nevada   89431
Nevada & California

 
Detroit_801261_9
 
151

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Schedule Number 6.3(b)
 
List of all real property owned by each Credit Party
 
Credit Party
Description of Real Estate
Sterling Construction Company, Inc.
None
Oakhurst Management Corporation
None
Texas Sterling Construction Co.
20810 Fernbush Lane, Houston, Harris County, Texas — 6.359 acres
Includes 14,400 sq. ft. office (tilt wall const.) and two maintenance facility
buildings (steel) of 8,000 square feet and 7,500 square feet
 
20810 Fernbush Lane, Houston, Harris County, Texas — 10.24 acres (under
contract)
For expansion to the main facility (closing mid December 2007)
 
Loop 21050 Loop 494, New Caney, Montgomery County, Texas — 4.33 acres
Project yard with temporary buildings.
 
Bauer Road, Cypress, Harris County, Texas — 64.839 acres
Batch plant location and materials yard
 
St. Hedwig Street, San Antonio, Bexar County, Texas — 50.7 acres
Vacant lot
 
5001 West Rock Island Road, Grand Prairie, Dallas County, Texas — 4.466 acres
Vacant lot
 
20505 Essman, Houston, Harris County, Texas — 5.0 acres
Vacant storage lot
Road and Highway Builders, LLC
500 Nevada Blvd., Lovelock, Pershing County, Nevada — 4.56 acres
7,200 square-foot combined office and maintenance shop (steel)
 
Nevada Blvd., Lovelock, Pershing County, Nevada — 39.99 acres
Storage and materials yard with Quonset hut.
Road and Highway Builders Inc.
None

Detroit_801261_9
 
152

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Schedule Number 6.4
 
Exceptions to tax filings
 
NONE
 
Detroit_801261_9
 
153

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Schedule Number 6.7
 
List of any existing violations of law that would have a material adverse effect
 
NONE

Detroit_801261_9
 
154

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Schedule Number 6.9
 
List of any litigation that would have a material adverse effect
 
NONE

Detroit_801261_9
 
155

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Schedule Number 6.10
 
List of third party consents (if any) needed for the loan transaction
 
NONE

Detroit_801261_9
 
156

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Schedule Number 6.13
 
List of Benefit Plans
 
Credit Party
Plan
Sterling Construction Company, Inc.
None
Oakhurst Management Corporation
None
Texas Sterling Construction Co.
Health Insurance — Group & Pension Administrators
 
Company-Paid Basic Life & AD&D — Guardian Life Insurance Company
 
Dental & Voluntary Life Insurance — Guardian Life Insurance Company
 
Vision – Group & Pension Administrators & Guardian Life Insurance Company
 
Short–Term & Long-Term Disability — Guardian Life Insurance Company
 
Employee Assistance Program – Guardian Life Insurance Company
 
Credit Union – Smart Financial
 
401K Plan — Fidelity Management Trust Company
The Company matches employee contributions at a rate of 50% of the first 6% of
employee contributions.
Oakhurst Management Corporation
None
Road and Highway Builders, LLC
None (Employees participated in the benefit plans of RHB LLC's 50% Member,
Fisher Sand & Gravel Co.)
Road and Highway Builders Inc.
None

 
Detroit_801261_9
 
157

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

 

Schedule Number 6.15
 
List of any violations or proceedings involving environmental laws
 
NONE

Detroit_801261_9
 
158

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

 

Schedule Number 6.16
 
List of Subsidiaries of each Credit Party
 
Credit Party
Subsidiaries
Sterling Construction Company, Inc.
2751 Centerville Road — Suite 3131
Wilmington, Delaware 19803
Oakhurst Management Corporation
Texas Sterling Construction Co.
Road and Highway Builders, LLC
Road and Highway Builders Inc.
Oakhurst Management Corporation
20810 Fernbush Lane
Houston Texas 77073
None
Texas Sterling Construction Co.
20810 Fernbush Lane
Houston Texas 77073
None
Road and Highway Builders, LLC
96 Glen Carran Circle — Suite # 106
Sparks, Nevada   89431
 
None
Road and Highway Builders Inc.
96 Glen Carran Circle — Suite # 106
Sparks, Nevada   89431
None

 
Detroit_801261_9
 
159

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

 

Schedule Number 6.19
 
List of all trade names used by each Credit Party in the last five years.
 
Credit Party
Trade Names
Sterling Construction Company, Inc.
Sterling Construction Company
Oakhurst Management Corporation
None
Texas Sterling Construction Co.
Texas Sterling Construction
RDI Foundation Drilling
Road and Highway Builders, LLC
 
Road and Highway Builders
Road and Highway Builders Inc.
None

 
Detroit_801261_9
 
160

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

 

Schedule Number 6.20
 
 
Equity Interests of each Credit Party including —

 
 
(1)
All authorized, and issued and outstanding Equity Interests of each Credit
Party.

 
 
(2)
The par value of such Equity Interests.

 
 
(3)
The holders of such Equity Interests (other than for Sterling).

 
 
(4)
List of any preemptive or other outstanding rights, options, warrants,
conversion rights or similar agreements for the purchase of such Equity
Interests.

 
Authorized Equity
Issued & Outstanding
Par Value
Holder
Outstanding Rights
Sterling Construction Company, Inc.
14,000 Common
1,000,000 Preferred
11,017,890 (1)
None
$0.01 per share
$0.01 per share
Not required
None
See footnote (2)
Oakhurst Management Corporation
1,000 Common
1,000
$1.00 per share
Sterling Construction Company, Inc.
None
Texas Sterling Construction Co.
1,000 Common
100
$0.01 per share
Sterling Construction Company, Inc.
None
Road and Highway Builders, LLC
N/A
N/A
N/A
Sterling Construction Company, Inc.
None
Road and Highway Builders Inc.
1,000
1,000
$10.00
Sterling Construction Company, Inc.
None

 
________________
 
(1)  
At September 30, 2007.

 
(2)  
At September 30, 2007, there were warrants outstanding and currently exercisable
at $1.50 per share to purchase 356,266 shares of Sterling Construction Company,
Inc.'s common stock.  The warrants expire on July 18, 2011.

 
See attached report of options outstanding at September 30, 2007.

 
161

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

 

Sterling Construction Company, Inc.
 
OUTSTANDING AND EXERCISABLE BY PRICE
AS OF 9/30/2007
     
Page:                 1
File:          Osprice
Date:                 10/26/2007
Time:                 5:35:52 PM
Name
ID                  Number
Option
Date
Expiration
Date
Remaining
Life in Years
 
Option
Price
 
Shares
Outstanding
Shares
Exercisable
Abernathy, John D.
008                  000517
5/7/2007
5/7/2008
 
0.60
   
$0.000
1,598
0
Abernathy, John D.
008                  000395
5/19/2005
5/19/2015
 
7.63
   
$6.870
5,000
5,000
Abernathy, John D.
008                  000258
7/23/2001
7/23/2011
 
3.81
   
$1.500
12,000
12,000
Abernathy, John D.
008                  000225
5/1/2001
5/1/2011
 
3.58
   
$0.750
1,166
1,166
Abernathy, John D.
008                  000217
5/1/2000
5/1/2010
 
2.58
   
$1.063
3,000
3,000
Abernathy, John D.
008                  000194
5/1/1999
5/1/2009
 
1.58
   
$0.938
3,000
3,000
Abernathy, John D.
008                  000189
5/1/1998
5/1/2008
 
0.58
   
$0.844
3,000
3,000
       
Avg. Life
3.59
Avg. Out.
 
$2.147
28,764
27,166
 
Account: Abernathy, John D.
       
Avg. Exer.
 
$2.273
   
Allen, James H
181                  000521
8/7/2007
8/7/2017
 
9.85
   
$18.990
13,707
0
       
Avg. Life
9.85
Avg. Out.
 
$18.990
13,707
0
 
Account: Allen, James H
       
Avg. Exer.
 
$0.000
   
Barefield, Stephen
163                  000476
8/8/2006
9/8/2011
 
3.94
   
$25.210
500
100
Barefield, Stephen
163                  000440
8/12/2005
9/12/2010
 
2.95
   
$16.780
900
360
Barefield, Stephen
163                  000332
8/12/2004
8/12/2014
 
6.87
   
$3.100
2,000
1,000
       
Avg. Life
5.40
Avg. Out.
 
$9.973
3,400
1,460
 
Account: Barefield, Stephen
       
Avg. Exer.
 
$7.988
   
Barzun, Roger M.
002                  000477
8/8/2006
9/8/2011
 
3.94
   
$25.210
600
120
Barzun, Roger M.
002                  000436
8/12/2005
9/12/2010
 
2.95
   
$16.780
1,000
400
Barzun, Roger M.
002                  000383
8/12/2004
8/12/2014
 
6.87
   
$3.100
2,000
2,000
Barzun, Roger M.
002                  000187
2/4/1998
2/4/2008
 
0.35
   
$0.875
3,980
3,980
       
Avg. Life
2.69
Avg. Out.
 
$5.487
7,580
6,500
 
Account: Barzun, Roger M.
       
Avg. Exer.
 
$2.988
   
Binford, Matthew
165
000478
8/8/2006
9/8/2011
 
3.94
   
$25.210
500
100
Binford, Matthew
165
000447
8/12/2005
9/12/2010
 
2.95
   
$16.780
600
240
Binford, Matthew
165
000333
8/12/2004
8/12/2014
 
6.87
   
$3.100
1,000
600
       
Avg. Life
5.05
Avg. Out.
 
