REVOLVING CREDIT, TERM LOAN

AND

SECURITY AGREEMENT

PNC BANK, NATIONAL ASSOCIATION

(AS LENDER AND AS AGENT)

WITH

HYBROOK RESOURCES CORP.
(to be renamed BEST ENERGY SERVICES, INC.),

BOB BEEMAN DRILLING COMPANY

and

BEST WELL SERVICE, INC.
 (BORROWERS)

February 14, 2008
 

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TABLE OF CONTENTS

I. DEFINITIONS.
1
1.1.  Accounting Terms
1
1.2.  General Terms
1
1.3.  Uniform Commercial Code Terms
24
1.4.  Certain Matters of Construction
24
 
 
II.  ADVANCES, PAYMENTS.
25
2.1.  Revolving Advances.
25
2.2.  Procedure for Revolving Advances Borrowing.
26
2.3.  Disbursement of Advance Proceeds
28
2.4.  Term Loan
28
2.5.  Maximum Advances
29
2.6.  Repayment of Advances.
29
2.7.  Repayment of Excess Advances
29
2.8.  Statement of Account
29
2.9.  Letters of Credit
30
2.10.  Issuance of Letters of Credit.
30
2.11.  Requirements For Issuance of Letters of Credit.
31
2.12.  Disbursements, Reimbursement.
31
2.13.  Repayment of Participation Advances.
32
2.14.  Documentation
33
2.15.  Determination to Honor Drawing Request
33
2.16.  Nature of Participation and Reimbursement Obligations
33
2.17.  Indemnity
35
2.18.  Liability for Acts and Omissions
35
2.19.  Additional Payments
36
2.20.  Manner of Borrowing and Payment.
36
2.21.  Mandatory Prepayments.
38
2.22.  Use of Proceeds.
39
2.23.  Defaulting Lender.
39
 
 
III.  INTEREST AND FEES.
40
3.1.  Interest
40
3.2.  Letter of Credit Fees.
41
3.3.  Closing Fee and Facility Fee.
41
3.4.  Collateral Evaluation Fee and Collateral Monitoring Fee.
42
3.5.  Computation of Interest and Fees
42
3.6.  Maximum Charges
42
3.7.  Increased Costs
42
3.8.  Basis For Determining Interest Rate Inadequate or Unfair
43
3.9.  Capital Adequacy.
44
3.10.  Gross Up for Taxes
44
3.11.  Withholding Tax Exemption.
45
 
 
IV.  COLLATERAL:  GENERAL TERMS
46
4.1.  Security Interest in the Collateral
46

 
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4.2.  Perfection of Security Interest
46
4.3.  Disposition of Collateral
46
4.4.  Preservation of Collateral
47
4.5.  Ownership of Collateral.
47
4.6.  Defense of Agent’s and Lenders’ Interests
48
4.7.  Books and Records
48
4.8.  Financial Disclosure
48
4.9.  Compliance with Laws
49
4.10.  Inspection of Premises
49
4.11.  Insurance
49
4.12.  Failure to Pay Insurance
50
4.13.  Payment of Taxes
50
4.14.  Payment of Leasehold Obligations
51
4.15.  Receivables.
51
4.16.  Inventory
53
4.17.  Maintenance of Equipment
54
4.18.  Exculpation of Liability
54
4.19.  Environmental Matters.
54
4.20.  Financing Statements
56
4.21.  Rig Fleet Equipment
56
 
 
V.  REPRESENTATIONS AND WARRANTIES.
57
5.1.  Authority
57
5.2.  Formation and Qualification.
57
5.3.  Survival of Representations and Warranties
57
5.4.  Tax Returns
58
5.5.  Financial Statements.
58
5.6.  Entity Names
59
5.7.  O.S.H.A. and Environmental Compliance.
59
5.8.  Solvency; No Litigation, Violation, Indebtedness or Default.
59
5.9.  Patents, Trademarks, Copyrights and Licenses
61
5.10.  Licenses and Permits
61
5.11.  Default of Indebtedness
61
5.12.  No Default
61
5.13.  No Burdensome Restrictions
61
5.14.  No Labor Disputes
61
5.15.  Margin Regulations
62
5.16.  Investment Company Act
62
5.17.  Disclosure
62
5.18.  Delivery of Acquisition Documents
62
5.19.  Swaps
62
5.20.  Conflicting Agreements
62
5.21.  Application of Certain Laws and Regulations
62
5.22.  Business and Property of Borrowers
63
5.23.  Section 20 Subsidiaries
63
5.24.  Anti-Terrorism Laws.
63
5.25.  Trading with the Enemy
64

 
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5.26.  Federal Securities Laws
64
 
 
VI.   AFFIRMATIVE COVENANTS.
64
6.1.  Payment of Fees
64
6.2.  Conduct of Business and Maintenance of Existence and Assets
64
6.3.  Violations
64
6.4.  Government Receivables
64
6.5.  Financial Covenants.
65
6.6.  Execution of Supplemental Instruments
66
6.7.  Payment of Indebtedness
66
6.8.  Standards of Financial Statements
66
6.9.  Federal Securities Laws
66
6.10.  Exercise of Rights
66
6.11.  Identification of Rig Fleet Equipment
66
 
 
VII.  NEGATIVE COVENANTS.
66
7.1.  Merger, Consolidation, Acquisition and Sale of Assets.
67
7.2.  Creation of Liens
67
7.3.  Guarantees
67
7.4.  Investments
67
7.5.  Loans
67
7.6.  Capital Expenditures
68
7.7.  Dividends
68
7.8.  Indebtedness
68
7.9.  Nature of Business
68
7.10.  Transactions with Affiliates
68
7.11.  Leases
68
7.12.  Subsidiaries.
69
7.13.  Fiscal Year and Accounting Changes
69
7.14.  Pledge of Credit
69
7.15.  Amendment of Articles of Incorporation, By-Laws
69
7.16.  Compliance with ERISA
69
7.17.  Prepayment of Indebtedness
70
7.18.  Anti-Terrorism Laws
70
7.19.  Membership/Partnership Interests
70
7.20.  Trading with the Enemy Act
70
7.21.  Other Agreements
70
7.22.  HRE Exploration
70
 
 
VIII.  CONDITIONS PRECEDENT.
70
8.1.  Conditions to Initial Advances
70
8.2.  Conditions to Each Advance
74
8.3.  Conditions Precedent Applicable to Second Acquisitions
74
 
 
IX.  INFORMATION AS TO BORROWERS.
75
9.1.  Disclosure of Material Matters
75
9.2.  Schedules
75
9.3.  Environmental Reports
76

 
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9.4.  Litigation
76
9.5.  Material Occurrences
76
9.6.  Government Receivables
76
9.7.  Annual Financial Statements
76
9.8.  Quarterly Financial Statements
77
9.9.  Monthly Financial Statements
77
9.10.  Other Reports
77
9.11.  Additional Information
77
9.12.  Projected Operating Budget
77
9.13.  Variances From Operating Budget
78
9.14.  Notice of Suits, Adverse Events
78
9.15.  ERISA Notices and Requests
78
9.16.  Appraisals
79
9.17.  Additional Documents
79
 
 
X.  EVENTS OF DEFAULT.
79
10.1.  Nonpayment
79
10.2.  Breach of Representation
79
10.3.  Financial Information
79
10.4.  Judicial Actions
79
10.5.  Noncompliance
80
10.6.  Judgments
80
10.7.  Bankruptcy
80
10.8.  Inability to Pay
80
10.9.  Affiliate Bankruptcy
80
10.10.  Material Adverse Effect
80
10.11.  Lien Priority
81
10.12.  [Intentionally Omitted.]
81
10.13.  Cross Default
81
10.14.  Breach of Guaranty
81
10.15.  Change of Control
81
10.16.  Invalidity
81
10.17.  Licenses
81
10.18.  Seizures
81
10.19.  Management
81
10.20.  Second Acquisitions
82
10.21.  Pension Plans
82
 
XI.  LENDERS’ RIGHTS AND REMEDIES AFTER DEFAULT.
11.1.  Rights and Remedies.
82
11.2.  Agent’s Discretion
84
11.3.  Setoff
84
11.4.  Rights and Remedies not Exclusive
84
11.5.  Allocation of Payments After Event of Default
84
 
 
XII.  WAIVERS AND JUDICIAL PROCEEDINGS
85
12.1.  Waiver of Notice
85
12.2.  Delay
85

 
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12.3.  Jury Waiver
85
   
XIII.  EFFECTIVE DATE AND TERMINATION.
85
13.1.  Term
85
13.2.  Termination
86
   
XIV.  REGARDING AGENT.
86
14.1.  Appointment
86
14.2.  Nature of Duties
87
14.3.  Lack of Reliance on Agent and Resignation
87
14.4.  Certain Rights of Agent
88
14.5.  Reliance
88
14.6.  Notice of Default
88
14.7.  Indemnification
88
14.8.  Agent in its Individual Capacity
89
14.9.  Delivery of Documents
89
14.10.  Borrowers’ Undertaking to Agent
89
14.11.  No Reliance on Agent’s Customer Identification Program
89
14.12.  Other Agreements
89
   
XV.  BORROWING AGENCY.
89
15.1.  Borrowing Agency Provisions.
90
15.2.  Waiver of Subrogation
90
   
XVI.  MISCELLANEOUS.
90
16.1.  Governing Law
90
16.2.  Entire Understanding.
91
16.3.  Successors and Assigns; Participations; New Lenders.
93
16.4.  Application of Payments
95
16.5.  Indemnity
95
16.6.  Notice
96
16.7.  Survival
98
16.8.  Severability
98
16.9.  Expenses
98
16.10.  Injunctive Relief
98
16.11.  Consequential Damages
99
16.12.  Captions
99
16.13.  Counterparts; Facsimile Signatures
99
16.14.  Construction
99
16.15.  Confidentiality; Sharing Information
99
16.16.  Publicity
100
16.17.  Certifications From Banks and Participants; US PATRIOT Act
100

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LIST OF EXHIBITS AND SCHEDULES

 
Exhibits
     
Exhibit 1.2
Borrowing Base Certificate
Exhibit 2.1(a)
Revolving Credit Note
Exhibit 2.4
Term Note
Exhibit 5.5(b)
Financial Projections
Exhibit 8.1(k)
Financial Condition Certificate
Exhibit 9.16
OLV Appraisal
Exhibit 16.3
Commitment Transfer Supplement

 

Schedules      
Schedule 1.2(a)
Original Owners
Schedule 1.2(b)
Permitted Encumbrances
Schedule 4.5
Equipment and Inventory Locations
Schedule 4.5(c)
Chief Executive Offices
Schedule 4.15(h)
Deposit and Investment Accounts
Schedule 4.19
Real Property
Schedule 4.21
Owned Rig Fleet Equipment
Schedule 5.1
Consents
Schedule 5.2(a)
States of Qualification and Good Standing
Schedule 5.2(b)
Subsidiaries
Schedule 5.4
Federal Tax Identification Number
Schedule 5.6
Prior Names
Schedule 5.8(b)
Litigation
Schedule 5.8(d)
Plans
Schedule 5.9
Intellectual Property, Source Code Escrow Agreements
Schedule 5.10
Licenses and Permits
Schedule 5.14
Labor Disputes
Schedule 7.3
Guarantees
Schedule 7.8
Existing Indebtedness

 
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REVOLVING CREDIT, TERM LOAN
AND
SECURITY AGREEMENT

Revolving Credit, Term Loan and Security Agreement dated as of February 14, 2008
among HYBROOK RESOURCES CORP. (to be renamed BEST ENERGY SERVICES, INC. on the
Closing Date), a corporation organized under the laws of the State of Nevada
(“Best”), BOB BEEMAN DRILLING COMPANY, a corporation organized under the laws of
the State of Utah (“BBD”), and BEST WELL SERVICE, INC., a corporation organized
under the laws of the State of Kansas (“BWS”) (Best, BBD and BWS, each a
“Borrower”, and collectively “Borrowers”), the financial institutions which are
now or which hereafter become a party hereto (collectively, the “Lenders” and
individually a “Lender”) and PNC BANK, NATIONAL ASSOCIATION (“PNC”), as agent
for Lenders (PNC, in such capacity, the “Agent”).
 
IN CONSIDERATION of the mutual covenants and undertakings herein contained,
Borrowers, Lenders and Agent hereby agree as follows:
 
I. DEFINITIONS.
 
1.1. Accounting Terms.  As used in this Agreement, the Other Documents or any
certificate, report or other document made or delivered pursuant to this
Agreement, accounting terms not defined in Section 1.2 or elsewhere in this
Agreement and accounting terms partly defined in Section 1.2 to the extent not
defined, shall have the respective meanings given to them under GAAP; provided,
however, whenever such accounting terms are used for the purposes of determining
compliance with financial covenants in this Agreement, such accounting terms
shall be defined in accordance with GAAP as applied in preparation of the
audited financial statements of Borrowers for the fiscal year ended December 31,
2006.
 
1.2. General Terms.  For purposes of this Agreement the following terms shall
have the following meanings:
 
“Accountants” shall have the meaning set forth in Section 9.7 hereof.
 
“Acquisitions” shall mean, collectively, the Initial Acquisitions and the Second
Acquisitions.
 
“Acquisition Documents” shall mean, collectively, the Initial Acquisition
Documents and the Second Acquisition Documents.
 
“Advance Rates” shall mean, collectively, the Receivables Advance Rate, the
Equipment Advance Rate and the Cash Collateral Advance Rate.
 
“Advances” shall mean and include the Revolving Advances, Letters of Credit, as
well as the Term Loan.
 
“Affiliate” of any Person shall mean (a) any Person which, directly or
indirectly, is in control of, is controlled by, or is under common control with
such Person, or (b) any Person who is a director, managing member, general
partner or officer (i) of such Person, (ii) of any
 

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Subsidiary of such Person or (iii) of any Person described in clause (a)
above.  For purposes of this definition, control of a Person shall mean the
power, direct or indirect, (x) to vote 5% or more of the Equity Interests having
ordinary voting power for the election of directors of such Person or other
Persons performing similar functions for any such Person, or (y) to direct or
cause the direction of the management and policies of such Person whether by
ownership of Equity Interests, contract or otherwise.
 
“Agent” shall have the meaning set forth in the preamble to this Agreement and
shall include its successors and assigns.
 
“Agreement” shall mean this Revolving Credit, Term Loan and Security Agreement,
as the same may be amended, restated, supplemented or otherwise modified from
time to time.
 
“Alternate Base Rate” shall mean, for any day, a rate per annum equal to the
higher of (i) the Base Rate in effect on such day and (ii) the Federal Funds
Open Rate in effect on such day plus 1/2 of 1%.
 
“Anti-Terrorism Laws” shall mean any Applicable Laws relating to terrorism or
money laundering, including Executive Order No. 13224, the USA PATRIOT Act, the
Applicable Laws comprising or implementing the Bank Secrecy Act, and the
Applicable Laws administered by the United States Treasury Department’s Office
of Foreign Asset Control (as any of the foregoing Applicable Laws may from time
to time be amended, renewed, extended, or replaced).
 
“Applicable Law” shall mean all laws, rules and regulations applicable to the
Person, conduct, transaction, covenant, Other Document or contract in question,
including all applicable common law and equitable principles; all provisions of
all applicable state, federal and foreign constitutions, statutes, rules,
regulations, treaties, directives and orders of any Governmental Body, and all
orders, judgments and decrees of all courts and arbitrators.
 
“ARH” shall mean, American Rig Housing, Inc., a corporation organized under the
laws of the State of Texas.
 
“ARH Acquisition” shall mean the acquisition by Best of substantially all of the
assets of ARH pursuant to the ARH Acquisition Agreement.
 
“ARH Acquisition Agreement” shall mean the Asset Purchase Agreement to be
entered into after the Closing Date by and among Best, ARH and Larry Hargrave,
and all bills of sale, disclosure schedules and certificates related thereto.
 
“ARH Acquisition Documents” shall mean, collectively, (i) ARH Acquisition
Agreement, (ii) the Release executed by Larry Hargrave in favor of Best and ARH
and (iii) the Lease Agreement between Larry Hargrave and Best related to the
yard located at 4092 US Highway 59 S., Cleveland, Texas 77327.
 
“Authority” shall have the meaning set forth in Section 4.19(d).
 
“Base Rate” shall mean the base commercial lending rate of PNC as publicly
announced to be in effect from time to time, such rate to be adjusted
automatically, without notice, on the
 
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effective date of any change in such rate.  This rate of interest is determined
from time to time by PNC as a means of pricing some loans to its customers and
is neither tied to any external rate of interest or index nor does it
necessarily reflect the lowest rate of interest actually charged by PNC to any
particular class or category of customers of PNC.
 
“BBD” shall have the meaning set forth in the preamble to this Agreement.
 
“BBD Acquisition” shall mean the acquisition by Best of all of the outstanding
Equity Interests of BBD from Beeman, pursuant to the BBD Acquisition Agreement.
 
“BBD Acquisition Agreement” shall mean the Stock Purchase Agreement dated as of
February 14, 2008, by and between Best and Beeman, and all bills of sale,
disclosure schedules and certificates related thereto.
 
“BBD Acquisition Documents” shall mean, collectively, (i) BBD Acquisition
Agreement, (ii) the Escrow Agreement dated as of February 14, 2008, by and among
Best, Beeman, and JPMorgan Chase Bank, N.A., as escrow agent, (iii) the Release
dated as of February 14, 2008, by and between Best and Beeman, (iv) the
Noncompetition, Nondisclosure and Nonsolicitation Agreement dated as of February
14, 2008, by and between Best and Beeman and (v) Lease Agreement to be entered
into by and between Best and Beeman with respect to the premises located at 3400
S. Highway 191, Moab, Utah and 1280  West Ridge Road, Wellington, Utah.
 
“BB Drilling Acquisition” shall mean the acquisition by Best of substantially
all of the assets of BB Drilling Co., from Beeman pursuant to the BB Drilling
Acquisition Agreement.
 
“BB Drilling Acquisition Agreement” shall mean the Asset Purchase Agreement to
be entered into after the Closing Date by and between Best and Beeman, and all
bills of sale, disclosure schedules and certificates related thereto.
 
“BB Drilling Acquisition Documents” shall mean, collectively, (i) BB Drilling
Acquisition Agreement, and (ii) the Noncompetition, Nondisclosure and
Nonsolicitation Agreement to be entered into, by and between Best and Beeman .
 
“Beeman” shall mean, Robert L. Beeman, an individual residing in Moab, Utah.
 
“Blocked Accounts” shall have the meaning set forth in Section 4.15(h).
 
“Blocked Account Bank” shall have the meaning set forth in Section 4.15(h).
 
“Blocked Person” shall have the meaning set forth in Section 5.24(b) hereof.
 
“Borrower” or “Borrowers” shall have the meaning set forth in the preamble to
this Agreement and shall extend to all permitted successors and assigns of such
Persons.
 
“Borrowers on a Consolidated Basis” shall mean the consolidation in accordance
with GAAP of the accounts or other items of Best and its Subsidiaries.
 
“Borrowers’ Account” shall have the meaning set forth in Section 2.8.
 
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“Borrowing Agent” shall mean Best.
 
“Borrowing Base Certificate” shall mean a certificate in substantially the form
of Exhibit 1.2 duly executed by the President, Chief Financial Officer or
Controller of the Borrowing Agent and delivered to the Agent, appropriately
completed, by which such officer shall certify to Agent the Formula Amount and
calculation thereof as of the date of such certificate.
 
“Bruce” shall mean Tony Bruce, an individual residing in Liberal, Kansas.
 
“Business Day” shall mean any day other than Saturday or Sunday or a legal
holiday on which commercial banks are authorized or required by law to be closed
for business in East Brunswick, New Jersey and, if the applicable Business Day
relates to any Eurodollar Rate Loans, such day must also be a day on which
dealings are carried on in the London interbank market.
 
“BWS” shall have the meaning set forth in the preamble to this Agreement.
 
“BWS Acquisition” shall mean the acquisition by Best of all of the outstanding
Equity Interests of BWS from Bruce, pursuant to the BWS Acquisition Agreement.
 
“BWS Acquisition Agreement” shall mean the Stock Purchase Agreement dated as of
February 14, 2008, by and between Best and Bruce, and all bills of sale,
disclosure schedules and certificates related thereto.
 
“BWS Acquisition Documents” shall mean, collectively, (i) BWS Acquisition
Agreement, (ii) the Escrow Agreement dated as of February 14, 2008, by and among
Best, Bruce, and JPMorgan Chase Bank, N.A., as escrow agent, (iii) the Release
dated as of February 14, 2008, by and between Best and Bruce, (iv) the
Noncompetition, Nondisclosure and Nonsolicitation Agreement dated as of February
14, 2008, by and between Best and Bruce, (v) the Employment Agreement dated as
of February 14, 2008, by and between Best and Bruce and (vi) the Lease Agreement
dated as of February 14, 2008 by and between Best and Bruce for the premises
located at 1461 General Welch Blvd., Liberal, Kansas.
 
“Capital Expenditures” shall mean expenditures made or liabilities incurred for
the acquisition of any fixed assets or improvements, replacements, substitutions
or additions thereto which have a useful life of more than one year, including
the total principal portion of Capitalized Lease Obligations, which, in
accordance with GAAP, would be classified as capital expenditures.
 
“Capitalized Lease Obligation” shall mean any Indebtedness of any Borrower
represented by obligations under a lease that is required to be capitalized for
financial reporting purposes in accordance with GAAP.
 
“Cash Collateral Advance Rate” shall have the meaning set forth in Section
2.1(a)(y)(iii) hereof.
 
“Cash Collateral Agreement” shall mean the Cash Collateral Agreement dated as of
the Closing Date by and among Morris Gad, as pledgor, Agent and PNC, as
depository bank.
 
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“Cash Collateral Deposit” shall mean cash or cash equivalents in an amount not
to exceed $2,500,000 deposited with Agent by Morris Gad and held by Agent as
collateral security for the Obligations in a manner satisfactory to Agent.
 
“CERCLA” shall mean the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, 42 U.S.C. §§9601 et seq.
 
“Change of Control” shall mean (a) any Person or “group” (within the meaning of
Rules 13d-3 and 13d-5 under the Exchange Act), other than the Original Owners,
shall have acquired beneficial ownership of 20% or more on a fully diluted basis
of the voting and/or economic interest in Bests’ Equity Interests, (b) the Board
of Directors of Best shall cease to consist of a majority of Continuing
Directors, (c) other than as permitted by Section 4.3 and 7.1, any merger or
consolidation of or with any Borrower or sale of all or substantially all of the
property or assets of any Borrower or (d) Best ceases to own 100% of the Equity
Interests of BBS and BWS.
 
“Charges” shall mean all taxes, charges, fees, imposts, levies or other
assessments, including all net income, gross income, gross receipts, sales, use,
ad valorem, value added, transfer, franchise, profits, inventory, capital stock,
license, withholding, payroll, employment, social security, unemployment,
excise, severance, stamp, occupation and property taxes, custom duties, fees,
assessments, liens, claims and charges of any kind whatsoever, together with any
interest and any penalties, additions to tax or additional amounts, imposed by
any taxing or other authority, domestic or foreign (including the Pension
Benefit Guaranty Corporation or any environmental agency or superfund), upon the
Collateral, any Borrower or any of its Affiliates.
 
“Closing Date” shall mean February 14, 2008 or such other date as may be agreed
to by the parties hereto.
 
“Code” shall mean the Internal Revenue Code of 1986, as the same may be amended
or supplemented from time to time, and any successor statute of similar import,
and the rules and regulations thereunder, as from time to time in effect.
 
“Collateral” shall mean and include:
 
(a) all Receivables;
 
(b) all Equipment;
 
(c) all General Intangibles;
 
(d) all Inventory;
 
(e) all Investment Property;
 
(f) all Subsidiary Stock;
 
(g) the Leasehold Interests;
 
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(h) all of each Borrower’s right, title and interest in and to, whether now
owned or hereafter acquired and wherever located, (i) its respective goods and
other property including, but not limited to, all merchandise returned or
rejected by Customers, relating to or securing any of the Receivables; (ii) all
of each Borrower’s rights as a consignor, a consignee, an unpaid vendor,
mechanic, artisan, or other lienor, including stoppage in transit, setoff,
detinue, replevin, reclamation and repurchase; (iii) all additional amounts due
to any Borrower from any Customer relating to the Receivables; (iv) other
property, including warranty claims, relating to any goods securing the
Obligations; (v) all of each Borrower’s contract rights, rights of payment which
have been earned under a contract right, instruments (including promissory
notes), documents, chattel paper (including electronic chattel paper), warehouse
receipts, deposit accounts, letters of credit and money; (vi) all commercial
tort claims (whether now existing or hereafter arising); (vii) if and when
obtained by any Borrower, all real and personal property of third parties in
which such Borrower has been granted a lien or security interest as security for
the payment or enforcement of Receivables; (viii) all letter of credit rights
(whether or not the respective letter of credit is evidenced by a writing); (ix)
all supporting obligations; and (x) any other goods, personal property or real
property now owned or hereafter acquired in which any Borrower has expressly
granted a security interest or may in the future grant a security interest to
Agent hereunder, or in any amendment or supplement hereto or thereto, or under
any other agreement between Agent and any Borrower;
 
(i) all of each Borrower’s ledger sheets, ledger cards, files, correspondence,
records, books of account, business papers, computers, computer software (owned
by any Borrower or in which it has an interest), computer programs, tapes, disks
and documents relating to (a), (b), (c), (d), (e), (f), (g) or (h) of this
Paragraph; and
 
(j) all proceeds and products of (a), (b), (c), (d), (e), (f), (g), (h) or (i)
in whatever form, including, but not limited to:  cash, deposit accounts
(whether or not comprised solely of proceeds), certificates of deposit,
insurance proceeds (including hazard, flood and credit insurance), negotiable
instruments and other instruments for the payment of money, chattel paper,
security agreements, documents, eminent domain proceeds, condemnation proceeds
and tort claim proceeds.
 
“Commitment Percentage” of any Lender shall mean the percentage set forth below
such Lender’s name on the signature page hereof as same may be adjusted upon any
assignment by a Lender pursuant to Section 16.3(c) or (d) hereof.
 
“Commitment Transfer Supplement” shall mean a document in the form of Exhibit
16.3 hereto, properly completed and otherwise in form and substance satisfactory
to Agent by which the Purchasing Lender purchases and assumes a portion of the
obligation of Lenders to make Advances under this Agreement.
 
“Compliance Certificate” shall mean a compliance certificate to be signed by the
Chief Financial Officer or Controller of Borrowing Agent, which shall state
that, based on an examination sufficient to permit such officer to make an
informed statement, no Default or Event of Default exists, or if such is not the
case, specifying such Default or Event of Default, its nature, when it occurred,
whether it is continuing and the steps being taken by Borrowers with respect to
such default and, such certificate shall have appended thereto calculations
which set
 
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forth Borrowers’ compliance with the requirements or restrictions imposed by
Sections 6.5, 7.5, 7.6, 7.7, 7.8 and 7.11.
 
“Consents” shall mean all filings and all licenses, permits, consents,
approvals, authorizations, qualifications and orders of Governmental Bodies and
other third parties, domestic or foreign, necessary to carry on any Borrower’s
business or necessary (including to avoid a conflict or breach under any
agreement, instrument, other document, license, permit or other authorization)
for the execution, delivery or performance of this Agreement, the Other
Documents or the Acquisition Documents, including any Consents required under
all applicable federal, state or other Applicable Law.
 
“Continuing Directors” shall mean the directors of Best on the Closing Date and
each other director if such director’s nomination for the election to the Board
of Directors of Best is recommended by a majority of the then Continuing
Directors.
 
“Contract Rate” shall mean, as applicable, the Revolving Interest Rate or the
Term Loan Rate.
 
“Controlled Group” shall mean, at any time, each Borrower and all members of a
controlled group of corporations and all trades or businesses (whether or not
incorporated) under common control and all other entities which, together with
any Borrower, are treated as a single employer under Section 414 of the Code.
 
“Customer” shall mean and include the account debtor with respect to any
Receivable and/or the prospective purchaser of goods, services or both with
respect to any contract or contract right, and/or any party who enters into or
proposes to enter into any contract or other arrangement with any Borrower,
pursuant to which such Borrower is to deliver any personal property or perform
any services.
 
“Customs” shall have the meaning set forth in Section 2.11(b) hereof.
 
“Default” shall mean an event, circumstance or condition which, with the giving
of notice or passage of time or both, would constitute an Event of Default.
 
“Default Rate” shall have the meaning set forth in Section 3.1 hereof.
 
“Defaulting Lender” shall have the meaning set forth in Section 2.23(a) hereof.
 
“Demand Notes” shall mean the demand promissory notes issued by Best to Bruce
and Beeman on the Closing Date, having an aggregate principal amount equal to
$24,050,000, and which will be repaid with the proceeds of the initial Advances
incurred by the Borrowers under this Agreement on the Closing Date.
 
“Depository Accounts” shall have the meaning set forth in Section 4.15(h)
hereof.
 
“Documents” shall have the meaning set forth in Section 8.1(c) hereof.
 
“Dollar” and the sign “$” shall mean lawful money of the United States of
America.
 
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“Domestic Rate Loan” shall mean any Advance that bears interest based upon the
Alternate Base Rate.
 
“Drawing Date” shall have the meaning set forth in Section 2.12(b) hereof.
 
“Drill Site Services Acquisition” shall mean the acquisition by Best of
substantially all of the assets of Drill Site Services & Investments, LLC, a
Wyoming limited liability company, pursuant to the Drill Site Services
Acquisition Agreement.
 
“Drill Site Services Acquisition Agreement” shall mean the Asset Purchase
Agreement to be entered into after the Closing Date by and among Best, Drill
Site Services & Investments, LLC, a Wyoming limited liability company, and Todd
Beeman, a resident of Moab, Utah, and all bills of sale, disclosure schedules
and certificates related thereto.
 
“Drill Site Services Acquisition Documents” shall mean, collectively, (i) Drill
Site Services Acquisition Agreement, (ii) the Employment Agreement, by and
between Best and Todd Beeman, and (iii) the Noncompetition, Nondisclosure and
Nonsolicitation Agreement by and between Best and Todd Beeman.
 
“Early Termination Date” shall have the meaning set forth in Section 13.1
hereof.
 
“Earnings Before Interest and Taxes” shall mean for any period the sum of (i)
net income (or loss) of Borrowers on a Consolidated Basis for such period
(excluding extraordinary gains), plus (ii) all interest expense of Borrowers on
a Consolidated Basis for such period, plus (iii) all charges against income of
Borrowers on a Consolidated Basis for such period for federal, state and local
taxes actually paid.
 
“EBITDA” shall mean for any period the sum of (i) Earnings Before Interest and
Taxes for such period plus (ii) depreciation expenses for such period, plus
(iii) amortization expenses for such period.
 
“Eligible Equipment” shall mean and include Equipment (other than Rig Fleet
Equipment), owned by Best (but only to the extent acquired in the ARH
Acquisition or after the date of the Second Acquisitions) and BWS, which Agent,
in its reasonable credit judgment, shall not deem ineligible Equipment, based on
such considerations as Agent may from time to time deem appropriate including
whether the Equipment is subject to a perfected, first priority security
interest in favor of Agent and no other Lien (other than a Permitted
Encumbrance).  In addition, Equipment shall not be Eligible Equipment if (i) it
is not in good condition, ordinary wear and tear excepted, (ii) it is
unmerchantable or does not conform to all standards imposed by any Governmental
Body which has regulatory authority over such Equipment or the use or sale
thereof, (iii) is located outside the continental United States or at a location
that is not otherwise in compliance with this Agreement; (iv) is subject to any
agreement that limits, conditions or restricts any Borrower’s or Agent’s right
to sell or otherwise dispose of such Equipment, unless Agent is a party to such
agreement; (v) is situated at a location not owned by a Borrower unless the
owner or occupier of such location has executed in favor of Agent a Lien Waiver
Agreement or is a customer and has entered into a contract with Best or BWS
reasonably acceptable to Agent; (vi) is covered by a negotiable document of
title or (vii) is not covered by insurance to the extent required under this
Agreement.
 
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“Eligible Receivables” shall mean and include with respect to each Borrower,
each Receivable of such Borrower arising in the Ordinary Course of Business and
which Agent, in its reasonable credit judgment, shall deem to be an Eligible
Receivable, based on such considerations as Agent may from time to time deem
appropriate.  A Receivable shall not be deemed eligible unless such Receivable
is subject to Agent’s first priority perfected security interest and no other
Lien (other than Permitted Encumbrances), and is evidenced by an invoice or
other documentary evidence satisfactory to Agent.  In addition, no Receivable
shall be an Eligible Receivable if:
 
(a) it arises out of a sale made by any Borrower to an Affiliate of any Borrower
or to a Person controlled by an Affiliate of any Borrower;
 
(b) it is due or unpaid more than ninety (90) days after the original invoice
date;
 
(c) fifty percent (50%) or more of the Receivables from such Customer are not
deemed Eligible Receivables hereunder.  Such percentage may, in Agent’s sole
discretion, be increased or decreased from time to time;
 
(d) any covenant, representation or warranty contained in this Agreement with
respect to such Receivable has been breached;
 
(e) the Customer shall (i) apply for, suffer, or consent to the appointment of,
or the taking of possession by, a receiver, custodian, trustee or liquidator of
itself or of all or a substantial part of its property or call a meeting of its
creditors, (ii) admit in writing its inability, or be generally unable, to pay
its debts as they become due or cease operations of its present business, (iii)
make a general assignment for the benefit of creditors, (iv) commence a
voluntary case under any state or federal bankruptcy laws (as now or hereafter
in effect), (v) be adjudicated a bankrupt or insolvent, (vi) file a petition
seeking to take advantage of any other law providing for the relief of debtors,
(vii) acquiesce to, or fail to have dismissed, any petition which is filed
against it in any involuntary case under such bankruptcy laws, or (viii) take
any action for the purpose of effecting any of the foregoing;
 
(f) the sale is to a Customer outside the continental United States of America,
unless the sale is on letter of credit, guaranty or acceptance terms, in each
case acceptable to Agent in its sole discretion;
 
(g) the sale to the Customer is on a bill-and-hold, guaranteed sale,
sale-and-return, sale on approval, consignment or any other repurchase or return
basis or is evidenced by chattel paper;
 
(h) Agent believes, in its sole judgment, that collection of such Receivable is
insecure or that such Receivable may not be paid by reason of the Customer’s
financial inability to pay;
 
(i) the Customer is the United States of America, any state or any department,
agency or instrumentality of any of them, unless the applicable Borrower assigns
its right to payment of such Receivable to Agent pursuant to the Assignment of
Claims Act of 1940, as
 
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amended (31 U.S.C. Sub-Section 3727 et seq. and 41 U.S.C. Sub-Section 15 et
seq.) or has otherwise complied with other applicable statutes or ordinances;
 
(j) the goods giving rise to such Receivable have not been delivered to and
accepted by the Customer or the services giving rise to such Receivable have not
been performed by the applicable Borrower and accepted by the Customer or the
Receivable otherwise does not represent a final sale;
 
(k) the Receivables of the Customer exceed a credit limit determined by Agent,
in its sole discretion, to the extent such Receivable exceeds such limit;
 
(l) the Receivable is subject to any offset, deduction, defense, dispute, or
counterclaim, the Customer is also a creditor or supplier of a Borrower or the
Receivable is contingent in any respect or for any reason;
 
(m) the applicable Borrower has made any agreement with any Customer for any
deduction therefrom, except for discounts or allowances made in the Ordinary
Course of Business for prompt payment, all of which discounts or allowances are
reflected in the calculation of the face value of each respective invoice
related thereto;
 
(n) any return, rejection or repossession of the merchandise has occurred or the
rendition of services has been disputed; or
 
(o) such Receivable is not payable to a Borrower.
 
“Eligible Rig Fleet Equipment” shall mean and include Rig Fleet Equipment owned
by BWS, which Agent, in its reasonable credit judgment, shall not deem
ineligible Rig Fleet Equipment, based on such considerations as Agent may from
time to time deem appropriate, including whether the Rig Fleet Equipment is
subject to a perfected, first priority security interest in favor of Agent and
no other Lien (other than a Permitted Encumbrance).  In addition, Rig Fleet
Equipment shall not be Eligible Rig Fleet Equipment if it (i) is a vehicle or
other rolling stock not constituting Rig Fleet Equipment, (ii) does not conform
in all material respects to all standards imposed by any Governmental Body which
has regulatory authority over such goods or the use or sale thereof, (iii) is
located at a location that is not otherwise in compliance with this Agreement,
(iv) is subject to any agreement that limits, conditions or restricts any
Borrower’s or Agent’s right to sell or otherwise dispose of such Rig Fleet
Equipment, unless Agent is a party to such agreement; (v) is situated at a
location not owned by a Borrower unless the owner or occupier of such location
has executed in favor of Agent a Lien Waiver Agreement (unless otherwise agreed
by Agent) or is a customer and has entered into a contract with BWS acceptable
to Agent in its sole discretion, (vi) is covered by a negotiable document of
title; (vii) is not covered by insurance to the extent required under this
Agreement, or (viii) is not operable and otherwise in good working
condition.  No Rig Fleet Equipment acquired by BWS after the Closing Date shall
be Eligible Rig Fleet Equipment unless a new OLV Appraisal is completed valuing
such new Rig Fleet Equipment and all existing Rig Fleet Equipment and other
Equipment of the Borrowers.
 
“Environmental Complaint” shall have the meaning set forth in Section 4.19(d)
hereof.
 
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“Environmental Laws” shall mean all federal, state and local environmental, land
use, zoning, health, chemical use, safety and sanitation laws, statutes,
ordinances and codes relating to the protection of the environment and/or
governing the use, storage, treatment, generation, transportation, processing,
handling, production or disposal of Hazardous Substances and the rules,
regulations, policies, guidelines, interpretations, decisions, orders and
directives of federal, state and local governmental agencies and authorities
with respect thereto.
 
“Equipment” shall mean and include as to each Borrower all of such Borrower’s
goods whether now owned or hereafter acquired and wherever located including all
equipment, machinery, apparatus, motor vehicles, fittings, furniture,
furnishings, fixtures, parts, accessories and all replacements and substitutions
therefor or accessions thereto.
 
“Equipment Advance Rate” shall mean initially, 70%, but on each Excess Cash Flow
Payment Date shall be reduced by a percentage amount (rounded to the nearest one
hundredth of one percent) equal to the quotient obtained by dividing (x) the
Excess Cash Flow Prepayment Amount on such date by (y) $200,000, provided that
the Equipment Advance Rate shall not be reduced below 50% by operation of this
definition.  For example, if the Equipment Advance Rate was 70% and the Excess
Cash Flow Prepayment Amount on a Excess Cash Flow Payment Date was $1,000,000,
the Equipment Advance Rate would be reduced by 5 percentage points, to 65% on
such date.
 
“Equity Interests” of any Person shall mean any and all shares, rights to
purchase, options, warrants, general, limited or limited liability partnership
interests, member interests, participation or other equivalents of or interest
in (regardless of how designated) equity of such Person, whether voting or
nonvoting, including common stock, preferred stock, convertible securities or
any other “equity security” (as such term is defined in Rule 3a11-1 of the
General Rules and Regulations promulgated by the SEC under the Exchange Act).
 
