Exhibit 10.1

 

 

$240,000,000

 

THIRD AMENDED AND RESTATED CREDIT AGREEMENT

 

dated as of October 3, 2003,

 

Amended and Restated as of December 15, 2005,

 

among

 

BASIC ENERGY SERVICES, INC., a Delaware corporation,
as Borrower,

 

THE SUBSIDIARY GUARANTORS PARTY HERETO,
as Subsidiary Guarantors,

 

THE LENDERS PARTY HERETO,

 

and

 

BANK OF AMERICA, N.A.,
as Syndication Agent,

 

HIBERNIA NATIONAL BANK,

as Co-Documentation Agent,

 

BNP PARIBAS,
as Co-Documentation Agent,

 

and

 

UBS AG, STAMFORD BRANCH,
as Issuing Bank, Administrative Agent and Collateral Agent

 

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

 

UBS SECURITIES LLC

Sole Lead Arranger and Bookrunner

 

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

 

Cahill Gordon & Reindel LLP
80 Pine Street
New York, New York 10005

 

 

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TABLE OF CONTENTS

 

 

Page

 

ARTICLE I

 

DEFINITIONS

 

SECTION 1.01.

 

Defined Terms

2

 

SECTION 1.02.

 

Classification of Loans and Borrowings

27

 

SECTION 1.03.

 

Terms Generally

27

 

SECTION 1.04.

 

Accounting Terms; GAAP

27

 

 

 

 

 

 

ARTICLE II

 

THE CREDITS

 

SECTION 2.01.

 

Commitments

 

27

 

SECTION 2.02.

 

Loans

 

28

 

SECTION 2.03.

 

Borrowing Procedure

 

29

 

SECTION 2.04.

 

Evidence of Debt; Repayment of Loans

 

29

 

SECTION 2.05.

 

Fees

 

30

 

SECTION 2.06.

 

Interest on Loans

 

31

 

SECTION 2.07.

 

Termination and Reduction of Commitments

 

32

 

SECTION 2.08.

 

Interest Elections

 

32

 

SECTION 2.09.

 

Amortization of Term B Borrowings

 

33

 

SECTION 2.10.

 

Optional and Mandatory Prepayments of Loans

 

34

 

SECTION 2.11.

 

Alternate Rate of Interest

 

37

 

SECTION 2.12.

 

Increased Costs

 

37

 

SECTION 2.13.

 

Breakage Payments

 

38

 

SECTION 2.14.

 

Payments Generally; Pro Rata Treatment; Sharing of Setoffs

 

39

 

SECTION 2.15.

 

Taxes

 

40

 

SECTION 2.16.

 

Mitigation Obligations; Replacement of Lenders

 

41

 

SECTION 2.17.

 

Swingline Loans

 

42

 

SECTION 2.18.

 

Letters of Credit

 

43

 

SECTION 2.19.

 

[Intentionally omitted]

 

49

 

SECTION 2.20.

 

[Intentionally omitted]

 

49

 

SECTION 2.21.

 

[Intentionally omitted]

 

49

 

SECTION 2.22.

 

Increase in Commitments

 

49

 

SECTION 2.23.

 

Term B Loans and Revolving Loans

 

51

 

 

 

 

 

 

 

ARTICLE III

 

 

 

 

 

 

REPRESENTATIONS AND WARRANTIES

 

 

 

 

 

 

SECTION 3.01.

 

Organization; Powers

 

52

 

SECTION 3.02.

 

Authorization; Enforceability

 

52

 

SECTION 3.03.

 

Governmental Approvals; No Conflicts

 

52

 

SECTION 3.04.

 

Financial Statements

 

52

 

SECTION 3.05.

 

No Claims

 

53

 

 

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Page

 

 

 

 

 

 

SECTION 3.06.

 

Properties

 

53

 

SECTION 3.07.

 

Intellectual Property

 

53

 

SECTION 3.08.

 

Condition and Maintenance of Equipment

 

54

 

SECTION 3.09.

 

Equity Interests and Subsidiaries

 

54

 

SECTION 3.10.

 

Litigation; Compliance with Laws

 

55

 

SECTION 3.11.

 

Agreements

 

55

 

SECTION 3.12.

 

Federal Reserve Regulations

 

56

 

SECTION 3.13.

 

Investment Company Act; Public Utility Holding Company Act

 

56

 

SECTION 3.14.

 

Use of Proceeds

 

56

 

SECTION 3.15.

 

Taxes

 

56

 

SECTION 3.16.

 

No Material Misstatements

 

56

 

SECTION 3.17.

 

Labor Matters

 

56

 

SECTION 3.18.

 

Solvency

 

57

 

SECTION 3.19.