$12.273
2,100
940
 
Account: Binford, Matthew
       
Avg. Exer.
 
$8.945
   
Callahan, Joseph
170                  000335
8/12/2004
8/12/2014
 
6.87
   
$3.100
500
300
       
Avg. Life
6.87
Avg. Out.
 
$3.100
500
300
 
Account: Callahan, Joseph
       
Avg. Exer.
 
$3.100
   
Castro, Salvador
152                  000336
8/12/2004
8/12/2014
 
6.87
   
$3.100
300
100
Castro, Salvador
152                  000327
8/20/2003
8/20/2013
 
5.89
   
$3.050
320
160

 
162

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

 
 
Sterling Construction Company,
Inc.                                                                               OUTSTANDING
AND EXERCISABLE BY
PRICE                                                                                                              Page:
2
AS OF
9/30/2007                                                                                                               File:          Osprice
Date: 10/26/2007
Time: 5:35:52 PM
Name
ID                  Number
Option
Date
Expiration
Date
Remaining
Life in Years
Option
Price
 
Shares
Outstanding
Shares
Exercisable
       
Avg. Life
6.36
Avg. Out.
$3.074
   
620
260
 
Account: Castro, Salvador
       
Avg. Exer.
$3.069
   
Chapa, Juan D.
144                  000480
8/8/2006
9/8/2011
 
3.94
 
$25.210
400
80
Chapa, Juan D.
144                  000441
8/12/2005
9/12/2010
 
2.95
 
$16.780
700
280
Chapa, Juan D.
144                  000337
8/12/2004
8/12/2014
 
6.87
 
$3.100
2,000
1,200
Chapa, Juan D.
144                  000321
8/20/2003
8/20/2013
 
5.89
 
$3.050
2,000
1,600
Chapa, Juan D.
144                  000266
7/24/2002
7/24/2012
 
4.81
 
$1.725
2,000
2,000
       
Avg. Life
5.46
Avg. Out.
$5.293
7,100
5,160
 
Account: Chapa, Juan D
       
Avg. Exer.
$3.637
   
Clark, Samuel
136
000481
8/8/2006
9/8/2011
 
3.94
 
$25.210
600
120
Clark, Samuel
136
000451
8/12/2005
9/12/2010
 
2.95
 
$16.780
1,200
480
Clark, Samuel
136
000338
8/12/2004
8/12/2014
 
6.87
 
$3.100
2,500
1,500
Clark, Samuel
136
000313
8/20/2003
8/20/2013
 
5.89
 
$3.050
2,000
1,600
Clark, Samuel
136
000267
7/24/2002
7/24/2012
 
4.81
 
$1.725
2,000
2,000
Clark, Samuel
136
000232
7/23/2001
7/23/2011
 
3.81
 
$1.500
2,400
2,400
       
Avg. Life
5.01
Avg. Out.
$5.249
10,700
8,100
 
Account: Clark, Samuel
       
Avg. Exer.
$3.415
   
Coates, Garland P.
141
000339
8/12/2004
8/12/2014
 
6.87
 
$3.100
800
480
Coates, Garland P.
141
000318
8/20/2003
8/20/2013
 
5.89
 
$3.050
800
640
Coates, Garland P.
141
000268
7/24/2002
7/24/2012
 
4.81
 
$1.725
200
200
       
Avg. Life
6.20
Avg. Out.
$2.925
1,800
1,320
 
Account: Coates, Garland P.
       
Avg. Exer.
$2.867
   
Cohlmeyer, Roger
154
000340
8/12/2004
8/12/2014
 
6.87
 
$3.100
800
480
Cohlmeyer, Roger
154
000325
8/20/2003
8/20/2013
 
5.89
 
$3.050
800
640
Cohlmeyer, Roger
154
000270
7/24/2002
7/24/2012
 
4.81
 
$1.725
500
500
       
Avg. Life
6.00
Avg. Out.
$2.754
2,100
1,620
 
Account: Cohlmeyer, Roger
       
Avg. Exer.
$2.656
   
Colombo, Anthony F.
129
000482
8/8/2006
9/8/2011
 
3.94
 
$25.210
600
0
Colombo, Anthony F.
129
000483
8/8/2006
9/8/2011
 
3.94
 
$25.210
400
200
Colombo, Anthony F.
129
000465
7/18/2006
7/18/2011
 
3.80
 
$24.960
3,633
3,633
Colombo, Anthony F.
129
000466
7/18/2006
7/18/2011
 
3.80
 
$24.960
3,867
3,867
Colombo, Anthony F.
129
000416
8/12/2005
9/12/2010
 
2.95
 
$16.780
300
300
Colombo, Anthony F.
129
000438
8/12/2005
9/12/2010
 
2.95
 
$16.780
1,200
300
Colombo, Anthony F.
129
000406
7/18/2005
7/18/2010
 
2.80
 
$9.690
7,380
7,380
Colombo, Anthony F.
129
000407
7/18/2005
7/18/2010
 
2.80
 
$9.690
120
120

 
 
163

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

 

Sterling Construction Company, Inc.
 
OUTSTANDING AND EXERCISABLE BY PRICE
AS OF 9/30/2007
     
Page:                 3
File:          Osprice
Date:                 10/26/2007
Time:                 5:35:52 PM
Name
ID                  Number
Option
Date
Expiration
Date
Remaining
Life in Years
 
Option
Price
 
Shares
Outstanding
Shares
Exercisable
Colombo, Anthony F.
129                  000341
8/12/2004
8/12/2014
 
6.87
   
$3.100
3,500
2,100
Colombo, Anthony F.
129                  000381
8/12/2004
8/12/2009
 
1.87
   
$3.100
7,500
7,500
Colombo, Anthony F.
129                  000305
8/20/2003
8/20/2013
 
5.89
   
$3.050
3,000
2,400
Colombo, Anthony F.
129                  000271
7/24/2002
7/24/2012
 
4.81
   
$1.725
2,800
2,800
Colombo, Anthony F.
129                  000234
7/23/2001
7/23/2011
 
3.81
   
$1.500
2,500
2,500
       
Avg. Life
3.71
Avg. Out.
 
$9.839
36,800
33,100
 
Account: Colombo, Anthony F.
       
Avg. Exer.
 
$9.687
   
Dolan, Timothy
142                  000342
8/12/2004
8/12/2014
 
6.87
   
$3.100
800
480
Dolan, Timothy
142                  000319
8/20/2003
8/20/2013
 
5.89
   
$3.050
800
640
Dolan, Timothy
142                  000272
7/24/2002
7/24/2012
 
4.81
   
$1.725
1,000
1,000
       
Avg. Life
5.78
Avg. Out.
 
$2.556
2,600
2,120
 
Account: Dolan, Timothy
       
Avg. Exer.
 
$2.436
   
Flores, Pete
133                  000484
8/8/2006
9/8/2011
 
3.94
   
$25.210
200
40
Flores, Pete
133                  000417
8/12/2005
9/12/2010
 
2.95
   
$16.780
180
0
Flores, Pete
133                  000343
8/12/2004
8/12/2014
 
6.87
   
$3.100
320
0
Flores, Pete
133                  000311
8/20/2003
8/20/2013
 
5.89
   
$3.050
160
0
       
Avg. Life
5.18
Avg. Out.
 
$11.096
860
40
 
Account: Flores, Pete
       
Avg. Exer.
 
$25.210
   
Frickel, Robert W.
151                  000513
5/7/2007
5/7/2008
 
0.60
   
$0.000
1,598
0
Frickel, Robert W.
151                  000398
5/19/2005
5/19/2015
 
7.63
   
$6.870
5,000
5,000
Frickel, Robert W.
151                  000260
7/23/2001
7/23/2011
 
3.81
   
$1.500
12,000
12,000
       
Avg. Life
4.56
Avg. Out.
 
$2.815
18,598
17,000
 
Account: Frickel, Robert W.
       
Avg. Exer.
 
$3.079
   
Fusilli, Jr., Donald P.
180                  000511
5/7/2007
5/7/2008
 
0.60
   
$0.000
1,598
0
       
Avg. Life
0.60
Avg. Out.
 
$0.000
1,598
0
 
Account: Fusilli, Jr., Donald P.
       
Avg. Exer.
 
$0.000
   
Garnett, Corey
164                  000344
8/12/2004
8/12/2014
 
6.87
   
$3.100
300
100
       
Avg. Life
6.87
Avg. Out.
 
$3.100
300
100
 
Account: Garnett, Corey
       
Avg. Exer.
 
$3.100
   
Garrison, Greg
155                  000485
8/8/2006
9/8/2011
 
3.94
   
$25.210
700
140
Garrison, Greg
155                  000418
8/12/2005
9/12/2010
 
2.95
   
$16.780
1,400
560
Garrison, Greg
155                  000345
8/12/2004
8/12/2014
 
6.87
   
$3.100
3,000
1,800
Garrison, Greg
155                  000307
8/20/2003
8/20/2013
 
5.89
   
$3.050
2,000
1,600

 
 
164

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

 

Sterling Construction Company, Inc.
   
OUTSTANDING AND EXERCISABLE BY PRICE
AS OF 9/30/2007
     
Page:                 4
File:          Osprice
Date:                 10/26/2007
Time:                 5:35:52 PM
     
Option
Expiration
Remaining
 
Option
 
Shares
Shares
Name
ID
Number
Date
Date
Life in Years
 
Price
 
Outstanding
Exercisable
Garrison, Greg
155
000274
7/24/2002
7/24/2012
 
4.81
   
$1.725
1,500
1,500
       
Avg. Life
5.40
Avg. Out.
 