“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time and the rules and regulations promulgated thereunder.
 
“Eurodollar Rate” shall mean for any Eurodollar Rate Loan for the then current
Interest Period relating thereto the interest rate per annum determined by Agent
by dividing (i) the rate which appears on the Bloomberg Page BBAM1 (or on such
other substitute Bloomberg page that displays rates at which US dollar deposits
are offered by leading banks in the London interbank deposit market), or the
rate which is quoted by another source selected by Agent which has been approved
by the British Bankers’ Association as an authorized information vendor for the
purpose of displaying rates at which US dollar deposits are offered by leading
banks in the London interbank deposit market (an “Alternative Source”), at
approximately 11:00 a.m., London time two (2) Business Days prior to the first
day of such Interest Period (or if there shall at any time, for any reason, no
longer exist a Bloomberg Page BBAM1 (or any substitute page) or any Alternate
Source, a comparable replacement rate determined by the Agent at such time
(which determination shall be conclusive absent manifest error)) for an amount
comparable to such Eurodollar Rate Loan and having a borrowing date and a
maturity comparable to such Interest Period by (ii) a number equal to 1.00 minus
the Reserve Percentage.
 
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The Eurodollar Rate shall be adjusted with respect to any Eurodollar Rate Loan
that is outstanding on the effective date of any change in the Reserve
Percentage as of such effective date.  The Agent shall give prompt notice to the
Borrowing Agent of the Eurodollar Rate as determined or adjusted in accordance
herewith, which determination shall be conclusive absent manifest error.
 
“Eurodollar Rate Loan” shall mean an Advance at any time that bears interest
based on the Eurodollar Rate.
 
“Event of Default” shall have the meaning set forth in Article X hereof.
 
“Excess Cash Flow” for any fiscal period shall mean EBITDA of Borrowers on a
Consolidated Basis for such fiscal period minus Unfinanced Capital Expenditures
made by Borrowers on a Consolidated Basis during such fiscal period minus taxes
actually paid by Borrowers on a Consolidated Basis during such fiscal period
minus payments of principal of the Term Loan and interest on indebtedness for
borrowed money minus all amounts paid to the holders of Best’s Series A
Convertible Preferred Stock in accordance with the provisions of the Certificate
of Designation therefor as in effect on the Closing Date, but only to the extent
such payments are permitted by Section 7.7 of this Agreement.
 
“Excess Cash Flow Payment Amount” shall have the meaning set forth in Section
2.21(b) hereof.
 
“Excess Cash Flow Payment Date” shall have the meaning set forth in Section
2.21(b) hereof.
 
“Exchange Act” shall have the mean the Securities Exchange Act of 1934, as
amended.
 
“Executive Order No. 13224” shall mean the Executive Order No. 13224 on
Terrorist Financing, effective September 24, 2001, as the same has been, or
shall hereafter be, renewed, extended, amended or replaced.
 
“Federal Funds Effective Rate” for any day shall mean the rate per annum (based
on a year of 360 days and actual days elapsed and rounded upward to the nearest
1/100 of 1%) announced by the Federal Reserve Bank of New York (or any
successor) on such day as being the weighted average of the rates on overnight
federal funds transactions arranged by federal funds brokers on the previous
trading day, as computed and announced by such Federal Reserve Bank (or any
successor) in substantially the same manner as such Federal Reserve Bank
computes and announces the weighted average it refers to as the “Federal Funds
Effective Rate” as of the date of this Agreement; provided, if such Federal
Reserve Bank (or its successor) does not announce such rate on any day, the
"Federal Funds Effective Rate" for such day shall be the Federal Funds Effective
Rate for the last day on which such rate was announced.
 
“Federal Funds Open Rate” shall mean the rate per annum determined by the Agent
in accordance with its usual procedures (which determination shall be conclusive
absent manifest error) to be the "open" rate for federal funds transactions as
of the opening of business for federal funds transactions among members of the
Federal Reserve System arranged by federal funds brokers on such day, as quoted
by Garvin Guybutler Corporation, any successor entity thereto, or any other
broker selected by the Agent, as set forth on the applicable Telerate display
page; provided, however; that if such day is not a Business Day, the Federal
Funds Open Rate for such day shall be the "open" rate on the immediately
preceding Business Day, or if no such rate shall be quoted by a Federal funds
broker at such time, such other rate as determined by the Agent in accordance
with its usual procedures.
 
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“Fee Deferral Agreements” shall mean one or more agreements to be entered into
on the Closing Date by Best with Andrew Garrett Inc. and ECH Consulting,
pursuant to which Andrew Garrett Inc. and ECH Consulting agree to defer certain
fees related to the Transactions.
 
“Fixed Charge Coverage Ratio” shall mean and include, with respect to any fiscal
period, the ratio of (a) EBITDA minus Unfinanced Capital Expenditures made
during such period minus cash taxes paid during such period minus all dividends
and distributions paid during such period (including, without limitation, all
payments to the holders of the Series A Convertible Preferred Stock of Best) to
(b) all Senior Debt Payments during such period.
 
“Foreign Subsidiary” of any Person, shall mean any Subsidiary of such Person
that is not organized or incorporated in the United States or any State or
territory thereof.
 
“Formula Amount” shall have the meaning set forth in Section 2.1(a).
 
“Funded Debt” shall mean, with respect to any Person, without duplication, all
Indebtedness for borrowed money evidenced by notes, bonds, debentures, or
similar evidences of Indebtedness that by its terms matures more than one year
from, or is directly or indirectly renewable or extendible at such Person’s
option under a revolving credit or similar agreement obligating the lender or
lenders to extend credit over a period of more than one year from the date of
creation thereof, and specifically including Capitalized Lease Obligations,
current maturities of long-term debt, revolving credit and short-term debt
extendible beyond one year at the option of the debtor, and also including, in
the case of Borrower, the Obligations and, without duplication, Indebtedness
consisting of guaranties of Funded Debt of other Persons.
 
“GAAP” shall mean generally accepted accounting principles in the United States
of America in effect from time to time.
 
“General Intangibles” shall mean and include as to each Borrower all of such
Borrower’s general intangibles, whether now owned or hereafter acquired,
including all payment intangibles, all choses in action, causes of action,
corporate or other business records, inventions, designs, patents, patent
applications, equipment formulations, manufacturing procedures, quality control
procedures, trademarks, tradenames, trademark applications, service marks, trade
secrets, goodwill, copyrights, design rights, software, computer information,
source codes, codes, records and updates, registrations, licenses, franchises,
customer lists, tax refunds, tax refund claims, computer programs, all claims
under guaranties, security interests or other security held by or granted to
such Borrower to secure payment of any of the Receivables by a Customer (other
than to the extent covered by Receivables) all rights of indemnification and all
other intangible property of every kind and nature (other than Receivables).
 
“Governmental Acts” shall have the meaning set forth in Section 2.17.
 
“Governmental Body” shall mean any nation or government, any state or other
political subdivision thereof or any entity, authority, agency, division or
department exercising the legislative, judicial, regulatory or administrative
functions of or pertaining to a government.
 
“Guarantor” shall mean any Person who may hereafter guarantee payment or
performance of the whole or any part of the Obligations and “Guarantors” means
collectively all such Persons.
 
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“Guarantor Security Agreement” shall mean any Security Agreement executed by any
Guarantor in favor of Agent securing the Guaranty of such Guarantor, in form and
substance satisfactory to the Agent.
 
“Guaranty” shall mean any guaranty of the obligations of Borrowers executed by a
Guarantor in favor of Agent for its benefit and for the ratable benefit of
Lenders, in form and substance satisfactory to the Agent.
 
“Hazardous Discharge” shall have the meaning set forth in Section 4.19(d)
hereof.
 
“Hazardous Substance” shall mean, without limitation, any flammable explosives,
radon, radioactive materials, asbestos, urea formaldehyde foam insulation,
polychlorinated biphenyls, petroleum and petroleum products, methane, hazardous
materials, Hazardous Wastes, hazardous or Toxic Substances or related materials
as defined in CERCLA, the Hazardous Materials Transportation Act, as amended (49
U.S.C. Sections 1801, et  seq.), RCRA, or any other applicable Environmental Law
and in the regulations adopted pursuant thereto.
 
“Hazardous Wastes” shall mean all waste materials subject to regulation under
CERCLA, RCRA or applicable state law, and any other applicable Federal and state
laws now in force or hereafter enacted relating to hazardous waste disposal.
 
“Hedge Liabilities” shall have the meaning provided in the definition of
“Lender-Provided Interest Rate Hedge”.
 
“Indebtedness” of a Person at a particular date shall mean all obligations of
such Person which in accordance with GAAP would be classified upon a balance
sheet as liabilities (except capital stock and surplus earned or otherwise) and
in any event, without limitation by reason of enumeration, shall include all
indebtedness, debt and other similar monetary obligations of such Person whether
direct or guaranteed, and all premiums, if any, due at the required prepayment
dates of such indebtedness, and  all indebtedness secured by a Lien on assets
owned by such Person, whether or not such indebtedness actually shall have been
created, assumed or incurred by such Person.  Any indebtedness of such Person
resulting from the acquisition by such Person of any assets subject to any Lien
shall be deemed, for the purposes hereof, to be the equivalent of the creation,
assumption and incurring of the indebtedness secured thereby, whether or not
actually so created, assumed or incurred.
 
“Ineligible Security” shall mean any security which may not be underwritten or
dealt in by member banks of the Federal Reserve System under Section 16 of the
Banking Act of 1933 (12 U.S.C. Section 24, Seventh), as amended.
 
“Initial Acquisition Documents” shall mean collectively, the BWS Acquisition
Documents and the BBD Acquisition Documents.
 
“Initial Acquisitions” shall mean, collectively, the BWS Acquisition and the BBD
Acquisition.
 
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“Intellectual Property” shall mean property constituting under any Applicable
Law a patent, patent application, copyright, trademark, service mark, trade
name, mask work, trade secret or license or other right to use any of the
foregoing.
 
“Intellectual Property Claim” shall mean the assertion by any Person of a claim
(whether asserted in writing, by action, suit or proceeding or otherwise) that
any Borrower’s ownership, use, marketing, sale or distribution of any Inventory,
Equipment, Intellectual Property or other property or asset is violative of any
ownership of or right to use any Intellectual Property of such Person.
 
“Interest Period” shall mean the period provided for any Eurodollar Rate Loan
pursuant to Section 2.2(b).
 
“Interest Rate Hedge” shall mean an interest rate exchange, collar, cap, swap,
adjustable strike cap, adjustable strike corridor or similar agreements entered
into by any Borrower or its Subsidiaries in order to provide protection to, or
minimize the impact upon, such Borrower, any Guarantor and/or their respective
Subsidiaries of increasing floating rates of interest applicable to
Indebtedness.
 
“Inventory” shall mean and include as to each Borrower all of such Borrower’s
now owned or hereafter acquired goods, merchandise and other personal property,
wherever located, to be furnished under any consignment arrangement, contract of
service or held for sale or lease, all raw materials, work in process, finished
goods and materials and supplies of any kind, nature or description which are or
might be used or consumed in such Borrower’s business or used in selling or
furnishing such goods, merchandise and other personal property, and all
documents of title or other documents representing them.
 
“Investment Property” shall mean and include as to each Borrower, all of such
Borrower’s now owned or hereafter acquired securities (whether certificated or
uncertificated), securities entitlements, securities accounts, commodities
contracts and commodities accounts.
 
“Issuer” shall mean any Person who issues a Letter of Credit and/or accepts a
draft pursuant to the terms hereof.
 
“Leasehold Interests” shall mean all of each Borrower’s right, title and
interest in and to the premises listed on Schedule 4.19.
 
“Lender” and “Lenders” shall have the meaning ascribed to such term in the
preamble to this Agreement and shall include each Person which becomes a
transferee, successor or assign of any Lender.
 
“Lender-Provided Interest Rate Hedge” shall mean an Interest Rate Hedge which is
provided by any Lender and with respect to which the Agent confirms meets the
following requirements: such Interest Rate Hedge (i) is documented in a standard
International Swap Dealer Association Agreement, (ii) provides for the method of
calculating the reimbursable amount of the provider's credit exposure in a
reasonable and customary manner, and (iii) is entered into for hedging (rather
than speculative) purposes.  The liabilities of any Borrower to the provider of
any Lender-Provided Interest Rate Hedge (the “Hedge Liabilities”) shall be
 
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“Obligations” hereunder, guaranteed obligations under any Guaranty and secured
obligations under any Guarantor Security Agreement and otherwise treated as
Obligations for purposes of each of the Other Documents. The Liens securing the
Hedge Liabilities shall be pari passu with the Liens securing all other
Obligations under this Agreement and the Other Documents.
 
“Letter of Credit Fees” shall have the meaning set forth in Section 3.2.
 
“Letter of Credit Borrowing” shall have the meaning set forth in Section
2.12(d).
 
“Letter of Credit Sublimit” shall mean $0.
 
“Letters of Credit” shall have the meaning set forth in Section 2.9.
 
“License Agreement” shall mean any agreement between any Borrower and a Licensor
pursuant to which such Borrower is authorized to use any Intellectual Property
in connection with the manufacturing, marketing, sale or other distribution of
any Inventory of such Borrower or otherwise in connection with such Borrower’s
business operations.
 
“Licensor” shall mean any Person from whom any Borrower obtains the right to use
(whether on an exclusive or non-exclusive basis) any Intellectual Property in
connection with such Borrower’s manufacture, marketing, sale or other
distribution of any Inventory or otherwise in connection with such Borrower’s
business operations.
 
“Licensor/Agent Agreement” shall mean an agreement between Agent and a Licensor,
in form and content satisfactory to Agent, by which Agent is given the
unqualified right, vis-a-vis such Licensor, to enforce Agent’s Liens with
respect to and to dispose of any Borrower’s Inventory with the benefit of any
Intellectual Property applicable thereto, irrespective of such Borrower’s
default under any License Agreement with such Licensor.
 
“Lien” shall mean any mortgage, deed of trust, pledge, hypothecation,
assignment, security interest, lien (whether statutory or otherwise), Charge,
claim or encumbrance, or preference, priority or other security agreement or
preferential arrangement held or asserted in respect of any asset of any kind or
nature whatsoever including any conditional sale or other title retention
agreement, any lease having substantially the same economic effect as any of the
foregoing, and the filing of, or agreement to give, any financing statement
under the Uniform Commercial Code or comparable law of any jurisdiction.
 
“Lien Waiver Agreement” shall mean an agreement which is executed in favor of
Agent by a Person who owns or occupies premises at which any Collateral may be
located from time to time and by which such Person shall waive any Lien that
such Person may ever have with respect to any of the Collateral and shall
authorize Agent from time to time to enter upon the premises to inspect or
remove the Collateral from such premises or to use such premises to store or
dispose of such Inventory.
 
“Material Adverse Effect” shall mean a material adverse effect on (a) the
condition (financial or otherwise), results of operations, assets, business,
properties or prospects of any Borrower or any Guarantor, (b) any Borrower’s
ability to duly and punctually pay or perform the Obligations in accordance with
the terms thereof, (c) the value of the Collateral, or Agent’s Liens
 
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on the Collateral or the priority of any such Lien or (d) the practical
realization of the benefits of Agent’s and each Lender’s rights and remedies
under this Agreement and the Other Documents.
 
“Maximum Face Amount” shall mean, with respect to any outstanding Letter of
Credit, the face amount of such Letter of Credit including all automatic
increases provided for in such Letter of Credit, whether or not any such
automatic increase has become effective.
 
“Maximum Revolving Advance Amount” shall mean $19,150,000.
 
“Maximum Undrawn Amount” shall mean with respect to any outstanding Letter of
Credit, the amount of such Letter of Credit that is or may become available to
be drawn, including all automatic increases provided for in such Letter of
Credit, whether or not any such automatic increase has become effective.
 
“Minimum Rig Utilization” shall mean, for any fiscal quarter, the ratio
(expressed as a percentage) of (a) the sum for all Rigs of the total days during
such period that each such Rig in the Borrowers’ Rig Fleet Equipment earned
revenue to (b) the sum for all Rigs of the total days that each such Rig in the
Borrowers’ Rig Fleet Equipment was available to earn revenue excluding days in
which a Rig is undergoing refurbishment, upgrades or other scheduled equipment
maintenance projects that are in the ordinary course of business consistent with
reasonable industry standards; provided, that, Borrowers will provide written
notice to Agent if such refurbishment, upgrade or other scheduled equipment
maintenance project causes any Rig to be unable to earn revenue for a period of
more than 90 days.
 
“Mobile Rigs” shall mean Rig Fleet Equipment and Rig Accessories which are
attached or affixed to, or comprise of an integral part of a vehicle, trailer or
carrier.
 
“Modified Commitment Transfer Supplement” shall have the meaning set forth in
Section 16.3(d).
 
“Multiemployer Plan” shall mean a “multiemployer plan” as defined in Sections
3(37) and 4001(a)(3) of ERISA.
 
“Multiple Employer Plan” shall mean a Plan which has two or more contributing
sponsors (including any Borrower or any member of the Controlled Group) at least
two of whom are not under common control, as such a plan is described in Section
4064 of ERISA.
 
“Note” shall mean collectively, the Term Note and the Revolving Credit Note.
 
“Obligations” shall mean and include any and all loans, advances, debts,
liabilities, obligations, covenants and duties owing by any Borrower to Lenders
or Agent or to any other direct or indirect subsidiary or affiliate of Agent or
any Lender of any kind or nature, present or future (including any interest or
other amounts accruing thereon after maturity, or after the filing of any
petition in bankruptcy, or the commencement of any insolvency, reorganization or
like proceeding relating to any Borrower, whether or not a claim for post-filing
or post-petition interest or other amounts is allowed in such proceeding),
whether or not evidenced by any note, guaranty or other instrument, whether
arising under any agreement, instrument or document, (including this Agreement
and the Other Documents) whether or not for the payment of money,
 
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whether arising by reason of an extension of credit, opening of a letter of
credit, loan, equipment lease or guarantee, under any interest or currency swap,
future, option or other similar agreement, or in any other manner, whether
arising out of overdrafts or deposit or other accounts or electronic funds
transfers (whether through automated clearing houses or otherwise) or out of the
Agent’s or any Lenders non-receipt of or inability to collect funds or otherwise
not being made whole in connection with depository transfer check or other
similar arrangements, whether direct or indirect (including those acquired by
assignment or participation), absolute or contingent, joint or several, due or
to become due, now existing or hereafter arising, contractual or tortious,
liquidated or unliquidated, regardless of how such indebtedness or liabilities
arise or by what agreement or instrument they may be evidenced or whether
evidenced by any agreement or instrument, including, but not limited to, any and
all of any Borrower’s Indebtedness and/or liabilities under this Agreement, the
Other Documents or under any other agreement between Agent or Lenders and any
Borrower and any amendments, extensions, renewals or increases and all costs and
expenses of Agent and any Lender incurred in the documentation, negotiation,
modification, enforcement, collection or otherwise in connection with any of the
foregoing, including but not limited to reasonable attorneys’ fees and expenses
and all obligations of any Borrower to Agent or Lenders to perform acts or
refrain from taking any action.
 
“OLV Appraisal” shall have the meaning set forth in Section 9.16.
 
“Orderly Liquidation Value” shall mean, as of any date, the orderly liquidation
value of the Rig Fleet Equipment and other Equipment as determined by the most
recent OLV Appraisal.
 
“Ordinary Course of Business” shall mean with respect to any Borrower, the
ordinary course of such Borrower’s business as conducted on the Closing Date.
 
“Original Owners” shall mean the Persons set forth on Schedule 1.2(a).
 
“Other Documents” shall mean the Note, the Questionnaire, any Guaranty, any
Guarantor Security Agreement, any Lender-Provided Interest Rate Hedge, the Cash
Collateral Agreement and any and all other agreements, instruments and
documents, including guaranties, pledges, powers of attorney, consents, interest
or currency swap agreements or other similar agreements and all other writings
heretofore, now or hereafter executed by any Borrower or any Guarantor and/or
delivered to Agent or any Lender in respect of the transactions contemplated by
this Agreement.
 
“Out-of-Formula Loans” shall have the meaning set forth in Section 16.2(b).
 
“Parent” of any Person shall mean a corporation or other entity owning, directly
or indirectly at least 50% of the shares of stock or other ownership interests
having ordinary voting power to elect a majority of the directors of the Person,
or other Persons performing similar functions for any such Person.
 
“Participant” shall mean each Person who shall be granted the right by any
Lender to participate in any of the Advances and who shall have entered into a
participation agreement in form and substance satisfactory to such Lender.
 
“Participation Advance” shall have the meaning set forth in Section 2.12(d).
 
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“Participation Commitment” shall mean each Lender’s obligation to buy a
participation of the Letters of Credit issued hereunder.
 
“Payee” shall have the meaning set forth in Section 3.10.
 
“Payment Office” shall mean initially Two Tower Center Boulevard, East
Brunswick, New Jersey 08816; thereafter, such other office of Agent, if any,
which it may designate by notice to Borrowing Agent and to each Lender to be the
Payment Office.
 
“PBGC” shall mean the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA or any successor.
 
“Pension Benefit Plan” shall mean at any time any employee pension benefit plan
(including a Multiple Employer Plan, but not a Multiemployer Plan) which is
covered by Title IV of ERISA or is subject to the minimum funding standards
under Section 412 of the Code and either (i) is maintained by any member of the
Controlled Group for employees of any member of the Controlled Group; or (ii)
has at any time within the preceding five years been maintained by any entity
which was at such time a member of the Controlled Group for employees of any
entity which was at such time a member of the Controlled Group.
 
“Permitted Encumbrances” shall mean (a) Liens in favor of Agent for the benefit
of Agent and Lenders; (b) Liens for taxes, assessments or other governmental
charges not delinquent or Properly Contested; (c) Liens disclosed in the
financial statements referred to in Section 5.5, the existence of which Agent
has consented to in writing, provided that such Liens shall secure only those
obligations which they secure on the Closing Date (and extensions, renewals and
refinancings of such obligations permitted by Section 7.8) and shall not
subsequently apply to any other property or assets of any Borrower or any
Guarantor ; (d) deposits or pledges to secure obligations under worker’s
compensation, social security or similar laws, or under unemployment insurance;
(e) deposits or pledges to secure bids, tenders, contracts (other than contracts
for the payment of money), leases, statutory obligations, surety and appeal
bonds and other obligations of like nature arising in the Ordinary Course of
Business; (f) Liens arising by virtue of the rendition, entry or issuance
against any Borrower or any Subsidiary, or any property of any Borrower or any
Subsidiary, of any judgment, writ, order, or decree for so long as each such
Lien (a) is in existence for less than 20 consecutive days after it first arises
or is being Properly Contested and (b) is at all times junior in priority to any
Liens in favor of Agent; (g) mechanics’, workers’, materialmen’s or other like
Liens arising in the Ordinary Course of Business with respect to obligations
which are not due or which are being contested in good faith by the applicable
Borrower; (h) Liens placed upon fixed assets hereafter acquired to secure a
portion of the purchase price thereof, provided that (x) any such lien shall not
encumber any other property of any Borrower and (y) the aggregate amount of
Indebtedness secured by such Liens incurred as a result of such purchases during
any fiscal year shall not exceed the amount provided for in Section 7.6; and (i)
Liens disclosed on Schedule 1.2(b), provided that such Liens shall secure only
those obligations which they secure on the Closing Date (and extensions,
renewals and refinancings of such obligations permitted by Section 7.8) and
shall not subsequently apply to any other property or assets of any Borrower or
any Guarantor; (j) easements, rights-of-way, restrictions, encroachments,
protrusions and other similar encumbrances and minor title defects affecting
real property of any Borrower which, in the
 
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aggregate, do not in any case materially interfere with the Ordinary Course of
Business; (k) Liens existing on property at the time of its acquisition;
provided that (i) such Lien was not created in contemplation of such
acquisition, and (ii) the Indebtedness secured thereby is permitted under
Section 7.8; and (l) other Liens securing Indebtedness outstanding in an
aggregate principal amount not to exceed $500,000.
 
“Person” shall mean any individual, sole proprietorship, partnership,
corporation, business trust, joint stock company, trust, unincorporated
organization, association, limited liability company, limited liability
partnership, institution, public benefit corporation, joint venture, entity or
Governmental Body (whether federal, state, county, city, municipal or otherwise,
including any instrumentality, division, agency, body or department thereof).
 
“Plan” shall mean any employee benefit plan within the meaning of Section 3(3)
of ERISA (including a Pension Benefit Plan), maintained for employees of any
Borrower or any member of the Controlled Group or any such Plan to which any
Borrower or any member of the Controlled Group is required to contribute on
behalf of any of its employees.
 
“PNC” shall have the meaning set forth in the preamble to this Agreement and
shall extend to all of its successors and assigns.
 
“Pro Forma Balance Sheet” shall have the meaning set forth in Section 5.5(a)
hereof.
 
“Pro Forma Financial Statements” shall have the meaning set forth in Section
5.5(b) hereof.
 
“Properly Contested” shall mean, in the case of any Indebtedness or Lien, as
applicable, of any Person (including any taxes) that is not paid as and when due
or payable by reason of such Person’s bona fide dispute concerning its liability
to pay same or concerning the amount thereof, (i) such Indebtedness or Lien, as
applicable, is being properly contested in good faith by appropriate proceedings
promptly instituted and diligently conducted; (ii) such Person has established
appropriate reserves as shall be required in conformity with GAAP; (iii) the
non-payment of such Indebtedness will not have a Material Adverse Effect and
will not result in the forfeiture of any assets of such Person; (iv) no Lien is
imposed upon any of such Person’s assets with respect to such Indebtedness
unless such Lien is at all times junior and subordinate in priority to the Liens
in favor of the Agent (except only with respect to property taxes that have
priority as a matter of applicable state law) and enforcement of such Lien is
stayed during the period prior to the final resolution or disposition of such
dispute; (v) if such Indebtedness or Lien, as applicable, results from, or is
determined by the entry, rendition or issuance against a Person or any of its
assets of a judgment, writ, order or decree, enforcement of such judgment, writ,
order or decree is stayed pending a timely appeal or other judicial review; and
(vi) if such contest is abandoned, settled or determined adversely (in whole or
in part) to such Person, such Person forthwith pays such Indebtedness and all
penalties, interest and other amounts due in connection therewith.
 
“Projections” shall have the meaning set forth in Section 5.5(b) hereof.
 
“Purchasing CLO” shall have the meaning set forth in Section 16.3(d) hereof.
 
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“Purchasing Lender” shall have the meaning set forth in Section 16.3(c) hereof.
 
“Questionnaire” shall mean the Documentation Information Questionnaire and the
responses thereto provided by Borrowing Agent and delivered to Agent.
 
“RCRA” shall mean the Resource Conservation and Recovery Act, 42 U.S.C. §§ 6901
et seq., as same may be amended from time to time.
 
“Real Property” shall mean all of each Borrower’s right, title and interest in
and to the owned and leased premises identified on Schedule 4.19 hereto or which
is hereafter owned or leased by any Borrower.
 
“Receivables” shall mean and include, as to each Borrower, all of such
Borrower’s accounts, contract rights, instruments (including those evidencing
indebtedness owed to such Borrower by its Affiliates), documents, chattel paper
(including electronic chattel paper), general intangibles relating to accounts,
drafts and acceptances, credit card receivables and all other forms of
obligations owing to such Borrower arising out of or in connection with the sale
or lease of Inventory or the rendition of services, all supporting obligations,
guarantees and other security therefor, whether secured or unsecured, now
existing or hereafter created, and whether or not specifically sold or assigned
to Agent hereunder.
 
“Receivables Advance Rate” shall have the meaning set forth in Section
2.1(a)(y)(i) hereof.
 
“Register” shall have the meaning set forth in Section 16.3(e).
 
“Reimbursement Obligation” shall have the meaning set forth in Section
2.12(b)hereof.
 
“Release” shall have the meaning set forth in Section 5.7(c)(i) hereof.
 
“Reportable Event” shall mean a reportable event described in Section 4043(c) of
ERISA or the regulations promulgated thereunder.
 
“Required Lenders” shall mean Lenders holding greater than fifty percent (50%)
of the Advances and, if no Advances are outstanding, shall mean Lenders holding
greater fifty percent (50%) of the Commitment Percentages; provided, however, if
there are fewer than three (3) Lenders, Required Lenders shall mean all Lenders.
 
“Reserve Percentage” shall mean as of any day the maximum percentage in effect
on such day as prescribed by the Board of Governors of the Federal Reserve
System (or any successor) for determining the reserve requirements (including
supplemental, marginal and emergency reserve requirements) with respect to
eurocurrency funding (currently referred to as “Eurocurrency Liabilities”.
 
“Revolving Advances” shall mean Advances made other than Letters of Credit and
the Term Loan.
 
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“Revolving Credit Note” shall mean, collectively, the promissory notes referred
to in Section 2.1(a) hereof.
 
“Revolving Interest Rate” shall mean an interest rate per annum equal to (a) the
sum of the Alternate Base Rate plus one percent (1.0%) with respect to Domestic
Rate Loans and (b) the sum of the Eurodollar Rate plus three percent (3.0%) with
respect to Eurodollar Rate Loans.
 
“Rig(s)” shall mean any drilling and workover rigs held or owned by any
Borrower.
 
“Rig Accessories” shall mean tubulars, pumps, drilling equipment, machinery,
equipment and parts and all other equipment ancillary to Rig Fleet Equipment.
 
“Rig Fleet Equipment” shall mean any Rigs, together with all Rig Accessories and
related parts, held or owned by any Borrower.
 
“SEC” shall mean the Securities and Exchange Commission or any successor
thereto.
 
“Second Acquisition Documents” shall mean collectively, the ARH Acquisition
Documents, BB Drilling Acquisition Documents and the Drill Site Services
Acquisition Documents.
 
“Second Acquisitions” shall mean, collectively, the ARH Acquisition, the BB
Drilling Acquisition and the Drill Site Services Acquisition.
 
“Section 20 Subsidiary” shall mean the Subsidiary of the bank holding company
controlling PNC, which Subsidiary has been granted authority by the Federal
Reserve Board to underwrite and deal in certain Ineligible Securities.
 
“Securities Act” shall mean the Securities Act of 1933, as amended.
 
“Senior Debt Payments” shall mean and include all cash actually expended by any
Borrower to make (a) interest payments on any Advances hereunder, plus (b)
scheduled principal payments on the Term Loan, plus (c) payments for all fees,
commissions and charges set forth herein and with respect to any Advances, plus
(d) capitalized lease payments, plus (e) payments with respect to any other
Indebtedness for borrowed money.
 
                 “Series A Convertible Preferred Stock” shall mean the Series A
Convertible Preferred Stock of Best issued on the Closing Date pursuant to those
certain Stock Subscription Agreements dated the Closing Date.
 
“Settlement Date” shall mean the Closing Date and thereafter Wednesday or
Thursday of each week or more frequently if Agent deems appropriate unless such
day is not a Business Day in which case it shall be the next succeeding Business
Day.
 
“Subsidiary” of any Person shall mean a corporation or other entity of whose
Equity Interests having ordinary voting power (other than Equity Interests
having such power only by reason of the happening of a contingency) to elect a
majority of the directors of such corporation, or other Persons performing
similar functions for such entity, are owned, directly or indirectly, by such
Person.
 
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“Subsidiary Stock” shall mean all of the issued and outstanding Equity Interests
of any Subsidiary owned by any Borrower (not to exceed 65% of the Equity
Interests of any Foreign Subsidiary).
 
“Term” shall have the meaning set forth in Section 13.1 hereof.
 
“Term Loan” shall mean the Advances made pursuant to Section 2.4 hereof.
 
“Term Loan Rate” shall mean an interest rate per annum equal to (a) the sum of
the Alternate Base Rate plus one percent (1.0%) with respect to Domestic Rate
Loans and (b) the sum of the Eurodollar Rate plus three percent (3.0%) with
respect to Eurodollar Rate Loans.
 
“Term Note” shall mean, collectively, the promissory notes described in Section
2.4 hereof.
 
“Termination Event” shall mean (i) a Reportable Event with respect to any Plan
or Multiemployer Plan; (ii) the withdrawal of any Borrower or any member of the
Controlled Group from a Plan or Multiemployer Plan during a plan year in which
such entity was a “substantial employer” as defined in Section 4001(a)(2) of
ERISA; (iii) the providing of notice of intent to terminate a Plan in a distress
termination described in Section 4041(c) of ERISA; (iv) the institution by the
PBGC of proceedings to terminate a Plan or Multiemployer Plan; (v) any event or
condition (a) which might constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Plan or
Multiemployer Plan, or (b) that may result in termination of a Multiemployer
Plan pursuant to Section 4041A of ERISA; or (vi) the partial or complete
withdrawal within the meaning of Sections 4203 and 4205 of ERISA, of any
Borrower or any member of the Controlled Group from a Multiemployer Plan.
 
“Toxic Substance” shall mean and include any material present on the Real
Property or the Leasehold Interests which has been shown to have significant
adverse effect on human health or which is subject to regulation under the Toxic
Substances Control Act (TSCA), 15 U.S.C. §§ 2601 et seq., applicable state law,
or any other applicable Federal or state laws now in force or hereafter enacted
relating to toxic substances.  “Toxic Substance” includes but is not limited to
asbestos, polychlorinated biphenyls (PCBs) and lead-based paints.
 
“Trading with the Enemy Act” shall mean the foreign assets control regulations
of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as
amended) and any enabling legislation or executive order relating thereto.
 
“Transactions” shall have the meaning set forth in Section 5.5 hereof.
 
“Transferee” shall have the meaning set forth in Section 16.3(d) hereof.
 
“Undrawn Availability” at a particular date shall mean an amount equal to (a)
the lesser of (i) the Formula Amount or (ii) the Maximum Revolving Advance
Amount, minus (b) the sum of (i) the outstanding amount of Advances (other than
the Term Loan) plus (ii) all amounts due and owing to any Borrower’s trade
creditors which are more than sixty (60) days past due, plus (iii) fees and
expenses for which Borrowers are liable but which have not been paid or charged
to Borrowers’ Account..
 
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“Unfinanced Capital Expenditures” shall mean all Capital Expenditures of
Borrower other than those made utilizing financing provided by the applicable
seller or third party lenders.  For the avoidance of doubt, Capital Expenditures
made by a Borrower utilizing Revolving Advances shall be deemed Unfinanced
Capital Expenditures.
 
“Uniform Commercial Code” shall have the meaning set forth in Section 1.3
hereof.
 
“USA PATRIOT Act” shall mean the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001,
Public Law 107-56, as the same has been, or shall hereafter be, renewed,
extended, amended or replaced.
 
“Week” shall mean the time period commencing with the opening of business on a
Wednesday and ending on the end of business the following Tuesday.
 
1.3. Uniform Commercial Code Terms.  All terms used herein and defined in the
Uniform Commercial Code as adopted in the State of New York from time to time
(the “Uniform Commercial Code”) shall have the meaning given therein unless
otherwise defined herein.  Without limiting the foregoing, the terms “accounts”,
“chattel paper”, “instruments”, “general intangibles”, “goods”, “payment
intangibles”, “proceeds”, “supporting obligations”, “securities”, “investment
property”, “documents”, “deposit accounts”, “software”, “letter of credit
rights”, “inventory”, “equipment” and “fixtures”, as and when used in the
description of Collateral shall have the meanings given to such terms in
Articles 8 or 9 of the Uniform Commercial Code.  To the extent the definition of
any category or type of collateral is expanded by any amendment, modification or
revision to the Uniform Commercial Code, such expanded definition will apply
automatically as of the date of such amendment, modification or revision.
 
1.4. Certain Matters of Construction.  The terms “herein”, “hereof” and
“hereunder” and other words of similar import refer to this Agreement as a whole
and not to any particular section, paragraph or subdivision.  All references
herein to Articles, Sections, Exhibits and Schedules shall be construed to refer
to Articles and Sections of, and Exhibits and Schedules to, this Agreement.  Any
pronoun used shall be deemed to cover all genders.  Wherever appropriate in the
context, terms used herein in the singular also include the plural and vice
versa.  All references to statutes and related regulations shall include any
amendments of same and any successor statutes and regulations.  Unless otherwise
provided, all references to any instruments or agreements to which Agent is a
party, including references to any of the Other Documents, shall include any and
all modifications or amendments thereto and any and all extensions or renewals
thereof.  All references herein to the time of day shall mean the time in New
York, New York.  Whenever the words “including” or “include” shall be used, such
words shall be understood to mean “including, without limitation” or “include,
without limitation”.  A Default or Event of Default shall be deemed to exist at
all times during the period commencing on the date that such Default or Event of
Default occurs to the date on which such Default or Event of Default is waived
in writing pursuant to this Agreement or, in the case of a Default, is cured
within any period of cure expressly provided for in this Agreement; and an Event
of Default shall “continue” or be “continuing” until such Event of Default has
been waived in writing by the Required Lenders.  Any Lien referred to in this
Agreement or any of the Other Documents as having been created in favor of
Agent, any agreement entered into by Agent pursuant to this Agreement or any of
the Other Documents, any payment made by or to or funds received by
 
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Agent pursuant to or as contemplated by this Agreement or any of the Other
Documents, or any act taken or omitted to be taken by Agent, shall, unless
otherwise expressly provided, be created, entered into, made or received, or
taken or omitted, for the benefit or account of Agent and Lenders. Wherever the
phrase “to the best of Borrowers’ knowledge” or words of similar import relating
to the knowledge or the awareness of any Borrower are used in this Agreement or
Other Documents, such phrase shall mean and refer to (i) the actual knowledge of
a senior officer of any Borrower or (ii) the knowledge that a senior officer
would have obtained if he had engaged in good faith and diligent performance of
his duties, including the making of such reasonably specific inquiries as may be
necessary of the employees or agents of such Borrower and a good faith attempt
to ascertain the existence or accuracy of the matter to which such phrase
relates.  All covenants hereunder shall be given independent effect so that if a
particular action or condition is not permitted by any of such covenants, the
fact that it would be permitted by an exception to, or otherwise within the
limitations of, another covenant shall not avoid the occurrence of a default if
such action is taken or condition exists.  In addition, all representations and
warranties hereunder shall be given independent effect so that if a particular
representation or warranty proves to be incorrect or is breached, the fact that
another representation or warranty concerning the same or similar subject matter
is correct or is not breached will not affect the incorrectness of a breach of a
representation or warranty hereunder.
 
II. ADVANCES, PAYMENTS.
 
2.1. Revolving Advances.
 
(a) Amount of Revolving Advances.  Subject to the terms and conditions set forth
in this Agreement, including Section 2.1(b), each Lender, severally and not
jointly, will make Revolving Advances to Borrowers in aggregate amounts
outstanding at any time equal to such Lender’s Commitment Percentage of the
lesser of (x) the Maximum Revolving Advance Amount less the aggregate Maximum
Undrawn Amount of all outstanding Letters of Credit  or (y) an amount equal to
the sum of:
 
(i) up to 85%, subject to the provisions of Section 2.1(b) hereof (“Receivables
Advance Rate”), of Eligible Receivables, plus
 
(ii) up to the Equipment Advance Rate, subject to the provisions of Section
2.1(b) hereof, of the Orderly Liquidation Value of the Eligible Equipment and
Eligible Rig Fleet Equipment, plus
 
(iii) up to 100%, subject to the provisions of Section 2.1(b) hereof (the “Cash
Collateral Advance Rate”), of the Cash Collateral Deposit, minus
 
(iv) the aggregate Maximum Undrawn Amount of all outstanding Letters of Credit,
minus
 
(v) such reserves as Agent may reasonably deem proper and necessary from time to
time in Agent’s reasonable credit judgment.
 