 

Employee Benefit Plans

 

57

 

SECTION 3.20.

 

Environmental Matters

 

57

 

SECTION 3.21.

 

Insurance

 

58

 

SECTION 3.22.

 

Security Documents

 

59

 

SECTION 3.23.

 

No Material Adverse Effect

 

59

 

SECTION 3.24.

 

Anti-Terrorism Law

 

59

 

 

 

 

 

 

 

ARTICLE IV

 

 

 

 

 

 

CONDITIONS TO CREDIT EXTENSIONS

 

SECTION 4.01.

 

Conditions to Initial Credit Extension

 

60

 

SECTION 4.02.

 

Conditions to All Credit Extensions

 

65

 

SECTION 4.03.

 

Intentionally omitted

 

66

 

SECTION 4.04.

 

Conditions to Effectiveness of the Amendment and Restatement

 

66

 

 

 

 

 

 

 

ARTICLE V

 

 

 

 

 

 

AFFIRMATIVE COVENANTS

 

SECTION 5.01.

 

Financial Statements, Reports, etc.

 

67

 

SECTION 5.02.

 

Litigation and Other Notices

 

69

 

SECTION 5.03.

 

Existence; Businesses and Properties

 

69

 

SECTION 5.04.

 

Insurance

 

70

 

SECTION 5.05.

 

Obligations and Taxes

 

70

 

SECTION 5.06.

 

Employee Benefits

 

71

 

SECTION 5.07.

 

Maintaining Records; Access to Properties and Inspections

 

71

 

SECTION 5.08.

 

Use of Proceeds

 

71

 

SECTION 5.09.

 

Compliance with Environmental Laws; Environmental Reports

 

71

 

SECTION 5.10.

 

Interest Rate Protection

 

72

 

SECTION 5.11.

 

Additional Collateral; Additional Guarantors

 

72

 

SECTION 5.12.

 

Security Interests; Further Assurances

 

73

 

SECTION 5.13.

 

Information Regarding Collateral

 

73

 

 

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Page

 

 

 

 

 

 

ARTICLE VI

 

NEGATIVE COVENANTS

 

SECTION 6.01.

 

Indebtedness

 

74

 

SECTION 6.02.

 

Liens

 

75

 

SECTION 6.03.

 

Sale and Leaseback Transactions

 

77

 

SECTION 6.04.

 

Investment, Loan and Advances

 

77

 

SECTION 6.05.

 

Mergers, Consolidations, Sales of Assets and Acquisitions

 

78

 

SECTION 6.06.

 

Dividends

 

79

 

SECTION 6.07.

 

Transactions with Affiliates

 

80

 

SECTION 6.08.

 

Financial Covenants

 

80

 

SECTION 6.09.

 

Limitation on Modifications or Prepayment of Indebtedness; Modifications of
Certificate of Incorporation, or Other Constitutive Documents, By laws and
Certain Other Agreements, etc.

 

81

 

SECTION 6.10.

 

Limitation on Certain Restrictions on Subsidiaries

 

81

 

SECTION 6.11.

 

Limitation on Issuance of Capital Stock

 

82

 

SECTION 6.12.

 

Limitation on Creation of Subsidiaries

 

82

 

SECTION 6.13.

 

Business

 

82

 

SECTION 6.14.

 

Limitation on Accounting Changes

 

82

 

SECTION 6.15.

 

Fiscal Year

 

82

 

SECTION 6.16.

 

Lease Obligations

 

82

 

SECTION 6.17.

 

Limitation on Further Negative Pledges

 

82

 

SECTION 6.18.

 

Anti-Terrorism Law; Anti-Money Laundering

 

83

 

 

 

 

 

 

 

ARTICLE VII

 

 

 

 

 

 

GUARANTEE

 

SECTION 7.01.

 

The Guarantee

 

83

 

SECTION 7.02.

 

Obligations Unconditional

 

83

 

SECTION 7.03.

 

Reinstatement

 

85

 

SECTION 7.04.

 

Subrogation; Subordination

 

85

 

SECTION 7.05.

 

Remedies

 

85

 

SECTION 7.06.

 

Instrument for the Payment of Money

 

85

 

SECTION 7.07.

 

Continuing Guarantee

 

85

 

SECTION 7.08.

 

General Limitation on Guarantee Obligations

 

86

 

 

 

 

 

 

 

ARTICLE VIII

 

 

 

 

 

 

EVENTS OF DEFAULT

 

SECTION 8.01.

 

Events of Default

 

86

 

 

 

 

 

 

 

ARTICLE IX

 

 

 

 

 

 

COLLATERAL ACCOUNT; APPLICATION OF COLLATERAL PROCEEDS

 

SECTION 9.01.