$6.875
8,600
5,600
 
Account: Garrison, Greg
       
Avg. Exer.
 
$4.638
   
Goldsmith, Dusty
143
000486
8/8/2006
9/8/2011
 
3.94
   
$25.210
400
80
Goldsmith, Dusty
143
000419
8/12/2005
9/12/2010
 
2.95
   
$16.780
560
140
Goldsmith, Dusty
143
000347
8/12/2004
8/12/2014
 
6.87
   
$3.100
1,000
0
Goldsmith, Dusty
143
000320
8/20/2003
8/20/2013
 
5.89
   
$3.050
400
0
       
Avg. Life
5.28
Avg. Out.
 
$10.085
2,360
220
 
Account: Goldsmith, Dusty
       
Avg. Exer.
 
$19.845
   
Gonzales, Rafael
145
000348
8/12/2004
8/12/2014
 
6.87
   
$3.100
500
300
Gonzales, Rafael
145
000322
8/20/2003
8/20/2013
 
5.89
   
$3.050
800
640
Gonzales, Rafael
145
000277
7/24/2002
7/24/2012
 
4.81
   
$1.725
500
500
Gonzales, Rafael
145
000239
7/23/2001
7/23/2011
 
3.81
   
$1.500
500
500
       
Avg. Life
5.42
Avg. Out.
 
$2.436
2,300
1,940
 
Account: Gonzales, Rafael
       
Avg. Exer.
 
$2.317
   
Green, Raymond
146
000349
8/12/2004
8/12/2014
 
6.87
   
$3.100
500
300
Green, Raymond
146
000323
8/20/2003
8/20/2013
 
5.89
   
$3.050
800
640
Green, Raymond
146
000278
7/24/2002
7/24/2012
 
4.81
   
$1.725
1,000
1,000
Green, Raymond
146
000240
7/23/2001
7/23/2011
 
3.81
   
$1.500
1,000
1,000
       
Avg. Life
5.08
Avg. Out.
 
$2.186
3,300
2,940
 
Account: Green, Raymond
       
Avg. Exer.
 
$2.077
   
Harper, Brien P.
138
000487
8/8/2006
9/8/2011
 
3.94
   
$25.210
500
100
Harper, Brien P.
138
000420
8/12/2005
9/12/2010
 
2.95
   
$16.780
1,000
400
Harper, Brien P.
138
000350
8/12/2004
8/12/2014
 
6.87
   
$3.100
1,500
500
Harper, Brien P.
138
000316
8/20/2003
8/20/2013
 
5.89
   
$3.050
800
400
Harper, Brien P.
138
000279
7/24/2002
7/24/2012
 
4.81
   
$1.725
400
400
       
Avg. Life
5.20
Avg. Out.
 
$8.849
4,200
1,800
 
Account: Harper, Brien P.
       
Avg. Exer.
 
$7.052
   
Harper, Jr., Joseph P.
130
000488
8/8/2006
9/8/2011
 
3.94
   
$25.210
600
0
Harper, Jr., Joseph P.
130
000489
8/8/2006
9/8/2011
 
3.94
   
$25.210
400
200
Harper, Jr., Joseph P.
130
000467
7/18/2006
7/18/2011
 
3.80
   
$24.960
3,633
3,633
Harper, Jr., Joseph P.
130
000468
7/18/2006
7/18/2011
 
3.80
   
$24.960
3,867
3,867
Harper, Jr., Joseph P.
130
000422
8/12/2005
9/12/2010
 
2.95
   
$16.780
300
300
Harper, Jr., Joseph P.
130
000421
8/12/2005
9/12/2010
 
2.95
   
$16.780
1,200
300
Harper, Jr., Joseph P.
130
000408
7/18/2005
7/18/2010
 
2.80
   
$9.690
7,390
7,390

 
 
165

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

 

Sterling Construction Company, Inc.
   
OUTSTANDING AND EXERCISABLE BY PRICE
AS OF 9/30/2007
     
Page:                 5
File:          Osprice
Date:                 10/26/2007
Time:                 5:35:52 PM
Name
ID
Number
Option
Date
Expiration
Date
Remaining
Life in Years
 
Option
Price
 
Shares
Outstanding
Shares
Exercisable
Harper, Jr., Joseph P.
130
000409
7/18/2005
7/18/2010
 
2.80
   
$9.690
110
110
Harper, Jr., Joseph P.
130
000351
8/12/2004
8/12/2014
 
6.87
   
$3.100
3,500
2,100
Harper, Jr., Joseph P.
130
000380
8/12/2004
8/12/2009
 
1.87
   
$3.100
7,500
7,500
Harper, Jr., Joseph P.
130
000306
8/20/2003
8/20/2013
 
5.89
   
$3.050
3,000
2,400
Harper, Jr., Joseph P.
130
000280
7/24/2002
7/24/2012
 
4.81
   
$1.725
2,500
2,500
Harper, Jr., Joseph P.
130
000244
7/23/2001
7/23/2011
 
3.81
   
$1.500
2,000
2,000
       
Avg. Life
3.70
Avg. Out.
 
$10.023
36,000
32,300
 
Account: Harper, Jr., Joseph P.
       
Avg. Exer.
 
$9.888
   
Harper, Sr., Joseph P.
125
000490
8/8/2006
9/8/2011
 
3.94
   
$25.210
600
0
Harper, Sr., Joseph P.
125
000491
8/8/2006
9/8/2011
 
3.94
   
$25.210
400
200
Harper, Sr., Joseph P.
125
000462
7/18/2006
7/18/2011
 
3.80
   
$24.960
3,804
3,804
Harper, Sr., Joseph P.
125
000463
7/18/2006
7/18/2011
 
3.80
   
$24.960
6,196
6,196
Harper, Sr., Joseph P.
125
000423
8/12/2005
9/12/2010
 
2.95
   
$16.780
1,200
300
Harper, Sr., Joseph P.
125
000424
8/12/2005
9/12/2010
 
2.95
   
$16.780
300
300
Harper, Sr., Joseph P.
125
000402
7/18/2005
7/18/2010
 
2.80
   
$9.690
6,747
6,747
Harper, Sr., Joseph P.
125
000403
7/18/2005
7/18/2010
 
2.80
   
$9.690
3,253
3,253
Harper, Sr., Joseph P.
125
000352
8/12/2004
8/12/2014
 
6.87
   
$3.100
3,500
3,500
Harper, Sr., Joseph P.
125
000379
8/12/2004
8/12/2009
 
1.87
   
$3.100
10,000
10,000
Harper, Sr., Joseph P.
125
000298
8/20/2003
8/20/2013
 
5.89
   
$3.050
3,500
3,500
Harper, Sr., Joseph P.
125
000281
7/24/2002
7/24/2012
 
4.81
   
$1.725
3,500
3,500
Harper, Sr., Joseph P.
125
000243
7/23/2001
7/23/2011
 
3.81
   
$1.500
3,700
3,700
       
Avg. Life
3.61
Avg. Out.
 
$9.871
46,700
45,000
 
Account: Harper, Sr., Joseph P.
       
Avg. Exer.
 
$9.461
   
Hemsley, Maarten D.
001
000522
7/18/2007
7/18/2012
 
4.80
   
$21.600
2,800
2,800
Hemsley, Maarten D.
001
000473
7/18/2006
7/18/2011
 
3.80
   
$24.960
2,800
2,800
Hemsley, Maarten D.
001
000452
7/18/2005
7/18/2010
 
2.80
   
$9.690
2,800
2,800
Hemsley, Maarten D.
001
000384
8/12/2004
8/12/2014
 
6.87
   
$3.100
5,000
5,000
Hemsley, Maarten D.
001
000176
1/13/1998
10/27/2013
 
6.07
   
$0.875
75,000
75,000
Hemsley, Maarten D.
001
000005
4/29/1994
2/11/2010
 
2.37
   
$2.750
100,000
100,000
       
Avg. Life
4.03
Avg. Out.
 
$2.726
188,400
188,400
 
Account: Hemsley, Maarten D.
       
Avg. Exer.
 