The amount derived from the sum of (x) Sections 2.1(a)(y)(i), (ii) and (iii)
minus (y) Section 2.1 (a)(y)(v) at any time and from time to time shall be
referred to as the “Formula
 
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Amount”.  Notwithstanding the foregoing, Advances against the Orderly
Liquidation Value of modular homes and related assets included as Eligible
Equipment for purposes of calculating the Formula Amount shall not exceed
$3,000,000. The Revolving Advances shall be evidenced by one or more secured
promissory notes (collectively, the “Revolving Credit Note”) substantially in
the form attached hereto as Exhibit 2.1(a).
 
(b) Discretionary Rights.  The Advance Rates may be increased or decreased by
Agent at any time and from time to time in the exercise of its reasonable credit
judgment.  Each Borrower consents to any such increases or decreases and
acknowledges that decreasing the Advance Rates or increasing or imposing
reserves may limit or restrict Advances requested by Borrowing Agent.  The
rights of Agent under this subsection are subject to the provisions of Section
16.2(b).
 
2.2. Procedure for Revolving Advances Borrowing.
 
(a) Borrowing Agent on behalf of any Borrower may notify Agent prior to 10:00
a.m. on a Business Day of a Borrower’s request to incur, on that day, a
Revolving Advance hereunder.  Should any amount required to be paid as interest
hereunder, or as fees or other charges under this Agreement or any other
agreement with Agent or Lenders, or with respect to any other Obligation, become
due, same shall be deemed a request for a Revolving Advance as of the date such
payment is due, in the amount required to pay in full such interest, fee, charge
or Obligation under this Agreement or any other agreement with Agent or Lenders,
and such request shall be irrevocable.
 
(b) Notwithstanding the provisions of subsection (a) above, in the event any
Borrower desires to obtain a Eurodollar Rate Loan, Borrowing Agent shall give
Agent written notice by no later than 10:00 a.m. on the day which is three (3)
Business Days prior to the date such Eurodollar Rate Loan is to be borrowed,
specifying (i) the date of the proposed borrowing (which shall be a Business
Day), (ii) the type of borrowing and the amount on the date of such Advance to
be borrowed, which amount shall be a minimum of $100,000 and integral multiples
of $100,000 in excess thereof, and (iii) the duration of the first Interest
Period therefor.  Interest Periods for Eurodollar Rate Loans shall be for one,
two or three months; provided, if an Interest Period would end on a day that is
not a Business Day, it shall end on the next succeeding Business Day unless such
day falls in the next succeeding calendar month in which case the Interest
Period shall end on the next preceding Business Day.  No Eurodollar Rate Loan
shall be made available to any Borrower during the continuance of a Default or
an Event of Default.  After giving effect to each requested Eurodollar Rate
Loan, including those which are converted from a Domestic Rate Loan under
Section 2.2(d), there shall not be outstanding more than three (3) Eurodollar
Rate Loans, in the aggregate.
 
(c) Each Interest Period of a Eurodollar Rate Loan shall commence on the date
such Eurodollar Rate Loan is made and shall end on such date as Borrowing Agent
may elect as set forth in subsection (b)(iii) above provided that the exact
length of each Interest Period shall be determined in accordance with the
practice of the interbank market for offshore Dollar deposits and no Interest
Period shall end after the last day of the Term.
 
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Borrowing Agent shall elect the initial Interest Period applicable to a
Eurodollar Rate Loan by its notice of borrowing given to Agent pursuant to
Section 2.2(b) or by its notice of conversion given to Agent pursuant to Section
2.2(d), as the case may be.  Borrowing Agent shall elect the duration of each
succeeding Interest Period by giving irrevocable written notice to Agent of such
duration not later than 10:00 a.m. on the day which is three (3) Business Days
prior to the last day of the then current Interest Period applicable to such
Eurodollar Rate Loan.  If Agent does not receive timely notice of the Interest
Period elected by Borrowing Agent, Borrowing Agent shall be deemed to have
elected to convert to a Domestic Rate Loan subject to Section 2.2(d)
hereinbelow.
 
(d) Provided that no Event of Default shall have occurred and be continuing,
Borrowing Agent may, on the last Business Day of the then current Interest
Period applicable to any outstanding Eurodollar Rate Loan, or on any Business
Day with respect to Domestic Rate Loans, convert any such loan into a loan of
another type in the same aggregate principal amount provided that any conversion
of a Eurodollar Rate Loan shall be made only on the last Business Day of the
then current Interest Period applicable to such Eurodollar Rate Loan.  If
Borrowing Agent desires to convert a loan, Borrowing Agent shall give Agent
written notice by no later than 10:00 a.m. (i) on the day which is three (3)
Business Days’ prior to the date on which such conversion is to occur with
respect to a conversion from a Domestic Rate Loan to a Eurodollar Rate Loan, or
(ii) on the day which is one (1) Business Day prior to the date on which such
conversion is to occur with respect to a conversion from a Eurodollar Rate Loan
to a Domestic Rate Loan, specifying, in each case, the date of such conversion,
the loans to be converted and if the conversion is from a Domestic Rate Loan to
any other type of loan, the duration of the first Interest Period therefor.
 
(e) At its option and upon written notice given prior to 10:00 a.m. (New York
time) at least three (3) Business Days’ prior to the date of such prepayment,
any Borrower may prepay the Eurodollar Rate Loans in whole at any time or in
part from time to time with accrued interest on the principal being prepaid to
the date of such repayment.  Such Borrower shall specify the date of prepayment
of Advances which are Eurodollar Rate Loans and the amount of such
prepayment.  In the event that any prepayment of a Eurodollar Rate Loan is
required or permitted on a date other than the last Business Day of the then
current Interest Period with respect thereto, such Borrower shall indemnify
Agent and Lenders therefor in accordance with Section 2.2(f) hereof.
 
(f) Each Borrower shall indemnify Agent and Lenders and hold Agent and Lenders
harmless from and against any and all losses or expenses that Agent and Lenders
may sustain or incur as a consequence of any prepayment, conversion of or any
default by any Borrower in the payment of the principal of or interest on any
Eurodollar Rate Loan or failure by any Borrower to complete a borrowing of, a
prepayment of or conversion of or to a Eurodollar Rate Loan after notice thereof
has been given, including, but not limited to, any interest payable by Agent or
Lenders to lenders of funds obtained by it in order to make or maintain its
Eurodollar Rate Loans hereunder.  A certificate as to any additional amounts
payable pursuant to the foregoing sentence submitted by Agent or any Lender to
Borrowing Agent shall be conclusive absent manifest error.
 
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(g) Notwithstanding any other provision hereof, if any Applicable Law, or any
change therein or in the interpretation or application thereof, shall make it
unlawful for any Lender (for purposes of this subsection (g), the term “Lender”
shall include any Lender and the office or branch where any Lender or any
corporation or bank controlling such Lender makes or maintains any Eurodollar
Rate Loans) to make or maintain its Eurodollar Rate Loans, the obligation of
Lenders to make Eurodollar Rate Loans hereunder shall forthwith be cancelled and
Borrowers shall, if any affected Eurodollar Rate Loans are then outstanding,
promptly upon request from Agent, either pay all such affected Eurodollar Rate
Loans or convert such affected Eurodollar Rate Loans into loans of another
type.  If any such payment or conversion of any Eurodollar Rate Loan is made on
a day that is not the last day of the Interest Period applicable to such
Eurodollar Rate Loan, Borrowers shall pay Agent, upon Agent’s request, such
amount or amounts as may be necessary to compensate Lenders for any loss or
expense sustained or incurred by Lenders in respect of such Eurodollar Rate Loan
as a result of such payment or conversion, including (but not limited to) any
interest or other amounts payable by Lenders to lenders of funds obtained by
Lenders in order to make or maintain such Eurodollar Rate Loan.  A certificate
as to any additional amounts payable pursuant to the foregoing sentence
submitted by Lenders to Borrowing Agent shall be conclusive absent manifest
error.
 
2.3. Disbursement of Advance Proceeds.  All Advances shall be disbursed from
whichever office or other place Agent may designate from time to time and,
together with any and all other Obligations of Borrowers to Agent or Lenders,
shall be charged to Borrowers’ Account on Agent’s books.  During the Term,
Borrowers may use the Revolving Advances by borrowing, prepaying and
reborrowing, all in accordance with the terms and conditions hereof.  The
proceeds of each Revolving Advance requested by Borrowing Agent on behalf of any
Borrower or deemed to have been requested by any Borrower under Section 2.2(a)
hereof shall, with respect to requested Revolving Advances to the extent Lenders
make such Revolving Advances, be made available to the applicable Borrower on
the day so requested by way of credit to such Borrower’s operating account at
PNC, or such other bank as Borrowing Agent may designate following notification
to Agent, in immediately available federal funds or other immediately available
funds or, with respect to Revolving Advances deemed to have been requested by
any Borrower, be disbursed to Agent to be applied to the outstanding Obligations
giving rise to such deemed request.
 
2.4. Term Loan.  Subject to the terms and conditions of this Agreement, each
Lender, severally and not jointly, will make a Term Loan to Borrowers in the sum
equal to such Lender’s Commitment Percentage of the lesser of (x) $5,850,000 and
(y) 80% of the OLV of the equipment and machinery of BBD and Best (in the case
of Best, only to the extent such equipment or machinery is to be acquired in the
Drill Site Services Acquisition or BB Drilling Acquisition, and expressly
excluding any machinery and equipment to be acquired in the ARH Acquisition)
that is satisfactory to Agent in its reasonable credit judgment.  Subject to the
terms and conditions of this Agreement, the Term Loan shall be advanced in two
draws, the first on the Closing Date, in an amount equal to $2,850,000 and the
second, on the date the Second Acquisitions are consummated, in an amount equal
to $3,000,000.  The Term Loan shall be, with respect to principal, payable in
sixty equal monthly installments (i.e., $97,500 per month if the full $5,850,000
is advanced) commencing on March 1, 2008 and on the first day of each
 
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month thereafter with the balance payable upon expiration of the Term, subject
to acceleration upon the occurrence of an Event of Default under this Agreement
or termination of this Agreement.  The Term Loan shall be evidenced by one or
more secured promissory notes (collectively, the “Term Note”) in substantially
the form attached hereto as Exhibit 2.4.
 
2.5. Maximum Advances.  The aggregate balance of Revolving Advances outstanding
at any time shall not exceed the lesser of (a) the Maximum Revolving Advance
Amount or (b) the Formula Amount less, in each case, the aggregate Maximum
Undrawn Amount of all issued and outstanding Letters of Credit.
 
2.6. Repayment of Advances.
 
(a) The Revolving Advances shall be due and payable in full on the last day of
the Term subject to earlier prepayment as herein provided.  The Term Loan shall
be due and payable as provided in Section 2.4 hereof and in the Term Note,
subject to mandatory prepayments as herein provided.
 
(b) Each Borrower recognizes that the amounts evidenced by checks, notes, drafts
or any other items of payment relating to and/or proceeds of Collateral may not
be collectible by Agent on the date received.  In consideration of Agent’s
agreement to conditionally credit Borrowers’ Account as of the Business Day on
which Agent receives those items of payment, each Borrower agrees that, in
computing the charges under this Agreement, all items of payment shall be deemed
applied by Agent on account of the Obligations one (1) Business Day after (i)
the Business Day Agent receives such payments via wire transfer or electronic
depository check or (ii) in the case of payments received by Agent in any other
form, the Business Day such payment constitutes good funds in Agent’s
account.  Agent is not, however, required to credit Borrowers’ Account for the
amount of any item of payment which is unsatisfactory to Agent and Agent may
charge Borrowers’ Account for the amount of any item of payment which is
returned to Agent unpaid.
 
(c) All payments of principal, interest and other amounts payable hereunder, or
under any of the Other Documents shall be made to Agent at the Payment Office
not later than 1:00 P.M. (New York time) on the due date therefor in lawful
money of the United States of America in federal funds or other funds
immediately available to Agent.  Agent shall have the right to effectuate
payment on any and all Obligations due and owing hereunder by charging
Borrowers’ Account or by making Advances as provided in Section 2.2 hereof.
 
(d) Borrowers shall pay principal, interest, and all other amounts payable
hereunder, or under any related agreement, without any deduction whatsoever,
including, but not limited to, any deduction for any setoff or counterclaim.
 
2.7. Repayment of Excess Advances.  The aggregate balance of Advances
outstanding at any time in excess of the maximum amount of Advances permitted
hereunder shall be immediately due and payable without the necessity of any
demand, at the Payment Office, whether or not a Default or Event of Default has
occurred.
 
2.8. Statement of Account.  Agent shall maintain, in accordance with its
customary procedures, a loan account (“Borrowers’ Account”) in the name of
Borrowers in which shall be
 
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recorded the date and amount of each Advance made by Agent and the date and
amount of each payment in respect thereof; provided, however, the failure by
Agent to record the date and amount of any Advance shall not adversely affect
Agent or any Lender.  Each month, Agent shall send to Borrowing Agent a
statement showing the accounting for the Advances made, payments made or
credited in respect thereof, and other transactions between Agent and Borrowers
during such month.  The monthly statements shall be deemed correct and binding
upon Borrowers in the absence of manifest error and shall constitute an account
stated between Lenders and Borrowers unless Agent receives a written statement
of Borrowers’ specific exceptions thereto within thirty (30) days after such
statement is received by Borrowing Agent.  The records of Agent with respect to
the loan account shall be conclusive evidence absent manifest error of the
amounts of Advances and other charges thereto and of payments applicable
thereto.
 
2.9. Letters of Credit.  Subject to the terms and conditions hereof, Agent shall
(a) issue or cause the issuance of standby and/or trade Letters of Credit
(“Letters of Credit”) for the account of any Borrower; provided, however, that
Agent will not be required to issue or cause to be issued any Letters of Credit
to the extent that the issuance thereof would then cause the sum of (i) the
outstanding Revolving Advances plus (ii) the Maximum Undrawn Amount of all
outstanding Letters of Credit to exceed the lesser of (x) the Maximum Revolving
Advance Amount or (y) the Formula Amount.  The Maximum Undrawn Amount of
outstanding Letters of Credit shall not exceed in the aggregate at any time the
Letter of Credit Sublimit.  All disbursements or payments related to Letters of
Credit shall be deemed to be Domestic Rate Loans consisting of Revolving
Advances and shall bear interest at the Revolving Interest Rate for Domestic
Rate Loans; Letters of Credit that have not been drawn upon shall not bear
interest.
 
2.10. Issuance of Letters of Credit.
 
(a) Borrowing Agent, on behalf of Borrowers, may request Agent to issue or cause
the issuance of a Letter of Credit by delivering to Agent at the Payment Office,
prior to 10:00 a.m. (New York time), at least five (5)  Business Days’ prior to
the proposed date of issuance, Agent’s form of Letter of Credit Application (the
“Letter of Credit Application”) completed to the satisfaction of Agent; and,
such other certificates, documents and other papers and information as Agent may
reasonably request.  Borrowing Agent, on behalf of Borrowers, also has the right
to give instructions and make agreements with respect to any application, any
applicable letter of credit and security agreement, any applicable letter of
credit reimbursement agreement and/or any other applicable agreement, any letter
of credit and the disposition of documents, disposition of any unutilized funds,
and to agree with Agent upon any amendment, extension or renewal of any Letter
of Credit.
 
(b) Each Letter of Credit shall, among other things, (i) provide for the payment
of sight drafts, other written demands for payment, or acceptances of usance
drafts when presented for honor thereunder in accordance with the terms thereof
and when accompanied by the documents described therein and (ii) have an expiry
date not later than twenty-four (24) months after such Letter of Credit’s date
of issuance and in no event later than the last day of the Term.  Each standby
Letter of Credit shall be subject either to the Uniform Customs and Practice for
Documentary Credits as  most recently published by the International Chamber of
Commerce at the time a Letter of Credit is issued (the “UCP”) or the
International
 
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Standby Practices (ISP98 International Chamber of Commerce Publication Number
590) (the “ISP98 Rules”)), and any subsequent revision thereof at the time a
standby Letter of Credit is issued, as determined by Agent, and each trade
Letter of Credit shall be subject to the UCP.
 
(c) Agent shall use its reasonable efforts to notify Lenders of the request by
Borrowing Agent for a Letter of Credit hereunder.
 
2.11. Requirements For Issuance of Letters of Credit.
 
(a) Borrowing Agent shall authorize and direct any Issuer to name the applicable
Borrower as the “Applicant” or “Account Party” of each Letter of Credit.  If
Agent is not the Issuer of any Letter of Credit, Borrowing Agent shall authorize
and direct the Issuer to deliver to Agent all instruments, documents, and other
writings and property received by the Issuer pursuant to the Letter of Credit
and to accept and rely upon Agent’s instructions and agreements with respect to
all matters arising in connection with the Letter of Credit or the application
therefor.
 
(b) In connection with all Letters of Credit issued or caused to be issued by
Agent under this Agreement, each Borrower hereby appoints Agent, or its
designee, as its attorney, with full power and authority if an Event of Default
shall have occurred, (i) to sign and/or endorse such Borrower’s name upon any
warehouse or other receipts, letter of credit applications and acceptances, (ii)
to sign such Borrower’s name on bills of lading; (iii) to clear Inventory
through the United States of America Customs Department (“Customs”) in the name
of such Borrower or Agent or Agent’s designee, and to sign and deliver to
Customs officials powers of attorney in the name of such Borrower for such
purpose; and (iv) to complete in such Borrower’s name or Agent’s, or in the name
of Agent’s designee, any order, sale or transaction, obtain the necessary
documents in connection therewith, and collect the proceeds thereof.  Neither
Agent nor its attorneys will be liable for any acts or omissions nor for any
error of judgment or mistakes of fact or law, except for Agent’s or its
attorney’s willful misconduct.  This power, being coupled with an interest, is
irrevocable as long as any Letters of Credit remain outstanding.
 
2.12. Disbursements, Reimbursement.
 
(a) Immediately upon the issuance of each Letter of Credit, each Lender shall be
deemed to, and hereby irrevocably and unconditionally agrees to, purchase from
Agent a participation in such Letter of Credit and each drawing thereunder in an
amount equal to such Lender’s Commitment Percentage of the Maximum Face Amount
of such Letter of Credit and the amount of such drawing, respectively.
 
(b) In the event of any request for a drawing under a Letter of Credit by the
beneficiary or transferee thereof, Agent will promptly notify Borrowing
Agent.  Provided that Borrowing Agent shall have received such notice, the
Borrowers shall reimburse (such obligation to reimburse Agent shall sometimes be
referred to as a “Reimbursement Obligation”) Agent prior to 12:00 Noon, New York
time on each date that an amount is paid by Agent under any Letter of Credit
(each such date, a “Drawing Date”) in an amount equal to the amount so paid by
Agent.  In the event Borrowers fail to reimburse Agent for the full amount of
any
 
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drawing under any Letter of Credit by 12:00 Noon, New York time, on the Drawing
Date, Agent will promptly notify each Lender thereof, and Borrowers shall be
deemed to have requested that a Domestic Rate Loan be made by the Lenders to be
disbursed on the Drawing Date under such Letter of Credit, subject to the amount
of the unutilized portion of the lesser of Maximum Revolving Advance Amount or
the Formula Amount and subject to Section 8.2 hereof.  Any notice given by Agent
pursuant to this Section 2.12(b) may be oral if immediately confirmed in
writing; provided that the lack of such an immediate confirmation shall not
affect the conclusiveness or binding effect of such notice.
 
(c) Each Lender shall upon any notice pursuant to Section 2.12(b) make available
to Agent an amount in immediately available funds equal to its Commitment
Percentage of the amount of the drawing, whereupon the participating Lenders
shall (subject to Section 2.12(d)) each be deemed to have made a Domestic Rate
Loan to Borrowers in that amount.  If any Lender so notified fails to make
available to Agent the amount of such Lender’s Commitment Percentage of such
amount by no later than 2:00 p.m., New York time on the Drawing Date, then
interest shall accrue on such Lender’s obligation to make such payment, from the
Drawing Date to the date on which such Lender makes such payment (i) at a rate
per annum equal to the Federal Funds Effective Rate during the first three days
following the Drawing Date and (ii) at a rate per annum equal to the rate
applicable to Revolving Advances maintained as Domestic Rate Loans on and after
the fourth day following the Drawing Date.  Agent will promptly give notice of
the occurrence of the Drawing Date, but failure of Agent to give any such notice
on the Drawing Date or in sufficient time to enable any Lender to effect such
payment on such date shall not relieve such Lender from its obligation under
this Section 2.12(c), provided that such Lender shall not be obligated to pay
interest as provided in Section 2.12(c) (i) and (ii) until and commencing from
the date of receipt of notice from Agent of a drawing.
 
(d) With respect to any unreimbursed drawing that is not converted into a
Revolving Advance maintained as a Domestic Rate Loan to Borrowers in whole or in
part as contemplated by Section 2.12(b), because of Borrowers’ failure to
satisfy the conditions set forth in Section 8.2 (other than any notice
requirements) or for any other reason, Borrowers shall be deemed to have
incurred from Agent a borrowing (each a “Letter of Credit Borrowing”) in the
amount of such drawing. Such Letter of Credit Borrowing shall be due and payable
on demand (together with interest) and shall bear interest at the rate per annum
applicable to a Revolving Advance maintained as a Domestic Rate Loan.  Each
Lender’s payment to Agent pursuant to Section 2.12(c) shall be deemed to be a
payment in respect of its participation in such Letter of Credit Borrowing and
shall constitute a “Participation Advance” from such Lender in satisfaction of
its Participation Commitment under this Section 2.12.
 
(e) Each Lender’s Participation Commitment shall continue until the last to
occur of any of the following events:  (x) Agent ceases to be obligated to issue
or cause to be issued Letters of Credit hereunder; (y) no Letter of Credit
issued or created hereunder remains outstanding and uncancelled and (z) all
Persons (other than the Borrowers) have been fully reimbursed for all payments
made under or relating to Letters of Credit.
 
2.13. Repayment of Participation Advances.
 
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(a) Upon (and only upon) receipt by Agent for its account of immediately
available funds from Borrowers (i) in reimbursement of any payment made by the
Agent under the Letter of Credit with respect to which any Lender has made a
Participation Advance to Agent, or (ii) in payment of interest on such a payment
made by Agent under such a Letter of Credit, Agent will pay to each Lender, in
the same funds as those received by Agent, the amount of such Lender’s
Commitment Percentage of such funds, except Agent shall retain the amount of the
Commitment Percentage of such funds of any Lender that did not make a
Participation Advance in respect of such payment by Agent.
 
(b) If Agent is required at any time to return to any Borrower, or to a trustee,
receiver, liquidator, custodian, or any official in any insolvency proceeding,
any portion of the payments made by Borrowers to Agent pursuant to Section
2.13(a) in reimbursement of a payment made under the Letter of Credit or
interest or fee thereon, each Lender shall, on demand of Agent, forthwith return
to Agent the amount of its Commitment Percentage of any amounts so returned by
Agent plus interest at the Federal Funds Effective Rate.
 
2.14. Documentation.  Each Borrower agrees to be bound by the terms of the
Letter of Credit Application and by Agent’s interpretations of any Letter of
Credit issued on behalf of such Borrower and by Agent’s written regulations and
customary practices relating to letters of credit, though Agent’s
interpretations may be different from such Borrower’s own.  In the event of a
conflict between the Letter of Credit Application and this Agreement, this
Agreement shall govern.  It is understood and agreed that, except in the case of
gross negligence or willful misconduct (as determined by a court of competent
jurisdiction in a final non-appealable judgment), Agent shall not be liable for
any error, negligence and/or mistakes, whether of omission or commission, in
following the Borrowing Agent’s or any Borrower’s instructions or those
contained in the Letters of Credit or any modifications, amendments or
supplements thereto.
 
2.15. Determination to Honor Drawing Request.  In determining whether to honor
any request for drawing under any Letter of Credit by the beneficiary thereof,
Agent shall be responsible only to determine that the documents and certificates
required to be delivered under such Letter of Credit have been delivered and
that they comply on their face with the requirements of such Letter of Credit
and that any other drawing condition appearing on the face of such Letter of
Credit has been satisfied in the manner so set forth.
 
2.16. Nature of Participation and Reimbursement Obligations.  Each Lender’s
obligation in accordance with this Agreement to make the Revolving Advances or
Participation Advances as a result of a drawing under a Letter of Credit, and
the obligations of Borrowers to reimburse Agent upon a draw under a Letter of
Credit, shall be absolute, unconditional and irrevocable, and shall be performed
strictly in accordance with the terms of this Section 2.16 under all
circumstances, including the following circumstances:
 
(i) any set-off, counterclaim, recoupment, defense or other right which such
Lender may have against Agent, any Borrower or any other Person for any reason
whatsoever;
 
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(ii) the failure of any Borrower or any other Person to comply, in connection
with a Letter of Credit Borrowing, with the conditions set forth in this
Agreement for the making of a Revolving Advance, it being acknowledged that such
conditions are not required for the making of a Letter of Credit Borrowing and
the obligation of the Lenders to make Participation Advances under Section 2.12;
 
(iii) any lack of validity or enforceability of any Letter of Credit;
 
(iv) any claim of breach of warranty that might be made by Borrower or any
Lender against the beneficiary of a Letter of Credit, or the existence of any
claim, set-off, recoupment, counterclaim, crossclaim, defense or other right
which any Borrower or any Lender may have at any time against a beneficiary, any
successor beneficiary or any transferee of any Letter of Credit or the proceeds
thereof (or any Persons for whom any such transferee may be acting), Agent or
any Lender or any other Person, whether in connection with this Agreement, the
transactions contemplated herein or any unrelated transaction (including any
underlying transaction between any Borrower or any Subsidiaries of such Borrower
and the beneficiary for which any Letter of Credit was procured);
 
(v) the lack of power or authority of any signer of (or any defect in or forgery
of any signature or endorsement on) or the form of or lack of validity,
sufficiency, accuracy, enforceability or genuineness of any draft, demand,
instrument, certificate or other document presented under or in connection with
any Letter of Credit, or any fraud or alleged fraud in connection with any
Letter of Credit, or the transport of any property or provisions of services
relating to a Letter of Credit, in each case even if Agent or any of Agent’s
Affiliates has been notified thereof;
 
(vi) payment by Agent under any Letter of Credit against presentation of a
demand, draft or certificate or other document which does not comply with the
terms of such Letter of Credit;
 
(vii) the solvency of, or any acts or omissions by, any beneficiary of any
Letter of Credit, or any other Person having a role in any transaction or
obligation relating to a Letter of Credit, or the existence, nature, quality,
quantity, condition, value or other characteristic of any property or services
relating to a Letter of Credit;
 
(viii) any failure by the Agent or any of Agent’s Affiliates to issue any Letter
of Credit in the form requested by Borrowing Agent, unless the Agent has
received written notice from Borrowing Agent of such failure within three (3)
Business Days after the Agent shall have furnished Borrowing Agent a copy of
such Letter of Credit and such error is material and no drawing has been made
thereon prior to receipt of such notice;
 
(ix) any Material Adverse Effect on any Borrower or any Guarantor;
 
(x) any breach of this Agreement or any Other Document by any party thereto;
 
(xi) the occurrence or continuance of an insolvency proceeding with respect to
any Borrower or any Guarantor;
 
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(xii) the fact that a Default or Event of Default shall have occurred and be
continuing;
 
(xiii) the fact that the Term shall have expired or this Agreement or the
Obligations hereunder shall have been terminated; and
 
(xiv) any other circumstance or happening whatsoever, whether or not similar to
any of the foregoing.
 
2.17. Indemnity.  In addition to amounts payable as provided in Section 16.5,
each Borrower hereby agrees to protect, indemnify, pay and save harmless Agent
and any of Agent’s Affiliates that have issued a Letter of Credit from and
against any and all claims, demands, liabilities, damages, taxes, penalties,
interest, judgments, losses, costs, charges and expenses (including reasonable
fees, expenses and disbursements of counsel and allocated costs of internal
counsel) which the Agent or any of Agent’s Affiliates may incur or be subject to
as a consequence, direct or indirect, of the issuance of any Letter of Credit,
other than as a result of (A) the gross negligence or willful misconduct of the
Agent as determined by a final and non-appealable judgment of a court of
competent jurisdiction or (b) the wrongful dishonor by the Agent or any of
Agent’s Affiliates of a proper demand for payment made under any Letter of
Credit, except if such dishonor resulted from any act or omission, whether
rightful or wrongful, of any present or future de jure or de facto Governmental
Body (all such acts or omissions herein called “Governmental Acts”).
 
2.18. Liability for Acts and Omissions.  As between Borrowers and Agent and
Lenders, each Borrower assumes all risks of the acts and omissions of, or misuse
of the Letters of Credit by, the respective beneficiaries of such Letters of
Credit.  In furtherance and not in limitation of the respective foregoing, Agent
shall not be responsible for: (i) the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document submitted by any party in connection
with the application for an issuance of any such Letter of Credit, even if it
should in fact prove to be in any or all respects invalid, insufficient,
inaccurate, fraudulent or forged (even if Agent shall have been notified
thereof); (ii) the validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign any such Letter of Credit or the
rights or benefits thereunder or proceeds thereof, in whole or in part, which
may prove to be invalid or ineffective for any reason; (iii) the failure of the
beneficiary of any such Letter of Credit, or any other party to which such
Letter of Credit may be transferred, to comply fully with any conditions
required in order to draw upon such Letter of Credit or any other claim of any
Borrower against any beneficiary of such Letter of Credit, or any such
transferee, or any dispute between or among any Borrower and any beneficiary of
any Letter of Credit or any such transferee; (iv) errors, omissions,
interruptions or delays in transmission or delivery of any messages, by mail,
cable, telegraph, telex or otherwise, whether or not they be in cipher; (v)
errors in interpretation of technical terms; (vi) any loss or delay in the
transmission or otherwise of any document required in order to make a drawing
under any such Letter of Credit or of the proceeds thereof; (vii) the
misapplication by the beneficiary of any such Letter of Credit of the proceeds
of any drawing under such Letter of Credit; or (viii) any consequences arising
from causes beyond the control of Agent, including any governmental acts, and
none of the above shall affect or impair, or prevent the vesting of, any of
Agent’s rights or powers hereunder. Nothing in the preceding sentence shall
relieve Agent from liability for Agent’s gross negligence or willful misconduct
(as
 
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determined by a court of competent jurisdiction in a final non-appealable
judgment) in connection with actions or omissions described in such clauses (i)
through (viii) of such sentence.  In no event shall Agent or Agent’s Affiliates
be liable to any Borrower for any indirect, consequential, incidental, punitive,
exemplary or special damages or expenses (including without limitation
attorneys’ fees), or for any damages resulting from any change in the value of
any property relating to a Letter of Credit.
 
Without limiting the generality of the foregoing, Agent and each of its
Affiliates (i) may rely on any oral or other communication believed in good
faith by Agent or  such Affiliate to have been authorized or given by or on
behalf of the applicant for a Letter of Credit, (ii) may honor any presentation
if the documents presented appear on their face substantially to comply with the
terms and conditions of the relevant Letter of Credit; (iii) may honor a
previously dishonored presentation under a Letter of Credit, whether such
dishonor was pursuant to a court order, to settle or compromise any claim of
wrongful dishonor, or otherwise, and shall be entitled to reimbursement to the
same extent as if such presentation had initially been honored, together with
any interest paid by Agent or its Affiliates; (iv) may honor any drawing that is
payable upon presentation of a statement advising negotiation or payment, upon
receipt of such statement (even if such statement indicates that a draft or
other document is being delivered separately), and shall not be liable for any
failure of any such draft or other document to arrive, or to conform in any way
with the relevant Letter of Credit; (v) may pay any paying or negotiating bank
claiming that it rightfully honored under the laws or practices of the place
where such bank is located; and (vi) may settle or adjust any claim or demand
made on Agent or its Affiliate in any way related to any order issued at the
applicant’s request to an air carrier, a letter of guarantee or of indemnity
issued to a carrier or any similar document (each an “Order”) and honor any
drawing in connection with any Letter of Credit that is the subject of such
Order, notwithstanding that any drafts or other documents presented in
connection with such Letter of Credit fail to conform in any way with such
Letter of Credit.
 
In furtherance and extension and not in limitation of the specific provisions
set forth above, any action taken or omitted by Agent under or in connection
with the Letters of Credit issued by it or any documents and certificates
delivered thereunder, if taken or omitted in good faith and without gross
negligence or willful misconduct (as determined by a court of competent
jurisdiction in a final non-appealable judgment), shall not put Agent under any
resulting liability to any Borrower or any Lender.
 
2.19. Additional Payments.  Any sums expended by Agent or any Lender due to any
Borrower’s failure to perform or comply with its obligations under this
Agreement or any Other Document including any Borrower’s obligations under
Sections 4.2, 4.4, 4.12, 4.13, 4.14 and 6.1 hereof, may be charged to Borrowers’
Account as a Revolving Advance and added to the Obligations.
 
2.20. Manner of Borrowing and Payment.
 
(a) Each borrowing of Revolving Advances shall be advanced according to the
applicable Commitment Percentages of Lenders.  The Term Loan shall be advanced
according to the Commitment Percentages of Lenders.
 
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(b) Each payment (including each prepayment) by any Borrower on account of the
principal of and interest on the Revolving Advances, shall be applied to the
Revolving Advances pro rata according to the applicable Commitment Percentages
of Lenders.  Each payment (including each prepayment) by any Borrower on account
of the principal of and interest on the Term Note, shall be made from or to, or
applied to that portion of the Term Loan evidenced by the Term Note pro rata
according to the Commitment Percentages of Lenders.  Except as expressly
provided herein, all payments (including prepayments) to be made by any Borrower
on account of principal, interest and fees shall be made without set off or
counterclaim and shall be made to Agent on behalf of the Lenders to the Payment
Office, in each case on or prior to 1:00 P.M., New York time, in Dollars and in
immediately available funds.
 
(c) (i)           Notwithstanding anything to the contrary contained in Sections
2.20(a) and (b) hereof, commencing with the first Business Day following the
Closing Date, each borrowing of Revolving Advances shall be advanced by Agent
and each payment by any Borrower on account of Revolving Advances shall be
applied first to those Revolving Advances advanced by Agent.  On or before 1:00
P.M., New York time, on each Settlement Date commencing with the first
Settlement Date following the Closing Date, Agent and Lenders shall make certain
payments as follows: (I) if the aggregate amount of new Revolving Advances made
by Agent during the preceding Week (if any) exceeds the aggregate amount of
repayments applied to outstanding Revolving Advances during such preceding Week,
then each Lender shall provide Agent with funds in an amount equal to its
applicable Commitment Percentage of the difference between (w) such Revolving
Advances and (x) such repayments and (II) if the aggregate amount of repayments
applied to outstanding Revolving Advances during such Week exceeds the aggregate
amount of new Revolving Advances made during such Week, then Agent shall provide
each Lender with funds in an amount equal to its applicable Commitment
Percentage of the difference between (y) such repayments and (z) such Revolving
Advances.
 
(ii) Each Lender shall be entitled to earn interest at the applicable Contract
Rate on outstanding Advances which it has funded.
 
(iii) Promptly following each Settlement Date, Agent shall submit to each Lender
a certificate with respect to payments received and Advances made during the
Week immediately preceding such Settlement Date.  Such certificate of Agent
shall be conclusive in the absence of manifest error.
 
(d) If any Lender or Participant (a “benefited Lender”) shall at any time
receive any payment of all or part of its Advances, or interest thereon, or
receive any Collateral in respect thereof (whether voluntarily or involuntarily
or by set-off) in a greater proportion than any such payment to and Collateral
received by any other Lender, if any, in respect of such other Lender’s
Advances, or interest thereon, and such greater proportionate payment or receipt
of Collateral is not expressly permitted hereunder, such benefited Lender shall
purchase for cash from the other Lenders a participation in such portion of each
such other Lender’s Advances, or shall provide such other Lender with the
benefits of any such Collateral, or the proceeds thereof, as shall be necessary
to cause such benefited Lender to share the excess payment or benefits of such
Collateral or proceeds ratably with each of the other Lenders; provided,
however, that if all or any portion of such excess payment or benefits is
thereafter recovered from such benefited Lender, such purchase shall be
rescinded, and the purchase price and benefits returned, to the
 
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extent of such recovery, but without interest.  Each Lender so purchasing a
portion of another Lender’s Advances may exercise all rights of payment
(including rights of set-off) with respect to such portion as fully as if such
Lender were the direct holder of such portion.
 
(e) Unless Agent shall have been notified by telephone, confirmed in writing, by
any Lender that such Lender will not make the amount which would constitute its
applicable Commitment Percentage of the Advances available to Agent, Agent may
(but shall not be obligated to) assume that such Lender shall make such amount
available to Agent on the next Settlement Date and, in reliance upon such
assumption, make available to Borrowers a corresponding amount.  Agent will
promptly notify Borrowing Agent of its receipt of any such notice from a
Lender.  If such amount is made available to Agent on a date after such next
Settlement Date, such Lender shall pay to Agent on demand an amount equal to the
product of (i) the daily average Federal Funds Rate (computed on the basis of a
year of 360 days) during such period as quoted by Agent, times (ii) such amount,
times (iii) the number of days from and including such Settlement Date to the
date on which such amount becomes immediately available to Agent.  A certificate
of Agent submitted to any Lender with respect to any amounts owing under this
paragraph (e) shall be conclusive, in the absence of manifest error.  If such
amount is not in fact made available to Agent by such Lender within three (3)
Business Days after such Settlement Date, Agent shall be entitled to recover
such an amount, with interest thereon at the rate per annum then applicable to
such Revolving Advances hereunder, on demand from Borrowers; provided, however,
that Agent’s right to such recovery shall not prejudice or otherwise adversely
affect Borrowers’ rights (if any) against such Lender.
 
2.21. Mandatory Prepayments.
 
(a) Subject to Section 4.3 hereof, when any Borrower sells or otherwise disposes
of any Collateral other than Inventory in the Ordinary Course of Business,
Borrowers shall repay the Advances in an amount equal to the net proceeds of
such sale (i.e., gross proceeds less the reasonable costs of such sales or other
dispositions), such repayments to be made promptly but in no event more than one
(1) Business Day following receipt of such net proceeds, and until the date of
payment, such proceeds shall be held in trust for Agent.  The foregoing shall
not be deemed to be implied consent to any such sale otherwise prohibited by the
terms and conditions hereof.  Such repayments shall be applied (y) first, to the
outstanding principal installments of the Term Loan in the inverse order of the
maturities thereof and (z) second, to the remaining Advances in such order as
Agent may determine, subject to Borrowers’ ability to reborrow Revolving
Advances in accordance with the terms hereof. Notwithstanding the foregoing, if
any Borrower reasonably expects the proceeds of any disposition of Collateral to
be reinvested within one hundred eighty (180) days to repair or replace such
assets with like assets, such Borrower shall deliver the proceeds to Agent to be
applied to the Revolving Advances and Agent shall establish a reserve against
available funds for borrowing purposes under the Revolving Advances for such
amount until such time as such proceeds have been re-borrowed or applied to
other Obligations as set forth herein.  If such Borrower so elects to deliver
such proceeds to Agent, such Borrower may, so long as no Default or Event of
Default shall have occurred and be continuing, reborrow such proceeds only for
such repair or replacement.  If such Borrower fails to reinvest such proceeds
within one hundred eighty (180) days, the Borrowers hereby authorize Agent and
Lenders to make a Revolving Advance in the amount of the
 
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remaining reserve to repay the Obligations in the manner set forth in the third
sentence of this Section 2.21(a).
 