$2.726
   
Jones, William
156
000492
8/8/2006
9/8/2011
 
3.94
   
$25.210
500
100
Jones, William
156
000425
8/12/2005
9/12/2010
 
2.95
   
$16.780
900
360
Jones, William
156
000353
8/12/2004
8/12/2014
 
6.87
   
$3.100
2,000
1,200
Jones, William
156
000308
8/20/2003
8/20/2013
 
5.89
   
$3.050
1,800
1,440
Jones, William
156
000282
7/24/2002
7/24/2012
 
4.81
   
$1.725
1,500
1,500

 
166

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

 
 
Sterling Construction Company,
Inc.                                                                               OUTSTANDING
AND EXERCISABLE BY
PRICE                                                                                                              Page:
6
AS OF
9/30/2007                                                                                                               File:          Osprice
Date: 10/26/2007
Time: 5:35:52 PM
Name
ID                  Number
Option
Date
Expiration
Date
Remaining
Life in Years
Option
Price
 
Shares
Outstanding
Shares
Exercisable
       
Avg. Life
5.40
Avg. Out.
$6.266
6,700
4,600
 
Account: Jones, William
       
Avg. Exer.
$4.187
   
Kelly, William
172                  000493
8/8/2006
9/8/2011
 
3.94
 
$25.210
300
60
Kelly, William
172                  000426
8/12/2005
9/12/2010
 
2.95
 
$16.780
600
240
Kelly, William
172                  000354
8/12/2004
8/12/2014
 
6.87
 
$3.100
1,200
400
       
Avg. Life
5.33
Avg. Out.
$10.167
2,100
700
 
Account: Kelly, William
       
Avg. Exer.
$9.685
   
Leal, Richard Troy
147
000355
8/12/2004
8/12/2014
 
6.87
 
$3.100
500
300
Leal, Richard Troy
147
000324
8/20/2003
8/20/2013
 
5.89
 
$3.050
800
640
Leal, Richard Troy
147
000284
7/24/2002
7/24/2012
 
4.81
 
$1.725
1,000
1,000
       
Avg. Life
5.63
Avg. Out.
$2.485
2,300
1,940
 
Account: Leal, Richard Troy
       
Avg. Exer.
$2.375
   
Littlefield, Joel
161
000494
8/8/2006
9/8/2011
 
3.94
 
$25.210
1,000
200
Littlefield, Joel
161
000427
8/12/2005
9/12/2010
 
2.95
 
$16.780
1,400
560
Littlefield, Joel
161
000356
8/12/2004
8/12/2014
 
6.87
 
$3.100
3,000
1,800
Littlefield, Joel
161
000330
8/20/2003
8/20/2013
 
5.89
 
$3.050
1,500
1,200
       
Avg. Life
5.43
Avg. Out.
$9.069
6,900
3,760
 
Account: Littlefield, Joel
       
Avg. Exer.
$6.298
   
Lively, Richard
134
000495
8/8/2006
9/8/2011
 
3.94
 
$25.210
600
120
Lively, Richard
134
000428
8/12/2005
9/12/2010
 
2.95
 
$16.780
720
180
Lively, Richard
134
000357
8/12/2004
8/12/2014
 
6.87
 
$3.100
1,500
500
Lively, Richard
134
000312
8/20/2003
8/20/2013
 
5.89
 
$3.050
800
400
Lively, Richard
134
000285
7/24/2002
7/24/2012
 
4.81
 
$1.725
400
400
       
Avg. Life
5.33
Avg. Out.
$8.703
4,020
1,600
 
Account: Lively, Richard
       
Avg. Exer.
$5.941
   
Machada, Santos
169                  000358
8/12/2004
8/12/2014
 
6.87
 
$3.100
500
300
       
Avg. Life
6.87
Avg. Out.
$3.100
500
300
 
Account: Machada, Santos
       
Avg. Exer.
$3.100
   
Manning, Brian R.
128                  000496
8/8/2006
9/8/2011
 
3.94
 
$25.210
600
0
Manning, Brian R.
128                  000497
8/8/2006
9/8/2011
 
3.94
 
$25.210
400
200
Manning, Brian R.
128                  000469
7/18/2006
7/18/2011
 
3.80
 
$24.960
3,633
3,633
Manning, Brian R.
128                  000470
7/18/2006
7/18/2011
 
3.80
 
$24.960
3,867
3,867
Manning, Brian R.
128                  000432
8/12/2005
9/12/2010
 
2.95
 
$16.780
1,200
300
Manning, Brian R.
128                  000433
8/12/2005
9/12/2010
 
2.95
 
$16.780
300
300

 
 
167

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

 

Sterling Construction Company, Inc.
 
OUTSTANDING AND EXERCISABLE BY PRICE
AS OF 9/30/2007
     
Page:                 7
File:          Osprice
Date:                 10/26/2007
Time:                 5:35:52 PM
Name
ID                  Number
Option
Date
Expiration
Date
Remaining
Life in Years
 
Option
Price
 
Shares
Outstanding
Shares
Exercisable
Manning, Brian R.
128                  000411
7/18/2005
7/18/2010
 
2.80
   
$9.690
110
110
Manning, Brian R.
128                  000410
7/18/2005
7/18/2010
 
2.80
   
$9.690
7,390
7,390
Manning, Brian R.
128                  000361
8/12/2004
8/12/2014
 
6.87
   
$3.100
3,500
2,100
Manning, Brian R.
128                  000377
8/12/2004
8/12/2009
 
1.87
   
$3.100
7,500
7,500
Manning, Brian R.
128                  000302
8/20/2003
8/20/2013
 
5.89
   
$3.050
3,000
2,400
Manning, Brian R.
128                  000288
7/24/2002
7/24/2012
 
4.81
   
$1.725
2,500
2,500
Manning, Brian R.
128                  000249
7/23/2001
7/23/2011
 
3.81
   
$1.500
2,000
2,000
       
Avg. Life
3.70
Avg. Out.
 
$10.023
36,000
32,300
 
Account: Manning, Brian R.
       
Avg. Exer.
 
$9.888
   
Manning, James D.
123                  000363
8/12/2004
8/12/2014
 
6.87
   
$3.100
833
833
       
Avg. Life
6.87
Avg. Out.
 
$3.100
833
833
 
Account: Manning, James D.
       
Avg. Exer.
 
$3.100
   
Manning, Jeffrey
127                  000498
8/8/2006
9/8/2011
 
3.94
   
$25.210
600
0
Manning, Jeffrey
127                  000499
8/8/2006
9/8/2011
 
3.94
   
$25.210
400
200
Manning, Jeffrey
127                  000471
7/18/2006
7/18/2011
 
3.80
   
$24.960
3,647
3,647
Manning, Jeffrey
127                  000472
7/18/2006
7/18/2011
 
3.80
   
$24.960
3,853
3,853
Manning, Jeffrey
127                  000429
8/12/2005
9/12/2010
 
2.95
   
$16.780
1,200
300
Manning, Jeffrey
127                  000430
8/12/2005
9/12/2010
 
2.95
   
$16.780
300
300
Manning, Jeffrey
127                  000412
7/18/2005
7/18/2010
 
2.80
   
$9.690
7,437
7,437
Manning, Jeffrey
127                  000413
7/18/2005
7/18/2010
 
2.80
   
$9.690
63
63
Manning, Jeffrey
127                  000359
8/12/2004
8/12/2014
 
6.87
   
$3.100
3,500
2,100
Manning, Jeffrey
127                  000378
8/12/2004
8/12/2009
 
1.87
   
$3.100
7,500
7,500
Manning, Jeffrey
127                  000301
8/20/2003
8/20/2013
 
5.89
   
$3.050
2,500
2,000
Manning, Jeffrey
127                  000287
7/24/2002
7/24/2012
 
4.81
   
$1.725
2,200
2,200
Manning, Jeffrey
127                  000250
7/23/2001
7/23/2011
 
3.81
   
$1.500
2,000
2,000
       
Avg. Life
3.66
Avg. Out.
 
$10.192
35,200
31,600
 
Account: Manning, Jeffrey
       
Avg. Exer.
 
$10.052
   
Manning, Kevin
131                  000502
8/8/2006
9/8/2011
 
3.94
   
$25.210
300
60
Manning, Kevin
131                  000431
8/12/2005
9/12/2010
 
2.95
   
$16.780
500
200
Manning, Kevin
131                  000360
8/12/2004
8/12/2014
 
6.87
   
$3.100
1,000
600
Manning, Kevin
131                  000303
8/20/2003
8/20/2013
 
5.89
   
$3.050
1,000
800
Manning, Kevin
131                  000289
7/24/2002
7/24/2012
 
4.81
   
$1.725
1,000
1,000
Manning, Kevin
131                  000251
7/23/2001
7/23/2011
 
3.81
   
$1.500
1,000
1,000
       
Avg. Life
5.01
Avg. Out.
 
$5.277
4,800
3,660
 
Account: Manning, Kevin
       
Avg. Exer.
 
$3.386
   
Manning, Patrick T.
124
000500
8/8/2006
9/8/2011
 
3.94
   
$25.210
600
0
Manning, Patrick T.
124
000501
8/8/2006
9/8/2011
 
3.94
   
$25.210
400
200

 
 
168

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

 

Sterling Construction Company, Inc.
 
OUTSTANDING AND EXERCISABLE BY PRICE
AS OF 9/30/2007
     
Page:                 8
File:          Osprice
Date:                 10/26/2007
Time:                 5:35:52 PM
Name
ID                  Number
Option
Date
Expiration
Date
Remaining
Life in Years
 
Option
Price
 
Shares
Outstanding
Shares
Exercisable
Manning, Patrick T.
124                  000460
7/18/2006
7/18/2011
 
3.80
   
$24.960
3,619
3,619
Manning, Patrick T.
124                  000461
7/18/2006
7/18/2011
 
3.80
   
$24.960
6,381
6,381
Manning, Patrick T.
124                  000434
8/12/2005
9/12/2010
 
2.95
   
$16.780
1,200
300
Manning, Patrick T.
124                  000435
8/12/2005
9/12/2010
 
2.95
   
$16.780
300
300
Manning, Patrick T.
124                  000400
7/18/2005
7/18/2010
 
2.80
   
$9.690
6,519
6,519
Manning, Patrick T.
124                  000401
7/18/2005
7/18/2010
 
2.80
   
$9.690
3,481
3,481
Manning, Patrick T.
124                  000362
8/12/2004
8/12/2014
 
6.87
   
$3.100
3,500
2,100
Manning, Patrick T.
124                  000376
8/12/2004
8/12/2009
 
1.87
   
$3.100
10,000
10,000
Manning, Patrick T.
124                  000300
8/20/2003
8/20/2013
 
5.89
   
$3.050
3,500
2,800
Manning, Patrick T.
124                  000286
7/24/2002
7/24/2012
 
4.81
   
$1.725
3,500
3,500
Manning, Patrick T.
124                  000252
7/23/2001
7/23/2011
 
3.81
   
$1.500
3,700
3,700
       
Avg. Life
3.61
Avg. Out.
 
$9.871
46,700
42,900
 
Account: Manning, Patrick T.
       
Avg. Exer.
 
$9.773
   
McCall, Jeff
166                  000364
8/12/2004
8/12/2014
 
6.87
   
$3.100
480
160
       
Avg. Life
6.87
Avg. Out.
 
$3.100
480
160
 
Account: McCall, Jeff
       
Avg. Exer.
 
$3.100
   
Mills, Christopher H. B.
150                  000514
5/7/2007
5/7/2008
 
0.60
   
$0.000
1,598
0
Mills, Christopher H. B.
150                  000397
5/19/2005
5/19/2015
 
7.63
   
$6.870
5,000
5,000
       
Avg. Life
5.93
Avg. Out.
 
$5.206
6,598
5,000
 
Account: Mills, Christopher H. B.
       
Avg. Exer.
 
$6.870
   
Mitchell, William
178                  000503
8/8/2006
9/8/2011
 
3.94
   
$25.210
1,000
200
Mitchell, William
178                  000453
8/12/2005
9/12/2010
 
2.95
   
$16.780
1,000
400
       
Avg. Life
3.45
Avg. Out.
 
$20.995
2,000
600
 
Account: Mitchell, William
       
Avg. Exer.
 
$19.590
   
Scott, Milton L.
179                  000515
5/7/2007
5/7/2008
 
0.60
   
$0.000
1,598
0
       
Avg. Life
0.60
Avg. Out.
 
$0.000
1,598
0
 
Account: Scott, Milton L.
       
Avg. Exer.
 
$0.000
   
Smith, Christine A.
137                  000504
8/8/2006
9/8/2011
 
3.94
   
$25.210
800
160
Smith, Christine A.
137                  000450
8/12/2005
9/12/2010
 
2.95
   
$16.780
1,200
480
Smith, Christine A.
137                  000365
8/12/2004
8/12/2014
 
6.87
   
$3.100
2,500
1,500
Smith, Christine A.
137                  000314
8/20/2003
8/20/2013
 
5.89
   
$3.050
2,000
1,600
Smith, Christine A.
137                  000292
7/24/2002
7/24/2012
 
4.81
   
$1.725
2,000
2,000
       
Avg. Life
5.32
Avg. Out.
 
$6.777
8,500
5,740
 
Account: Smith, Christine A.
       
Avg. Exer.
 
$4.367
   

 
 
169

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

 

Sterling Construction Company, Inc.
   
OUTSTANDING AND EXERCISABLE BY PRICE
AS OF 9/30/2007
     
Page:                 9
File:          Osprice
Date:                 10/26/2007
Time:                 5:35:52 PM
     
Option
Expiration
Remaining
 
Option
 
Shares
Shares
Name
ID
Number
Date
Date
Life in Years
 
Price
 
Outstanding
Exercisable
Steadman, David R. A.
177
000516
5/7/2007
5/7/2008
 
0.60
   
$0.000
1,598
0
Steadman, David R. A.
177
000399
5/19/2005
5/19/2015
 
7.63
   
$6.870
5,000
5,000
       
Avg. Life
5.93
Avg. Out.
 
$5.206
6,598
5,000
 
Account: Steadman, David R. A.
       
Avg. Exer.
 
$6.870
   
Stempinski, Karen A.
004
000510
8/8/2006
9/8/2011
 
3.94
   
$25.210
800
160
Stempinski, Karen A.
004
000437
8/12/2005
9/12/2010
 
2.95
   
$16.780
720
0
       
Avg. Life
3.47
Avg. Out.
 
$21.217
1,520
160
 
Account: Stempinski, Karen A.
       
Avg. Exer.
 
$25.210
   
Stevens, Robert L.
139
000505
8/8/2006
9/8/2011
 
3.94
   
$25.210
1,000
200
Stevens, Robert L.
139
000443
8/12/2005
9/12/2010
 
2.95
   
$16.780
1,400
560
Stevens, Robert L.
139
000366
8/12/2004
8/12/2014
 
6.87
   
$3.100
1,800
600
Stevens, Robert L.
139
000315
8/20/2003
8/20/2013
 
5.89
   
$3.050
800
400
Stevens, Robert L.
139
000293
7/24/2002
7/24/2012
 
4.81
   
$1.725
400
400
       
Avg. Life
5.01
Avg. Out.
 
$10.632
5,400
2,160
 
Account: Stevens, Robert L.
       
Avg. Exer.
 
$8.430
   
Surface, Jeffrey
148
000506
8/8/2006
9/8/2011
 
3.94
   
$25.210
600
120
Surface, Jeffrey
148
000442
8/12/2005
9/12/2010
 
2.95
   
$16.780
900
360
Surface, Jeffrey
148
000367
8/12/2004
8/12/2014
 
6.87
   
$3.100
1,500
500
Surface, Jeffrey
148
000326
8/20/2003
8/20/2013
 
5.89
   
$3.050
800
400
Surface, Jeffrey
148
000294
7/24/2002
7/24/2012
 
4.81
   
$1.725
400
400
       
Avg. Life
5.23
Avg. Out.
 
$9.050
4,200
1,780
 
Account: Surface, Jeffrey
       
Avg. Exer.
 
$7.037
   
Wall, Carl
159
000507
8/8/2006
9/8/2011
 
3.94
   
$25.210
200
40
Wall, Carl
159
000448
8/12/2005
9/12/2010
 
2.95
   
$16.780
300
120
Wall, Carl
159
000369
8/12/2004
8/12/2014
 
6.87
   
$3.100
2,000
1,200
Wall, Carl
159
000310
8/20/2003
8/20/2013
 
5.89
   
$3.050
400
0
       
Avg. Life
6.12
Avg. Out.
 
$6.033
2,900
1,360
 
Account: Wall, Carl
       
Avg. Exer.
 
$4.957
   
Warren, Clint
168                  000370
8/12/2004
8/12/2014
 
6.87
   
$3.100
500
300
       
Avg. Life
6.87
Avg. Out.
 
$3.100
500
300
 
Account: Warren, Clint
       
Avg. Exer.
 
$3.100
   
Weir, James
167                  000371
8/12/2004
8/12/2014
 
6.87
   
$3.100
500
300

 
 
170

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Sterling Construction Company, Inc.

OUTSTANDING AND EXERCISABLE BY PRICE AS OF 9/30/2007

Page: 10
File:          Osprice Date: 10/26/2007 Time: 5:35:52 PM
Name
ID                  Number
Option
Date
Expiration
Date
Remaining
Life in Years
Option
Price
 
Shares
Outstanding
Shares
Exercisable
       
Avg. Life
6.87
Avg. Out.
$3.100
500
300
 
Account: Weir, James
       
Avg. Exer.
$3.100
   
Williamson, Terry D.
126                  000509
8/8/2006
9/8/2011
 
3.94
 
$25.210
400
200
Williamson, Terry D.
126                  000508
8/8/2006
9/8/2011
 
3.94
 
$25.210
600
0
Williamson, Terry D.
126                  000474
7/18/2006
7/18/2011
 
3.80
 
$24.960
3,619
3,619
Williamson, Terry D.
126                  000475
7/18/2006
7/18/2011
 
3.80
 
$24.960
6,381
6,381
Williamson, Terry D.
126                  000444
8/12/2005
9/12/2010
 
2.95
 
$16.780
1,200
300
Williamson, Terry D.
126                  000445
8/12/2005
9/12/2010
 
2.95
 
$16.780
300
300
Williamson, Terry D.
126                  000404
7/18/2005
7/18/2010
 
2.80
 
$9.690
6,519
6,519
Williamson, Terry D.
126                  000405
7/18/2005
7/18/2010
 
2.80
 
$9.690
3,481
3,481
Williamson, Terry D.
126                  000372
8/12/2004
8/12/2014
 
6.87
 
$3.100
3,500
2,100
Williamson, Terry D.
126                  000375
8/12/2004
8/12/2009
 
1.87
 
$3.100
10,000
10,000
Williamson, Terry D.
126                  000304
8/20/2003
8/20/2013
 
5.89
 
$3.050
3,500
2,800
Williamson, Terry D.
126                  000296
7/24/2002
7/24/2012
 
4.81
 
$1.725
3,500
3,500
Williamson, Terry D.
126                  000256
7/23/2001
7/23/2011
 
3.81
 
$1.500
3,500
3,500
       
Avg. Life
3.61
Avg. Out.
$9.907
46,500
42,700
 
Account: Williamson, Terry D.
       