(b) Borrowers shall prepay the outstanding amount of the Advances in an amount
equal to the greater of (x) 25% of Excess Cash Flow or (y) all payments made to
the holders of Best's Series A Convertible Preferred Stock (the “Excess Cash
Flow Payment Amount”) for each fiscal year commencing on or after January 1,
2008, payable upon delivery of the financial statements to Agent referred to in
and required by Section 9.7 for such fiscal year but in any event not later than
ninety (90) days after the end of each such fiscal year (each, an “Excess Cash
Flow Payment Date”), which amount shall be applied to the Revolving Advances in
such order as Agent may determine subject to Borrowers’ ability to reborrow
Revolving Advances in accordance with the terms hereof.  In the event that the
financial statement is not so delivered, then a calculation based upon estimated
amounts shall be made by Agent upon which calculation Borrowers shall make the
prepayment required by this Section 2.21(b), subject to adjustment when the
financial statement is delivered to Agent as required hereby.  The calculation
made by Agent shall not be deemed a waiver of any rights Agent or Lenders may
have as a result of the failure by Borrowers to deliver such financial
statement.  For the avoidance of doubt, it is understood and agreed that no
payment of Revolving Advances will be required on any Excess Cash Flow Payment
Date to the extent such amounts have already been applied to reduce the
outstanding Revolving Advances as a result of the application of Section 4.15(h)
of this Agreement.
 
(c)  If Best issues any Equity Interests to any Person after the Closing Date,
Borrowers shall repay the Advances in an amount equal to 100% of the net
proceeds received from such issuance (i.e., gross proceeds less the reasonable
costs of such issuance) of Equity Interests (excluding any proceeds permitted to
be utilized pay fees owing pursuant to the Fee Deferral Agreements), such
repayments to be made promptly but in no event more than (1) Business Day
following receipt of such net proceeds, and until the date of payment, such
proceeds shall be held in trust for Agent.  The forgoing shall not be deemed to
be implied consent to such sale or issuance otherwise prohibited by the terms
and conditions hereof.  Such repayments shall be applied to any Revolving
Advances then outstanding, subject to Borrowers’ ability to reborrow Revolving
Advances in accordance with the terms hereof.  Notwithstanding the foregoing,
the Borrowers shall only be required to repay Advances pursuant to this Section
2.21(c) until such time as the aggregate amount of net proceeds received by Best
from the issuance of Equity Interests (including proceeds received on or prior
to the Closing Date) shall be greater than 12,000,000, at which time Borrowers
shall permitted to retain such proceeds to be utilized in a manner permitted by
this Agreement.
 
2.22. Use of Proceeds.
 
(a) Borrowers shall apply the proceeds of Advances (x) incurred on Closing Date
to (i) pay a portion of purchase price in connection with Initial Acquisitions
by repayment of the Demand Notes, and (ii) pay fees and expenses relating to
this transaction and the Initial Acquisitions and (y) after the Closing Date to
(i) pay a portion of purchase price in connection with Second Acquisitions, (ii)
pay fees and expenses relating to the Second Acquisitions, and (iii) provide for
its working capital needs and reimburse drawings under Letters of Credit.
 
(b) Without limiting the generality of Section 2.22(a) above, neither the
Borrowers nor any other Person which may in the future become party to this
Agreement or the Other Documents as a Borrower intends to use nor shall they use
any portion of the proceeds of the Advances, directly or indirectly, for any
purpose in violation of the Trading with the Enemy Act.
 
(c) If Best issues any Equity Interests to any Person after the Closing Date,
Borrowers shall repay the Advances in an amount equal to 100% of the net
proceeds received  from such issuance (i.e., gross proceeds less the reasonable
costs of such issuance) of Equity Interests (excluding any proceeds permitted to
be utilized to pay fees owing pursuant to the Fee Deferral Agreements), such
repayments to be made promptly but in no event more than one (1) Business Day
following receipt of such net proceeds, and until the date of payment, such
proceeds shall be held in trust for Agent.  The foregoing shall not be deemed to
be implied consent to any such sale or issuance otherwise prohibited by the
terms and conditions hereof.  Such repayments shall be applied to any Revolving
Advances then outstanding, subject to Borrowers’ ability to reborrow Revolving
Advances in accordance with the terms hereof.  Notwithstanding the foregoing,
the Borrowers shall only be required to repay Advances pursuant to this Section
2.21(c) until such time as the aggregate amount of net proceeds received by Best
from the issuance of Equity Interests (including proceeds received on or prior
to the Closing Date) shall be greater than $12,000,000, at which time Borrowers
shall be permitted to retain such proceeds to be utilized in a manner permitted
by this Agreement.
 
2.23. Defaulting Lender.
 
(a) Notwithstanding anything to the contrary contained herein, in the event any
Lender (x) has refused (which refusal constitutes a breach by such Lender of its
obligations under this Agreement) to make available its portion of any Advance
or (y) notifies either Agent or Borrowing Agent that it does not intend to make
available its portion of any Advance (if the actual refusal would constitute a
breach by such Lender of its obligations under this Agreement) (each, a “Lender
Default”), all rights and obligations hereunder of such Lender (a “Defaulting
Lender”) as to which a Lender Default is in effect and of the other parties
hereto shall be modified to the extent of the express provisions of this Section
2.23 while such Lender Default remains in effect.
 
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(b) Advances shall be incurred pro rata from Lenders (the “Non-Defaulting
Lenders”) which are not Defaulting Lenders based on their respective Commitment
Percentages, and no Commitment Percentage of any Lender or any pro rata share of
any Advances required to be advanced by any Lender shall be increased as a
result of such Lender Default.  Amounts received in respect of principal of any
type of Advances shall be applied to reduce the applicable Advances of each
Lender (other than any Defaulting Lender) pro rata based on the aggregate of the
outstanding Advances of that type of all Lenders at the time of such
application; provided, that, Agent shall not be obligated to transfer to a
Defaulting Lender any payments received by Agent for the Defaulting Lender’s
benefit, nor shall a Defaulting Lender be entitled to the sharing of any
payments hereunder (including any principal, interest or fees).  Amounts payable
to a Defaulting Lender shall instead be paid to or retained by Agent.  Agent may
hold and, in its discretion, re-lend to a Borrower the amount of such payments
received or retained by it for the account of such Defaulting Lender.
 
(c) A Defaulting Lender shall not be entitled to give instructions to Agent or
to approve, disapprove, consent to or vote on any matters relating to this
Agreement and the Other Documents.  All amendments, waivers and other
modifications of this Agreement and the Other Documents may be made without
regard to a Defaulting Lender and, for purposes of the definition of “Required
Lenders”, a Defaulting Lender shall be deemed not to be a Lender and not to have
Advances outstanding.
 
(d) Other than as expressly set forth in this Section 2.23, the rights and
obligations of a Defaulting Lender (including the obligation to indemnify Agent)
and the other parties hereto shall remain unchanged.  Nothing in this Section
2.23 shall be deemed to release any Defaulting Lender from its obligations under
this Agreement and the Other Documents, shall alter such obligations, shall
operate as a waiver of any default by such Defaulting Lender hereunder, or shall
prejudice any rights which any Borrower, Agent or any Lender may have against
any Defaulting Lender as a result of any default by such Defaulting Lender
hereunder.
 
(e) In the event a Defaulting Lender retroactively cures to the satisfaction of
Agent the breach which caused a Lender to become a Defaulting Lender, such
Defaulting Lender shall no longer be a Defaulting Lender and shall be treated as
a Lender under this Agreement.
 
III. INTEREST AND FEES.
 
3.1. Interest.  Interest on Advances shall be payable in arrears on the first
day of each month with respect to Domestic Rate Loans and, with respect to
Eurodollar Rate Loans, at the end of each Interest Period and upon conversion to
a Domestic Rate Loan (if such conversion occurs other than on the last day of an
applicable Interest Perid).  Interest charges shall be computed on the actual
principal amount of Advances outstanding during the month at a rate per annum
equal to (i) with respect to Revolving Advances, the applicable Revolving
Interest Rate and (ii) with respect to the Term Loan, the applicable Term Loan
Rate (as applicable, the “Contract Rate”).  Whenever, subsequent to the date of
this Agreement, the Alternate Base Rate is increased or decreased, the
applicable Contract Rate shall be similarly changed without notice or demand of
any kind by an amount equal to the amount of such change in the Alternate Base
Rate during the time such change or changes remain in effect.  The Eurodollar
Rate shall be adjusted with respect to Eurodollar Rate Loans without notice or
demand of any kind on the
 
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effective date of any change in the Reserve Percentage as of such effective
date.  Upon and after the occurrence of an Event of Default, and during the
continuation thereof, at the option of Agent or at the direction of Required
Lenders, the Obligations shall bear interest at the applicable Contract Rate
plus two (2%) percent per annum (the “Default Rate”).
 
3.2. Letter of Credit Fees.
 
(a) Borrowers shall pay (x) to Agent, for the ratable benefit of Lenders, fees
for each Letter of Credit for the period from and excluding the date of issuance
of same to and including the date of expiration or termination, equal to the
average daily face amount of each outstanding Letter of Credit multiplied by two
percent (2.0%)per annum, such fees to be calculated on the basis of a 360-day
year for the actual number of days elapsed and to be payable quarterly in
arrears on the first day of each quarter and on the last day of the Term, and
(y) to the Issuer, a fronting fee of one quarter of one percent (0.25%) per
annum, together with any and all administrative, issuance, amendment, payment
and negotiation charges with respect to Letters of Credit and all fees and
expenses as agreed upon by the Issuer and the Borrowing Agent in connection with
any Letter of Credit, including in connection with the opening, amendment or
renewal of any such Letter of Credit and any acceptances created thereunder and
shall reimburse Agent for any and all fees and expenses, if any, paid by Agent
to the Issuer (all of the foregoing fees, the “Letter of Credit Fees”).  All
such charges shall be deemed earned in full on the date when the same are due
and payable hereunder and shall not be subject to rebate or pro-ration upon the
termination of this Agreement for any reason.  Any such charge in effect at the
time of a particular transaction shall be the charge for that transaction,
notwithstanding any subsequent change in the Issuer’s prevailing charges for
that type of transaction.  All Letter of Credit Fees payable hereunder shall be
deemed earned in full on the date when the same are due and payable hereunder
and shall not be subject to rebate or pro-ration upon the termination of this
Agreement for any reason.
 
On demand after the occurrence and during the continuance of an Event of
Default, Borrowers will cause cash to be deposited and maintained in an account
with Agent, as cash collateral, in an amount equal to one hundred and five
percent (105%) of the Maximum Undrawn Amount of all outstanding Letters of
Credit, and each Borrower hereby irrevocably authorizes Agent, in its
discretion, on such Borrower’s behalf and in such Borrower’s name, to open such
an account and to make and maintain deposits therein, or in an account opened by
such Borrower, in the amounts required to be made by such Borrower, out of the
proceeds of Receivables or other Collateral or out of any other funds of such
Borrower coming into any Lender’s possession at any time.  Agent will invest
such cash collateral (less applicable reserves) in such short-term money-market
items as to which Agent and such Borrower mutually agree and the net return on
such investments shall be credited to such account and constitute additional
cash collateral.  No Borrower may withdraw amounts credited to any such account
except upon the occurrence of all of the following: (w) payment and performance
in full of all Obligations, (x) expiration of all Letters of Credit, (y)
termination of this Agreement or (z) upon waiver of all existing Events of
Default.
 
3.3. Closing Fee and Facility Fee.
 
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(a) Closing Fee.  Upon the execution of this Agreement, Borrowers shall pay to
Agent for the ratable benefit of Lenders a closing fee of $250,000 less that
portion of the deposit fee of $100,000 heretofore paid by Borrowers to Agent
remaining after application of such fee to out of pocket expenses.
 
(b) Facility Fee.  If, for any calendar quarter during the Term, the average
daily unpaid balance of the Revolving Advances and undrawn amount of any
outstanding Letters of Credit for each day of such calendar quarter does not
equal the Maximum Revolving Advance Amount, then Borrowers shall pay to Agent
for the ratable benefit of Lenders a fee at a rate equal to one quarter of one
percent (0.25%) per annum on the amount by which the Maximum Revolving Advance
Amount exceeds such average daily unpaid balance.  Such fee shall be payable to
Agent in arrears on the first day of each calendar quarter with respect to the
previous calendar quarter.
 
3.4. Collateral Evaluation Fee and Collateral Monitoring Fee.
 
(a) Collateral Evaluation Fee.  Borrowers shall pay Agent a collateral
evaluation fee equal to $1,500 per month commencing on the first day of the
month following the Closing Date and on the first day of each month thereafter
during the Term.  The collateral evaluation fee shall be deemed earned in full
on the date when same is due and payable hereunder and shall not be subject to
rebate or proration upon termination of this Agreement for any reason.
 
(b) Collateral Monitoring Fee.  Borrowers shall pay to Agent on the first day of
each month following any month in which Agent performs any collateral monitoring
- namely any field examination, collateral analysis or other business analysis,
the need for which is to be determined by Agent and which monitoring is
undertaken by Agent or for Agent’s benefit - a collateral monitoring fee in an
amount equal to $750 per day for each person employed to perform such
monitoring, plus all costs and disbursements incurred by Agent in the
performance of such examination or analysis.
 
3.5. Computation of Interest and Fees.  Interest and fees hereunder shall be
computed on the basis of a year of 360 days and for the actual number of days
elapsed.  If any payment to be made hereunder becomes due and payable on a day
other than a Business Day, the due date thereof shall be extended to the next
succeeding Business Day and interest thereon shall be payable at the applicable
Contract Rate during such extension.
 
3.6. Maximum Charges.  In no event whatsoever shall interest and other charges
charged hereunder exceed the highest rate permissible under law. In the event
interest and other charges as computed hereunder would otherwise exceed the
highest rate permitted under law, such excess amount shall be first applied to
any unpaid principal balance owed by Borrowers, and if the then remaining excess
amount is greater than the previously unpaid principal balance, Lenders shall
promptly refund such excess amount to Borrowers and the provisions hereof shall
be deemed amended to provide for such permissible rate.
 
3.7. Increased Costs.  In the event that any Applicable Law, or any change
therein or in the interpretation or application thereof, or compliance by any
Lender (for purposes of this
 
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Section 3.7, the term “Lender” shall include Agent or any Lender and any
corporation or bank controlling Agent or any Lender) and the office or branch
where Agent or any Lender (as so defined) makes or maintains any Eurodollar Rate
Loans with any request or directive (whether or not having the force of law)
from any central bank or other financial, monetary or other authority, shall:
 
(a) subject Agent or any Lender to any tax of any kind whatsoever with respect
to this Agreement or any Other Document or change the basis of taxation of
payments to Agent or any Lender of principal, fees, interest or any other amount
payable hereunder or under any Other Documents (except for changes in the rate
of tax on the overall net income of Agent or any Lender by the jurisdiction in
which it maintains its principal office);
 
(b) impose, modify or hold applicable any reserve, special deposit, assessment
or similar requirement against assets held by, or deposits in or for the account
of, advances or loans by, or other credit extended by, any office of Agent or
any Lender, including pursuant to Regulation D of the Board of Governors of the
Federal Reserve System; or
 
(c) impose on Agent or any Lender or the London interbank Eurodollar market any
other condition with respect to this Agreement or any Other Document;
 
and the result of any of the foregoing is to increase the cost to Agent or any
Lender of making, renewing or maintaining its Advances hereunder by an amount
that Agent or such Lender deems to be material or to reduce the amount of any
payment (whether of principal, interest or otherwise) in respect of any of the
Advances by an amount that Agent or such Lender deems to be material, then, in
any case Borrowers shall promptly pay Agent or such Lender, upon its demand,
such additional amount as will compensate Agent or such Lender for such
additional cost or such reduction, as the case may be, provided that the
foregoing shall not apply to increased costs which are reflected in the
Eurodollar Rate, as the case may be.  Agent or such Lender shall certify the
amount of such additional cost or reduced amount to Borrowing Agent, and such
certification shall be conclusive absent manifest error.
 
3.8. Basis For Determining Interest Rate Inadequate or Unfair.  In the event
that Agent or any Lender shall have determined that:
 
(a) reasonable means do not exist for ascertaining the Eurodollar Rate
applicable pursuant to Section 2.2 hereof for any Interest Period; or
 
(b) Dollar deposits in the relevant amount and for the relevant maturity are not
available in the London interbank Eurodollar market, with respect to an
outstanding Eurodollar Rate Loan, a proposed Eurodollar Rate Loan, or a proposed
conversion of a Domestic Rate Loan into a Eurodollar Rate Loan,
 
then Agent shall give Borrowing Agent prompt written, telephonic or telegraphic
notice of such determination.  If such notice is given, (i) any such requested
Eurodollar Rate Loan shall be made as a Domestic Rate Loan, unless Borrowing
Agent shall notify Agent no later than 10:00 a.m. (New York City time) two (2)
Business Days prior to the date of such proposed borrowing, that its request for
such borrowing shall be cancelled or made as an unaffected type of Eurodollar
Rate Loan, (ii) any Domestic Rate Loan or Eurodollar Rate Loan which was to have
been
 
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converted to an affected type of Eurodollar Rate Loan shall be continued as or
converted into a Domestic Rate Loan, or, if Borrowing Agent shall notify Agent,
no later than 10:00 a.m. (New York City time) two (2) Business Days prior to the
proposed conversion, shall be maintained as an unaffected type of Eurodollar
Rate Loan, and (iii) any outstanding affected Eurodollar Rate Loans shall be
converted into a Domestic Rate Loan, or, if Borrowing Agent shall notify Agent,
no later than 10:00 a.m. (New York City time) two (2) Business Days prior to the
last Business Day of the then current Interest Period applicable to such
affected Eurodollar Rate Loan, shall be converted into an unaffected type of
Eurodollar Rate Loan, on the last Business Day of the then current Interest
Period for such affected Eurodollar Rate Loans.  Until such notice has been
withdrawn, Lenders shall have no obligation to make an affected type of
Eurodollar Rate Loan or maintain outstanding affected Eurodollar Rate Loans and
no Borrower shall have the right to convert a Domestic Rate Loan or an
unaffected type of Eurodollar Rate Loan into an affected type of Eurodollar Rate
Loan.
 
3.9. Capital Adequacy.
 
(a) In the event that Agent or any Lender shall have determined that any
Applicable Law or guideline regarding capital adequacy, or any change therein,
or any change in the interpretation or administration thereof by any
Governmental Body, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by Agent or any Lender
(for purposes of this Section 3.9, the term “Lender” shall include Agent or any
Lender and any corporation or bank controlling Agent or any Lender) and the
office or branch where Agent or any Lender (as so defined) makes or maintains
any Eurodollar Rate Loans with any request or directive regarding capital
adequacy (whether or not having the force of law) of any such authority, central
bank or comparable agency, has or would have the effect of reducing the rate of
return on Agent or any Lender’s capital as a consequence of its obligations
hereunder to a level below that which Agent or such Lender could have achieved
but for such adoption, change or compliance (taking into consideration Agent’s
and each Lender’s policies with respect to capital adequacy) by an amount deemed
by Agent or any Lender to be material, then, from time to time, Borrowers shall
pay upon demand to Agent or such Lender such additional amount or amounts as
will compensate Agent or such Lender for such reduction.  In determining such
amount or amounts, Agent or such Lender may use any reasonable averaging or
attribution methods.  The protection of this Section 3.9 shall be available to
Agent and each Lender regardless of any possible contention of invalidity or
inapplicability with respect to the Applicable Law or condition.
 
(b) A certificate of Agent or such Lender setting forth such amount or amounts
as shall be necessary to compensate Agent or such Lender with respect to Section
3.9(a) hereof when delivered to Borrowing Agent shall be conclusive absent
manifest error.
 
3.10. Gross Up for Taxes.  If any Borrower shall be required by Applicable Law
to withhold or deduct any taxes from or in respect of any sum payable under this
Agreement or any of the Other Documents to Agent, or any Lender, assignee of any
Lender, or Participant (each, individually, a “Payee” and collectively, the
“Payees”), (a) the sum payable to such Payee or Payees, as the case may be,
shall be increased as may be necessary so that, after making all required
withholding or deductions, the applicable Payee or Payees receives an amount
equal to the sum it would have received had no such withholding or deductions
been made (the “Gross
 
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-Up Payment”), (b) such Borrower shall make such withholding or deductions, and
(c) such Borrower shall pay the full amount withheld or deducted to the relevant
taxation authority or other authority in accordance with Applicable
Law.  Notwithstanding the foregoing, no Borrower shall be obligated to make any
portion of the Gross-Up Payment that is attributable to any withholding or
deductions that would not have been paid or claimed had the applicable Payee or
Payees properly claimed a complete exemption with respect thereto pursuant to
Section 3.11 hereof.
 
3.11. Withholding Tax Exemption.
 
(a) Each Payee that is not incorporated under the Laws of the United States of
America or a state thereof (and, upon the written request of Agent, each other
Payee) agrees that it will deliver to Borrowing Agent and Agent two (2) duly
completed appropriate valid Withholding Certificates (as defined under
§1.1441-1(c)(16) of the Income Tax Regulations (“Regulations”)) certifying its
status (i.e., U.S. or foreign person) and, if appropriate, making a claim of
reduced, or exemption from, U.S. withholding tax on the basis of an income tax
treaty or an exemption provided by the Code.  The term “Withholding Certificate”
means a Form W-9; a Form W-8BEN; a Form W-8ECI; a Form W-8IMY and the related
statements and certifications as required under §1.1441-1(e)(2) and/or (3) of
the Regulations; a statement described in §1.871-14(c)(2)(v) of the Regulations;
or any other certificates under the Code or Regulations that certify or
establish the status of a payee or beneficial owner as a U.S. or foreign person.
 
(b) Each Payee required to deliver to Borrowing Agent and Agent a valid
Withholding Certificate pursuant to Section 3.11(a) hereof shall deliver such
valid Withholding Certificate as follows:  (A) each Payee which is a party
hereto on the Closing Date shall deliver such valid Withholding Certificate at
least five (5) Business Days prior to the first date on which any interest or
fees are payable by any Borrower hereunder for the account of such Payee; (B)
each Payee shall deliver such valid Withholding Certificate at least five (5)
Business Days before the effective date of such assignment or participation
(unless Agent in its sole discretion shall permit such Payee to deliver such
Withholding Certificate less than five (5) Business Days before such date in
which case it shall be due on the date specified by Agent).  Each Payee which so
delivers a valid Withholding Certificate further undertakes to deliver to
Borrowing Agent and Agent two (2) additional copies of such Withholding
Certificate (or a successor form) on or before the date that such Withholding
Certificate expires or becomes obsolete or after the occurrence of any event
requiring a change in the most recent Withholding Certificate so delivered by
it, and such amendments thereto or extensions or renewals thereof as may be
reasonably requested by Borrowing Agent or Agent.
 
(c) Notwithstanding the submission of a Withholding Certificate claiming a
reduced rate of or exemption from U.S. withholding tax required under Section
3.11(b) hereof, Agent shall be entitled to withhold United States federal income
taxes at the full 30% withholding rate if in its reasonable judgment it is
required to do so under the due diligence requirements imposed upon a
withholding agent under §1.1441-7(b) of the Regulations.  Further, Agent is
indemnified under §1.1461-1(e) of the Regulations against any claims and demands
of any Payee for the amount of any tax it deducts and withholds in accordance
with regulations under §1441 of the Code.
 
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IV. COLLATERAL:  GENERAL TERMS
 
4.1. Security Interest in the Collateral.  To secure the prompt payment and
performance to Agent and each Lender of the Obligations, each Borrower hereby
assigns, pledges and grants to Agent for its benefit and for the ratable benefit
of each Lender a continuing security interest in and to and Lien on all of its
Collateral, whether now owned or existing or hereafter acquired or arising and
wheresoever located.  Each Borrower shall mark its books and records as may be
necessary or appropriate to evidence, protect and perfect Agent’s security
interest and shall cause its financial statements to reflect such security
interest.  Each Borrower shall promptly provide Agent with written notice of all
commercial tort claims, such notice to contain the case title together with the
applicable court and a brief description of the claim(s).  Upon delivery of each
such notice, such Borrower shall be deemed to hereby grant to Agent a security
interest and lien in and to such commercial tort claims and all proceeds
thereof.
 
4.2. Perfection of Security Interest.  Each Borrower shall take all action that
may be necessary or desirable, or that Agent may request, so as at all times to
maintain the validity, perfection, enforceability and priority of Agent’s
security interest in and Lien on the Collateral or to enable Agent to protect,
exercise or enforce its rights hereunder and in the Collateral, including, but
not limited to, (i) immediately discharging all Liens other than Permitted
Encumbrances, (ii) obtaining Lien Waiver Agreements, (iii) delivering to Agent,
endorsed or accompanied by such instruments of assignment as Agent may specify,
and stamping or marking, in such manner as Agent may specify, any and all
chattel paper, instruments, letters of credits and advices thereof and documents
evidencing or forming a part of the Collateral, (iv) entering into warehousing,
lockbox and other custodial arrangements satisfactory to Agent, and (v)
executing and delivering financing statements, control agreements, instruments
of pledge, mortgages, notices and assignments, in each case in form and
substance satisfactory to Agent, relating to the creation, validity, perfection,
maintenance or continuation of Agent’s security interest and Lien under the
Uniform Commercial Code or other Applicable Law.  By its signature hereto, each
Borrower hereby authorizes Agent to file against such Borrower, one or more
financing, continuation or amendment statements pursuant to the Uniform
Commercial Code in form and substance satisfactory to Agent (which statements
may have a description of collateral which is broader than that set forth
herein).  All charges, expenses and fees Agent may incur in doing any of the
foregoing, and any local taxes relating thereto, shall be charged to Borrowers’
Account as a Revolving Advance of a Domestic Rate Loan and added to the
Obligations, or, at Agent’s option, shall be paid to Agent for its benefit and
for the ratable benefit of Lenders immediately upon demand.
 
4.3. Disposition of Collateral.  Each Borrower will safeguard and protect all
Collateral for Agent’s general account and make no disposition thereof whether
by sale, lease or otherwise except (a) the sale of Inventory in the Ordinary
Course of Business, (b) the disposition or transfer of obsolete and worn-out
Equipment in the Ordinary Course of Business or Equipment no longer used or
useful to the Business during any fiscal year having an aggregate fair market
value of not more than $100,000 and only to the extent that (i) the proceeds of
any such disposition are used to acquire replacement Equipment which is subject
to Agent’s first priority security interest or (ii) the proceeds of which are
remitted to Agent to be applied pursuant to Section 2.21, (c) dispositions of
Equipment by any Borrower to any other Borrower; and (d) dispositions of
Equipment to the extent that (i) such Equipment is exchanged for similar
replacement Equipment
 
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which is subject to Agent’s first priority security interest or (ii) the
proceeds of which are remitted to Agent to be applied pursuant to Section 2.21.
 
4.4. Preservation of Collateral.  Following the occurrence and during the
continuance of a Default or Event of Default in addition to the rights and
remedies set forth in Section 11.1 hereof, Agent: (a) may at any time take such
steps as Agent deems necessary to protect Agent’s interest in and to preserve
the Collateral, including the hiring of such security guards or the placing of
other security protection measures as Agent may deem appropriate; (b) may employ
and maintain at any of any Borrower’s premises a custodian who shall have full
authority to do all acts necessary to protect Agent’s interests in the
Collateral; (c) may lease warehouse facilities to which Agent may move all or
part of the Collateral; (d) may use any Borrower’s owned or leased lifts,
hoists, trucks and other facilities or equipment for handling or removing the
Collateral; and (e) shall have, and is hereby granted, a right of ingress and
egress to the places where the Collateral is located, and may proceed over and
through any of Borrower’s owned or leased property.  Each Borrower shall
cooperate fully with all of Agent’s efforts to preserve the Collateral and will
take such actions to preserve the Collateral as Agent may direct.  All of
Agent’s expenses of preserving the Collateral, including any expenses relating
to the bonding of a custodian, shall be charged to Borrowers’ Account as a
Revolving Advance and added to the Obligations.
 
4.5. Ownership of Collateral.
 
(a) With respect to the Collateral, at the time the Collateral becomes subject
to Agent’s security interest:  (i) each Borrower shall be the sole owner of and
fully authorized and able to sell, transfer, pledge and/or grant a first
priority security interest in each and every item of its respective Collateral
to Agent; and, except for Permitted Encumbrances the Collateral shall be free
and clear of all Liens and encumbrances whatsoever; (ii) each document and
agreement executed by each Borrower or delivered to Agent or any Lender in
connection with this Agreement shall be true and correct in all respects;
(iii) all signatures and endorsements of each Borrower that appear on such
documents and agreements shall be genuine and each Borrower shall have full
capacity to execute same; and (iv) each Borrower’s Equipment and Inventory shall
be located as set forth on Schedule 4.5 and shall not be removed from such
location(s) without the prior written consent of Agent except with respect to
(x) the sale of Inventory in the Ordinary Course of Business, (y) the sale of
Equipment to the extent permitted in Section 4.3 hereof and (z) Equipment
in-transit to and from, and in use at, Customers’ premises, provided that such
premises are properly reflected on the Rig Fleet Equipment status report
delivered to Agent pursuant to Section 9.2 hereof.
 
(b) (i) There is no location at which any Borrower has any Inventory (except for
Inventory in transit) other than those locations listed on Schedule 4.5; (ii)
Schedule 4.5 hereto contains a correct and complete list, as of the Closing
Date, of the legal names and addresses of each warehouse at which Inventory of
any Borrower is stored;  none of the receipts received by any Borrower from any
warehouse states that the goods covered thereby are to be delivered to bearer or
to the order of a named Person or to a named Person and such named Person’s
assigns;  (iii) Schedule 4.5 hereto sets forth a correct and complete list as of
the Closing Date of (A) each place of business of each Borrower and (B) the
chief executive office of each Borrower; and (iv) Schedule 4.5 hereto sets forth
a correct and complete list as of the Closing Date of the location,
 
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by state and street address, of all Real Property owned or leased by each
Borrower, together with the names and addresses of any landlords.
 
4.6. Defense of Agent’s and Lenders’ Interests.  Until (a) payment and
performance in full of all of the Obligations and (b) termination of this
Agreement, Agent’s interests in the Collateral shall continue in full force and
effect.  During such period no Borrower shall, without Agent’s prior written
consent, pledge, sell (except Inventory in the Ordinary Course of Business and
Equipment to the extent permitted in Section 4.3 hereof), assign, transfer,
create or suffer to exist a Lien upon or encumber or allow or suffer to be
encumbered in any way except for Permitted Encumbrances, any part of the
Collateral.  Each Borrower shall defend Agent’s interests in the Collateral
against any and all Persons whatsoever.  At any time following demand by Agent
for payment of all Obligations, Agent shall have the right to take possession of
the indicia of the Collateral and the Collateral in whatever physical form
contained, including:  labels, stationery, documents, instruments and
advertising materials.  If Agent exercises this right to take possession of the
Collateral, Borrowers shall, upon demand, assemble it in the best manner
possible and make it available to Agent at a place reasonably convenient to
Agent.  In addition, with respect to all Collateral, Agent and Lenders shall be
entitled to all of the rights and remedies set forth herein and further provided
by the Uniform Commercial Code or other Applicable Law.  Each Borrower shall,
and Agent may, at its option, instruct all suppliers, carriers, forwarders,
warehousers or others receiving or holding cash, checks, Inventory, documents or
instruments in which Agent holds a security interest to deliver same to Agent
and/or subject to Agent’s order and if they shall come into any Borrower’s
possession, they, and each of them, shall be held by such Borrower in trust as
Agent’s trustee, and such Borrower will immediately deliver them to Agent in
their original form together with any necessary endorsement.
 
4.7. Books and Records.  Each Borrower shall (a) keep proper books of record and
account in which full, true and correct entries will be made of all dealings or
transactions of or in relation to its business and affairs; (b) set up on its
books accruals with respect to all taxes, assessments, charges, levies and
claims; and (c) on a reasonably current basis set up on its books, from its
earnings, allowances against doubtful Receivables, advances and investments and
all other proper accruals (including by reason of enumeration, accruals for
premiums, if any, due on required payments and accruals for depreciation,
obsolescence, or amortization of properties), which should be set aside from
such earnings in connection with its business.  All determinations pursuant to
this subsection shall be made in accordance with, or as required by, GAAP
consistently applied in the opinion of such independent public accountant as
shall then be regularly engaged by Borrowers.
 
4.8. Financial Disclosure.  Each Borrower hereby irrevocably authorizes and
directs all accountants and auditors employed by such Borrower at any time
during the Term to exhibit and deliver to Agent and each Lender copies of any of
such Borrower’s financial statements, trial balances or other accounting records
of any sort in the accountant’s or auditor’s possession, and to disclose to
Agent and each Lender any information such accountants may have concerning such
Borrower’s financial status and business operations.  Each Borrower hereby
authorizes all Governmental Bodies to furnish to Agent and each Lender copies of
reports or examinations relating to such Borrower, whether made by such Borrower
or otherwise; however, Agent and
 
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each Lender will attempt to obtain such information or materials directly from
such Borrower prior to obtaining such information or materials from such
accountants or Governmental Bodies.
 
4.9. Compliance with Laws.  Each Borrower shall comply with all Applicable Laws
with respect to the Collateral or any part thereof or to the operation of such
Borrower’s business the non-compliance with which could reasonably be expected
to have a Material Adverse Effect.  Each Borrower may, however, contest or
dispute any Applicable Laws in any reasonable manner, provided that any related
Lien is inchoate or stayed and sufficient reserves are established to the
reasonable satisfaction of Agent to protect Agent’s Lien on or security interest
in the Collateral.  The assets of Borrowers at all times shall be maintained in
accordance with the requirements of all insurance carriers which provide
insurance with respect to the assets of Borrowers so that such insurance shall
remain in full force and effect.
 
4.10. Inspection of Premises.  At all reasonable times Agent and each Lender
shall have full access to and the right to audit, check, inspect and make
abstracts and copies from each Borrower’s books, records, audits, correspondence
and all other papers relating to the Collateral and the operation of each
Borrower’s business. Upon reasonable prior notice (which prior notice will not
be required after the occurrence and during the continuance of an Event
of  Default), Agent, any Lender and their agents may enter upon any premises of
any Borrower at any time during business hours and at any other reasonable time,
and from time to time, for the purpose of inspecting the Collateral and any and
all records pertaining thereto and the operation of such Borrower’s business.
 
4.11. Insurance.  The assets and properties of each Borrower at all times shall
be maintained in accordance with the requirements of all insurance carriers
which provide insurance with respect to the assets and properties of such
Borrower so that such insurance shall remain in full force and effect.  Each
Borrower shall bear the full risk of any loss of any nature whatsoever with
respect to the Collateral.  At each Borrower’s own cost and expense in amounts
and with carriers acceptable to Agent, each Borrower shall (a) keep all its
insurable properties and properties in which such Borrower has an interest
insured against the hazards of fire, flood, sprinkler leakage, those hazards
covered by extended coverage insurance and such other hazards, and for such
amounts, as is customary in the case of companies engaged in businesses similar
to such Borrower’s including business interruption insurance; (b) maintain a
bond in such amounts as is customary in the case of companies engaged in
businesses similar to such Borrower insuring against larceny, embezzlement or
other criminal misappropriation of insured’s officers and employees who may
either singly or jointly with others at any time have access to the assets or
funds of such Borrower either directly or through authority to draw upon such
funds or to direct generally the disposition of such assets; (c) maintain public
and product liability insurance against claims for personal injury, death or
property damage suffered by others; (d) maintain all such worker’s compensation
or similar insurance as may be required under the laws of any state or
jurisdiction in which such Borrower is engaged in business; (e) furnish Agent
with (i) copies of all policies and evidence of the maintenance of such policies
by the renewal thereof at least thirty (30) days before any expiration date, and
(ii) appropriate loss payable endorsements in form and substance satisfactory to
Agent, naming Agent as a co-insured and loss payee as its interests may appear
with respect to all insurance coverage referred to in clauses (a), and (c)
above, and providing (A) that all proceeds thereunder shall be payable to Agent,
(B) no such insurance shall be affected by any act or neglect of the insured or
owner of the property
 
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described in such policy, and (C) that such policy and loss payable clauses may
not be cancelled, amended or terminated unless at least thirty (30) days’ prior
written notice is given to Agent.  In the event of any loss thereunder, the
carriers named therein hereby are directed by Agent and the applicable Borrower
to make payment for such loss to Agent and not to such Borrower and Agent
jointly.  If any insurance losses are paid by check, draft or other instrument
payable to any Borrower and Agent jointly, Agent may endorse such Borrower’s
name thereon and do such other things as Agent may deem advisable to reduce the
same to cash.  Agent is hereby authorized to adjust and compromise claims under
insurance coverage referred to in clauses (a), and (b) above.  All loss
recoveries received by Agent upon any such insurance may be applied to the
Obligations, in such order as Agent in its sole discretion shall determine.  Any
surplus shall be paid by Agent to Borrowers or applied as may be otherwise
required by law.  Any deficiency thereon shall be paid by Borrowers to Agent, on
demand.  Anything hereinabove to the contrary notwithstanding, and subject to
the fulfillment of the conditions set forth below, Agent shall remit to
Borrowing Agent insurance proceeds received by Agent during any calendar year
under insurance policies procured and maintained by Borrowers which insure
Borrowers’ insurable properties to the extent such insurance proceeds do not
exceed $500,000 in the aggregate during such calendar year or $250,000 per
occurrence.  In the event the amount of insurance proceeds received by Agent for
any occurrence exceeds $250,000, then Agent shall not be obligated to remit the
insurance proceeds to Borrowing Agent unless Borrowing Agent shall provide Agent
with evidence reasonably satisfactory to Agent that the insurance proceeds will
be used by Borrowers to repair, replace or restore the insured property which
was the subject of the insurable loss.  In the event Borrowing Agent have
previously received (or, after giving effect to any proposed remittance by Agent
to Borrowing Agent would receive) insurance proceeds which equal or exceed
$500,000 in the aggregate during any calendar year, then Agent may, in its sole
discretion, either remit the insurance proceeds to Borrowing Agent upon
Borrowing Agent providing Agent with evidence reasonably satisfactory to Agent
that the insurance proceeds will be used by Borrowers to repair, replace or
restore the insured property which was the subject of the insurable loss, or
apply the proceeds to the Obligations, as aforesaid.  The agreement of Agent to
remit insurance proceeds in the manner above provided shall be subject in each
instance to satisfaction of each of the following conditions: (x) No Event of
Default or Default shall then have occurred, and (y) Borrowers shall use such
insurance proceeds to repair, replace or restore the insurable property which
was the subject of the insurable loss and for no other purpose.
 