Avg. Exer.
$9.811
   
Withrow, Forest
171                  000373
8/12/2004
8/12/2014
 
6.87
 
$3.100
500
300
       
Avg. Life
6.87
Avg. Out.
$3.100
500
300
 
Account: Withrow, Forest
       
Avg. Exer.
$3.100
   
Wood, William A.
149                  000374
8/12/2004
8/12/2014
 
6.87
 
$3.100
640
320
Wood, William A.
149                  000328
8/20/2003
8/20/2013
 
5.89
 
$3.050
480
320
Wood, William A.
149                  000297
7/24/2002
7/24/2012
 
4.81
 
$1.725
400
400
Wood, William A.
149                  000257
7/23/2001
7/23/2011
 
3.81
 
$1.500
100
100
       
Avg. Life
5.88
Avg. Out.
$2.647
1,620
1,140
 
Account: Wood, William A.
       
Avg. Exer.
$2.463
     
TOTALS
   
Avg. Life
4.21
Avg. Out.
$6.891
666,454
574,279
           
Avg. Exer.
$6.195
   

Detroit_801261_9
 
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--------------------------------------------------------------------------------

 

Schedule Number 6.23
 
List of all collective bargaining agreements & grievances
 
Agreement
Parties (1)
Master Agreement for Northern Nevada
2003—2008
Nevada Chapter, Associated General Contractors of America, Inc.
Operating Engineers Local Union No. 3
Master Agreement
July 1, 2003 through June 30, 2007
Southern California Contractors Association, Inc.
The International Union of Operating Engineers Local 12
Master Agreement
2004 — 2010
Nevada Chapter, Associated General Contractors of America, Inc.
Laborers' International Union of North America – A.F.L. – C.I.O. Local #169

 
___________________
 
(1)
These collective bargaining agreements relate to Road and Highway Builders,
LLC.  No other Credit Party is a party to a collective bargaining agreement.

 
 
* * * * *

 

 
Strikes, grievances etc.:
The Nevada Department of Transportation has withheld approximately $240,000 of
amounts otherwise due RHB LLC claiming that RHB LLC underpaid certain union
employees by paying them at a lower job classification rate than the employees
were entitled to.  RHB LLC is challenging decision.

 
 
____________________

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

 

Schedule Number 8.1
 
 
Existing debt

 
 
None other than is listed in Schedules 1.4 and 1.5

 
Detroit_801261_9
 
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--------------------------------------------------------------------------------

 

Schedule Number 8.1(i)
 
 
Liberty Mutual Insurance Company bonds remaining outstanding post closing

 
Owner
Job Number
Amount
Percent Complete
Nevada DOT
#3206
$9,500,000
100%
Nevada DOT
#3267
$16,540,000
98%
Nevada DOT
#3271
$6,056,000
100%
Elko Airport
N/A
$6,062,000
100%
Nevada DOT
#3296
$7,925,000
98%
 Nevada DOT
#3303
$6,472,000
100%
Nevada DOT
#3312
$23,500,000
98%
Nevada DOT
#3323
$31,500,000
60%
Nevada State Licensing Board
 N/A
$50,000
N/A

 
Detroit_801261_9
 
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--------------------------------------------------------------------------------

 

Schedule Number 8.2
 
 
Existing liens

 
UCC Lien Search Summary

1.
Sterling Construction Company, Inc.
2.
Oakhurst Management Corporation
3.
Road and Highway Builders
4.
Steel City Products
5.
Sterling General, Inc.
6.
Sterling Houston Holdings, Inc.
7.
Texas Sterling Construction Co.
8.
Texas Sterling Construction, L.P.

1.           Sterling Construction Company, Inc.

Jurisdiction:  Delaware, Secretary of State
Search results certified through:  09/24/2007
Federal tax liens:  Clear.
UCC liens:
Secured Party
Filing Information
Collateral
Comerica Bank-Texas
 
 
 
 
 
 
 
Filed:  07/27/2001
Number:  10737614
All of the debtor’s rights, titles, and interests in and to the equipment,
inventory, accounts, general intangibles and any and all other personal property
of any kind or character described in and covered by Security Agreement between
the Debtor and Secured Party, a copy of which is attached hereto as Exhibit “A”
and made a part hereof for all purposes , and the proceeds and products of such
personal property.
 
amendment filed 10/09/2001 to restate collateral;
 
Security Agreement attached as Exhibit “A” hereby replaces the Exhibit “A”
attached to original Financing Statement filed under File Number 1073761 4 –
0000000.
 
 
amendment filed 03/12/2002 to change debtor name from “Oakhurst Company, Inc.”
to “Sterling Construction Company, Inc;”
 
   
amendment filed 09/24/2002 to add collateral;
 
 
All of debtor’s rights, titles, and interests in and to the capital stock of
Sterling Construction Company, a Delaware corporation (now known as Sterling
Houston Holdings, Inc., a Delaware corporation) as described in that certain
Security Agreement (Third Party Pledge) attached hereto as Exhibit “A,” as
supplemented by that certain Supplemental Security Agreement (Third Party
Pledge) attached hereto as Exhibit “B” (the “Collateral”). Proceeds and products
of Collateral are also covered.
 
 
amendment filed 10/30/2002 to add collateral;
 
 
All of debtor’s rights, titles, and interests in and to the capital stock of
Sterling Houston Holdings, Inc., a Delaware corporation (formerly known as
Sterling Construction Company, a Delaware corporation) as described in that
certain Security Agreement (Third Party Pledge) attached hereto as Exhibit “A,”
as supplemented by that certain Supplemental Security Agreement (Third Party
Pledge) attached hereto as Exhibit “B” (the “Collateral”). Proceeds and products
of Collateral are also covered.
 
 
amendment filed 02/22/2005 to add collateral;
 
 
All of debtor’s rights, titles, and interests in and to the capital stock of
Sterling Construction Company, a Delaware corporation (now known as Sterling
Houston Holdings, Inc., a Delaware corporation) as described in that certain
Security Agreement (Third Party Pledge) dated as of July 18, 2001, attached
hereto as Exhibit “A,” as supplemented by that certain Supplemental Security
Agreement (Third Party Pledge), dated as of September 23, 2002, attached hereto
as Exhibit “B,” and as further supplemented by that certain Supplemental
Security Agreement (Third Party Pledge), dated as of December 23, 2004, attached
hereto as Exhibit “C” (the “Collateral”). Proceeds and products of Collateral
are also covered.
 
 
amendment filed 05/23/2006 to add collateral;
 
 
All of the Debtor’s right, title and interest in and to all equipment, fixtures,
software, goods, instruments (including, without limitation, promissory notes),
documents (including, without limitation, negotiable documents), policies and
certificates of insurance, deposit accounts, money and investment property,
motor vehicles, mobile goods and rolling stock together with all of Debtor’s
right, title and interest in and to the capital stock of (i) Sterling Houston
Holdings, Inc., a Delaware corporation, and (ii) Sterling General, Inc., a
Delaware corporation, and all proceeds, interest, profits and other payments or
rights to payment related thereto and all proceeds and products of the
foregoing.
 
 
continuation filed 07/07/2006.
 
 

 
Detroit_801261_9
 
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--------------------------------------------------------------------------------

 

2.           Oakhurst Management Corporation

Jurisdiction:  Texas, Secretary of State
Search results certified through:  10/17/2007
Federal tax liens:  Clear.
UCC liens:  Clear.

3.           Road and Highway Builders

Jurisdiction:  Nevada, Secretary of State
Search results certified through:  10/18/2007
Tax liens:  Clear.
UCC liens:
Debtor
Secured Party
Filing Information
Collateral
Road and Highway Builders, LLC
Volvo Commercial Finance LLC The Americas
 
Filed:  01/03/2000
Number:  0000157
 
continuation filed 12/06/2004;
 
amendment filed 12/06/2004 to change debtor name from “Road & Highway Builders”
to “Road and Highway Builders.”
 
Specific equipment, as more particularly described in the financing statement.
Road and Highway Builders LLC
Caterpillar Financial Services Corporation
Filed:  07/22/2002
Number:  2002019248-1
 
Termination filed 07/31/2002.
 
Specific equipment.
Terminated.
Road and Highway Builders LLC
Arnold Machinery Company
Filed:  08/07/2002
Number:  2002021078-4
 
Termination filed 04/06/2004.
 
Specific equipment.
Terminated.
Road and Highway Builders, LLC
Caterpillar Financial Services Corporation
Filed:  09/12/2002
Number:  2002024217-3
 
Termination filed 09/17/2002.
 
Specific equipment.
Terminated.
Road and Highway Builders, LLC
Caterpillar Financial Services
Filed:  05/30/2003
Number:  2003014768-0
 
Termination filed 06/22/2004.
 
Specific equipment.
Terminated.
Road and Highway Builders, LLC
Caterpillar Financial Services Corporation
Filed:  06/02/2003
Number:  2003014961-0
Specific equipment, as more particularly described in the financing statement.
Road and Highway Builders, LLC
Caterpillar Financial Services
Filed:  03/25/2004
Number:  2004009699-8
 
Termination filed 06/07/2006.
 
Specific equipment.
Terminated.
Road and Highway Builders, LLC
 
Herc Exchange, LLC
Filed:  05/24/2004
Number:  2004016336-9
Specific equipment, as more particularly described in the financing statement.
 
Road and Highway Builders, LLC
 
CitiCapital Commercial Corporation
Filed:  06/17/2004
Number:  2004019063-3
Specific equipment, as more particularly described in the financing statement.
 
Road and Highway Builders, LLC
 
Caterpillar Financial Services
Filed:  09/13/2004
Number:  2004028029-2
 
Termination filed 08/31/2006.
 
Specific equipment.
Terminated.
Road and Highway Builders, LLC
 
Herc Exchange, LLC
Filed:  11/16/2004
Number:  2004035055-6
Specific equipment, as more particularly described in the financing statement.
Road and Highway Builders Inc.
 