4.12. Failure to Pay Insurance.  If any Borrower fails to obtain insurance as
hereinabove provided, or to keep the same in force, Agent, if Agent so elects,
may obtain such insurance and pay the premium therefor on behalf of such
Borrower, and charge Borrowers’ Account therefor as a Revolving Advance of a
Domestic Rate Loan and such expenses so paid shall be part of the Obligations.
 
4.13. Payment of Taxes.  Each Borrower will pay, when due, all taxes,
assessments and other Charges lawfully levied or assessed upon such Borrower or
any of the Collateral including real and personal property taxes, assessments
and charges and all franchise, income, employment, social security benefits,
withholding, and sales taxes.  If any tax by any Governmental Body is or may be
imposed on or as a result of any transaction between any Borrower and Agent or
any Lender which Agent or any Lender may be required to withhold or pay or if
any taxes, assessments, or other Charges remain unpaid after the date fixed for
their payment, or if any claim shall be made which, in Agent’s or any Lender’s
opinion, may possibly
 
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create a valid Lien on the Collateral, Agent may without notice to Borrowers pay
the taxes, assessments or other Charges and each Borrower hereby indemnifies and
holds Agent and each Lender harmless in respect thereof.  Agent will not pay any
taxes, assessments or Charges to the extent that any applicable Borrower has
contested or disputed those taxes, assessments or Charges in good faith, by
expeditious protest, administrative or judicial appeal or similar proceeding
provided that any related tax lien is stayed and sufficient reserves are
established to the reasonable satisfaction of Agent to protect Agent’s security
interest in or Lien on the Collateral.  The amount of any payment by Agent under
this Section 4.13 shall be charged to Borrowers’ Account as a Revolving Advance
and added to the Obligations and, until Borrowers shall furnish Agent with an
indemnity therefor (or supply Agent with evidence satisfactory to Agent that due
provision for the payment thereof has been made), Agent may hold without
interest any balance standing to Borrowers’ credit and Agent shall retain its
security interest in and Lien on any and all Collateral held by Agent.
 
4.14. Payment of Leasehold Obligations.  Each Borrower shall at all times pay,
when and as due, its rental obligations under all leases under which it is a
tenant, and shall otherwise comply, in all material respects, with all other
terms of such leases and keep them in full force and effect (unless such leases
are being terminated in the Ordinary Course of Business) and, at Agent’s request
will provide evidence of having done so.
 
4.15. Receivables.
 
(a) Nature of Receivables.  Each of the Receivables shall be a bona fide and
valid account representing a bona fide indebtedness incurred by the Customer
therein named, for a fixed sum as set forth in the invoice relating thereto
(provided immaterial or unintentional invoice errors shall not be deemed to be a
breach hereof) with respect to an absolute sale or lease and delivery of goods
upon stated terms of a Borrower, or work, labor or services theretofore rendered
by a Borrower as of the date each Receivable is created.  Same shall be due and
owing in accordance with the applicable Borrower’s standard terms of sale
without dispute, setoff or counterclaim except as may be stated on the accounts
receivable schedules delivered by Borrowers to Agent.
 
(b) Solvency of Customers.  Each Customer, to the best of each Borrower’s
knowledge, as of the date each Receivable is created, is and will be solvent and
able to pay all Receivables on which the Customer is obligated in full when due
or with respect to such Customers of any Borrower who are not solvent such
Borrower has set up on its books and in its financial records bad debt reserves
adequate to cover such Receivables.
 
(c) Location of Borrowers.  Each Borrower’s chief executive office is located at
the location set forth on Schedule 4.5(c).  Until written notice is given to
Agent by Borrowing Agent of any other office at which any Borrower keeps its
records pertaining to Receivables, all such records shall be kept at such
executive office.
 
(d) Collection of Receivables.  Until any Borrower’s authority to do so is
terminated by Agent (which notice Agent may give at any time following the
occurrence of an Event of Default or a Default or when Agent in its reasonable
credit judgment deems it to be in Lenders’ best interest to do so), each
Borrower will, at such Borrower’s sole cost and expense,
 
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but on Agent’s behalf and for Agent’s account, collect as Agent’s property and
in trust for Agent all amounts received on Receivables, and shall not commingle
such collections with any Borrower’s funds or use the same except to pay
Obligations.  Each Borrower shall deposit in the Blocked Account or, upon
request by Agent, deliver to Agent, in original form and on the date of receipt
thereof, all checks, drafts, notes, money orders, acceptances, cash and other
evidences of Indebtedness.
 
(e) Notification of Assignment of Receivables.  At any time following the
occurrence of an Event of Default or a Default, Agent shall have the right to
send notice of the assignment of, and Agent’s security interest in and Lien on,
the Receivables to any and all Customers or any third party holding or otherwise
concerned with any of the Collateral.  Thereafter, Agent shall have the sole
right to collect the Receivables, take possession of the Collateral, or
both.  Agent’s actual collection expenses, including, but not limited to,
stationery and postage, telephone and telegraph, secretarial and clerical
expenses and the salaries of any collection personnel used for collection, may
be charged to Borrowers’ Account and added to the Obligations.
 
(f) Power of Agent to Act on Borrowers’ Behalf.  Agent shall have the right to
receive, endorse, assign and/or deliver in the name of Agent or any Borrower any
and all checks, drafts and other instruments for the payment of money relating
to the Receivables, and each Borrower hereby waives notice of presentment,
protest and non-payment of any instrument so endorsed.  Each Borrower hereby
constitutes Agent or Agent’s designee as such Borrower’s attorney with power (i)
to endorse such Borrower’s name upon any notes, acceptances, checks, drafts,
money orders or other evidences of payment or Collateral; (ii) to sign such
Borrower’s name on any invoice or bill of lading relating to any of the
Receivables, drafts against Customers, assignments and verifications of
Receivables; (iii) to send verifications of Receivables to any Customer; (iv) to
sign such Borrower’s name on all financing statements or any other documents or
instruments deemed necessary or appropriate by Agent to preserve, protect, or
perfect Agent’s interest in the Collateral and to file same; (v) to demand
payment of the Receivables; (vi) to enforce payment of the Receivables by legal
proceedings or otherwise; (vii) to exercise all of such Borrower’s rights and
remedies with respect to the collection of the Receivables and any other
Collateral; (viii) to settle, adjust, compromise, extend or renew the
Receivables; (ix) to settle, adjust or compromise any legal proceedings brought
to collect Receivables; (x) to prepare, file and sign such Borrower’s name on a
proof of claim in bankruptcy or similar document against any Customer; (xi) to
prepare, file and sign such Borrower’s name on any notice of Lien, assignment or
satisfaction of Lien or similar document in connection with the Receivables; and
(xii) to do all other acts and things necessary to carry out this Agreement;
provided that Agent will not exercise the rights set forth in sub-clauses (i),
(ii), (v), (vi), (vii), (vii), (ix), (x), (xi) and (xii) until after the
occurrence and during the continuance of an Event of Default.  All acts of said
attorney or designee are hereby ratified and approved, and said attorney or
designee shall not be liable for any acts of omission or commission nor for any
error of judgment or mistake of fact or of law, unless done maliciously or with
gross negligence or willful misconduct (as determined by a court of competent
jurisdiction in a final non-appealable judgment); this power being coupled with
an interest is irrevocable while any of the Obligations remain unpaid.  Agent
shall have the right at any time following the occurrence and during the
continuance of an Event of Default or Default, to change the address for
delivery
 
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of mail addressed to any Borrower to such address as Agent may designate and to
receive, open and dispose of all mail addressed to any Borrower.
 
(g) No Liability.  Neither Agent nor any Lender shall, under any circumstances
other that as result of their own willful misconduct or gross negligence (as
determined by a court of competent jurisdiction in a final non-appealable
judgment) or in any event whatsoever, have any liability for any error or
omission or delay of any kind occurring in the settlement, collection or payment
of any of the Receivables or any instrument received in payment thereof, or for
any damage resulting therefrom.  Following the occurrence and during the
continuance of an Event of Default or Default, Agent may, without notice or
consent from any Borrower, sue upon or otherwise collect, extend the time of
payment of, compromise or settle for cash, credit or upon any terms any of the
Receivables or any other securities, instruments or insurance applicable thereto
and/or release any obligor thereof.  Agent is authorized and empowered to
accept, following the occurrence and during the continuance of an Event of
Default or Default, the return of the goods represented by any of the
Receivables, without notice to or consent by any Borrower, all without
discharging or in any way affecting any Borrower’s liability hereunder.
 
(h) Establishment of a Lockbox Account, Dominion Account.  All proceeds of
Collateral shall be deposited by Borrowers into either (i) a lockbox account,
dominion account or such other “blocked account” (“Blocked Accounts”)
established at a bank or banks (each such bank, a “Blocked Account Bank”)
pursuant to an arrangement with such Blocked Account Bank as may be selected by
Borrowing Agent and be acceptable to Agent or (ii) depository accounts
(“Depository Accounts”) established at the Agent for the deposit of such
proceeds.  Each applicable Borrower, Agent and each Blocked Account Bank shall
enter into a deposit account control agreement in form and substance
satisfactory to Agent directing such Blocked Account Bank to transfer such funds
so deposited to Agent, either to any account maintained by Agent at said Blocked
Account Bank or by wire transfer to appropriate account(s) of Agent.  All funds
deposited in such Blocked Accounts shall immediately become the property of
Agent and Borrowing Agent shall obtain the agreement by such Blocked Account
Bank to waive any offset rights against the funds so deposited.  Neither Agent
nor any Lender assumes any responsibility for such blocked account arrangement,
including any claim of accord and satisfaction or release with respect to
deposits accepted by any Blocked Account Bank thereunder.  All deposit accounts
and investment accounts of each Borrower and its Subsidiaries are set forth on
Schedule 4.15(h).
 
(i) Adjustments.  No Borrower will, without Agent’s consent, compromise or
adjust any Receivables (or extend the time for payment thereof) or accept any
returns of merchandise or grant any additional discounts, allowances or credits
thereon except for those compromises, adjustments, returns, discounts, credits
and allowances as have been heretofore customary in the business of such
Borrower.
 
4.16. Inventory.  To the extent Inventory held for sale or lease has been
produced by any Borrower, it has been and will be produced by such Borrower in
accordance with the Federal Fair Labor Standards Act of 1938, as amended, and
all rules, regulations and orders thereunder.
 
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4.17. Maintenance of Equipment.  The Equipment (including all Rig Fleet
Equipment) shall be maintained in good operating condition and repair
(reasonable wear and tear and damege due to casualty excepted) and all necessary
replacements of and repairs thereto shall be made so that the value and
operating efficiency of the Equipment shall be maintained and preserved.  No
Borrower shall use or operate the Equipment (including the Rig Fleet Equipment)
in violation of any law, statute, ordinance, code, rule or regulation.  Each
Borrower shall have the right to sell Equipment (including Rig Fleet Equipment)
to the extent set forth in Section 4.3 hereof.
 
4.18. Exculpation of Liability.  Nothing herein contained shall be construed to
constitute Agent or any Lender as any Borrower’s agent for any purpose
whatsoever, nor shall Agent or any Lender be responsible or liable for any
shortage, discrepancy, damage, loss or destruction of any part of the Collateral
wherever the same may be located and regardless of the cause thereof other than
the gross negligence or willful misconduct of Agent or any Lender (as determined
by a court of competent jurisdiction in a final non-appealable
judgment).  Neither Agent nor any Lender, whether by anything herein or in any
assignment or otherwise, assume any of any Borrower’s obligations under any
contract or agreement assigned to Agent or such Lender, and neither Agent nor
any Lender shall be responsible in any way for the performance by any Borrower
of any of the terms and conditions thereof.
 
4.19. Environmental Matters.
 
(a) Borrowers shall ensure that the Real Property and all operations and
businesses conducted thereon remains in compliance in all material respects with
all Environmental Laws and they shall not place or permit to be placed any
Hazardous Substances on any Real Property except as permitted by Applicable Law
or appropriate governmental authorities.
 
(b) Borrowers shall establish and maintain a system to assure and monitor
continued compliance with all applicable Environmental Laws which system shall
include periodic reviews of such compliance.
 
(c) Borrowers shall (i) employ in connection with the use of the Real Property
appropriate technology necessary to maintain compliance with any applicable
Environmental Laws and (ii) dispose of any and all Hazardous Waste generated at
the Real Property only at facilities and with carriers that maintain valid
permits under RCRA and any other applicable Environmental Laws.  Borrowers shall
use their best efforts to obtain certificates of disposal, such as hazardous
waste manifest receipts, from all treatment, transport, storage or disposal
facilities or operators employed by Borrowers in connection with the transport
or disposal of any Hazardous Waste generated at the Real Property.
 
(d) In the event any Borrower obtains, gives or receives notice of any Release
or threat of Release of a reportable quantity of any Hazardous Substances at the
Real Property (any such event being hereinafter referred to as a “Hazardous
Discharge”) or receives any notice of violation, request for information or
notification that it is potentially responsible for investigation or cleanup of
environmental conditions at the Real Property, demand letter or complaint,
order, citation, or other written notice with regard to any Hazardous Discharge
or violation of Environmental Laws affecting the Real Property or any Borrower’s
interest therein
 
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(any of the foregoing is referred to herein as an “Environmental Complaint”)
from any Person, including any state agency responsible in whole or in part for
environmental matters in the state in which the Real Property is located or the
United States Environmental Protection Agency (any such person or entity
hereinafter the “Authority”), then Borrowing Agent shall, within five (5)
Business Days, give written notice of same to Agent detailing facts and
circumstances of which any Borrower is aware giving rise to the Hazardous
Discharge or Environmental Complaint.  Such information is to be provided to
allow Agent to protect its security interest in and Lien on the Real Property
and the Collateral and is not intended to create nor shall it create any
obligation upon Agent or any Lender with respect thereto.
 
(e) Borrowing Agent shall promptly forward to Agent copies of any request for
information, notification of potential liability, demand letter relating to
potential responsibility with respect to the investigation or cleanup of
Hazardous Substances at any other site owned, operated or used by any Borrower
to dispose of Hazardous Substances and shall continue to forward copies of
correspondence between any Borrower and the Authority regarding such claims to
Agent until the claim is settled.  Borrowing Agent shall promptly forward to
Agent copies of all documents and reports concerning a Hazardous Discharge at
the Real Property that any Borrower is required to file under any Environmental
Laws.  Such information is to be provided solely to allow Agent to protect
Agent’s security interest in and Lien on the Real Property and the Collateral.
 
(f) Borrowers shall respond promptly to any Hazardous Discharge or Environmental
Complaint and take all necessary action in order to safeguard the health of any
Person and to avoid subjecting the Collateral or Real Property to any Lien.  If
any Borrower shall fail to respond promptly to any Hazardous Discharge or
Environmental Complaint or any Borrower shall fail to comply with any of the
requirements of any Environmental Laws, Agent on behalf of Lenders may, but
without the obligation to do so, for the sole purpose of protecting Agent’s
interest in the Collateral:  (A) give such notices or (B) enter onto the Real
Property (or authorize third parties to enter onto the Real Property) and take
such actions as Agent (or such third parties as directed by Agent) deem
reasonably necessary or advisable, to clean up, remove, mitigate or otherwise
deal with any such Hazardous Discharge or Environmental Complaint.  All
reasonable costs and expenses incurred by Agent and Lenders (or such third
parties) in the exercise of any such rights, including any sums paid in
connection with any judicial or administrative investigation or proceedings,
fines and penalties, together with interest thereon from the date expended at
the Default Rate for Domestic Rate Loans constituting Revolving Advances shall
be paid upon demand by Borrowers, and until paid shall be added to and become a
part of the Obligations secured by the Liens created by the terms of this
Agreement or any other agreement between Agent, any Lender and any Borrower.
 
(g) Promptly upon the written request of Agent from time to time, Borrowers
shall provide Agent, at Borrowers’ expense, with an environmental site
assessment or environmental audit report prepared by an environmental
engineering firm acceptable in the reasonable opinion of Agent, to assess with a
reasonable degree of certainty the existence of a Hazardous Discharge and the
potential costs in connection with abatement, cleanup and removal of any
Hazardous Substances found on, under, at or within the Real Property.  Any
report or investigation of such Hazardous Discharge proposed and acceptable to
an appropriate Authority that is charged to oversee the clean-up of such
Hazardous Discharge shall be acceptable to
 
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Agent.  If such estimates, individually or in the aggregate, exceed $100,000,
Agent shall have the right to require Borrowers to post a bond, letter of credit
or other security reasonably satisfactory to Agent to secure payment of these
costs and expenses.
 
(h) Borrowers shall defend and indemnify Agent and Lenders and hold Agent,
Lenders and their respective employees, agents, directors and officers harmless
from and against all loss, liability, damage and expense, claims, costs, fines
and penalties, including attorney’s fees, suffered or incurred by Agent or
Lenders under or on account of any Environmental Laws, including the assertion
of any Lien thereunder, with respect to any Hazardous Discharge, the presence of
any Hazardous Substances affecting the Real Property, whether or not the same
originates or emerges from the Real Property or any contiguous real estate,
including any loss of value of the Real Property as a result of the foregoing
except to the extent such loss, liability, damage and expense is attributable to
any Hazardous Discharge resulting from actions on the part of Agent or any
Lender.  Borrowers’ obligations under this Section 4.19 shall arise upon the
discovery of the presence of any Hazardous Substances at the Real Property,
whether or not any federal, state, or local environmental agency has taken or
threatened any action in connection with the presence of any Hazardous
Substances.  Borrowers’ obligation and the indemnifications hereunder shall
survive the termination of this Agreement.
 
(i) For purposes of Section 4.19 and 5.7, all references to Real Property shall
be deemed to include all of each Borrower’s right, title and interest in and to
its owned and leased premises.
 
4.20. Financing Statements.  Except as respects the financing statements filed
by Agent and the financing statements described on Schedule 1.2(b), no financing
statement covering any of the Collateral or any proceeds thereof is on file in
any public office.
 
4.21. Rig Fleet Equipment.  A complete record of all Rig Fleet Equipment owned
by BWS as of the Closing Date (including on a Rig-by-Rig basis (w)
identification of the rig number of each Rig, (x) identification of the location
of each Rig (by county, state and country), (y) a notation of whether or not the
Rig Fleet Equipment is operating under a drilling contract at a customer’s
working job site and (z) whether such Rig Fleet Equipment is a Mobile Rig and,
if so, annotation of whether such Mobile Rig is covered by a certificate of
title and the state of issuance thereof) is set forth in Schedule 4.21
hereto.  The Agent and the Lenders shall at all reasonable times and upon
reasonable prior notice (which prior notice will not be required after the
occurrence and during the continuance of an Event of Default) have access, to
the extent any Borrower has the power to grant Agent and the Lenders such
access, to the Rig Fleet Equipment located on such property; and unless
otherwise agreed to by Agent, after the occurrence and during the continuance of
an Event of Default, the Agent shall have the right to enter on such property
and to remove such Rig Fleet Equipment therefrom without interference from, or
imposition of any Lien on such Rig Fleet Equipment by, any owner, landlord,
tenant or other Person with an interest in such property.  Each of the Rig Fleet
Equipment (a) constitutes goods which are mobile, of a type normally used in
more than one jurisdiction and not designed to be permanently used in any one
location; and (b) is not a fixture under the laws of any jurisdiction in which
any of the Rig Fleet Equipment is located.  Each self-propelled Mobile Rig has
been issued a permit license plate or machinery license plate in accordance with
Transportation Code of the State of Texas §§ 504.504, 623.144 and 623.149 or
other Applicable Law and is exempted
 
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from (i) certification under Section 501 of the Transportation Code of the State
of Texas pursuant to Texas Department of Transportation Rules, Chapter 43,
Section 17.3, and (ii) registration under Section 502 of the Transportation Code
of the State of Texas.
 
V. REPRESENTATIONS AND WARRANTIES.
 
Each Borrower represents and warrants as follows:
 
5.1. Authority.  Each Borrower has full power, authority and legal right to
enter into this Agreement and the Other Documents and to perform all its
respective Obligations hereunder and thereunder.  This Agreement and the Other
Documents have been duly executed and delivered by each Borrower, and this
Agreement and the Other Documents constitute the legal, valid and binding
obligation of such Borrower enforceable in accordance with their terms, except
as such enforceability may be limited by any applicable bankruptcy, insolvency,
moratorium or similar laws affecting creditors’ rights generally.  The
execution, delivery and performance of this Agreement and of the Other Documents
(a) are within such Borrower’s corporate powers, have been duly authorized by
all necessary corporate action, are not in contravention of law or the terms of
such Borrower’s by-laws, certificate of incorporation or other appli­cable
documents relating to such Borrower’s formation or to the conduct of such
Borrower’s business or of any material agreement or undertaking to which such
Borrower is a party or by which such Borrower is bound, including the Initial
Acquisition Documents, (b) will not conflict with or violate any law or
regulation, or any judgment, order or decree of any Governmental Body, (c) will
not require the Consent of any Governmental Body or any other Person, except
those Consents set forth on Schedule 5.1 hereto, all of which will have been
duly obtained, made or compiled prior to the Closing Date and which are in full
force and effect and (d) will not conflict with, nor result in any breach in any
of the provisions of or constitute a default under or result in the creation of
any Lien except Permitted Encumbrances upon any asset of such Borrower under the
provisions of any agreement, charter document, instrument, by-law or other
instrument to which such Borrower is a party or by which it or its property is a
party or by which it may be bound, including under the provisions of the Initial
Acquisition Documents.
 
5.2. Formation and Qualification.
 
(a) Each Borrower is duly incorporated and in good standing under the laws of
the state listed on Schedule 5.2(a) and is qualified to do business and is in
good standing in the states listed on Schedule 5.2(a) which constitute all
states in which qualification and good standing are necessary for such Borrower
to conduct its business and own its property and where the failure to so qualify
could reasonably be expected to have a Material Adverse Effect on such
Borrower.  Each Borrower has delivered to Agent true and complete copies of its
certificate of incorporation and by-laws and will promptly notify Agent of any
amendment or changes thereto.
 
(b) The only Subsidiaries of each Borrower are listed on Schedule 5.2(b).
 
5.3. Survival of Representations and Warranties.  All representations and
warranties of such Borrower contained in this Agreement and the Other Documents
shall be true at the time of such Borrower’s execution of this Agreement and the
Other Documents, and shall survive the
 
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execution, delivery and acceptance thereof by the parties thereto and the
closing of the transactions described therein or related thereto.
 
5.4. Tax Returns.  Each Borrower’s federal tax identification number is set
forth on Schedule 5.4.  Each Borrower has filed all federal, state and local tax
returns and other reports each is required by law to file and has paid all
taxes, assessments, fees and other governmental charges that are due and
payable.  Federal, state and local income tax returns of each Borrower have been
examined and reported upon by the appropriate taxing authority or closed by
applicable statute and satisfied for all fiscal years prior to and including the
fiscal year ending December 31, 2006.  The provision for taxes on the books of
each Borrower is adequate for all years not closed by applicable statutes, and
for its current fiscal year, and no Borrower has any knowledge of any deficiency
or additional assessment in connection therewith not provided for on its books.
 
5.5. Financial Statements.
 
(a) The pro forma balance sheet of Borrowers on a Consolidated Basis (the “Pro
Forma Balance Sheet”) furnished to Agent on the Closing Date reflects the
consummation of the transactions contemplated by the Acquisition Documents, and
under this Agreement (collectively, the “Transactions”) and is accurate,
complete and correct and fairly reflects the financial condition of Borrowers on
a Consolidated Basis as of the Closing Date after giving effect to the
Transactions, and has been prepared in accordance with GAAP, consistently
applied.  The Pro Forma Balance Sheet has been certified as accurate, complete
and correct in all material respects by the President and Chief Financial
Officer of Borrowing Agent.  All financial statements referred to in this
subsection 5.5(a), including the related schedules and notes thereto, have been
prepared, in accordance with GAAP, except as may be disclosed in such financial
statements.
 
(b) The twelve-month cash flow projections of Borrowers on a Consolidated Basis
and their projected balance sheets as of the Closing Date, copies of which are
annexed hereto as Exhibit 5.5(b) (the “Projections”) were prepared by the Chief
Financial Officer of Borrowing Agent, are based on underlying assumptions which
provide a reasonable basis for the projections contained therein and reflect
Borrowers’ judgment based on present circumstances of the most likely set of
conditions and course of action for the projected period.  The cash flow
Projections together with the Pro Forma Balance Sheet, are referred to as the
“Pro Forma Financial Statements”.
 
(c) The balance sheet of each Borrower and such other Persons described therein
(including the accounts of all Subsidiaries for the respective periods during
which a subsidiary relationship existed) as of December 31, 2005 and December
31, 2006, and the related statements of income, changes in stockholder’s equity,
and changes in cash flow for the period ended on such date, all accompanied by
reports thereon containing opinions without qualification by independent
certified public accountants, copies of which have been delivered to Agent, have
been prepared in accordance with GAAP, consistently applied (except for changes
in application in which such accountants concur and present fairly the financial
position of each Borrower and their Subsidiaries at such date and the results of
their operations for such period.  Since December 31, 2006 there has been no
change in the condition, financial or otherwise, of any
 
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Borrower or their Subsidiaries as shown on the consolidated balance sheet as of
such date and no change in the aggregate value of machinery, equipment and Real
Property owned by each Borrower and their respective Subsidiaries, except
changes in the Ordinary Course of Business, none of which individually or in the
aggregate has been materially adverse.
 
5.6. Entity Names.  No Borrower has been known by any other corporate name in
the past five years and does not sell or lease Inventory or provide services
under any other name except as set forth on Schedule 5.6, nor has any Borrower
been the surviving corporation of a merger or consolidation or acquired all or
substantially all of the assets of any Person during the preceding five (5)
years.
 
5.7. O.S.H.A. and Environmental Compliance.
 
(a) Each Borrower has duly complied in all material respects with, and its
facilities, business, assets, property, leaseholds, Real Property and Equipment
are in compliance in all material respects with, the provisions of the Federal
Occupational Safety and Health Act, the Environmental Protection Act, RCRA and
all other Environmental Laws; there have been no outstanding citations, notices
or orders of non-compliance issued to any Borrower or relating to its business,
assets, property, leaseholds or Equipment under any such laws, rules or
regulations.
 
(b) Each Borrower has been issued all material required federal, state and local
licenses, certificates or permits relating to all applicable Environmental Laws.
 
(c) (i) There are no visible signs of releases, spills, discharges, leaks or
disposal (collectively referred to as “Releases”) of Hazardous Substances at,
upon, under or within any Real Property or any premises leased by any Borrower;
(ii) there are no underground storage tanks or polychlorinated biphenyls on the
Real Property or any premises leased by any Borrower; (iii) neither the Real
Property nor any premises leased by any Borrower has ever been used as a
treatment, storage or disposal facility of Hazardous Waste; and (iv) no
Hazardous Substances are present on the Real Property or any premises leased by
any Borrower, excepting such quantities as are handled in accordance with all
applicable manufacturer’s instructions and governmental regulations and in
proper storage containers and as are necessary for the operation of the
commercial business of any Borrower or of its tenants.
 
5.8. Solvency; No Litigation, Violation, Indebtedness or Default.
 
(a) After giving effect to the Transactions, each Borrower will be solvent, able
to pay its debts as they mature, will have capital sufficient to carry on its
business and all businesses in which it is about to engage, and (i) as of the
Closing Date, the fair present saleable value of its assets, calculated on a
going concern basis, is in excess of the amount of its liabilities and (ii)
subsequent to the Closing Date, the fair saleable value of its assets
(calculated on a going concern basis) will be in excess of the amount of its
liabilities.
 
(b) Except as disclosed in Schedule 5.8(b), no Borrower has (i) any pending or
threatened litigation, arbitration, actions or proceedings which involve the
possibility of having a Material Adverse Effect, and (ii) any liabilities or
indebtedness for borrowed money other than the Obligations.
 
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(c) No Borrower is in violation of any applicable statute, law, rule, regulation
or ordinance in any respect which could reasonably be expected to have a
Material Adverse Effect, nor is any Borrower in violation of any order of any
court, Governmental Body or arbitration board or tribunal.
 
(d) As of the Closing Date, no Borrower nor any member of the Controlled Group
maintains or contributes to any Plan other than those listed on Schedule 5.8(d)
hereto.  (i) No Plan has incurred any “accumulated funding deficiency,” as
defined in Section 302(a)(2) of ERISA and Section 412(a) of the Code, whether or
not waived, and each Borrower and each member of the Controlled Group has met
all applicable minimum funding requirements under Section 302 of ERISA in
respect of each Plan; (ii) each Plan which is intended to be a qualified plan
under Section 401(a) of the Code as currently in effect has been determined by
the Internal Revenue Service to be qualified under Section 401(a) of the Code
and the trust related thereto is exempt from federal income tax under Section
501(a) of the Code; (iii) neither any Borrower nor any member of the Controlled
Group has incurred any liability to the PBGC other than for the payment of
premiums, and there are no premium payments which have become due which are
unpaid; (iv) no Plan has been terminated by the plan administrator thereof nor
by the PBGC, and there is no occurrence which would cause the PBGC to institute
proceedings under Title IV of ERISA to terminate any Plan; (v) at this time, the
current value of the assets of each Plan exceeds the present value of the
accrued benefits and other liabilities of such Plan and neither any Borrower nor
any member of the Controlled Group knows of any facts or circumstances which
would materially change the value of such assets and accrued benefits and other
liabilities; (vi) neither any Borrower nor any member of the Controlled Group
has breached any of the material responsibilities, obligations or duties imposed
on it by ERISA with respect to any Plan; (vii) neither any Borrower nor any
member of a Controlled Group has incurred any liability for any excise tax
arising under Section 4972 or 4980B of the Code, and no fact exists which could
give rise to any such liability; (viii) neither any Borrower nor any member of
the Controlled Group nor any fiduciary of, nor any trustee to, any Plan, has
engaged in a “prohibited transaction” described in Section 406 of the ERISA or
Section 4975 of the Code nor taken any action which would constitute or result
in a Termination Event with respect to any such Plan which is subject to ERISA;
(ix) each Borrower and each member of the Controlled Group has made all
contributions due and payable with respect to each Plan; (x) there exists no
event described in Section 4043(b) of ERISA, for which the thirty (30) day
notice period has not been waived; (xi) neither any Borrower nor any member of
the Controlled Group has any fiduciary responsibility for investments with
respect to any plan existing for the benefit of persons other than employees or
former employees of any Borrower and any member of the Controlled Group; (xii)
neither any Borrower nor any member of the Controlled Group maintains or
contributes to any Plan which provides health, accident or life insurance
benefits to former employees, their spouses or dependents, other than in
accordance with Section 4980B of the Code; (xiii) neither any Borrower nor any
member of the Controlled Group has withdrawn, completely or partially, from any
Multiemployer Plan so as to incur liability under the Multiemployer Pension Plan
Amendments Act of 1980 and there exists no fact which would reasonably be
expected to result in any such liability; and (xiv) no Plan fiduciary (as
defined in Section 3(21) of ERISA) has any liability in excess of $100,000 for
breach of fiduciary duty or for any failure in connection with the
administration or investment of the assets of a Plan.
 
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5.9. Patents, Trademarks, Copyrights and Licenses.  All patents, patent
applications, trademarks, trademark applications, service marks, service mark
applications, copyrights, copyright applications, design rights, tradenames,
assumed names, trade secrets and licenses owned or utilized by any Borrower as
of the Closing Date are set forth on Schedule 5.9, are valid and have been duly
registered or filed with all appropriate Governmental Bodies and constitute all
of the intellectual property rights which are necessary for the operation of its
business; there is no objection to or pending challenge to the validity of any
such patent, trademark, copyright, design rights, tradename, trade secret or
license and no Borrower is aware of any grounds for any challenge, except as set
forth in Schedule 5.9 hereto.  Each patent, patent application, patent license,
trademark, trademark application, trademark license, service mark, service mark
application, service mark license, design rights, copyright, copyright
application and copyright license owned or held by any Borrower and all trade
secrets used by any Borrower consist of original material or property developed
by such Borrower or was lawfully acquired by such Borrower from the proper and
lawful owner thereof.  Each of such items has been maintained so as to preserve
the value thereof from the date of creation or acquisition thereof.  With
respect to all software used by any Borrower (other than “off-the-shelf” or
public software), such Borrower is in possession of all source and object codes
related to each piece of software or is the beneficiary of a source code escrow
agreement, each such source code escrow agreement being listed on Schedule 5.9
hereto.
 
5.10. Licenses and Permits.  Except as set forth in Schedule 5.10, each Borrower
(a) is in compliance with and (b) has procured and is now in possession of, all
material licenses or permits required by any applicable federal, state,
provincial or local law, rule or regulation for the operation of its business in
each jurisdiction wherein it is now conducting or proposes to conduct business
and where the failure to procure such licenses or permits could have a Material
Adverse Effect.
 
5.11. Default of Indebtedness.  No Borrower is in default in the payment of the
principal of or interest on any Indebtedness having a principal amount in excess
of $100,000 or under any instrument or agreement under or subject to which any
such Indebtedness has been issued and no event has occurred under the provisions
of any such instrument or agreement which with or without the lapse of time or
the giving of notice, or both, constitutes or would constitute an event of
default thereunder.
 
5.12. No Default.  No Borrower is in default in the payment or performance of
any of its material contractual obligations and no Default has occurred.
 
5.13. No Burdensome Restrictions.  No Borrower is party to any contract or
agreement the performance of which could have a Material Adverse Effect.  Each
Borrower has heretofore delivered to Agent true and complete copies of all
material contracts to which it is a party or to which it or any of its
properties is subject.  No Borrower has agreed or consented to cause or permit
in the future (upon the happening of a contingency or otherwise) any of its
property, whether now owned or hereafter acquired, to be subject to a Lien which
is not a Permitted Encumbrance.
 
5.14. No Labor Disputes.  No Borrower is involved in any labor dispute; there
are no strikes or walkouts or union organization of any Borrower’s employees
threatened or in
 
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existence and no labor contract is scheduled to expire during the Term other
than as set forth on Schedule 5.14 hereto.
 
5.15. Margin Regulations.  No Borrower is engaged, nor will it engage,
principally or as one of its important activities, in the business of extending
credit for the purpose of “purchasing” or “carrying” any “margin stock” within
the respective meanings of each of the quoted terms under Regulation U of the
Board of Governors of the Federal Reserve System as now and from time to time
hereafter in effect.  No part of the proceeds of any Advance will be used for
“purchasing” or “carrying” “margin stock” as defined in Regulation U of such
Board of Governors.
 
5.16. Investment Company Act.  No Borrower is an “investment company” registered
or required to be registered under the Investment Company Act of 1940, as
amended, nor is it controlled by such a company.
 
5.17. Disclosure.  No representation or warranty made by any Borrower in this
Agreement or in any Acquisition Document, or in any financial statement, report,
certificate or any other document furnished in connection herewith or therewith
contains any untrue statement of a material fact or omits to state any material
fact necessary to make the statements herein or therein not misleading.  There
is no fact known to any Borrower or which reasonably should be known to such
Borrower which such Borrower has not disclosed to Agent in writing with respect
to the transactions contemplated by the Acquisition Documents or this Agreement
which could reasonably be expected to have a Material Adverse Effect.
 
5.18. Delivery of Acquisition Documents.  Agent has received complete copies of
the Initial Acquisition Documents (including all exhibits, schedules and
disclosure letters referred to therein or delivered pursuant thereto, if any)
and all amendments thereto, waivers relating thereto and other side letters or
agreements affecting the terms thereof.  None of such documents and agreements
has been amended or supplemented, nor have any of the provisions thereof been
waived, except pursuant to a written agreement or instrument which has
heretofore been delivered to Agent.
 
5.19. Swaps.  No Borrower is a party to, nor will it be a party to, any swap
agreement whereby such Borrower has agreed or will agree to swap interest rates
or currencies unless same provides that damages upon termination following an
event of default thereunder are payable on an unlimited “two-way basis” without
regard to fault on the part of either party.
 
5.20. Conflicting Agreements.  No provision of any mortgage, indenture,
contract, agreement, judgment, decree or order binding on any Borrower or
affecting the Collateral conflicts with, or requires any Consent which has not
already been obtained to, or would in any way prevent the execution, delivery or
performance of, the terms of this Agreement or the Other Documents.
 
5.21. Application of Certain Laws and Regulations.  Neither any Borrower nor any
Affiliate of any Borrower is subject to any law, statute, rule or regulation
which regulates the incurrence of any Indebtedness, including laws, statutes,
rules or regulations relative to common
 
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or interstate carriers or to the sale of electricity, gas, steam, water,
telephone, telegraph or other public utility services.
 
5.22. Business and Property of Borrowers.  Upon and after the Closing Date,
Borrowers do not propose to engage in any business other than oil field and
mineral services, including operating drilling, core and well service rigs and
the rental of ancillary equipment, such as pipe racks, mud pumps, blowout
preventers, and the sale and rental of ancillary products and services and
activities necessary to conduct the foregoing.  On the Closing Date, each
Borrower will own all the property and possess all of the rights and Consents
necessary for the conduct of the business of such Borrower.
 
5.23. Section 20 Subsidiaries.  Borrowers do not intend to use and shall not use
any portion of the proceeds of the Advances, directly or indirectly, to purchase
during the underwriting period, or for 30 days thereafter, Ineligible Securities
being underwritten by a Section 20 Subsidiary.
 
5.24. Anti-Terrorism Laws.
 
(a) General.  Neither any Borrower nor any Affiliate of any Borrower is in
violation of any Anti-Terrorism Law or engages in or conspires to engage in any
transaction  that evades or avoids, or has the purpose of evading or avoiding,
or attempts to violate, any of the prohibitions set forth in any Anti-Terrorism
Law.
 
(b) Executive Order No. 13224.  Neither any Borrower nor any Affiliate of any
Borrower or their respective agents acting or benefiting in any capacity in
connection with the Advances or other transactions hereunder, is any of the
following (each a “Blocked Person”):
 
(i) a Person that is listed in the annex to, or is otherwise subject to the
provisions of, the Executive Order No. 13224;
 
(ii) a Person owned or  controlled  by, or acting for or on
behalf  of,  any  Person  that is listed in the annex to, or is otherwise
subject to the provisions of, the Executive Order No. 13224;
 
(iii) a Person or entity with which any Lender is prohibited from dealing or
otherwise engaging in any transaction by any Anti-Terrorism Law;
 
(iv) a Person or entity that commits, threatens or conspires to commit or
supports “terrorism” as defined in the Executive Order No. 13224;
 
(v) a Person or entity that is named as a “specially designated national” on the
most current list published by the U.S. Treasury Department Office of Foreign
Asset Control at its official website or any replacement website or other
replacement official publication of such list, or
 
(vi) a Person or entity who is affiliated or associated with a Person or entity
listed above.
 
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Neither any Borrower nor to the knowledge of any Borrower, any of its agents
acting in any capacity in connection with the Advances or other transactions
hereunder (i) conducts any business or engages in making or receiving any
contribution of funds, goods or services to or for the benefit of any Blocked
Person, or (ii) deals in, or otherwise engages in any transaction relating to,
any property or interests in property  blocked  pursuant to the Executive Order
No. 13224.
 