Caterpillar Financial Services Corporation
Filed:  12/10/2004
Number:  2004037392-2
 
Termination filed 11/09/2006.
 
Specific equipment.
Terminated.
Road and Highway Builders, LLC
 
Herc Exchange, LLC
Filed:  06/21/2005
Number:  2005019052-2
Specific equipment, as more particularly described in the financing statement.
Road and Highway Builders, LLC
 
General Electric Capital Corporation
Filed:  06/28/2005
Number:  2005020003-2
 
amendment filed 01/26/2007 to restate collateral description;
 
amendment filed 01/30/2007 to change debtor address.
 
Specific equipment, as more particularly described in the financing statement.
Road and Highway Builders, LLC
 
Caterpillar Financial Services Corporation
Filed:  12/21/2005
Number:  2005040137-9
Specific equipment, as more particularly described in the financing statement.
Road and Highway Builders, LLC
 
Herc Exchange, LLC
Filed:  03/06/2006
Number:  2006007082-3
Specific equipment, as more particularly described in the financing statement.
Road and Highway Builders, LLC
 
The CIT Group / Equipment Financing, Inc.
Filed:  12/29/2006
Number:  2006042626-0
Specific equipment, as more particularly described in the financing statement.

 
Detroit_801261_9
 
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--------------------------------------------------------------------------------

 
 
4.           Steel City Products

Jurisdiction:  Delaware, Secretary of State
Search results certified through:  09/19/2007
Federal tax liens:  Clear.
UCC liens:
Debtor
Secured Party
Filing Information
Collateral
Steel City Products Inc.
Marlin Leasing Corp.
Filed:  01/06/2003
Number:  3020467 0
 
Specific equipment, as more particularly described in the financing statement.
Steel City Products, Inc
Raymond Leasing Corporation
Filed:  02/11/2005
Number:  5047836 3
 
Specific equipment, as more particularly described in the financing statement.

 
Detroit_801261_9
 
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--------------------------------------------------------------------------------

 

5.           Sterling General, Inc.

Jurisdiction:  Delaware, Secretary of State
Search results certified through:  09/19/2007
Federal tax liens:  Clear.
UCC liens:
Secured Party
Filing Information
Collateral
Comerica Bank
Filed:  06/01/2006
Number:  6185554 3
 
 All of the Debtor’s right, title and interest in and to all equipment,
fixtures, software, goods, instruments (including, without limitation,
promissory notes), documents (including, without limitation, negotiable
documents), policies and certificates of insurance, deposit accounts, money and
investment property, motor vehicles, mobile goods and rolling stock together
with Debtor’s general partnership interest in Texas Sterling Construction, L.P.,
a Texas limited partnership, and all proceeds, interest, profits and other
payments or rights to payment related thereto and all proceeds and products of
the foregoing.
 

6.           Sterling Houston Holdings, Inc.

Jurisdiction:  Delaware Secretary of State
Search results certified through:  10/17/2007
UCC liens:
Secured Party
Filing Information
Collateral
Comerica Bank
Filed:  8/7/2003
Number:  32052853
All of debtor’s right, title and interest, whether now owned or hereafter
acquired, in and to (i) that certain Promissory Note dated as of April 28, 2003,
in the original principal amount of $3,200,000, executed by Sterling
Construction Company, Inc., and payable to Debtor…
 
All of Debtor’s right, title and interest in and to all equipment, fixtures,
software, goods, instruments (including, without limitation, promissory notes),
documents (including, without limitation, negotiable documents), policies and
certificates of insurance, deposit accounts, money and investment property,
motor vehicles, mobile goods and rolling stock together with Debtor’s limited
partnership interest in Texas Sterling Construction, L.P., a Texas limited
liability partnership, and all proceeds, interest, profits and other payments or
rights to payment related thereto and all proceeds and products of the
foregoing.
 
as further described in the UCC filings.
 

 
Detroit_801261_9

178

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

 
Jurisdiction:  Texas, Secretary of State
Search results certified through:  10/17/2007
UCC liens:  Clear.

 

7.           Texas Sterling Construction Co.

Jurisdiction:  Delaware, Secretary of State
Search results certified through:  09/19/2007
Federal tax liens:  Clear.
UCC liens:  Clear.

8.           Texas Sterling Construction, L.P.

Jurisdiction:  Texas, Secretary of State
Search results certified through:  10/17/2007
Federal tax liens:  Clear.
UCC liens:
Secured Party
Filing Information
Collateral
Comerica Bank - Texas
Filed:  11/04/1982
Number:  82-00214385
 
Comments:
 
All accounts, contract rights, chattel paper, instruments, general intangibles
and rights to payment of every kind now or at any time hereafter arising out of
the business of the debtor; all interest of the debtor in any goods and
services, the sale of which shall have given or shall give rise to any of the
foregoing.
 
Comerica Bank - Texas
Filed:  11/04/1982
Number:  82-00214386
 
Comments:
 
 
Equipment as per attached Exhibit “A”
 
(exhibit A not provided with search results)
Comerica Bank - Texas
Filed:  10/10/1985
Number:  85-00261190
 
Comments:
 
All business equipment, machinery and furnishings and all attachments and
accessories thereto, now owned or hereafter acquired including but not limited
to the attached Exhibit “III”
 
Comerica Bank - Texas
Filed:  11/13/1985
Number:  85-00297256
 
Comments:
 
All business equipment, machinery and furnishings and all attachments and
accessories thereto, now owned or hereafter acquired including but not limited
to the attached Exhibit “III”
 
Comerica Bank – Texas
Filed:  06/14/1989
Number:  89-00135359
 
Comments:
 
Any and all accounts, contract rights, chattel paper and general intangibles now
existing or hereafter arising out of the business of the debtor, as well as any
and all returned, reported and repossessed goods and the proceeds resulting
therefrom.
 
Comerica Bank – Texas
Filed:  10/04/1989
Number:  89-00224602
 
Comments:
 
All business equipment and machinery and accessories thereto, now owned or
hereafter acquired, including but not limited to the attached “Exhibit A”.
 
Comerica Bank - Texas
Filed:  05/01/1992
Number:  92-00086748
 
Comments:
 
All accounts (as defined in the Texas Business and Commerce Code) and accounts
receivable of debtor now existing or hereafter arising; the rights and interests
of debtor in and to the goods, the sale and delivery of which gave rise to such
accounts receivable, and the proceeds of such accounts and accounts receivable.
 
All of debtor’s equipment, including, without limitation, all furniture,
furnishings, fixtures, machinery, parts and tools, now owned or hereafter
acquired by debtor, and all additions, accessions, substitutions, replacements,
and attachments thereof or thereto.
 
Comerica Bank - Texas
Filed:  12/05/1994
Number:  94-00234327
 
Comments:
 
All right, title, and interest of Debtor in and to a Hitachi EX 700 Hydraulic
Excavator, and certain related equipment, as more particularly described in
Exhibit “A” attached hereto.
 
All substitutions and replacements for, accessions, attachments and other
additions to, tools, parts and equipment used in connection with, and proceeds
and products of, the above Collateral; all certificates of title, manufacturer’s
statements of origin, other documents, accounts and chattel paper arising from
or related to the above Collateral, any of which, if received by Debtor, upon
request shall be delivered immediately to Secured Party.
 
Comerica Bank – Texas
 
 
Filed:  03/15/1996
Number:  96-00047946
 
Comments:  Sterling Construction Company also listed as Debtor.
 
All of the equipment and fixtures of the Debtor (including, without limitation,
all equipment, furniture and fixtures), both now owned and hereafter acquired,
together with (i) all additions, parts, fittings, accessories, special tools,
attachments, and accessions now and hereafter affixed thereto and/or used in
connection therewith, (ii) all replacements thereof and substitutions therefor,
and (iii) all cash and non-cash proceeds and products thereof.
 
Proceeds and products of the collateral are also covered.
 
Comerica Bank – Texas
 
 
Filed:  06/22/1998
Number:  98-00125328
 
Comments:
 
The items described in the Description of Collateral attached hereto as Exhibit
“A” and incorporated herein by reference for all purposes, as the same relate to
the land (“Real Property”) described in Exhibit “B” attached hereto and the
improvements thereon or thereto (collectively, the “Mortgaged Property”).
 
Proceeds of the above-described Collateral are also covered.
 
Contract Rights, General Intangibles, Equipment, Fixtures.
 
Real Estate described as property in Harris County, TX.
 
Comerica Bank – Texas
 
 
Filed:  02/20/2002
Number:  02-0019932086
 
Comments:
 
Specific equipment, as more particularly described in the financing statement.
Comerica Bank – Texas
 
 
Filed:  09/23/2002
Number:  03-0002265725
 
Comments:  this is an “in-lieu” filing of a Michigan UCC.
 
Second Lien Deed of Trust, Security Agreement, Assignment of Rents and Financing
Statement, dated June 18, 2001.
 
as to Real Estate described as located in Harris Co., TX.
Comerica Bank - Texas
Filed:  9/23/2002
Number:  03-0002265836
 
Comments:  this is an “in-lieu” filing of a Michigan UCC.
 
Second Lien Deed of Trust, Security Agreement, Assignment of Rents and Financing
Statement dated June 18, 2001
Comerica Bank – Texas
 
 
Filed:  09/24/2002
Number:  03-0002456666
 
Comments:  this is an “in-lieu” filing of a Michigan UCC.
 