5.25. Trading with the Enemy.  No Borrower has engaged, nor does it intend to
engage, in any business or activity prohibited by the Trading with the Enemy
Act.
 
5.26. Federal Securities Laws.  Neither any Borrower nor any of its Subsidiaries
(i) is required to file periodic reports under the Exchange Act, (ii) has any
securities registered under the Exchange Act or (iii) has filed a registration
statement that has not yet become effective under the Securities Act.
 
VI. AFFIRMATIVE COVENANTS.
 
Each Borrower shall, until payment in full of the Obligations and termination of
this Agreement:
 
6.1. Payment of Fees.  Pay to Agent on demand all usual and customary fees and
expenses which Agent incurs in connection with (a) the forwarding of Advance
proceeds and (b) the establishment and maintenance of any Blocked Accounts or
Depository Accounts as provided for in Section 4.15(h).  Agent may, without
making demand, charge Borrowers’ Account for all such fees and expenses.
 
6.2. Conduct of Business and Maintenance of Existence and Assets.  (a) Conduct
continuously and operate actively its business according to good business
practices and maintain all of its properties useful or necessary in its business
in good working order and condition (reasonable wear and tear and damage due to
casualty excepted and except as may be disposed of in accordance with the terms
of this Agreement), including all licenses, patents, copyrights, design rights,
tradenames, trade secrets and trademarks and take all actions necessary to
enforce and protect the validity of any intellectual property right or other
right included in the Collateral; (b) keep in full force and effect its
existence and comply in all material respects with the laws and regulations
governing the conduct of its business where the failure to do so could
reasonably be expected to have a Material Adverse Effect; and (c) make all such
reports and pay all such franchise and other taxes and license fees and do all
such other acts and things as may be lawfully required to maintain its rights,
licenses, leases, powers and franchises under the laws of the United States or
any political subdivision thereof where the failure to do so could reasonably be
expected to have a Material Adverse Effect.
 
6.3. Violations.  Promptly notify Agent in writing of any violation of any law,
statute, regulation or ordinance of any Governmental Body, or of any agency
thereof, applicable to any Borrower which could reasonably be expected to have a
Material Adverse Effect.
 
6.4. Government Receivables.  Take all steps necessary to protect Agent’s
interest in the Collateral under the Federal Assignment of Claims Act, the
Uniform Commercial Code and all other applicable state or local statutes or
ordinances and deliver to Agent appropriately
 
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endorsed, any instrument or chattel paper connected with any Receivable arising
out of contracts between any Borrower and the United States, any state or any
department, agency or instrumentality of any of them.
 
6.5. Financial Covenants.
 
(a) Fixed Charge Coverage Ratio.  Cause to be maintained as of the end of each
fiscal quarter, for the twelve month period ending on the last day of such
fiscal quarter, a Fixed Charge Coverage Ratio of not less than 1.10 of 1.0;
provided that (w) for the fiscal quarter of the Borrowers ending on or about
March 31, 2008, the Fixed Charge Coverage Ratio shall be calculated for the
period commencing on the Closing Date and ending on the last day of such fiscal
quarter, (x) for the fiscal quarter of the Borrowers ending on or about June 30,
2008, the Fixed Charge Coverage Ratio shall be calculated for the three month
period ending on the last day of such fiscal quarter, (y) for the fiscal quarter
of the Borrowers ending on or about September 30, 2008, the Fixed Charge
Coverage Ratio shall be calculated for the six month period ending on the last
day of such fiscal quarter, and (z) for the fiscal quarter of the Borrowers
ending on or about December 31, 2008, the Fixed Charge Coverage Ratio shall be
calculated for the nine month period ending on the last day of such fiscal
quarter .
 
(b) Leverage Ratio.  Maintain as of the end of each fiscal quarter, for the
twelve month period ending on the last day of such fiscal quarter, a ratio of
Funded Debt to EBITDA of not greater than the amount set forth in the table
below for such period:
 
Fiscal Quarter Ending:
Leverage Ratio:
March 31, 2008
3.5 to 1.0
June 30, 2008
3.5 to 1.0
September 30, 2008
3.5 to 1.0
December 31, 2008
3.5 to 1.0
March 31, 2009
3.0 to 1.0
June 30, 2009
3.0 to 1.0
September 30, 2009
3.0 to 1.0
December 31, 2009
3.0 to 1.0
March 30, 2010 and each fiscal quarter ending thereafter
2.50 to 1.0

; provided that, notwithstanding the foregoing, (w) for the fiscal quarter of
the Borrowers ending on or about March 31, 2008, EBITDA shall be calculated by
taking the actual EBITDA for the period commencing on the Closing Date and
ending on the last day of such fiscal quarter and (i)
 
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dividing such amount by the number of days in such period and then (ii)
multiplying such amount by 360, (x) for the fiscal quarter of the Borrowers
ending on or about June 30, 2008, EBITDA shall be calculated by taking the
actual EBITDA for the three month period ending on the last day of such fiscal
quarter and multiplying such amount by 4, (y) for the fiscal quarter of the
Borrowers ending on or about September 30, 2008, EBITDA shall be calculated by
taking the actual EBITDA for the six month period ending on the last day of such
fiscal quarter and multiplying such amount by 2, and (z) for the fiscal quarter
of the Borrowers ending on or about December 31, 2008, EBITDA shall be
calculated by taking the actual EBITDA for the nine month period ending on the
last day of such fiscal quarter and (i) dividing each such amount by 3 and then
(ii) multiplying such amount by 4.
 
6.6. Execution of Supplemental Instruments.  Execute and deliver to Agent from
time to time, upon demand, such supplemental agreements, statements, assignments
and transfers, or instructions or documents relating to the Collateral, and such
other instruments as Agent may request, in order that the full intent of this
Agreement may be carried into effect.
 
6.7. Payment of Indebtedness.  Pay, discharge or otherwise satisfy at or before
maturity (subject, where applicable, to specified grace periods and, in the case
of the trade payables, to normal payment practices) all its obligations and
liabilities of whatever nature, except when the failure to do so could not
reasonably be expected to have a Material Adverse Effect or when the amount or
validity thereof is currently being contested in good faith by appropriate
proceedings and each Borrower shall have provided for such reserves as Agent may
reasonably deem proper and necessary, subject at all times to any applicable
subordination arrangement in favor of Lenders.
 
6.8. Standards of Financial Statements.  Cause all financial statements referred
to in Sections 9.7, 9.8, 9.9, 9.10, 9.11, 9.12, 9.13 and 9.14 as to which GAAP
is applicable to be complete and correct in all material respects (subject, in
the case of interim financial statements, to normal year-end audit adjustments)
and to be prepared in reasonable detail and in accordance with GAAP applied
consistently throughout the periods reflected therein (except as concurred in by
such reporting accountants or officer, as the case may be, and disclosed
therein).
 
6.9. Federal Securities Laws.  Best will provide Agent copies of (i) all
periodic reports it is required to file under the Exchange Act and (ii) all
registration statements it files under the Securities Act.
 
6.10. Exercise of Rights.  Enforce all of its rights under the Acquisition
Documents including, but not limited to, all indemnification rights and pursue
all remedies available to it with diligence and in good faith in connection with
the enforcement of any such rights.
 
6.11. Identification of Rig Fleet Equipment.  Each Borrower will cause each Rig
to be numbered with identifying numbers as set forth on Schedule 4.21 hereto and
will cause each Rig to be conspicuously and permanently marked as property of
such Borrower and subject to the Lien of Agent.  No Borrower will change the
identifying number of any Rig without prior written notice to Agent.
 
VII. NEGATIVE COVENANTS.
 
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No Borrower shall, until satisfaction in full of the Obligations and termination
of this Agreement:
 
7.1. Merger, Consolidation, Acquisition and Sale of Assets.
 
(a) Enter into any merger, consolidation or other reorganization with or into
any other Person or acquire all or a substantial portion of the assets or Equity
Interests of any Person or permit any other Person to consolidate with or merge
with it; provided that (x) the Acquisitions shall be permitted and (y) BBD and
BWS shall be permitted to merge or consolidate into each other or into Best
(with Best being the survivor of any such merger).
 
(b) Sell, lease, transfer or otherwise dispose of any of its properties or
assets, except (i) dispositions of Inventory and Equipment to the extent
expressly permitted by Section 4.3 and (ii) any other sales or dispositions
expressly permitted by this Agreement.
 
7.2. Creation of Liens.  Create or suffer to exist any Lien or transfer upon or
against any of its property or assets now owned or hereafter acquired, except
Permitted Encumbrances.
 
7.3. Guarantees.  Become liable upon the obligations or liabilities of any
Person by assumption, endorsement or guaranty thereof or otherwise (other than
to Lenders) except (a) as disclosed on Schedule 7.3, (b) guarantees made in the
Ordinary Course of Business up to an aggregate amount of $100,000 and (c) the
endorsement of checks in the Ordinary Course of Business.
 
7.4. Investments.  Purchase or acquire obligations or Equity Interests of, or
any other interest in, any Person, except (a) obligations issued or guaranteed
by the United States of America or any agency thereof, (b) commercial paper with
maturities of not more than 180 days and a published rating of not less than A-1
or P-1 (or the equivalent rating), (c) certificates of time deposit and bankers’
acceptances having maturities of not more than 180 days and repurchase
agreements backed by United States government securities of a commercial bank if
(i) such bank has a combined capital and surplus of at least $500,000,000, or
(ii) its debt obligations, or those of a holding company of which it is a
Subsidiary, are rated not less than A (or the equivalent rating) by a nationally
recognized investment rating agency, (d) U.S. money market funds that invest
solely in obligations issued or guaranteed by the United States of America or an
agency thereof, (e) the Acquisitions or (f) Investments by a Borrower in any
other Borrower (other than Best).
 
7.5. Loans.  Make advances, loans or extensions of credit to (a) any Person,
including any Parent, Subsidiary or Affiliate except with respect to loans to
its employees or independent sales persons in the Ordinary Course of Business
not to exceed the aggregate amount of $100,000 at any time outstanding, (b) any
other Borrower, or (c) to the extent permitted by applicable law, officers,
directors or employees of any Borrower with respect to Equity Interests
purchased by such officers, directors or employees pursuant to a stock
ownership, purchase or compensation plan of any Borrower not to exceed the
aggregate amount of $100,000 at any time outstanding.
 
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7.6. Capital Expenditures.  Contract for, purchase or make any expenditure or
commitments for Capital Expenditures in any fiscal year in an aggregate amount
for all Borrowers in excess of $2,000,000.
 
7.7. Dividends.  Declare, pay or make any dividend or distribution on any shares
of the common stock or preferred stock of any Borrower (other than dividends or
distributions payable in its stock, or split-ups or reclassifications of its
stock) or apply any of its funds, property or assets to the purchase, redemption
or other retirement of any common or preferred stock, or of any options to
purchase or acquire any such shares of common or preferred stock of any
Borrower; provided that Borrower shall be permitted to make payments (i)
utilizing up to 25% of net income of the Borrowers on a consolidated basis in
any fiscal year to the holders of Best’s Series A Convertible Preferred Stock in
accordance with the provisions of the Certificate of Designation therefor as in
effect on the Closing Date, so long as after giving effect to such payment (x)
Borrowers have at least $1,500,000 of Undrawn Availability and (y) Borrowers
demonstrate to Agent’s reasonable satisfaction pro forma compliance with
financial covenants set forth in Section 6.5 of this Agreement, and (ii) to
Best, to pay professional fees, franchise taxes and other Ordinary Course of
Business operating expenses (excluding salaries and other employee compensation)
incurred by Best solely in its capacity as parent corporation of Borrowers;
provided, however, that after giving effect to the payment of such dividends
there shall not exist any Event of Default or Default.
 
7.8. Indebtedness.  Create, incur, assume or suffer to exist any Indebtedness
(exclusive of trade debt) except in respect of (i) Indebtedness to Lenders; (ii)
Indebtedness incurred for Capital Expenditures permitted under Section 7.6
hereof; (iii) Indebtedness under the Demand Notes, (iv) Indebtedness assumed
under the Acquisition Documents, (v) Indebtedness of any Borrower to another
Borrower, (vi) unsecured Indebtedness in aggregate principal amount not to
exceed $500,000 at any time outstanding, and (vii) Indebtedness set forth on
Schedule 7.8 and any refinancing, refunding or extension thereof, so long as the
aggregate principal amount of such Indebtedness is not increased as a result
thereof.
 
7.9. Nature of Business.  Substantially change the nature of the business in
which it is presently engaged, nor except as specifically permitted hereby
purchase or invest, directly or indirectly, in any assets or property other than
in the Ordinary Course of Business for assets or property which are useful in,
necessary for and are to be used in its business as presently conducted.
 
7.10. Transactions with Affiliates.  Directly or indirectly, purchase, acquire
or lease any property from, or sell, transfer or lease any property to, or
otherwise enter into any transaction or deal with, any Affiliate other than
another Borrower, except (x) the Second Acquisitions and (y) transactions
disclosed to the Agent, which are in the Ordinary Course of Business, on an
arm’s-length basis on terms and conditions no less favorable than terms and
conditions which would have been obtainable from a Person other than an
Affiliate.
 
7.11. Leases.  Enter as lessee into any lease arrangement for real or personal
property (unless capitalized and permitted under Section 7.6 hereof) if after
giving effect thereto,
 
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aggregate annual rental payments for all leased property would exceed $200,000
in any one fiscal year in the aggregate for all Borrowers.
 
7.12. Subsidiaries.
 
(a) Form any Subsidiary unless (i) such Subsidiary expressly joins in this
Agreement as a borrower and becomes jointly and severally liable for the
obligations of Borrowers hereunder, under the Notes, and under any other
agreement between any Borrower and Lenders and (ii) Agent shall have received
all documents, including legal opinions, it may reasonably require to establish
compliance with each of the foregoing conditions.
 
(b) Enter into any partnership, joint venture or similar arrangement.
 
7.13. Fiscal Year and Accounting Changes.  Change its fiscal year from December
31 or make any material change (i) in accounting treatment and reporting
practices except as required by GAAP or (ii) in tax reporting treatment except
as required by law.
 
7.14. Pledge of Credit.  Now or hereafter pledge Agent’s or any Lender’s credit
on any purchases or for any purpose whatsoever or use any portion of any Advance
in or for any business other than such Borrower’s business as conducted on the
date of this Agreement.
 
7.15. Amendment of Articles of Incorporation, By-Laws.  Amend, modify or waive
any term or material provision of its Articles of Incorporation, By-Laws or
Certificate of Designation unless required by law.
 
7.16. Compliance with ERISA.  (i) (x) Maintain, or permit any member of the
Controlled Group to maintain, or (y) become obligated to contribute, or permit
any member of the Controlled Group to become obligated to contribute, to any
Plan, other than those Plans disclosed on Schedule 5.8(d) or such Plans as may
be disclosed in writing to Agent from time to time, (ii) engage, or permit any
member of the Controlled Group to engage, in any non-exempt “prohibited
transaction”, as that term is defined in section 406 of ERISA and Section 4975
of the Code, (iii) incur, or permit any member of the Controlled Group to incur,
any “accumulated funding deficiency”, as that term is defined in Section 302 of
ERISA or Section 412 of the Code, (iv) terminate, or permit any member of the
Controlled Group to terminate, any Plan where such event could result in any
liability of any Borrower or any member of the Controlled Group or the
imposition of a lien on the property of any Borrower or any member of the
Controlled Group pursuant to Section 4068 of ERISA, (v) assume, or permit any
member of the Controlled Group to assume, any obligation to contribute to any
Multiemployer Plan not disclosed on Schedule 5.8(d), (vi) incur, or permit any
member of the Controlled Group to incur, any withdrawal liability to any
Multiemployer Plan; (vii) fail promptly to notify Agent of the occurrence of any
Termination Event, (viii) fail to comply, or permit a member of the Controlled
Group to fail to comply, with the requirements of ERISA or the Code or other
Applicable Laws in respect of any Plan, (ix) fail to meet, or permit any member
of the Controlled Group to fail to meet, all minimum funding requirements under
ERISA or the Code or postpone or delay or allow any member of the Controlled
Group to postpone or delay any funding requirement with respect of any Plan.
 
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7.17. Prepayment of Indebtedness.  At any time, directly or indirectly, prepay
any Indebtedness (other than to Lenders), or repurchase, redeem, retire or
otherwise acquire any Indebtedness of any Borrower (other than the repayment of
the Demand Notes with the proceeds of the initial Advances on the Closing Date).
 
7.18. Anti-Terrorism Laws.  No Borrower shall, until satisfaction in full of the
Obligations and termination of this Agreement, nor shall it permit any Affiliate
or agent to:
 
(a) Conduct any business or engage in any transaction or dealing with any
Blocked Person, including the making or receiving any contribution of funds,
goods or services to or for the benefit of any Blocked Person.
 
(b) Deal in, or otherwise engage in any transaction relating to, any property or
interests in property blocked pursuant to the Executive Order No. 13224.
 
(c) Engage in or conspire to engage in any transaction that evades or avoids, or
has the purpose of evading or avoiding, or attempts to violate, any of the
prohibitions set forth in the Executive Order No. 13224, the USA PATRIOT Act or
any other Anti-Terrorism Law.  Borrower shall deliver to Lenders any
certification or other evidence requested from time to time by any Lender in its
sole discretion, confirming Borrower’s compliance with this Section.
 
7.19. Membership/Partnership Interests.  Elect to treat or permit any of its
Subsidiaries to (x) treat its limited liability company membership interests or
partnership interests, as the case may be, as securities as contemplated by the
definition of “security” in Section 8-102(15) and by Section 8-103 of Article 8
of Uniform Commercial Code or (y) certificate its limited liability company
membership interests or partnership interests, as the case may be.
 
7.20. Trading with the Enemy Act.  Engage in any business or activity in
violation of the Trading with the Enemy Act.
 
7.21. Other Agreements.  Enter into any material amendment, waiver or
modification of any Acquisition Document or any related agreements.
 
7.22. HRE Exploration.  HRE Exploration Ltd., a British Columbia corporation,
shall remain a dormant subsidiary and shall not own any assets or have any
liabilities, and not withstanding anything in this Agreement, Best shall be
permitted to liquidate or dissolve HRE Exploration Ltd.
 
7.23. Fee Deferral Agreements.  Best shall not pay any amounts to ECH Consulting
or Andrew Garrett Inc. (or any of their respective Affiliates) other than in
accordance with the Fee Deferral Agreements and shall not amend, supplement or
modify the Fee Deferral Agreements without the prior written consent of Agent.
 
VIII. CONDITIONS PRECEDENT.
 
8.1. Conditions to Initial Advances.  The agreement of Lenders to make the
initial Advances requested to be made on the Closing Date is subject to the
satisfaction, or waiver by
 
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Agent, immediately prior to or concurrently with the making of such Advances, of
the following conditions precedent:
 
(a) Note.  Agent shall have received the Notes duly executed and delivered by an
authorized officer of each Borrower;
 
(b) Filings, Registrations and Recordings.  Each document (including any Uniform
Commercial Code financing statement) required by this Agreement, any related
agreement or under law or reasonably requested by the Agent to be filed,
registered or recorded in order to create, in favor of Agent, a perfected
security interest in or lien upon the Collateral shall have been properly filed,
registered or recorded in each jurisdiction in which the filing, registration or
recordation thereof is so required  or requested, and Agent shall have received
an acknowledgment copy, or other evidence satisfactory to it, of each such
filing, registration or recordation and satisfactory evidence of the payment of
any necessary fee, tax or expense relating thereto;
 
(c) Corporate Proceedings of Borrowers.  Agent shall have received a copy of the
resolutions in form and substance reasonably satisfactory to Agent, of the Board
of Directors of each Borrower authorizing (i) the execution, delivery and
performance of this Agreement, the Notes, any related agreements, and the
Initial Acquisition Documents (collectively the “Documents”) and (ii) the
granting by each Borrower of the security interests in and liens upon the
Collateral in each case certified by the Secretary or an Assistant Secretary of
each Borrower as of the Closing Date; and, such certificate shall state that the
resolutions thereby certified have not been amended, modified, revoked or
rescinded as of the date of such certificate;
 
(d) Incumbency Certificates of Borrowers.  Agent shall have received a
certificate of the Secretary or an Assistant Secretary of each Borrower, dated
the Closing Date, as to the incumbency and signature of the officers of each
Borrower executing this Agreement, the Other Documents, any certificate or other
documents to be delivered by it pursuant hereto, together with evidence of the
incumbency of such Secretary or Assistant Secretary;
 
(e) Certificates.  Agent shall have received a copy of the Articles or
Certificate of Incorporation of each Borrower, and all amendments thereto,
certified by the Secretary of State or other appropriate official of its
jurisdiction of incorporation together with copies of the By-Laws of each
Borrower and all agreements of each Borrower’s shareholders certified as
accurate and complete by the Secretary of each Borrower;
 
(f) Good Standing Certificates.  Agent shall have received good standing
certificates for each Borrower dated not more than 30 days prior to the Closing
Date, issued by the Secretary of State or other appropriate official of each
Borrower’s jurisdiction of incorporation and each jurisdiction where the conduct
of each Borrower’s business activities or the ownership of its properties
necessitates qualification;
 
(g) Legal Opinion.  Agent shall have received the executed legal opinion of
Jackson Walker L.L.P.opinions in form and substance satisfactory to Agent which
shall cover such matters incident to the transactions contemplated by this
Agreement, the Notes, the Other Documents and related agreements as Agent may
reasonably require and each Borrower hereby authorizes and directs suchits
counsel to deliver such opinions to Agent and Lenders;
 
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(h) No Litigation.  (i) No litigation, investigation or proceeding before or by
any arbitrator or Governmental Body shall be continuing or threatened against
any Borrower or against the officers or directors of any Borrower (A) in
connection with this Agreement, the Other Documents or any of the transactions
contemplated thereby and which, in the reasonable opinion of Agent, is deemed
material or (B) which could, in the reasonable opinion of Agent, have a Material
Adverse Effect; and (ii) no injunction, writ, restraining order or other order
of any nature materially adverse to any Borrower or the conduct of its business
or inconsistent with the due consummation of the Transactions shall have been
issued by any Governmental Body;
 
(i) Financial Condition Certificates.  Agent shall have received an executed
Financial Condition Certificate in the form of Exhibit 8.1(k).
 
(j) Collateral Examination.  Agent shall have completed Collateral examinations
and received appraisals, the results of which shall be satisfactory in form and
substance to Lenders, of the Receivables, Inventory, General Intangibles and
Equipment of each Borrower and all books and records in connection therewith;
 
(k) Fees.  Agent shall have received all fees payable to Agent and Lenders on or
prior to the Closing Date hereunder, including pursuant to Article III hereof;
 
(l) Pro Forma Financial Statements.  Agent shall have received a copy of the Pro
Forma Financial Statements which shall be satisfactory in all respects to
Lenders;
 
(m) Acquisition Documents.  (i) Agent shall have received final executed copies
of the Initial Acquisition Documents and all related agreements, documents and
instruments as in effect on the Closing Date all of which shall be satisfactory
in form and substance satisfactory to Agent and the transactions contemplated by
such documentation shall be consummated prior to or simultaneously with the
making of the initial Advance and (ii) Agent shall have received substantially
final versions of the Second Acquisition Documents and all related agreements,
documents and instruments as in existence on the Closing Date all of which shall
be satisfactory in form and substance satisfactory to Agent;
 
(n) Equity Issuance.  Agent shall have received final executed copies of the
documents governing the issuance of common stock and Series A Convertible
Preferred Stock by Best on the Closing Date and all related agreements,
documents and instruments as in effect on the Closing Date all of which shall be
satisfactory in form and substance to Agent and the transactions contemplated by
such documentation shall be consummated prior to or simultaneously with the
making of the initial Advance including, without limitation, the receipt by Best
of gross cash proceeds from the issuance of its common stock and Series A
Convertible Preferred Stock in the sum of $9,500,000;
 
(o) Insurance.  Agent shall have received in form and substance satisfactory to
Agent, certified copies of Borrowers’ casualty insurance policies, together with
loss payable endorsements on Agent’s standard form of loss payee endorsement
naming Agent as loss payee,
 
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and certified copies of Borrowers’ liability insurance policies, together with
endorsements naming Agent as a co-insured;
 
(p) Payment Instructions.  Agent shall have received written instructions from
Borrowing Agent directing the application of proceeds of the initial Advances
made pursuant to this Agreement;
 
(q) Blocked Accounts.  Agent shall have received duly executed agreements
establishing the Blocked Accounts or Depository Accounts with financial
institutions acceptable to Agent for the collection or servicing of the
Receivables and proceeds of the Collateral;
 
(r) Consents.  Agent shall have received any and all Consents necessary to
permit the effectuation of the transactions contemplated by this Agreement and
the Other Documents; and, Agent shall have received such Consents and waivers of
such third parties as might assert claims with respect to the Collateral, as
Agent and its counsel shall deem necessary;
 
(s) No Adverse Material Change.  (i) since December 31, 2006, there shall not
have occurred any event, condition or state of facts which could reasonably be
expected to have a Material Adverse Effect and (ii) no representations made or
information supplied to Agent or Lenders shall have been proven to be inaccurate
or misleading in any material respect;
 
(t) Leasehold Agreements.  Agent shall have received landlord, mortgagee or
warehouseman agreements satisfactory to Agent with respect to all premises
leased by Borrowers at which Inventory and books and records are located;
 
(u) Contract Review.  Agent shall have reviewed all material contracts of
Borrowers including leases, union contracts, labor contracts, vendor supply
contracts, license agreements and distributorship agreements and such contracts
and agreements shall be satisfactory in all respects to Agent;
 
(v) Closing Certificate.  Agent shall have received a closing certificate signed
by the Chief Financial Officer of each Borrower dated as of the date hereof,
stating that (i) all representations and warranties set forth in this Agreement
and the Other Documents are true and correct on and as of such date, (ii)
Borrowers are on such date in compliance with all the terms and provisions set
forth in this Agreement and the Other Documents and (iii) on such date no
Default or Event of Default has occurred or is continuing;
 
(w) Borrowing Base.  Agent shall have received evidence from Borrowers that the
aggregate amount of Eligible Receivables, Eligible Rig Fleet Equipment and
Eligible Equipment is sufficient in value and amount to support Advances in the
amount requested by Borrowers on the Closing Date;
 
(x) Undrawn Availability.  After giving effect to the initial Advances
hereunder, Borrowers shall have Undrawn Availability of at least $2,500,000;
 
(y) Compliance with Laws.  Agent shall be reasonably satisfied that each
Borrower is in compliance with all pertinent federal, state, local or
territorial regulations,
 
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including those with respect to the Federal Occupational Safety and Health Act,
the Environmental Protection Act, ERISA and the Trading with the Enemy Act;
 
(z) Cash Collateral.  Agent shall have received the Cash Collateral Deposit and
shall have entered into a cash collateral deposit letter with Morris Gad in form
and substance reasonably satisfactory to Agent; and
 
(aa) Other.  All corporate and other proceedings, and all documents, instruments
and other legal matters in connection with the Transactions shall be
satisfactory in form and substance to Agent and its counsel.
 
8.2. Conditions to Each Advance.  The agreement of Lenders to make any Advance
requested to be made on any date (including the initial Advance and any Advance
utilized to consummate the Second Acquisitions), is subject to the satisfaction
of the following conditions precedent as of the date such Advance is made:
 
(a) Representations and Warranties.  Each of the representations and warranties
made by any Borrower in or pursuant to this Agreement, the Other Documents and
any related agreements to which it is a party, and each of the representations
and warranties contained in any certificate, document or financial or other
written statement furnished at any time under or in connection with this
Agreement, the Other Documents or any related agreement shall be true and
correct in all material respects on and as of such date as if made on and as of
such date;
 
(b) No Default.  No Event of Default or Default shall have occurred and be
continuing on such date, or would exist after giving effect to the Advances
requested to be made, on such date and, in the case of (x) the initial Advance,
after giving effect to the consummation of the transactions contemplated by the
Initial Acquisition Documents and (y) the Advances to be utilized to consummate
the Second Acquisitions, after giving effect to the consummation of the
transactions contemplated by the Second Acquisition Documents; provided, however
that Agent, in its sole discretion, may continue to make Advances
notwithstanding the existence of an Event of Default or Default and that any
Advances so made shall not be deemed a waiver of any such Event of Default or
Default; and
 
(c) Maximum Advances.  In the case of any type of Advance requested to be made,
after giving effect thereto, the aggregate amount of such type of Advance shall
not exceed the maximum amount of such type of Advance permitted under this
Agreement.
 
Each request for an Advance by any Borrower hereunder shall constitute a
representation and warranty by each Borrower as of the date of such Advance that
the conditions contained in this subsection shall have been satisfied.
 
8.3. Conditions Precedent Applicable to Second Acquisitions.  The agreement of
Lenders to make the Advances requested to be made in connection with the
consummation of the Second Acquisitions is subject to the satisfaction, or
waiver by Agent, immediately prior to or concurrently with the making of such
Advances, of the following conditions precedent:
 
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(a) Second Acquisition Documents.  Agent shall have received final executed
copies of the Second Acquisition Documents and all related agreements, documents
and instruments, and any modifications to such documents from the versions
delivered to Agent on the Closing Date shall be satisfactory to Agent in its
sole and absolute discretion;
 
(b) Second Acquisitions Consideration.  Agent shall have received an officer’s
certificate from the chief executive officer or chief financial officer of Best
certifying to Agent and Lenders that (x) the aggregate cash consideration for
the Second Acquisitions does not exceed $3,000,000 and (y) the only
consideration being paid by Best to ARH in connection with the ARH Acquisition
are shares of the common stock of Best;
 
(c) Undrawn Availability.  After giving effect to the Advances utilized to
effect the Second Acquisitions and to pay all fee and expenses related to such
transactions, Borrowers shall have Undrawn Availability of at least $2,500,000;
 
(d) Updated Disclosure Schedules.  Agent shall have received updated versions of
the Schedules to this Agreement and each of the Other Documents (if applicable),
and such Schedules shall be in form and substance reasonably satisfactory to
Agent; and
 
(e) Other.  All corporate and other proceedings, and all documents, instruments
and other legal matters in connection with the Second Acquisitions shall be
satisfactory in form and substance to Agent and its counsel.
 
IX. INFORMATION AS TO BORROWERS.
 
Each Borrower shall, or (except with respect to Section 9.11) shall cause
Borrowing Agent on its behalf to, until satisfaction in full of the Obligations
and the termination of this Agreement:
 
9.1. Disclosure of Material Matters.  Immediately upon learning thereof, report
to Agent all matters materially affecting the value, enforceability or
collectibility of any portion of the Collateral, including any Borrower’s
reclamation or repossession of, or the return to any Borrower of, a material
amount of goods or claims or disputes asserted by any Customer or other obligor.
 
9.2. Schedules.  Deliver to Agent on or before Wednesday of each week, a
Borrowing Base Certificate in form and substance satisfactory to Agent (which
shall be calculated as of the last day of the prior week and which shall not be
binding upon Agent or restrictive of Agent’s rights under this
Agreement).  Deliver to Agent on or before the fifteenth (15th) day of each
month as and for the prior month (a) accounts receivable ageings inclusive of
reconciliations to the general ledger, (b) accounts payable schedules inclusive
of reconciliations to the general ledger, (c) Inventory reports and (d) a Rig
Fleet Equipment status report, containing such information regarding the status
of each piece of Rig Fleet Equipment as Agent shall reasonably request.  In
addition, each Borrower will deliver to Agent at such intervals as Agent may
require:  (i) confirmatory assignment schedules, (ii) copies of Customer’s
invoices, (iii) evidence of shipment or delivery, and (iv) such further
schedules, documents and/or information regarding the Collateral as Agent may
require including trial balances and test verifications.  Agent shall have the
right to confirm and verify all Receivables by any manner and through any medium
it
 
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considers advisable and do whatever it may deem reasonably necessary to protect
its interests hereunder.  The items to be provided under this Section are to be
in form satisfactory to Agent and executed by each Borrower and delivered to
Agent from time to time solely for Agent’s convenience in main­taining records
of the Collateral, and any Borrower’s failure to deliver any of such items to
Agent shall not affect, terminate, modify or otherwise limit Agent’s Lien with
respect to the Collateral.
 
9.3. Environmental Reports.  Furnish Agent, concurrently with the delivery of
the financial statements referred to in Sections 9.7 and 9.8, with a certificate
signed by the President of Borrowing Agent stating, to the best of his
knowledge, that each Borrower is in compliance in all material respects with all
federal, state and local Environmental Laws.  To the extent any Borrower is not
in compliance with the foregoing laws, the certificate shall set forth with
specificity all areas of non-compliance and the proposed action such Borrower
will implement in order to achieve full compliance.
 
9.4. Litigation.  Promptly notify Agent in writing of any claim, litigation,
suit or administrative proceeding affecting any Borrower or any Guarantor,
whether or not the claim is covered by insurance, and of any litigation, suit or
administrative proceeding, which in any such case affects the Collateral or
which could reasonably be expected to have a Material Adverse Effect.
 
9.5. Material Occurrences.  Promptly notify Agent in writing upon the occurrence
of (a) any Event of Default or Default; (b) any event, development or
circumstance whereby any financial statements or other reports furnished to
Agent fail in any material respect to present fairly, in accordance with GAAP
consistently applied, the financial condition or operating results of any
Borrower as of the date of such statements; (c) any accumulated retirement plan
funding deficiency which, if such deficiency continued for two plan years and
was not corrected as provided in Section 4971 of the Code, could subject any
Borrower to a tax imposed by Section 4971 of the Code; (d) each and every
default by any Borrower which might result in the acceleration of the maturity
of any Indebtedness having a principal amount in excess of $100,000, including
the names and addresses of the holders of such Indebtedness with respect to
which there is a default existing or with respect to which the maturity has been
or could be accelerated, and the amount of such Indebtedness; and (e) any other
development in the business or affairs of any Borrower or any Guarantor, which
could reasonably be expected to have a Material Adverse Effect; in each case
describing the nature thereof and the action Borrowers propose to take with
respect thereto.
 
9.6. Government Receivables.  Notify Agent immediately if any of its Receivables
arise out of contracts between any Borrower and the United States, any state, or
any department, agency or instrumentality of any of them.
 
9.7. Annual Financial Statements.  Furnish Agent within ninety (90) days after
the end of each fiscal year of Borrowers, financial statements of Borrowers on a
consolidating and consolidated basis including, but not limited to, statements
of income and stockholders’ equity and cash flow from the beginning of the
current fiscal year to the end of such fiscal year and the balance sheet as at
the end of such fiscal year, all prepared in accordance with GAAP applied on a
basis consistent with prior practices, and in reasonable detail and reported
upon without
 
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qualification by an independent certified public accounting firm selected by
Borrowers and satisfactory to Agent (the “Accountants”).  The report of the
Accountants shall be accompanied by a statement of the Accountants certifying
that (i) they have caused this Agreement to be reviewed, (ii) in making the
examination upon which such report was based either no information came to their
attention which to their knowledge constituted an Event of Default or a Default
under this Agreement or any related agreement or, if such information came to
their attention, specifying any such Default or Event of Default, its nature,
when it occurred and whether it is continuing, and such report shall contain or
have appended thereto calculations which set forth Borrowers’ compliance with
the requirements or restrictions imposed by Sections 6.5, 7.5, 7.6, 7.7, 7.8 and
7.11 hereof.  In addition, the reports shall be accompanied by a Compliance
Certificate.
 
9.8. Quarterly Financial Statements.  Furnish Agent within forty-five (45) days
after the end of each fiscal quarter, an unaudited balance sheet of Borrowers on
a consolidated and consolidating basis and unaudited statements of income and
stockholders’ equity and cash flow of Borrowers on a consolidated and
consolidating basis reflecting results of operations from the beginning of the
fiscal year to the end of such quarter and for such quarter, prepared on a basis
consistent with prior practices and complete and correct in all material
respects, subject to normal and recurring year end adjustments that individually
and in the aggregate are not material to Borrowers’ business.  The reports shall
be accompanied by a Compliance Certificate.
 
9.9. Monthly Financial Statements.  Furnish Agent within thirty (30) days after
the end of each month, an unaudited balance sheet of Borrowers on a consolidated
and consolidating basis and unaudited statements of income and stockholders’
equity and cash flow of Borrowers on a consolidated and consolidating basis
reflecting results of operations from the beginning of the fiscal year to the
end of such month and for such month, prepared on a basis consistent with prior
practices and complete and correct in all material respects, subject to normal
and recurring year end adjustments that individually and in the aggregate are
not material to Borrowers’ business.
 
9.10. Other Reports.  Furnish Agent as soon as available, but in any event
within ten (10) days after the issuance thereof, (i) with copies of such
financial statements, reports and returns as each Borrower shall send to its
stockholders.
 
9.11. Additional Information.  Furnish Agent with such additional information as
Agent shall reasonably request in order to enable Agent to determine whether the
terms, covenants, provisions and conditions of this Agreement and the Notes have
been complied with by Borrowers including, without the necessity of any request
by Agent, (a) copies of all environmental audits and reviews, (b) at least
thirty (30) days prior thereto, notice of any Borrower’s opening of any new
office or place of business or any Borrower’s closing of any existing office or
place of business, and (c) promptly upon any Borrower’s learning thereof, notice
of any labor dispute to which any Borrower may become a party, any strikes or
walkouts relating to any of its plants or other facilities, and the expiration
of any labor contract to which any Borrower is a party or by which any Borrower
is bound.
 
9.12. Projected Operating Budget.  Furnish Agent, no later than thirty (30) days
prior to the beginning of each Borrower’s fiscal years commencing with fiscal
year 2009, a month by
 
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month projected operating budget and cash flow of Borrowers on a consolidated
and consolidating basis for such fiscal year (including an income statement for
each month and a balance sheet as at the end of the last month in each fiscal
quarter), such projections to be accompanied by a certificate signed by the
President or Chief Financial Officer of each Borrower to the effect that such
projections have been prepared on the basis of sound financial planning practice
consistent with past budgets and financial statements and that such officer has
no reason to question the reasonableness of any material assumptions on which
such projections were prepared.
 
9.13. Variances From Operating Budget.  Furnish Agent, concurrently with the
delivery of the financial statements referred to in Section 9.7 and each
quarterly report, a written report summarizing all material variances from
budgets submitted by Borrowers pursuant to Section 9.12 and a discussion and
analysis by management with respect to such variances.
 
9.14. Notice of Suits, Adverse Events.  Furnish Agent with prompt written notice
of (i) any lapse or other termination of any Consent issued to any Borrower by
any Governmental Body or any other Person that is material to the operation of
any Borrower’s business, (ii) any refusal by any Governmental Body or any other
Person to renew or extend any such Consent; and (iii) copies of any periodic or
special reports filed by any Borrower or any Guarantor with any Governmental
Body or Person, if such reports indicate any material change in the business,
operations, affairs or condition of any Borrower or any Guarantor, or if copies
thereof are requested by Lender, and (iv) copies of any material notices and
other communications from any Governmental Body or Person which specifically
relate to any Borrower or any Guarantor.
 