Third Lien Deed of Trust, Security Agreement, Assignment of Rents and Financing
Statement, dated July 18, 2001.
 
First Modification Agreement dated September 23, 2002.
 
as to Real Estate described as located in Harris Co., TX.
 
Comerica Bank – Texas
 
 
Filed:  09/24/2002
Number:  03-0002457798
 
Comments:  this is an “in-lieu” filing of a Michigan UCC.
 
Security Agreement (all assets) dated July 18, 2001.
 
Supplemental Security Agreement (all assets) dated September 23, 2002.
 
Supplemental Security Agreement (all assets) dated December 23, 2004.
 
Caterpillar Financial Services Corporation
Filed:  12/03/2002
Number:  03-0009654077
 
Specific equipment, as more particularly described in the financing statement.
Caterpillar Financial Services Corporation
Filed:  12/03/2002
Number:  03-0009654300
 
Specific equipment, as more particularly described in the financing statement.
Caterpillar Financial Services Corporation
Filed:  12/03/2002
Number:  03-0009654411
 
Specific equipment, as more particularly described in the financing statement.
Caterpillar Financial Services Corporation
Filed:  12/03/2002
Number:  03-0009654522
 
Specific equipment, as more particularly described in the financing statement.
Caterpillar Financial Services Corporation
Filed:  12/03/2002
Number:  03-0009655109
 
Specific equipment, as more particularly described in the financing statement.
Caterpillar Financial Services Corporation
Filed:  12/03/2002
Number:  03-0009655543
 
Specific equipment, as more particularly described in the financing statement.
Caterpillar Financial Services Corporation
Filed:  12/03/2002
Number:  03-0009655654
 
Specific equipment, as more particularly described in the financing statement.
Caterpillar Financial Services Corporation
Filed:  12/03/2002
Number:  03-0009655765
 
Specific equipment, as more particularly described in the financing statement.
Caterpillar Financial Services Corporation
Filed:  12/03/2002
Number:  03-0009655876
 
Specific equipment, as more particularly described in the financing statement.
CitiCapital Commercial Corporation
Filed:  05/02/2003
Number:  03-0026341382
 
Specific equipment, as more particularly described in the financing statement.
Comerica Bank
Filed:  08/07/2003
Number:  03-0037123514
 
All of Debtor’s right, title and interest, whether now owned or hereafter
acquired, in and to (i) that certain Promissory Note dated as of April 28, 2003,
in the original principal amount of $3,200,000, executed by Sterling Houston
Holdings, Inc., and payable to Debtor.
 
as further described in the UCC filing.
 
CIT Financial USA, Inc.
Filed:  11/22/2004
Number:  04-0089199868
 
Specific computer equipment as to Loan Agreement dated November 12, 2004.
 
as further described in the UCC filing.
 
CitiCapital Commercial Leasing Corporation
 
Filed:  05/25/2005
Number:  05-0016473824
Specific equipment, as more particularly described in the financing statement.
CitiCapital Commercial Leasing Corporation
 
Filed:  05/25/2005
Number:  05-0016473935
Specific equipment, as more particularly described in the financing statement.
ROMCO Equipment Co., L.P.
Filed:  10/17/2005
Number:  05-0032204056
 
Specific equipment, as more particularly described in the financing statement.
HOLT CAT
Filed:  02/22/2006
Number:  06-0005958881
 
Specific equipment, as more particularly described in the financing statement.
Comerica Bank, successor by merger with Comerica Bank - Texas
Filed:  04/21/2006
Number:  06-0013702766
 
Comments:  this is an “in-lieu” of two MI UCC filings.
 
Second Lien Deed of Trust, Security Agreement, Assignment of Rents and Financing
Statement, dated June 18, 2001.
 
as to Real Estate described as located in Harris Co., TX.
Comerica Bank, successor by merger with Comerica Bank - Texas
Filed:  05/15/2006
Number:  06-0016474301
 
Comments:  this is an “in-lieu” of two MI UCC filings.
 
Third Lien Deed of Trust, Security Agreement, Assignment of Rents and Financing
Statement, dated July 18, 2001.
 
as to Real Estate described as located in Harris Co., TX.
 
Comerica Bank, successor by merger with Comerica Bank - Texas
Filed:  05/22/2006
Number:  06-0017374068
 
Comments:  this is an “in-lieu” of one DE UCC filing.
 
Security Agreement (Third Party Pledge) dated July 18, 2001.
Comerica Bank, successor by merger with Comerica Bank - Texas
Filed:  06/06/2006
Number:  06-0019072863
All of Debtor’s equipment, now owned or hereafter acquired including but not
limited to the Exhibits “A” and “B” attached hereto…
 
as further described in the UCC filing.
 
Exhibits A and B not provided with search results.
 
ROMCO Equipment Co., L.P.
Filed:  07/17/2006
Number:  06-0024047790
 
Specific equipment, as more particularly described in the financing statement.
ROMCO Equipment Co., L.P.
Filed:  07/21/2006
Number:  06-0024684686
 
Specific equipment, as more particularly described in the financing statement.
Union Bank and Trust Company
Filed:  09/15/2006
Number:  06-0030878789
 
Specific equipment, as more particularly described in the financing statement.
Union Bank and Trust Company
Filed:  09/15/2006
Number:  06-0030879033
 
Specific equipment, as more particularly described in the financing statement.
Comerica Leasing Corporation
Filed:  09/22/2006
Number:  06-0031671600
 
Specific equipment, as more particularly described in the financing statement.
Protection Services Inc.
Filed:  01/30/2007
Number:  07-0003459452
 
Specific equipment, as more particularly described in the financing statement.
Comerica Leasing Corporation
Filed:  03/22/2007
Number:  07-0009612691
 
Specific equipment, as more particularly described in the financing statement.
ROMCO Equipment Co., L.P.
Filed:  04/10/2007
Number:  07-0011834296
 
Specific equipment, as more particularly described in the financing statement.
Herc Exchange, LLC
Filed:  05/01/2007
Number:  07-0014662056
 
Specific equipment, as more particularly described in the financing statement.
ROMCO Equipment Co., L.P.
Filed:  05/24/2007
Number:  07-0017670381
 
Specific equipment, as more particularly described in the financing statement.
JP Morgan Chase Bank
Filed:  05/25/2007
Number:  07-0017684821
 
Specific equipment, as more particularly described in the financing statement.
Comerica Leasing Corporation
Filed:  08/23/2007
Number:  07-0028864106
 
Specific equipment, as more particularly described in the financing statement.
ROMCO Equipment Co., L.P.
Filed:  09/21/2007
Number:  07-0032422212
 
Specific equipment, as more particularly described in the financing statement.
ROMCO Equipment Co., L.P.
Filed:  09/21/2007
Number:  07-0032422323
 
Specific equipment, as more particularly described in the financing statement.
ROMCO Equipment Co., L.P.
Filed:  10/05/2007
Number:  07-0034208307
 
Specific equipment, as more particularly described in the financing statement.

 
Detroit_801261_9
 
179

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Texas Sterling Construction, L.P.
Jurisdiction:  Texas, Secretary of State
Terminated UCC Financing Statements:
Secured Party
Filing Information
Collateral
NationsRent, Inc.
Filed:  12/08/2004
Number:  04-0090663735
 
Specific equipment.
Terminated.
National Trench Safety, LLC
Filed:  3/10/2006
Number:  06-0007900901
 
Terminated
National Trench Safety, LLC
Filed:  5/25/2006
Number:  06-0017898069
 
Terminated
National Trench Safety, LLC
Filed:  5/8/2007
Number:  07-0015628261
 
Terminated
National Trench Safety, LLC
Filed:  5/8/2007
Number:  07-00156228372
 
Terminated
National Trench Safety, LLC
Filed:  5/23/2007
Number:  07-0017438929
 
Terminated
National Trench Safety, LLC
Filed:  8/17/2007
Number:  07-0028106589
 
Terminated
NTS Mikedon, LLC
Filed:  9/12/07
Number:  07-0031174124
 
Terminated

Detroit_801261_9
 
180

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Schedule Number 8.7
 
Existing Investments
 
NONE
 
Detroit_801261_9
 
181

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Schedule Number 8.8
 
Transactions with Affiliates
 
NONE
 
Detroit_801261_9
 
182

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Schedule Number 13.6
 
Notice Addresses
 
Notice to Borrowers:
 
Sterling Construction Company, Inc.
Texas Sterling Construction Co.
Oakhurst Management Corporation
Road and Highway Builders, LLC
Road and Highway Builders Inc.
Mail:
20810 Fernbush Lane
Houston, Texas 77073
Attention:                  Joseph P. Harper, Sr.,President
Telephone:                   (281) 821-9091
Facsimile:                   (281) 821-2995
E-mail:                   JoeH@texas-sterling.com
 
With a copy, not, however, constituting notice to:
Mail:
Roger M. Barzun, Esq.
60 Hubbard Street
Concord, Massachusetts 01742
Telephone: (978) 287-4275
Facsimile: (978) 405-5024
E-mail: Rbarzun@Verizon.net
 
Notice to Agent:
 
Comerica Bank
Corporate Finance
500 Woodward Ave.
Detroit, Michigan 48226
Fax: 313-222-5272
 
Email for reporting requirements: corporatefinance@comerica.com
 
Email for Requests for Advance and Payments: corpfinadmin@comerica.com
 

 
183

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