9.15. ERISA Notices and Requests.  Furnish Agent with immediate written notice
in the event that (i) any Borrower or any member of the Controlled Group knows
or has reason to know that a Termination Event has occurred, together with a
written statement describing such Termination Event and the action, if any,
which such Borrower or any member of the Controlled Group has taken, is taking,
or proposes to take with respect thereto and, when known, any action taken or
threatened by the Internal Revenue Service, Department of Labor or PBGC with
respect thereto, (ii) any  Borrower or any member of the Controlled Group knows
or has reason to know that a prohibited transaction (as defined in Sections 406
of ERISA and 4975 of the Code) has occurred together with a written statement
describing such transaction and the action which such Borrower or any member of
the Controlled Group has taken, is taking or proposes to take with respect
thereto, (iii) a funding waiver request has been filed with respect to any Plan
together with all communications received by any Borrower or any member of the
Controlled Group with respect to such request, (iv) any increase in the benefits
of any existing Plan or the establishment of any new Plan or the commencement of
contributions to any Plan to which any Borrower or any member of the Controlled
Group was not previously contributing shall occur, (v) any Borrower or any
member of the Controlled Group shall receive from the PBGC a notice of intention
to terminate a Plan or to have a trustee appointed to administer a Plan,
together with copies of each such notice, (vi) any Borrower or any member of the
Controlled Group shall receive any favorable or unfavorable determination letter
from the Internal Revenue Service regarding the qualification of a Plan under
Section 401(a) of the Code, together with copies of each such letter; (vii) any
Borrower or any member of the Controlled Group shall receive a notice regarding
the imposition of withdrawal liability, together with copies of each such
notice; (viii) any Borrower or any member of the Controlled Group shall fail to
make a required
 
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installment or any other required payment under Section 412 of the Code on or
before the due date for such installment or payment; or (ix) any Borrower or any
member of the Controlled Group knows that (a) a Multiemployer Plan has been
terminated, (b) the administrator or plan sponsor of a Multiemployer Plan
intends to terminate a Multiemployer Plan, or (c) the PBGC has instituted or
will institute proceedings under Section 4042 of ERISA to terminate a
Multiemployer Plan.
 
9.16. Appraisals.  Borrowers shall provide to Agent, at Borrowers’ expense, a
full appraisal of the orderly liquidation value of all of Borrower’s Rig Fleet
Equipment and other Equipment by Superior Asset Appraisals, or another firm
acceptable to Agent in its sole discretion (each an “OLV Appraisal”), the form,
scope and results of which shall be satisfactory to Agent in its sole
discretion, (a) annually, (b) if Agent, in its sole discretion deems appropriate
and so directs, semi-annually, when the Minimum Rig Utilization, is less than
85% for BWS, measured as of the last day of the fiscal quarter most recently
ended for such quarter, or (c) at any time and frequency during an Event of
Default.  Agent shall have the right to conduct additional appraisals at its own
expense from time to time, with access to the Collateral provided by and other
cooperation from Borrowers.  The initial OLV Appraisal is attached as Exhibit
9.16
 
9.17. Additional Documents.  Execute and deliver to Agent, upon request, such
documents and agreements as Agent may, from time to time, reasonably request to
carry out the purposes, terms or conditions of this Agreement.
 
X. EVENTS OF DEFAULT.
 
The occurrence of any one or more of the following events shall constitute an
“Event of Default”:
 
10.1. Nonpayment.  Failure by any Borrower to pay any principal or interest on
the Obligations when due, whether at maturity or by reason of acceleration
pursuant to the terms of this Agreement or by notice of intention to prepay, or
by required prepayment or failure to pay any other liabilities or make any other
payment, fee or charge provided for herein when due or in any Other Document;
 
10.2. Breach of Representation.  Any representation or warranty made or deemed
made by any Borrower or any Guarantor in this Agreement, any Other Document or
any related agreement or in any certificate, document or financial or other
statement furnished at any time in connection herewith or therewith shall prove
to have been misleading in any material respect on the date when made or deemed
to have been made;
 
10.3. Financial Information.  Failure by any Borrower to (i) furnish financial
information when due or when requested which is unremedied for a period of
fifteen (15) days, or (ii) permit the inspection of its books or records as
required by this Agreement;
 
10.4. Judicial Actions.  Issuance of a notice of Lien, levy, assessment,
injunction or attachment against any Borrower’s Inventory or Receivables or
against a material portion of any Borrower’s other property which is not stayed
or lifted within forty-five (45) days;
 
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10.5. Noncompliance.  Except as otherwise provided for in Sections 10.1, 10.3
and 10.5(ii), (i) failure or neglect of any Borrower or any Guarantor to
perform, keep or observe any term, provision, condition, covenant herein
contained, or contained in any Other Document or any other agreement or
arrangement, now or hereafter entered into between any Borrower or any
Guarantor, and Agent or any Lender, or (ii) failure or neglect of any Borrower
to perform, keep or observe any term, provision, condition or covenant,
contained in Sections 4.6, 4.7, 4.9, 6.1, 6.3, 6.4, 9.4 or 9.6 hereof which is
not cured within thirty (30) days from the occurrence of such failure or
neglect;
 
10.6. Judgments.  Any judgment or judgments are rendered against any Borrower or
any Guarantor for an aggregate amount in excess of $250,000 or against all
Borrowers or Guarantors for an aggregate amount in excess of $250,000 and (i)
enforcement proceedings shall have been commenced by a creditor upon such
judgment, (ii) there shall be any period of forty-five (45) consecutive days
during which a stay of enforcement of such judgment, by reason of a pending
appeal or otherwise, shall not be in effect, or (iii) any such judgment results
in the creation of a Lien upon any of the Collateral (other than a Permitted
Encumbrance);
 
10.7. Bankruptcy.  Any Borrower or any Guarantor shall (i) apply for, consent to
or suffer the appointment of, or the taking of possession by, a receiver,
custodian, trustee, liquidator or similar fiduciary of itself or of all or a
substantial part of its property, (ii) make a general assignment for the benefit
of creditors, (iii) commence a voluntary case under any state or federal
bankruptcy laws (as now or hereafter in effect), (iv) be adjudicated a bankrupt
or insolvent, (v) file a petition seeking to take advantage of any other law
providing for the relief of debtors, (vi) acquiesce to, or fail to have
dismissed, within thirty (30) days, any petition filed against it in any
involuntary case under such bankruptcy laws,  or (vii) take any action for the
purpose of effecting any of the foregoing;
 
10.8. Inability to Pay.  Any Borrower or any Guarantor shall admit in writing
its inability, or be generally unable, to pay its debts as they become due or
cease operations of its present business;
 
10.9. Affiliate Bankruptcy.  Any Affiliate or any Subsidiary of any Borrower, or
any Guarantor, shall (i) apply for, consent to or suffer the appointment of, or
the taking of possession by, a receiver, custodian, trustee, liquidator or
similar fiduciary of itself or of all or a substantial part of its property,
(ii) admit in writing its inability, or be generally unable, to pay its debts as
they become due or cease operations of its present business, (iii) make a
general assignment for the benefit of creditors, (iv) commence a voluntary case
under any state or federal bankruptcy laws (as now or hereafter in effect), (v)
be adjudicated a bankrupt or insolvent, (vi) file a petition seeking to take
advantage of any other law providing for the relief of debtors, (vii) acquiesce
to, or fail to have dismissed, within thirty (30) days, any petition filed
against it in any involuntary case under such bankruptcy laws, or (viii) take
any action for the purpose of effecting any of the foregoing;
 
10.10. Material Adverse Effect.  Any change in any Borrower’s or any Guarantor’s
results of operations or condition (financial or otherwise) which in Agent’s
opinion has a Material Adverse Effect;
 
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10.11. Lien Priority.  Any Lien created hereunder or provided for hereby or
under any related agreement for any reason ceases to be or is not a valid and
perfected Lien having a first priority interest;
 
10.12. [Intentionally Omitted.]
 
10.13. Cross Default.  A default of the obligations of any Borrower under any
other agreement to which it is a party requiring payments in an aggregate amount
in excess of $100,000 (to or by a Borrower) shall occur which adversely affects
its condition, affairs or prospects (financial or otherwise) which default is
not cured within any applicable grace period;
 
10.14. Breach of Guaranty.  Termination or breach of any Guaranty or Guaranty
Security Agreement or similar agreement executed and delivered to Agent in
connection with the Obligations of any Borrower, or if any Guarantor attempts to
terminate, challenges the validity of, or its liability under, any such Guaranty
or Guaranty Security Agreement or similar agreement;
 
10.15. Change of Control.  Any Change of Control shall occur;
 
10.16. Invalidity.  Any material provision of this Agreement or any Other
Document shall, for any reason, cease to be valid and binding on Borrower or any
Guarantor, or any Borrower or any Guarantor shall so claim in writing to Agent
or any Lender;
 
10.17. Licenses.  (i) Any Governmental Body shall (A) revoke, terminate, suspend
or adversely modify any license, permit, patent trademark or tradename of any
Borrower or any Guarantor, the continuation of which is material to the
continuation of any Borrower’s or Guarantor’s business, or (B) commence
proceedings to suspend, revoke, terminate or adversely modify any such license,
permit, trademark, tradename or patent and such proceedings shall not be
dismissed or discharged within sixty (60) days, or (c) schedule or conduct a
hearing on the renewal of any license, permit, trademark, tradename or patent
necessary for the continuation of any Borrower’s or any Guarantor’s business and
the staff of such Governmental Body issues a report recommending the
termination, revocation, suspension or material, adverse modification of such
license, permit, trademark, tradename or patent; (ii) any agreement which is
necessary or material to the operation of any Borrower’s or any Guarantor’s
business shall be revoked or terminated and not replaced by a substitute
acceptable to Agent within thirty (30) days after the date of such revocation or
termination, and such revocation or termination and non-replacement would
reasonably be expected to have a Material Adverse Effect;
 
10.18. Seizures.  Any portion of the Collateral shall be seized or taken by a
Governmental Body, or any Borrower or any Guarantor or the title and rights of
any Borrower, any Guarantor or any Original Owner which is the owner of any
material portion of the Collateral shall have become the subject matter of
claim, litigation, suit or other proceeding which might, in the opinion of
Agent, upon final determination, result in impairment or loss of the security
provided by this Agreement or the Other Documents;
 
10.19. Management.  Larry Hargrave ceases to be employed as the chief executive
officer of Best, unlesss he is replaced with a chief exectuive officer
satisfactory to Agent;
 
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10.20. Second Acquisitions.  The Second Acquisitions are not consummated on or
prior to the tenth day following the Closing Date; provided that if the tenth
day following the Closing Date is not a Business Day, such period shall be
extended until the first Business Day after the tenth day following the Closing
Date; or

10.21. Pension Plans.  An event or condition specified in Sections 7.16 or 9.15
hereof shall occur or exist with respect to any Plan and, as a result of such
event or condition, together with all other such events or conditions, any
Borrower or any member of the Controlled Group shall incur, or in the opinion of
Agent be reasonably likely to incur, a liability to a Plan or the PBGC (or both)
which, in the reasonable judgment of Agent, would have a Material Adverse
Effect.
 
XI. LENDERS’ RIGHTS AND REMEDIES AFTER DEFAULT.
 
11.1. Rights and Remedies.
 
(a) Upon the occurrence of (i) an Event of Default pursuant to Section 10.7 all
Obligations shall be immediately due and payable and this Agreement and the
obligation of Lenders to make Advances shall be deemed terminated; and, (ii) any
of the other Events of Default and at any time thereafter (such default not
having previously been cured), at the option of Required Lenders all Obligations
shall be immediately due and payable and Lenders shall have the right to
terminate this Agreement and to terminate the obligation of Lenders to make
Advances and (iii) a filing of a petition against any Borrower in any
involuntary case under any state or federal bankruptcy laws, all Obligations
shall be immediately due and payable and the obligation of Lenders to make
Advances hereunder shall be terminated other than as may be required by an
appropriate order of the bankruptcy court having jurisdiction over such
Borrower.  Upon the occurrence of any Event of Default, Agent shall have the
right to exercise any and all rights and remedies provided for herein, under the
Other Documents, under the Uniform Commercial Code and at law or equity
generally, including the right to foreclose the security interests granted
herein and to realize upon any Collateral by any available judicial procedure
and/or to take possession of and sell any or all of the Collateral with or
without judicial process.  Agent may enter any of any Borrower’s premises or
other premises without legal process and without incurring liability to any
Borrower therefor, and Agent may thereupon, or at any time thereafter, in its
discretion without notice or demand, take the Collateral and remove the same to
such place as Agent may deem advisable and Agent may require Borrowers to make
the Collateral available to Agent at a convenient place, including, without
limitation requiring Borrowers to disassemble and re-assemble Collateral in
order to remove such Collateral to such place as Agent may deem advisable and
convenient and removing Rig Fleet Equipment from customer locations.  With or
without having the Collateral at the time or place of sale, Agent may sell the
Collateral, or any part thereof, at public or private sale, at any time or
place, in one or more sales, at such price or prices, and upon such terms,
either for cash, credit or future delivery, as Agent may elect.  Except as to
that part of the Collateral which is perishable or threatens to decline speedily
in value or is of a type customarily sold on a recognized market, Agent shall
give Borrowers reasonable notification of such sale or sales, it being agreed
that in all events written notice mailed to Borrowing Agent at least ten (10)
days prior to such sale or sales is reasonable notification.  At any public sale
Agent or any Lender may bid for and become the purchaser, and Agent, any Lender
or any other purchaser at any such sale thereafter shall hold the Collateral
sold absolutely free from any claim or right of whatsoever kind, including any
equity of redemption and all such claims, rights and equities are hereby
expressly waived and
 
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released by each Borrower.  In connection with the exercise of the foregoing
remedies, including the sale of Inventory, Agent is granted a perpetual
nonrevocable, royalty free, nonexclusive license and Agent is granted permission
to use all of each Borrower’s (a) trademarks, trade styles, trade names,
patents, patent applications, copyrights, service marks, licenses, franchises
and other proprietary rights which are used or useful in connection with
Inventory for the purpose of marketing, advertising for sale and selling or
otherwise disposing of such Inventory and (b) Equipment for the purpose of
completing the manufacture of unfinished goods.  The cash proceeds realized from
the sale of any Collateral shall be applied to the Obligations in the order set
forth in Section 11.5 hereof.  Noncash proceeds will only be applied to the
Obligations as they are converted into cash.  If any deficiency shall arise,
Borrowers shall remain liable to Agent and Lenders therefor.
 
(b) To the extent that Applicable Law imposes duties on the Agent to exercise
remedies in a commercially reasonable manner, each Borrower acknowledges and
agrees that it is not commercially unreasonable for the Agent (i) to fail to
incur expenses reasonably deemed significant by the Agent to prepare Collateral
for disposition or otherwise to complete raw material or work in process into
finished goods or other finished products for disposition, (ii) to fail to
obtain third party consents for access to Collateral to be disposed of, or to
obtain or, if not required by other law, to fail to obtain governmental or third
party consents for the collection or disposition of Collateral to be collected
or disposed of, (iii) to fail to exercise collection remedies against Customers
or other Persons obligated on Collateral or to remove Liens on or any adverse
claims against Collateral, (iv) to exercise collection remedies against
Customers and other Persons obligated on Collateral directly or through the use
of collection agencies and other collection specialists, (v) to advertise
dispositions of Collateral through publications or media of general circulation,
whether or not the Collateral is of a specialized nature, (vi) to contact other
Persons, whether or not in the same business as any Borrower, for expressions of
interest in acquiring all or any portion of such Collateral, (vii) to hire one
or more professional auctioneers to assist in the disposition of Collateral,
whether or not the Collateral is of a specialized nature, (viii) to dispose of
Collateral by utilizing internet sites that provide for the auction of assets of
the types included in the Collateral or that have the reasonable capacity of
doing so, or that match buyers and sellers of assets, (ix) to dispose of assets
in wholesale rather than retail markets, (x) to disclaim disposition warranties,
such as title, possession or quiet enjoyment, (xi) to purchase insurance or
credit enhancements to insure the Agent against risks of loss, collection or
disposition of Collateral or to provide to the Agent a guaranteed return from
the collection or disposition of Collateral, or (xii) to the extent deemed
appropriate by the Agent, to obtain the services of other brokers, investment
bankers, consultants and other professionals to assist the Agent in the
collection or disposition of any of the Collateral.  Each Borrower acknowledges
that the purpose of this Section 11.1(b) is to provide non-exhaustive
indications of what actions or omissions by the Agent would not be commercially
unreasonable in the Agent’s exercise of remedies against the Collateral and that
other actions or omissions by the Agent shall not be deemed commercially
unreasonable solely on account of not being indicated in this Section
11.1(b).  Without limitation upon the foregoing, nothing contained in this
Section11.1(b) shall be construed to grant any rights to any Borrower or to
impose any duties on Agent that would not have been granted or imposed by this
Agreement or by Applicable Law in the absence of this Section 11.1(b).
 
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11.2. Agent’s Discretion.  Agent shall have the right in its sole discretion to
determine which rights, Liens, security interests or remedies Agent may at any
time pursue, relinquish, subordinate, or modify or to take any other action with
respect thereto and such determination will not in any way modify or affect any
of Agent’s or Lenders’ rights hereunder.
 
11.3. Setoff.  Subject to Section 14.12, in addition to any other rights which
Agent or any Lender may have under Applicable Law, upon the occurrence of an
Event of Default hereunder, Agent and such Lender shall have a right,
immediately and without notice of any kind, to apply any Borrower’s property
held by Agent and such Lender to reduce the Obligations.
 
11.4. Rights and Remedies not Exclusive.  The enumeration of the foregoing
rights and remedies is not intended to be exhaustive and the exercise of any
rights or remedy shall not preclude the exercise of any other right or remedies
provided for herein or otherwise provided by law, all of which shall be
cumulative and not alternative.
 
11.5. Allocation of Payments After Event of Default.  Notwithstanding any other
provisions of this Agreement to the contrary, after the occurrence and during
the continuance of an Event of Default, all amounts collected or received by the
Agent on account of the Obligations or any other amounts outstanding under any
of the Other Documents or in respect of the Collateral may, at Agent’s
discretion, be paid over or delivered as follows:
 
FIRST, to the payment of all reasonable out-of-pocket costs and expenses
(including reasonable attorneys’ fees) of the Agent in connection with enforcing
its rights and the rights of the Lenders under this Agreement and the Other
Documents and any protective advances made by the Agent with respect to the
Collateral under or pursuant to the terms of this Agreement;
 
SECOND, to payment of any fees owed to the Agent;
 
THIRD, to the payment of all reasonable out-of-pocket costs and expenses
(including reasonable attorneys’ fees) of each of the Lenders to the extent
owing to such Lender pursuant to the terms of this Agreement;
 
FOURTH, to the payment of all of the Obligations consisting of accrued fees and
interest;
 
FIFTH, to the payment of the outstanding principal amount of the Obligations
(including the payment or cash collateralization of any outstanding Letters of
Credit);
 
SIXTH, to all other Obligations and other obligations which shall have become
due and payable under the Other Documents or otherwise and not repaid pursuant
to clauses “FIRST” through “FIFTH” above; and
 
SEVENTH, to the payment of the surplus, if any, to whoever may be lawfully
entitled to receive such surplus.
 
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In carrying out the foregoing, (i) amounts received shall be applied in the
numerical order provided until exhausted prior to application to the next
succeeding category; (ii) each of the Lenders shall receive (so long as it is
not a Defaulting Lender) an amount equal to its pro rata share (based on the
proportion that the then outstanding Advances held by such Lender bears to the
aggregate then outstanding Advances) of amounts available to be applied pursuant
to clauses “FOURTH”, “FIFTH” and “SIXTH” above; and (iii) to the extent that any
amounts available for distribution pursuant to clause “FIFTH” above are
attributable to the issued but undrawn amount of outstanding Letters of Credit,
such amounts shall be held by the Agent in a cash collateral account and applied
(A) first, to reimburse the Issuer from time to time for any drawings under such
Letters of Credit and (B) then, following the expiration of all Letters of
Credit, to all other obligations of the types described in clauses “FIFTH” and
“SIXTH” above in the manner provided in this Section 11.5.
 
XII. WAIVERS AND JUDICIAL PROCEEDINGS.
 
12.1. Waiver of Notice.  Each Borrower hereby waives notice of non-payment of
any of the Receivables, demand, presentment, protest and notice thereof with
respect to any and all instruments, notice of acceptance hereof, notice of loans
or advances made, credit extended, Collateral received or delivered, or any
other action taken in reliance hereon, and all other demands and notices of any
description, except such as are expressly provided for herein.
 
12.2. Delay.  No delay or omission on Agent’s or any Lender’s part in exercising
any right, remedy or option shall operate as a waiver of such or any other
right, remedy or option or of any Default or Event of Default.
 
12.3. Jury Waiver.  EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY
RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (A)
ARISING UNDER THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT
EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR (B) IN ANY WAY CONNECTED WITH
OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM
WITH RESPECT TO THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT
EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR THE TRANSACTIONS RELATED HERETO
OR THERETO IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER
SOUNDING IN CONTRACT OR TORT OR OTHERWISE AND EACH PARTY HEREBY CONSENTS THAT
ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT
TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE
CONSENTS OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
 
XIII. EFFECTIVE DATE AND TERMINATION.
 
13.1. Term.  This Agreement, which shall inure to the benefit of and shall be
binding upon the respective successors and permitted assigns of each Borrower,
Agent and each Lender, shall become effective on the date hereof and shall
continue in full force and effect until
 
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February 12, 2012 (the “Term”) unless sooner terminated as herein
provided.  Borrowers may terminate this Agreement at any time upon forty-five
(45) days’ prior written notice upon payment in full of the Obligations.  In the
event the Obligations are prepaid in full prior to the last day of the Term (the
date of such prepayment hereinafter referred to as the “Early Termination
Date”), Borrowers shall pay to Agent for the benefit of Lenders an early
termination fee in an amount equal to (x) $500,000 if the Early Termination Date
occurs on or after the Closing Date to and including the date immediately
preceding the first anniversary of the Closing Date, (y) $250,000 if the Early
Termination Date occurs on or after the first anniversary of the Closing Date to
and including the date immediately preceding the second anniversary of the
Closing Date, and (z) $125,000 if the Early Termination Date occurs on or after
the second anniversary of the Closing Date to and including the date immediately
preceding the third anniversary of the Closing Date.
 
13.2. Termination.  The termination of the Agreement shall not affect any
Borrower’s, Agent’s or any Lender’s rights, or any of the Obligations having
their inception prior to the effective date of such termination, and the
provisions hereof shall continue to be fully operative until all transactions
entered into, rights or interests created or Obligations have been fully and
indefeasibly paid, disposed of, concluded or liquidated.  The security
interests, Liens and rights granted to Agent and Lenders hereunder and the
financing statements filed hereunder shall continue in full force and effect,
notwithstanding the termination of this Agreement or the fact that Borrowers’
Account may from time to time be temporarily in a zero or credit position, until
all of the Obligations of each Borrower have been indefeasibly paid and
performed in full after the termination of this Agreement or each Borrower has
furnished Agent and Lenders with an indemnification satisfactory to Agent and
Lenders with respect thereto.  Accordingly, each Borrower waives any rights
which it may have under the Uniform Commercial Code to demand the filing of
termination statements with respect to the Collateral, and Agent shall not be
required to send such termination statements to each Borrower, or to file them
with any filing office, unless and until this Agreement shall have been
terminated in accordance with its terms and all Obligations have been
indefeasibly paid in full in immediately available funds.  All representations,
warranties, covenants, waivers and agreements contained herein shall survive
termination hereof until all Obligations are indefeasibly paid and performed in
full.
 
XIV. REGARDING AGENT.
 
14.1. Appointment.  Each Lender hereby designates PNC to act as Agent for such
Lender under this Agreement and the Other Documents.  Each Lender hereby
irrevocably authorizes Agent to take such action on its behalf under the
provisions of this Agreement and the Other Documents and to exercise such powers
and to perform such duties hereunder and thereunder as are specifically
delegated to or required of Agent by the terms hereof and thereof and such other
powers as are reasonably incidental thereto and Agent shall hold all Collateral,
payments of principal and interest, fees (except the fees set forth in Sections
3.3(a) and 3.4), charges and collections (without giving effect to any
collection days) received pursuant to this Agreement, for the ratable benefit of
Lenders.  Agent may perform any of its duties hereunder by or through its agents
or employees.  As to any matters not expressly provided for by this Agreement
(including collection of the Note) Agent shall not be required to exercise any
discretion or take any action, but shall be required to act or to refrain from
acting (and shall be fully protected in so acting or refraining from acting)
upon the instructions of the Required
 
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Lenders, and such instructions shall be binding; provided, however, that Agent
shall not be required to take any action which exposes Agent to liability or
which is contrary to this Agreement or the Other Documents or Applicable Law
unless Agent is furnished with an indemnification reasonably satisfactory to
Agent with respect thereto.
 
14.2. Nature of Duties.  Agent shall have no duties or responsibilities except
those expressly set forth in this Agreement and the Other Documents.  Neither
Agent nor any of its officers, directors, employees or agents shall be (i)
liable for any action taken or omitted by them as such hereunder or in
connection herewith, unless caused by their gross (not mere) negligence or
willful misconduct (as determined by a court of competent jurisdiction in a
final non-appealable judgment), or (ii) responsible in any manner for any
recitals, statements, representations or warranties made by any Borrower or any
officer thereof contained in this Agreement, or in any of the Other Documents or
in any certificate, report, statement or other document referred to or provided
for in, or received by Agent under or in connection with, this Agreement or any
of the Other Documents or for the value, validity, effectiveness, genuineness,
due execution, enforceability or sufficiency of this Agreement, or any of the
Other Documents or for any failure of any Borrower to perform its obligations
hereunder.  Agent shall not be under any obligation to any Lender to ascertain
or to inquire as to the observance or performance of any of the agreements
contained in, or conditions of, this Agreement or any of the Other Documents, or
to inspect the properties, books or records of any Borrower.  The duties of
Agent as respects the Advances to Borrowers shall be mechanical and
administrative in nature; Agent shall not have by reason of this Agreement a
fiduciary relationship in respect of any Lender; and nothing in this Agreement,
expressed or implied, is intended to or shall be so construed as to impose upon
Agent any obligations in respect of this Agreement except as expressly set forth
herein.
 
14.3. Lack of Reliance on Agent and Resignation.  Independently and without
reliance upon Agent or any other Lender, each Lender has made and shall continue
to make (i) its own independent investigation of the financial condition and
affairs of each Borrower and each Guarantor in connection with the making and
the continuance of the Advances hereunder and the taking or not taking of any
action in connection herewith, and (ii) its own appraisal of the
creditworthiness of each Borrower and each Guarantor.  Agent shall have no duty
or responsibility, either initially or on a continuing basis, to provide any
Lender with any credit or other information with respect thereto, whether coming
into its possession before making of the Advances or at any time or times
thereafter except as shall be provided by any Borrower pursuant to the terms
hereof.  Agent shall not be responsible to any Lender for any recitals,
statements, information, representations or warranties herein or in any
agreement, document, certificate or a statement delivered in connection with or
for the execution, effectiveness, genuineness, validity, enforceability,
collectibility or sufficiency of this Agreement or any Other Document, or of the
financial condition of any Borrower or any Guarantor, or be required to make any
inquiry concerning either the performance or observance of any of the terms,
provisions or conditions of this Agreement, the Note, the Other Documents or the
financial condition of any Borrower, or the existence of any Event of Default or
any Default.
 
Agent may resign on sixty (60) days’ written notice to each of Lenders and
Borrowing Agent and upon such resignation, the Required Lenders will promptly
designate a successor Agent reasonably satisfactory to Borrowers.
 
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Any such successor Agent shall succeed to the rights, powers and duties of
Agent, and the term “Agent” shall mean such successor agent effective upon its
appointment, and the former Agent’s rights, powers and duties as Agent shall be
terminated, without any other or further act or deed on the part of such former
Agent.  After any Agent’s resignation as Agent, the provisions of this Article
XIV shall inure to its benefit as to any actions taken or omitted to be taken by
it while it was Agent under this Agreement.
 
14.4. Certain Rights of Agent.  If Agent shall request instructions from Lenders
with respect to any act or action (including failure to act) in connection with
this Agreement or any Other Document, Agent shall be entitled to refrain from
such act or taking such action unless and until Agent shall have received
instructions from the Required Lenders; and Agent shall not incur liability to
any Person by reason of so refraining.  Without limiting the foregoing, Lenders
shall not have any right of action whatsoever against Agent as a result of its
acting or refraining from acting hereunder in accordance with the instructions
of the Required Lenders.
 
14.5. Reliance.  Agent shall be entitled to rely, and shall be fully protected
in relying, upon any note, writing, resolution, notice, statement, certificate,
telex, teletype or telecopier message, cablegram, order or other document or
telephone message believed by it to be genuine and correct and to have been
signed, sent or made by the proper person or entity, and, with respect to all
legal matters pertaining to this Agreement and the Other Documents and its
duties hereunder, upon advice of counsel selected by it.  Agent may employ
agents and attorneys-in-fact and shall not be liable for the default or
misconduct of any such agents or attorneys-in-fact selected by Agent with
reasonable care.
 
14.6. Notice of Default.  Agent shall not be deemed to have knowledge or notice
of the occurrence of any Default or Event of Default hereunder or under the
Other Documents, unless Agent has received notice from a Lender or Borrowing
Agent referring to this Agreement or the Other Documents, describing such
Default or Event of Default and stating that such notice is a “notice of
default”.  In the event that Agent receives such a notice, Agent shall give
notice thereof to Lenders.  Agent shall take such action with respect to such
Default or Event of Default as shall be reasonably directed by the Required
Lenders; provided, that, unless and until Agent shall have received such
directions, Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interests of Lenders.
 
14.7. Indemnification.  To the extent Agent is not reimbursed and indemnified by
Borrowers, each Lender will reimburse and indemnify Agent in proportion to its
respective portion of the Advances (or, if no Advances are outstanding,
according to its Commitment Percentage), from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever which may be
imposed on, incurred by or asserted against Agent in performing its duties
hereunder, or in any way relating to or arising out of this Agreement or any
Other Document; provided that, Lenders shall not be liable for any portion of
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from Agent’s gross (not mere)
negligence or willful misconduct (as determined by a court of competent
jurisdiction in a final non-appealable judgment).
 
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14.8. Agent in its Individual Capacity.  With respect to the obligation of Agent
to lend under this Agreement, the Advances made by it shall have the same rights
and powers hereunder as any other Lender and as if it were not performing the
duties as Agent specified herein; and the term “Lender” or any similar term
shall, unless the context clearly otherwise indicates, include Agent in its
individual capacity as a Lender.  Agent may engage in business with any Borrower
as if it were not performing the duties specified herein, and may accept fees
and other consideration from any Borrower for services in connection with this
Agreement or otherwise without having to account for the same to Lenders.
 
14.9. Delivery of Documents.  To the extent Agent receives financial statements
required under Sections 9.7, 9.8, 9.9, 9.12 and 9.13 or Borrowing Base
Certificates from any Borrower pursuant to the terms of this Agreement which any
Borrower is not obligated to deliver to each Lender, Agent will promptly furnish
such documents and information to Lenders.
 
14.10. Borrowers’ Undertaking to Agent.  Without prejudice to their respective
obligations to Lenders under the other provisions of this Agreement, each
Borrower hereby undertakes with Agent to pay to Agent from time to time on
demand all amounts from time to time due and payable by it for the account of
Agent or Lenders or any of them pursuant to this Agreement to the extent not
already paid.  Any payment made pursuant to any such demand shall pro tanto
satisfy the relevant Borrower’s obligations to make payments for the account of
Lenders or the relevant one or more of them pursuant to this Agreement.
 
14.11. No Reliance on Agent’s Customer Identification Program.  Each Lender
acknowledges and agrees that neither such Lender, nor any of its Affiliates,
participants or assignees, may rely 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 USA 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 any Borrower, its Affiliates or its agents,
this Agreement, the Other Documents or the transactions hereunder or
contemplated hereby: (1) any identity verification procedures, (2) any
record-keeping, (3) comparisons with government lists, (4) customer notices or
(5) other procedures required under the CIP Regulations or such other laws.
 
14.12. Other Agreements.  Each of the Lenders agrees that it shall not, without
the express consent of Agent, and that it shall, to the extent it is lawfully
entitled to do so, upon the request of Agent, set off against the Obligations,
any amounts owing by such Lender to any Borrower or any deposit accounts of any
Borrower now or hereafter maintained with such Lender.  Anything in this
Agreement to the contrary notwithstanding, each of the Lenders further agrees
that it shall not, unless specifically requested to do so by Agent, take any
action to protect or enforce its rights arising out of this Agreement or the
Other Documents, it being the intent of Lenders that any such action to protect
or enforce rights under this Agreement and the Other Documents shall be taken in
concert and at the direction or with the consent of Agent or Required Lenders.
 
XV. BORROWING AGENCY.
 
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15.1. Borrowing Agency Provisions.
 
(a) Each Borrower hereby irrevocably designates Borrowing Agent to be its
attorney and agent and in such capacity to borrow, sign and endorse notes, and
execute and deliver all instruments, documents, writings and further assurances
now or hereafter required hereunder, on behalf of such Borrower or Borrowers,
and hereby authorizes Agent to pay over or credit all loan proceeds hereunder in
accordance with the request of Borrowing Agent.
 
(b) The handling of this credit facility as a co-borrowing facility with a
borrowing agent in the manner set forth in this Agreement is solely as an
accommodation to Borrowers and at their request.  Neither Agent nor any Lender
shall incur liability to Borrowers as a result thereof.  To induce Agent and
Lenders to do so and in consideration thereof, each Borrower hereby indemnifies
Agent and each Lender and holds Agent and each Lender harmless from and against
any and all liabilities, expenses, losses, damages and claims of damage or
injury asserted against Agent or any Lender by any Person arising from or
incurred by reason of the handling of the financing arrangements of Borrowers as
provided herein, reliance by Agent or any Lender on any request or instruction
from Borrowing Agent or any other action taken by Agent or any Lender with
respect to this Section 15.1 except due to willful misconduct or gross (not
mere) negligence by the indemnified party (as determined by a court of competent
jurisdiction in a final and non-appealable judgment).
 
(c) All Obligations shall be joint and several, and each Borrower shall make
payment upon the maturity of the Obligations by acceleration or otherwise, and
such obligation and liability on the part of each Borrower shall in no way be
affected by any extensions, renewals and forbearance granted to Agent or any
Lender to any Borrower, failure of Agent or any Lender to give any Borrower
notice of borrowing or any other notice, any failure of Agent or any Lender to
pursue or preserve its rights against any Borrower, the release by Agent or any
Lender of any Collateral now or thereafter acquired from any Borrower, and such
agreement by each Borrower to pay upon any notice issued pursuant thereto is
unconditional and unaffected by prior recourse by Agent or any Lender to the
other Borrowers or any Collateral for such Borrower’s Obligations or the lack
thereof.  Each Borrower waives all suretyship defenses.
 
15.2. Waiver of Subrogation.  Each Borrower expressly waives any and all rights
of subrogation, reimbursement, indemnity, exoneration, contribution of any other
claim which such Borrower may now or hereafter have against the other Borrowers
or other Person directly or contingently liable for the Obligations hereunder,
or against or with respect to the other Borrowers’ property (including, without
limitation, any property which is Collateral for the Obligations), arising from
the existence or performance of this Agreement, until termination of this
Agreement and repayment in full of the Obligations.
 
XVI. MISCELLANEOUS.
 
16.1. Governing Law.  This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applied to contracts to be
performed wholly within the State of New York.  Any judicial proceeding brought
by or against any Borrower with respect to any of the Obligations, this
Agreement, the Other Documents or any related agreement may be brought in any
court of competent jurisdiction in the State of New York, United States of
 
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America, and, by execution and delivery of this Agreement, each Borrower accepts
for itself and in connection with its properties, generally and unconditionally,
the non-exclusive jurisdiction of the aforesaid courts, and irrevocably agrees
to be bound by any judgment rendered thereby in connection with this
Agreement.  Each Borrower hereby waives personal service of any and all process
upon it and consents that all such service of process may be made by registered
mail (return receipt requested) directed to Borrowing Agent at its address set
forth in Section 16.6 and service so made shall be deemed completed five (5)
days after the same shall have been so deposited in the mails of the United
States of America, or, at the Agent’s option, by service upon Borrowing Agent
which each Borrower irrevocably appoints as such Borrower’s Agent for the
purpose of accepting service within the State of New York.  Nothing herein shall
affect the right to serve process in any manner permitted by law or shall limit
the right of Agent or any Lender to bring proceedings against any Borrower in
the courts of any other jurisdiction.  Each Borrower waives any objection to
jurisdiction and venue of any action instituted hereunder and shall not assert
any defense based on lack of jurisdiction or venue or based upon forum non
conveniens.  Each Borrower waives the right to remove any judicial proceeding
brought against such Borrower in any state court to any federal court.  Any
judicial proceeding by any Borrower against Agent or any Lender involving,
directly or indirectly, any matter or claim in any way arising out of, related
to or connected with this Agreement or any related agreement, shall be brought
only in a federal or state court located in the County of New York, State of New
York.
 
16.2. Entire Understanding.
 
(a) This Agreement and the documents executed concurrently herewith contain the
entire understanding between each Borrower, Agent and each Lender and supersedes
all prior agreements and understandings, if any, relating to the subject matter
hereof.  Any promises, representations, warranties or guarantees not herein
contained and hereinafter made shall have no force and effect unless in writing,
signed by each Borrower’s, Agent’s and each Lender’s respective
officers.  Neither this Agreement nor any portion or provisions hereof may be
changed, modified, amended, waived, supplemented, discharged, cancelled or
terminated orally or by any course of dealing, or in any manner other than by an
agreement in writing, signed by the party to be charged.  Each Borrower
acknowledges that it has been advised by counsel in connection with the
execution of this Agreement and Other Documents and is not relying upon oral
representations or statements inconsistent with the terms and provisions of this
Agreement.
 
(b) The Required Lenders, Agent with the consent in writing of the Required
Lenders, and Borrowers may, subject to the provisions of this Section 16.2 (b),
from time to time enter into written supplemental agreements to this Agreement
or the Other Documents executed by Borrowers, for the purpose of adding or
deleting any provisions or otherwise changing, varying or waiving in any manner
the rights of Lenders, Agent or Borrowers thereunder or the conditions,
provisions or terms thereof or waiving any Event of Default thereunder, but only
to the extent specified in such written agreements; provided, however, that no
such supplemental agreement shall, without the consent of all Lenders:
 
(i) increase the Commitment Percentage, the maximum dollar commitment of any
Lender or the Maximum Revolving Advance Amount.
 
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(ii) extend the maturity of any Note or the due date for any amount payable
hereunder, or decrease the rate of interest or reduce any fee payable by
Borrowers to Lenders pursuant to this Agreement.
 
(iii) alter the definition of the term Required Lenders or alter, amend or
modify this Section 16.2(b).
 
(iv) release any Collateral during any calendar year (other than in accordance
with the provisions of this Agreement) having an aggregate value in excess of
$500,000.
 
(v) change the rights and duties of Agent.
 
(vi) permit any Revolving Advance to be made if after giving effect thereto the
total of Revolving Advances outstanding hereunder would exceed the Formula
Amount for more than sixty (30) consecutive Business Days or exceed one hundred
and five percent (105%) of the Formula Amount.
 
(vii) increase the Advance Rates above the Advance Rates in effect on the
Closing Date.
 
(viii) release any Guarantor.
 
Any such supplemental agreement shall apply equally to each Lender and shall be
binding upon Borrowers, Lenders and Agent and all future holders of the
Obligations.  In the case of any waiver, Borrowers, Agent and Lenders shall be
restored to their former positions and rights, and any Event of Default waived
shall be deemed to be cured and not continuing, but no waiver of a specific
Event of Default shall extend to any subsequent Event of Default (whether or not
the subsequent Event of Default is the same as the Event of Default which was
waived), or impair any right consequent thereon.
 
In the event that Agent requests the consent of a Lender pursuant to this
Section 16.2 and such consent is denied, then PNC may, at its option, require
such Lender to assign its interest in the Advances to PNC or to another Lender
or to any other Person designated by the Agent (the “Designated Lender”), for a
price equal to (i) the then outstanding principal amount thereof plus (ii)
accrued and unpaid interest and fees due such Lender, which interest and fees
shall be paid when collected from Borrowers.  In the event PNC elects to require
any Lender to assign its interest to PNC or to the Designated Lender, PNC will
so notify such Lender in writing within forty five (45) days following such
Lender’s denial, and such Lender will assign its interest to PNC or the
Designated Lender no later than five (5) days following receipt of such notice
pursuant to a Commitment Transfer Supplement executed by such Lender, PNC or the
Designated Lender, as appropriate, and Agent.
 
Notwithstanding (a) the existence of a Default or an Event of Default, (b) that
any of the other applicable conditions precedent set forth in Section 8.2 hereof
have not been satisfied or (c) any other provision of this Agreement, Agent may
at its discretion and without the consent of the Required Lenders, voluntarily
permit the sum of the outstanding Revolving Advances and the Maximum Undrawn
Amount at any time to exceed the Formula Amount
 
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hereof at such time (such sum, the “Overadvance Threshold Amount”) by up to ten
percent (10%) of the Formula Amount for up to thirty (30) consecutive Business
Days (the “Out-of-Formula Loans”); provided, that, such outstanding Advances do
not exceed the Maximum Revolving Advance Amount.  If Agent is willing in its
sole and absolute discretion to make such Out-of-Formula Loans, such
Out-of-Formula Loans shall be payable on demand and shall bear interest at the
Default Rate for Revolving Advances consisting of Domestic Rate Loans; provided
that, if Lenders do make Out-of-Formula Loans, neither Agent nor Lenders shall
be deemed thereby to have changed the limits of Section 2.1(a).  For purposes of
this paragraph, the discretion granted to Agent hereunder shall not preclude
involuntary overadvances that may result from time to time due to the fact that
the Formula Amount was unintentionally exceeded for any reason, including, but
not limited to, Collateral previously deemed to be either “Eligible Receivables”
or “Eligible Inventory”, as applicable, becomes ineligible, collections of
Receivables applied to reduce outstanding Revolving Advances are thereafter
returned for insufficient funds or overadvances are made to protect or preserve
the Collateral.  In the event Agent involuntarily permits the outstanding
Revolving Advances to exceed the Formula Amount or Overadvance Threshold Amount
by more than ten percent (10%), Agent shall use its efforts to have Borrowers
decrease such excess in as expeditious a manner as is practicable under the
circumstances and not inconsistent with the reason for such excess.  Revolving
Advances made after Agent has determined the existence of involuntary
overadvances shall be deemed to be involuntary overadvances and shall be
decreased in accordance with the preceding sentence.
 
In addition to (and not in substitution of) the discretionary Revolving Advances
permitted above in this Section 16.2, the Agent is hereby authorized by
Borrowers and the Lenders, from time to time in the Agent’s sole discretion, (A)
after the occurrence and during the continuation of a Default or an Event of
Default, or (B) at any time that any of the other applicable conditions
precedent set forth in Section 8.2 hereof have not been satisfied, to make
Revolving Advances to Borrowers on behalf of the Lenders which the Agent, in its
reasonable business judgment, deems necessary or desirable (a) to preserve or
protect the Collateral, or any portion thereof, (b) to enhance the likelihood
of, or maximize the amount of, repayment of the Advances and other Obligations,
or (c) to pay any other amount chargeable to Borrowers pursuant to the terms of
this Agreement; provided, that at any time after giving effect to any such
Revolving Advances the outstanding Revolving Advances do not exceed one hundred
and ten percent (110%) of the Formula Amount.
 
16.3. Successors and Assigns; Participations; New Lenders.
 
(a) This Agreement shall be binding upon and inure to the benefit of Borrowers,
Agent, each Lender, all future holders of the Obligations and their respective
successors and assigns, except that no Borrower may assign or transfer any of
its rights or obligations under this Agreement without the prior written consent
of Agent and each Lender.
 
(b) Each Borrower acknowledges that in the regular course of commercial banking
business one or more Lenders may at any time and from time to time sell
participating interests in the Advances to other financial institutions (each
such transferee or purchaser of a participating interest, a
“Participant”).  Each Participant may exercise all rights of payment (including
rights of set-off) with respect to the portion of such Advances held by it or
other Obligations payable hereunder as fully as if such Participant were the
direct holder thereof
 
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provided that Borrowers shall not be required to pay to any Participant more
than the amount which it would have been required to pay to Lender which granted
an interest in its Advances or other Obligations payable hereunder to such
Participant had such Lender retained such interest in the Advances hereunder or
other Obligations payable hereunder and in no event shall Borrowers be required
to pay any such amount arising from the same circumstances and with respect to
the same Advances or other Obligations payable hereunder to both such Lender and
such Participant.  Each Borrower hereby grants to any Participant a continuing
security interest in any deposits, moneys or other property actually or
constructively held by such Participant as security for the Participant’s
interest in the Advances.
 
(c) Any Lender, with the consent of Agent which shall not be unreasonably
withheld or delayed, may sell, assign or transfer all or any part of its rights
and obligations under or relating to Revolving Advances and/or Term Loans under
this Agreement and the Other Documents to one or more additional banks or
financial institutions and one or more additional banks or financial
institutions may commit to make Advances hereunder (each a “Purchasing Lender”),
in minimum amounts of not less than $5,000,000, pursuant to a Commitment
Transfer Supplement, executed by a Purchasing Lender, the transferor Lender, and
Agent and delivered to Agent for recording.  Upon such execution, delivery,
acceptance and recording, from and after the transfer effective date determined
pursuant to such Commitment Transfer Supplement, (i) Purchasing Lender
thereunder shall be a party hereto and, to the extent provided in such
Commitment Transfer Supplement, have the rights and obligations of a Lender
thereunder with a Commitment Percentage as set forth therein, and (ii) the
transferor Lender thereunder shall, to the extent provided in such Commitment
Transfer Supplement, be released from its obligations under this Agreement, the
Commitment Transfer Supplement creating a novation for that purpose.  Such
Commitment Transfer Supplement shall be deemed to amend this Agreement to the
extent, and only to the extent, necessary to reflect the addition of such
Purchasing Lender and the resulting adjustment of the Commitment Percentages
arising from the purchase by such Purchasing Lender of all or a portion of the
rights and obligations of such transferor Lender under this Agreement and the
Other Documents.  Each Borrower hereby consents to the addition of such
Purchasing Lender and the resulting adjustment of the Commitment Percentages
arising from the purchase by such Purchasing Lender of all or a portion of the
rights and obligations of such transferor Lender under this Agreement and the
Other Documents.  Borrowers shall execute and deliver such further documents and
do such further acts and things in order to effectuate the foregoing.
 
(d) Any Lender, with the consent of Agent which shall not be unreasonably
withheld or delayed, may directly or indirectly sell, assign or transfer all or
any portion of its rights and obligations under or relating to Revolving
Advances and/or Term Loans under this Agreement and the Other Documents to an
entity, whether a corporation, partnership, trust, limited liability company or
other entity that (i) is engaged in making, purchasing, holding or otherwise
investing in bank loans and similar extensions of credit in the ordinary course
of its business and (ii) is administered, serviced or managed by the assigning
Lender or an Affiliate of such Lender (a “Purchasing CLO” and together with each
Participant and Purchasing Lender, each a “Transferee” and collectively the
“Transferees”), pursuant to a Commitment Transfer Supplement modified as
appropriate to reflect the interest being assigned (“Modified Commitment
Transfer Supplement”), executed by any intermediate purchaser, the Purchasing
CLO, the transferor Lender, and Agent as appropriate and delivered to Agent for
recording.  
 
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Upon such execution and delivery, from and after the transfer effective date
determined pursuant to such Modified Commitment Transfer Supplement, (i)
Purchasing CLO thereunder shall be a party hereto and, to the extent provided in
such Modified Commitment Transfer Supplement, have the rights and obligations of
a Lender thereunder and (ii) the transferor Lender thereunder shall, to the
extent provided in such Modified Commitment Transfer Supplement, be released
from its obligations under this Agreement, the Modified Commitment Transfer
Supplement creating a novation for that purpose.  Such Modified Commitment
Transfer Supplement shall be deemed to amend this Agreement to the extent, and
only to the extent, necessary to reflect the addition of such Purchasing
CLO.  Each Borrower hereby consents to the addition of such Purchasing
CLO.  Borrowers shall execute and deliver such further documents and do such
further acts and things in order to effectuate the foregoing.
 
(e) Agent shall maintain at its address a copy of each Commitment Transfer
Supplement and Modified Commitment Transfer Supplement delivered to it and a
register (the “Register”) for the recordation of the names and addresses of each
Lender and the outstanding principal, accrued and unpaid interest and other fees
due hereunder.  The entries in the Register shall be conclusive, in the absence
of manifest error, and each Borrower, Agent and Lenders may treat each Person
whose name is recorded in the Register as the owner of the Advance recorded
therein for the purposes of this Agreement.  The Register shall be available for
inspection by any Borrower or any Lender at any reasonable time and from time to
time upon reasonable prior notice.  Agent shall receive a fee in the amount of
$3,500 payable by the applicable Purchasing Lender and/or Purchasing CLO upon
the effective date of each transfer or assignment (other than to an intermediate
purchaser) to such Purchasing Lender and/or Purchasing CLO.
 
(f) Each Borrower authorizes each Lender to disclose to any Transferee and any
prospective Transferee any and all financial information in such Lender’s
possession concerning such Borrower which has been delivered to such Lender by
or on behalf of such Borrower pursuant to this Agreement or in connection with
such Lender’s credit evaluation of such Borrower.
 
16.4. Application of Payments.  Agent shall have the continuing and exclusive
right to apply or reverse and re-apply any payment and any and all proceeds of
Collateral to any portion of the Obligations.  To the extent that any Borrower
makes a payment or Agent or any Lender receives any payment or proceeds of the
Collateral for any Borrower’s benefit, which are subsequently invalidated,
declared to be fraudulent or preferential, set aside or required to be repaid to
a trustee, debtor in possession, receiver, custodian or any other party under
any bankruptcy law, common law or equitable cause, then, to such extent, the
Obligations or part thereof intended to be satisfied shall be revived and
continue as if such payment or proceeds had not been received by Agent or such
Lender.
 
16.5. Indemnity.  Each Borrower shall indemnify Agent, each Lender and each of
their respective officers, directors, Affiliates, attorneys, employees and
agents from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses and disbursements of any
kind or nature whatsoever (including fees and disbursements of counsel) which
may be imposed on, incurred by, or asserted against Agent or any Lender in any
claim, litigation, proceeding or investigation instituted or conducted by any
Governmental Body or instrumentality or any other Person with respect to any
aspect of, or any transaction
 
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contemplated by, or referred to in, or any matter related to, this Agreement or
the Other Documents, whether or not Agent or any Lender is a party thereto,
except to the extent that any of the foregoing arises out of the gross
negligence or willful misconduct of the party being indemnified (as determined
by a court of competent jurisdiction in a final and non-appealable
judgment).  Without limiting the generality of the foregoing, this indemnity
shall extend to any liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses and disbursements of any kind or
nature whatsoever (including fees and disbursements of counsel) asserted against
or incurred by any of the indemnitees described above in this Section 16.5 by
any Person under any Environmental Laws or similar laws by reason of any
Borrower’s or any other Person’s failure to comply with laws applicable to solid
or hazardous waste materials, including Hazardous Substances and Hazardous
Waste, or other Toxic Substances.  Additionally, if any taxes (excluding taxes
imposed upon or measured solely by the net income of Agent and Lenders, but
including any intangibles taxes, stamp tax, recording tax or franchise tax)
shall be payable by Agent, Lenders or Borrowers on account of the execution or
delivery of this Agreement, or the execution, delivery, issuance or recording of
any of the Other Documents, or the creation or repayment of any of the
Obligations hereunder, by reason of any Applicable Law now or hereafter in
effect, Borrowers will pay (or will promptly reimburse Agent and Lenders for
payment of) all such taxes, including interest and penalties thereon, and will
indemnify and hold the indemnitees described above in this Section 16.5 harmless
from and against all liability in connection therewith.
 
16.6. Notice.  Any notice or request hereunder may be given to Borrowing Agent
or any Borrower or to Agent or any Lender at their respective addresses set
forth below or at such other address as may hereafter be specified in a notice
designated as a notice of change of address under this Section.  Any notice,
request, demand, direction or other communication (for purposes of this Section
16.6 only, a “Notice”) to be given to or made upon any party hereto under any
provision of this Loan Agreement shall be given or made by telephone or in
writing (which includes by means of electronic transmission (i.e., “e-mail”) or
facsimile transmission or by setting forth such Notice on a site on the World
Wide Web (a “Website Posting”) if Notice of such Website Posting (including the
information necessary to access such site) has previously been delivered to the
applicable parties hereto by another means set forth in this Section 16.6) in
accordance with this Section 16.6.  Any such Notice must be delivered to the
applicable parties hereto at the addresses and numbers set forth under their
respective names on Section 16.6 hereof or in accordance with any subsequent
unrevoked Notice from any such party that is given in accordance with this
Section 16.6.  Any Notice shall be effective:
 
(a) In the case of hand-delivery, when delivered;
 
(b) If given by mail, four days after such Notice is deposited with the United
States Postal Service, with first-class postage prepaid, return receipt
requested;
 
(c) In the case of a telephonic Notice, when a party is contacted by telephone,
if delivery of such telephonic Notice is confirmed no later than the next
Business Day by hand delivery, a facsimile or electronic transmission, a Website
Posting or an overnight courier delivery of a confirmatory Notice (received at
or before noon on such next Business Day);
 
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(d) In the case of a facsimile transmission, when sent to the applicable party’s
facsimile machine’s telephone number, if the party sending such Notice receives
confirmation of the delivery thereof from its own facsimile machine;
 
(e) In the case of electronic transmission, when actually received;
 
(f) In the case of a Website Posting, upon delivery of a Notice of such posting
(including the information necessary to access such site) by another means set
forth in this Section 16.6; and
 
(g) If given by any other means (including by overnight courier), when actually
received.
 
Any Lender giving a Notice to Borrowing Agent or any Borrower shall concurrently
send a copy thereof to the Agent, and the Agent shall promptly notify the other
Lenders of its receipt of such Notice.
 
 
(A)
If to Agent or PNC at:

 
PNC Bank, National Association

 
70 East 55th Street
  New York, NY  10022   Attention:  A. Roger Craig   Telephone:  212-752-6043  
Facsimile:     212-303-0060
 
 

 
 
with a copy to:

 
PNC Bank, National Association

 
PNC Agency Services

 
PNC Firstside Center

 
500 First Avenue, 4th Floor

 
Pittsburgh, Pennsylvania 15219

Attention:  Lisa Pierce

Telephone:  412-762-6442

Facsimile: 412-762-8672

 
with an additional copy to:

 
Hahn & Hessen LLP

 
488 Madison Avenue

 
New York, New York 10022

Attention:
Steven J. Seif, Esq.

Telephone:
212-478-7200

Facsimile:
212-478-7400

 
(B)
If to a Lender other than Agent, as specified on the signature pages hereof.

 
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(C)
If to Borrowing Agent or any Borrower:

 
Best Energy Services, Inc.

 
1010 Lamar Street, Suite 1200

 
Houston, Texas 77002

 
Attention:  Larry Hargrave

Telephone:  713-933-2600

Facsimile:  713-933-2602

with a copy to:
 

 
Jackson Walker L.L.P.
 
100 Congress Avenue, Suite 1100
  Austin, Texas 78701   Attention: Lawrence A.Waks, Esq.   Telephone:
512-236-2000   Facsimile: 512-236-2002

 
16.7. Survival.  The indemnification obligations of Borrowers under Sections
2.2(f), 3.7, 3.8, 3.9, 4.19(h), and 16.5 and the obligations of Lenders under
Section 14.7, shall survive termination of this Agreement and the Other
Documents and payment in full of the Obligations.
 
16.8. Severability.  If any part of this Agreement is contrary to, prohibited
by, or deemed invalid under Applicable Laws, such provision shall be
inapplicable and deemed omitted to the extent so contrary, prohibited or
invalid, but the remainder hereof shall not be invalidated thereby and shall be
given effect so far as possible.
 
16.9. Expenses.  All costs and expenses including reasonable attorneys’ fees
(including the allocated costs of in house counsel) and disbursements incurred
by Agent on its behalf or on behalf of Lenders (a) in all efforts made to
enforce payment of any Obligation or effect collection of any Collateral, or (b)
in connection with the entering into, modification, amendment, administration
and enforcement of this Agreement or any consents or waivers hereunder and all
related agreements, documents and instruments, or (c) in instituting,
maintaining, preserving, enforcing and foreclosing on Agent’s security interest
in or Lien on any of the Collateral, or maintaining, preserving or enforcing any
of Agent’s or any Lender’s rights hereunder and under all related agreements,
documents and instruments, whether through judicial proceedings or otherwise, or
(d) in defending or prosecuting any actions or proceedings arising out of or
relating to Agent’s or any Lender’s transactions with any Borrower or any
Guarantor or (e) in connection with any advice given to Agent or any Lender with
respect to its rights and obligations under this Agreement and all related
agreements, documents and instruments, may be charged to Borrowers’ Account and
shall be part of the Obligations.
 
16.10. Injunctive Relief.  Each Borrower recognizes that, in the event any
Borrower fails to perform, observe or discharge any of its obligations or
liabilities under this Agreement, or threatens to fail to perform, observe or
discharge such obligations or liabilities, any remedy at law may prove to be
inadequate relief to Lenders; therefore, Agent, if Agent so requests, shall be
 
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entitled to temporary and permanent injunctive relief in any such case without
the necessity of proving that actual damages are not an adequate remedy.
 
16.11. Consequential Damages.  Neither Agent nor any Lender, nor any agent or
attorney for any of them, shall be liable to any Borrower or any Guarantor (or
any Affiliate of any such Person) for indirect, punitive, exemplary or
consequential damages arising from any breach of contract, tort or other wrong
relating to the establishment, administration or collection of the Obligations
or as a result of any transaction contemplated under this Agreement or any Other
Document.
 
16.12. Captions.  The captions at various places in this Agreement are intended
for convenience only and do not constitute and shall not be interpreted as part
of this Agreement.
 
16.13. Counterparts; Facsimile Signatures.  This Agreement may be executed in
any number of and by different parties hereto on separate counterparts, all of
which, when so executed, shall be deemed an original, but all such counterparts
shall constitute one and the same agreement.  Any signature delivered by a party
by facsimile transmission shall be deemed to be an original signature hereto.
 
16.14. Construction.  The parties acknowledge that each party and its counsel
have reviewed this Agreement and that the normal rule of construction to the
effect that any ambiguities are to be resolved against the drafting party shall
not be employed in the interpretation of this Agreement or any amendments,
schedules or exhibits thereto.
 
16.15. Confidentiality; Sharing Information.  Agent, each Lender and each
Transferee shall hold all non-public information obtained by Agent, such Lender
or such Transferee pursuant to the requirements of this Agreement in accordance
with Agent’s, such Lender’s and such Transferee’s customary procedures for
handling confidential information of this nature; provided, however, Agent, each
Lender and each Transferee may disclose such confidential information (a) to its
examiners, Affiliates, outside auditors, counsel and other professional
advisors, (b) to Agent, any Lender or to any prospective Transferees, and (c) as
required or requested by any Governmental Body or representative thereof or
pursuant to legal process; provided, further that (i) unless specifically
prohibited by Applicable Law, Agent, each Lender and each Transferee shall use
its reasonable best efforts prior to disclosure thereof, to notify the
applicable Borrower of the applicable request for disclosure of such non-public
information (A) by a Governmental Body or representative thereof (other than any
such request in connection with an examination of the financial condition of a
Lender or a Transferee by such Governmental Body) or (B) pursuant to legal
process and (ii) in no event shall Agent, any Lender or any Transferee be
obligated to return any materials furnished by any Borrower other than those
documents and instruments in possession of Agent or any Lender in order to
perfect its Lien on the Collateral once the Obligations have been paid in full
and this Agreement has been terminated.  Each Borrower acknowledges that from
time to time financial advisory, investment banking and other services may be
offered or provided to such Borrower or one or more of its Affiliates (in
connection with this Agreement or otherwise) by any Lender or by one or more
Subsidiaries or Affiliates of such Lender and each Borrower hereby authorizes
each Lender to share any information delivered to such Lender by such Borrower
and its Subsidiaries pursuant to this Agreement, or in connection with the
decision of such Lender to enter into this
 
99

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

 
Agreement, to any such Subsidiary or Affiliate of such Lender, it being
understood that any such Subsidiary or Affiliate of any Lender receiving such
information shall be bound by the provisions of this Section 16.15 as if it were
a Lender hereunder.  Such authorization shall survive the repayment of the other
Obligations and the termination of this Agreement.
 
16.16. Publicity.  Each Borrower and each Lender hereby authorizes Agent to make
appropriate announcements of the financial arrangement entered into among
Borrowers, Agent and Lenders, including announcements which are commonly known
as tombstones, in such publications and to such selected parties as Agent shall
in its sole and absolute discretion deem appropriate.
 
16.17. Certifications From Banks and Participants; US PATRIOT Act.  Each Lender
or assignee or participant of a Lender that is not incorporated under the Laws
of the United States of America 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 supervision by a banking
authority regulating such affiliated depository institution or foreign bank)
shall deliver to the 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 USA PATRIOT Act and the
applicable regulations: (1) within 10 days after the Closing Date, and (2) as
such other times as are required under the USA PATRIOT Act.
 
100

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

 
Each of the parties has signed this Agreement as of the day and year first above
written.
 

 

ATTEST: HYBROOK RESOURCES CORP.   (to be renamed Best Energy Services, Inc.)    
Kim Eade By: /s/ Larry Hargrave   Name: Larry Hargrave   Title: CEO

 

ATTEST: BOB BEEMAN DRILLING COMPANY     Kim Eade By: /s/ Larry Hargrave   Name:
Larry Hargrave   Title: President

 

ATTEST: BEST WELL SERVICE, INC.     Kim Eade By: /s/ Larry Hargrave   Name:
Larry Hargrave   Title: President

 

  PNC BANK NATIONAL ASSOCIATION   As Lender and Agent        By: /s/ Jeffrey J.
Bender   Name: Jeffrey J. Bender   Title: VP      
Commitment Percentage:  100% 

 
 

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

 

STATE OF TEXAS )   ) ss. COUNTY OF MONTGOMERY )

 
On this 15TH day of FEBRUARY, 2008, before me personally came LARRY HARGRAVE, to
me known, who, being by me duly sworn, did depose and say that s/he is the CEO
of HYBROOK RESOURCES CORP., the corporation described in and which executed the
foregoing instrument; and that s/he signed her/his name thereto by order of the
board of directors of said corporation.
 
/s/ Erin Krebs
Notary Public

 

STATE OF TEXAS )   ) ss. COUNTY OF MONTGOMERY )

 
On this 15TH day of FEBRUARY, 2008, before me personally came LARRY HARGRAVE, to
me known, who, being by me duly sworn, did depose and say that s/he is the
PRESIDENT of BOB BEEMAN DRILLING COMPANY, the corporation described in and which
executed the foregoing instrument; and that s/he signed her/his name thereto by
order of the board of directors of said corporation.
 
/s/ Erin Krebs
Notary Public
 

STATE OF TEXAS )   ) ss. COUNTY OF MONTGOMERY )

 
On this 15TH day of FEBRUARY, 2008, before me personally came LARRY HARGRAVE, to
me known, who, being by me duly sworn, did depose and say that s/he is the
PRESIDENT of BEST WELL SERVICE, INC., the corporation described in and which
executed the foregoing instrument; and that s/he signed her/his name thereto by
order of the board of directors of said corporation.
 
/s/ Erin Krebs
Notary Public
 

STATE OF NEW JERSEY  )   ) ss. COUNTY OF MIDDLESEX )

 
On this 11TH day of FEBRUARY 2008, before me personally came JEFFREY BENDER to
me known, who, being by me duly sworn, did depose and say that s/he is the VICE
PRESIDENT of PNC BANK, NATIONAL ASSOCIATION, and that s/he was authorized to
sign her/his name thereto.
 
/S/ JOSEPHINE R. GRIFFIN
Notary Public
 

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

Schedule 1.2(a) - Original Owners
 
William Weekley
Larry Hargrave

 

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

Schedule 1.2(b) - Permitted Encumbrances
       
Best Well Services, Inc. - the vehicles listed below have purchase money
security interests against them in favor of either GMAC or Ford Motor Credit.  
None of these vehicles is cross-collaterlized.
Vehicle
Year and Model
VIN
Account #
Brian
2007 Chev. Tahoe
1GNFK13037R150087
024-9091-61093
Mike
2006 Chevy Tahoe
1GNEK13T96J130882
024-9089-19099
Densel
2006 Chevy Silverado 1500 Crewcab
#2GCEK13T961159186
024-9083-62694
Terry
2007 Chevrolet 1500
1GCEC14CX7Z555289
024-9120-13158
Rig 1
2007 Chevrolet
1GCHC29KX7E591719
024-9114-99675
Rig 2
2006 Chevy Silverado
1GCHC29U36E195681
024-9092-22800
Rig 3
2005 Chevy
#1GCHC29U35E170603
024-9071-17680
Rig 4
2007 Chevy
1GCHC29K47E586967
024-9114-26357
Rig 6
2005 Chevy
#1GCHC29U45E187698
024-9071-23359
Rig 7
2007 Chevy
1GCHC29K17E542764
024-9102-93101
Rig 8
2007 Chevy
1GCHC29K67E587988
024-9119-24437
Rig 11
2006 Chevy Silverado
#1GCHC29U26E162977
024-9085-78713
Rig 12
2006 Chevy
#1GCHC29U76E151229
024-9085-61791
Rig 14
2007 Chevy
#1GCHC29U27E104806
024-9109-62572
Rig 15
2005 Chevy
#1GCHC29U15E290626
024-9073-68335
Rig 16
2006 Chevy Silverado
#1GCHC29UX6E160314
024-9088-76805
Rig 17
2007 Chevy
1GCHC29KX7E542777
024-9110-84415
Rig 18
2006 Chevy 3/4 Extended Cab
1GCHC29U96E57844
024-9091-41247
Rig 19
2007 Chevy
1GCHC29U57E148945
024-9105-22317
Rig 22
2006 Chevy 3/4 Crew Cab - 4x4
1GCHK23U46F191516
024-9080-69647
Rig 23
2006 Chevy
#1GCHC29U76E117842
024-9078-10056
Rig 24
2007 Chevy
1GCHC29U77E101612
024-9104-08227
Rig 25
2007 Chevy
1GCHC29KX7E590165
024-9116-24310
Spare-25
2005 Chevy C25
#1GCHC29U15E329375
024-9071-85832
Juan H.
2006 Ford F 150
#1FTPW14566FA38735
40663002
Larry
2006 Ford F150
1FTPW14V86FB59783
41506066
Juan V
2006 Ford F150
#1FTPW14556FA16192
40521257
Eugene
2007 Toyota
5TBDV54137S459039
005-6197153
       
Bob Beeman Drilling Company
None
       
Hybrook Resources Corp.
None

 

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

Schedule 4.5 - Equipment and Inventory Locations
   
Best Well Service, Inc.
 
Type of Equipment
Location(s)
Inventory and Equipment
Main Office:  1461 General Welch Blvd, Liberal, KS, 67901
 
Term:  3 years, $3500 a month
 
Landlord:  Tony Bruce
 
Address:  2081 Road C, Liberal, KS,  67901
 
Use: Main Location (Inventory and Equipment Storage)
   
Stock Supplies
Satellite Yard:  2409 North Fork Road, Ulysses, KS, 67880
 
Term:  Month to Month, $400 a month
 
Landlord:  DNK Enterprises
 
Address:  P.O. Box 1086, Liberal, KS, 67880
       
Bob Beeman Drilling Company
 
Type of Equipment
Location(s)
Inventory and Equipment
Main Office:  3400 S. Hwy 191, Moab, UT, 84532
 
Landlord:  Robert Beeman
 
Address: 418 Cottonwood Lane Moab Utah 84532
     
Satellite Yard:  1280 West Ridge Road, Wellington, UT, 84542
 
Landlord:  Robert Beeman
 
Address: 418 Cottonwood Lane Moab Utah 84532
   
Hybrook Resources Corp.
 
None
 

 

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

Schedule 4.5(c) - Chief Executive Offices
 
1010 Lamar Street, Suite 1200
Houston, TX 77002

 

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

Schedule 4.15(h) - Deposit and Investment Accounts
 
Best Well Service, Inc.
Checking Account:  Community Bank, Account # 007420
   
Bob Beeman Drilling Company
Checking Account:  Wells Fargo, Account # 045-0038716
Sweep Account link to Checking:  Wells Fargo Account # 045-0038716
 
Hybrook Resources Corp.
Checking Account:  Bank of Montreal, Account # 4268-673

 

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

Schedule 4.19 - Real Property
 
Best Well Service, Inc.
 
Main Office: 1461 General Welch Blvd, Liberal, KS, 67901
Type of Real Property Interest: Lease
Term: 3 years, $3500 a month
Landlord:  Tony Bruce
Address:  2081 Road C, Liberal, KS,  67901
Use: Main Location (Inventory and Equipment Storage)
 
Satellite Yard:  2409 North Fork Road, Ulysses, KS, 67880
 
Term:  Month to Month, $400 a month
Landlord:  DNK Enterprises
Address:  P.O. Box 1086, Liberal, KS, 67880
   
Bob Beeman Drilling Company
 
Main Office:  3400 S. Hwy 191, Moab, UT, 84532
Type of Real Property Interest: Lease
Landlord:  Robert Beeman
Address: 418 Cottonwood Lane Moab Utah 84532
   
Satellite Yard:  1280 West Ridge Road, Wellington, UT, 84542
Type of Real Property Interest: Lease
Landlord:  Robert Beeman
Address: 418 Cottonwood Lane Moab Utah 84532
 
Hybrook Resources Corp.
 
Main Office: 1010 Lamar Street, Suite 1200, Houston, TX  77002
Type of Real Property Interest : Lease (please note that this space is currently
being leased by Pan American Production Company, Inc., an affiliate of American
Rig Housing, but will be subleased to Best Energy Service post-closing)
Landlord: YPI 1010 Lamar, LLC
Address: Dept. 2113, PO Box 122113, Dallas, TX 75312-2113

 

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

Schedule 4.21 - Owned Rig Fleet Equipment
             
Best Well Service, Inc.
Rig Number
County of Location
State
Mobile Rig
Certificate of Title
State of Title
Long Term Contract
1
Texas
OK
Yes
Yes
OK
No
2
Mead
KS
Yes
Yes
OK
No
3
Morton
KS
Yes
Yes
OK
No
4
Grant
KS
Yes
Yes
OK
No
5
Phinniey
KS
Yes
Yes
OK
No
6
Seward
KS
Yes
Yes
OK
No
7
Seward
KS
Yes
Yes
OK
No
8
Stanton
KS
Yes
Yes
OK
No
9
Seward
KS
Yes
Yes
OK
No
10
Phinniey
KS
Yes
Yes
OK
No
11
Beaver
OK
Yes
Yes
OK
No
12
Beaver
OK
Yes
Yes
OK
No
14
Seward
KS
Yes
Yes
OK
No
15
Morton
KS
Yes
Yes
OK
No
16
Stevens
KS
Yes
Yes
OK
No
17
Texas
OK
Yes
Yes
OK
No
18
Beaver
OK
Yes
Yes
OK
No
19
Phinniey
KS
Yes
Yes
OK
No
20
Grant
KS
Yes
Yes
OK
No
21
Stevens
KS
Yes
Yes
OK
No
22
Seward
KS
Yes
Yes
OK
No
23
Morton
KS
Yes
Yes
OK
No
24
Beaver
OK
Yes
Yes
OK
No
25
Seward
KS
Yes
Yes
OK
No
26 (under construction)
Seward
KS
Yes
Pending
OK
No
             
Bob Beeman Drilling Company
Rig Number
County of Location
State
Mobile Rig
Certificate of Title
State of Title
Long Term Contract
20
San Juan
UT
Yes
Yes
UT
No
28
San Juan
UT
Yes
Yes
UT
No
30
Carbon
UT
Yes
Yes
UT
No
33
La Plata
CO
Yes
Yes
UT
No
34
La Plata
CO
Yes
Yes
UT
No
             
Hybrook Resources Corp.
     
None
     

 

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

Schedule 5.1 - Consents
 
Best Well Service, Inc.
None
 
Bob Beeman Drilling Company
None
 
Hybrook Resources Corp.
None

 

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

Schedule 5.2(a) - States of Qualification and Good Standing
 
Best Well Service, Inc.
KS (state of incorporation)
Best Well Service, Inc. will not be qualified in TX or OK, but will file a
fictitious name certificate in those states shortly after closing.
   
Bob Beeman Drilling Company
UT (state of incorporation)
AZ
 
Hybrook Resources Corp.
NV (state of incorporation)

 

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

Schedule 5.2(b) - Subsidiaries
 
Best Well Service, Inc.
None
 
Bob Beeman Drilling Company
None
 
Hybrook Resources Corp.
HRE Exploration Ltd., a British Columbia corporation, is a wholly-owned
subsidiary
Also, note that Best Well Service, Inc. and Bob Beeman Drilling Company will be
wholly owned subsidiaries of Hybrook/Best Energy Service post-closing

 

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

Schedule 5.4 - Federal Tax Identification Number
 
Best Well Service, Inc.
Federal Tax ID#: 48-1109678
 
Bob Beeman Drilling Company
Federal Tax ID#: 87-0325425
 
Hybrook Resources Corp.
Federal Tax ID# 02-0789714

 

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

Schedule 5.6 - Prior Names
 
Best Well Service, Inc.
None
Note, however, that prior to 1992 Tony Bruce was doing business as Best Well
Service, and then incorporated under the name Best Well Service, Inc.
 
Bob Beeman Drilling Company
None
 
Hybrook Resources Corp.
None

 

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

Schedule 5.8(b) - Litigation
 
Best Well Service, Inc.
None
 
Bob Beeman Drilling Company
None
 
Hybrook Resources Corp.
None

 

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

Schedule 5.8(d) - Plans
 
Best Well Service, Inc.
None
 
Bob Beeman Drilling Company
None
 
Hybrook Resources Corp.
None

 

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

Schedule 5.9 - Intellectual Property, Source Code Escrow Agreements
 
Best Well Service, Inc.
The Company has always operated under its registered corporate name
The Company has no additional tradenames or intellectual property
 
Bob Beeman Drilling Company
The Company has always operated under its registered corporate name
The Company has no additional tradenames or intellectual property
 
Hybrook Resources Corp.
The Company has always operated under its registered corporate name
The Company has no additional tradenames or intellectual property

 

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

Schedule 5.10 - Licenses and Permits
 
Best Well Service, Inc.
None
 
Bob Beeman Drilling Company
None
 
Hybrook Resources Corp.
None

 

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

Schedule 5.14 - Labor Disputes
 
Best Well Service, Inc.
None
 
Bob Beeman Drilling Company
None
 
Hybrook Resources Corp.
None

 

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

Schedule 7.3 - Guarantees
 
Best Well Service, Inc.
None
 
Bob Beeman Drilling Company
None
 
Hybrook Resources Corp.
None

 

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

Schedule 7.8 - Existing Indebtedness
       
Best Well Services, Inc.
     
(1) The company has loans covering the following vehicles in favor of either
GMAC or Ford Motor Credit in the aggregate amount of approximately $340,000:
Vehicle
Year and Model
VIN
Account #
Brian
2007 Chev. Tahoe
1GNFK13037R150087
024-9091-61093
Mike
2006 Chevy Tahoe
1GNEK13T96J130882
024-9089-19099
Densel
2006 Chevy Silverado 1500 Crewcab
#2GCEK13T961159186
024-9083-62694
Terry
2007 Chevrolet 1500
1GCEC14CX7Z555289
024-9120-13158
Rig 1
2007 Chevrolet
1GCHC29KX7E591719
024-9114-99675
Rig 2
2006 Chevy Silverado
1GCHC29U36E195681
024-9092-22800
Rig 3
2005 Chevy
#1GCHC29U35E170603
024-9071-17680
Rig 4
2007 Chevy
1GCHC29K47E586967
024-9114-26357
Rig 6
2005 Chevy
#1GCHC29U45E187698
024-9071-23359
Rig 7
2007 Chevy
1GCHC29K17E542764
024-9102-93101
Rig 8
2007 Chevy
1GCHC29K67E587988
024-9119-24437
Rig 11
2006 Chevy Silverado
#1GCHC29U26E162977
024-9085-78713
Rig 12
2006 Chevy
#1GCHC29U76E151229
024-9085-61791
Rig 14
2007 Chevy
#1GCHC29U27E104806
024-9109-62572
Rig 15
2005 Chevy
#1GCHC29U15E290626
024-9073-68335
Rig 16
2006 Chevy Silverado
#1GCHC29UX6E160314
024-9088-76805
Rig 17
2007 Chevy
1GCHC29KX7E542777
024-9110-84415
Rig 18
2006 Chevy 3/4 Extended Cab
1GCHC29U96E57844
024-9091-41247
Rig 19
2007 Chevy
1GCHC29U57E148945
024-9105-22317
Rig 22
2006 Chevy 3/4 Crew Cab - 4x4
1GCHK23U46F191516
024-9080-69647
Rig 23
2006 Chevy
#1GCHC29U76E117842
024-9078-10056
Rig 24
2007 Chevy
1GCHC29U77E101612
024-9104-08227
Rig 25
2007 Chevy
1GCHC29KX7E590165
024-9116-24310
Spare-25
2005 Chevy C25
#1GCHC29U15E329375
024-9071-85832
Juan H.
2006 Ford F 150
#1FTPW14566FA38735
40663002
Larry
2006 Ford F150
1FTPW14V86FB59783
41506066
Juan V
2006 Ford F150
#1FTPW14556FA16192
40521257
Eugene
2007 Toyota
5TBDV54137S459039
005-6197153
(2) Additionally, the Company has a $115,821 payable due upon delivery of Rig 26
(which is currently under construction) on 2/20/2008
       
Bob Beeman Drilling Company
None
       
Hybrook Resources Corp.
None