 

Collateral Account

 

88

 

SECTION 9.02.

 

Proceeds of Destruction, Taking and Collateral Dispositions

 

89

 

 

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Page

 

 

 

 

 

 

SECTION 9.03.

 

Application of Proceeds

 

89

 

 

 

 

 

 

 

ARTICLE X

 

 

 

 

 

 

THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT

 

SECTION 10.01.

 

Appointment

 

90

 

SECTION 10.02.

 

Agent in Its Individual Capacity

 

90

 

SECTION 10.03.

 

Exculpatory Provisions

 

90

 

SECTION 10.04.

 

Reliance by Agent

 

91

 

SECTION 10.05.

 

Delegation of Duties

 

91

 

SECTION 10.06.

 

Successor Agent

 

91

 

SECTION 10.07.

 

Non Reliance on Agent and Other Lenders

 

92

 

SECTION 10.08.

 

No Other Administrative Agent

 

92

 

SECTION 10.09.

 

Indemnification

 

92

 

 

 

 

 

 

 

ARTICLE XI

 

 

 

 

 

 

MISCELLANEOUS

 

SECTION 11.01.

 

Notices

 

93

 

SECTION 11.02.

 

Waivers; Amendment

 

94

 

SECTION 11.03.

 

Expenses; Indemnity

 

96

 

SECTION 11.04.

 

Successors and Assigns

 

97

 

SECTION 11.05.

 

Survival of Agreement

 

99

 

SECTION 11.06.

 

Counterparts; Integration; Effectiveness

 

100

 

SECTION 11.07.

 

Severability

 

100

 

SECTION 11.08.

 

Right of Setoff

 

100

 

SECTION 11.09.

 

Governing Law; Jurisdiction; Consent to Service of Process

 

100

 

SECTION 11.10.

 

Waiver of Jury Trial

 

101

 

SECTION 11.11.

 

Headings

 

101

 

SECTION 11.12.

 

Confidentiality

 

101

 

SECTION 11.13.

 

Interest Rate Limitation

 

102

 

SECTION 11.14.

 

Lender Addendum

 

102

 

SECTION 11.15.

 

Integration

 

102

 

SECTION 11.16.

 

USA PATRIOT Act Notice

 

102

 

 

iv

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ANNEXES

 

 

 

 

 

Annex I

Applicable Margin

 

 

Annex II

Amortization Table

 

 

 

 

 

SCHEDULES

 

 

 

 

 

Schedule 1.01(a)

Subsidiary Guarantors

 

 

Schedule 3.03

Governmental Approvals; Compliance with Laws

 

 

Schedule 3.06(b)

Real Property

 

 

Schedule 3.07(c)

Violations or Proceedings

 

 

Schedule 3.09(a)

Subsidiaries and Equity Interests Shares Issued and Outstanding

 

 

Schedule 3.09(c)

Corporate Organizational Chart

 

 

Schedule 3.11(c)

Material Agreements

 

 

Schedule 3.20

Environmental Matters

 

 

Schedule 3.21

Insurance

 

 

Schedule 4.01(g)

Local Counsel

 

 

Schedule 4.01(n)

Landlord Lien Waiver and Access Agreements

 

 

Schedule 4.01(o)(iii)

Title Insurance Amounts

 

 

Schedule 6.01(b)

Existing Indebtedness

 

 

Schedule 6.02(c)

Existing Liens

 

 

Schedule 6.04(b)

Existing Investments

 

 

 

 

 

 

EXHIBITS

 

 

 

 

 

 

 

Exhibit A

Form of Administrative Questionnaire

 

 

Exhibit B

Form of Assignment and Acceptance

 

 

Exhibit C-1

Form of Borrowing Request

 

 

Exhibit C-2

Form of LC Request

 

 

Exhibit D

Form of Interest Election Request

 

 

Exhibit E

Form of Joinder Agreement

 

 

Exhibit F

Form of Landlord Lien Waiver, Access Agreement and Consent

 

 

Exhibit G-1

Form of Original Term B Note

 

 

Exhibit G-2

Form of Original Revolving Note

 

 

Exhibit G-3

Form of Term B Note

 

 

Exhibit G-4

Form of Revolving Note

 

 

Exhibit G-5

Form of Swingline Note

 

 

Exhibit H-1

Form of Perfection Certificate

 

 

Exhibit H-2

Form of Perfection Certificate Supplement

 

 

Exhibit I

Form of Security Agreement

 

 

Exhibit J-1

Form of Opinion of Company Counsel

 

 

Exhibit J-2

Form of Opinion of Local Counsel

 

 

Exhibit K

Form of Intercompany Note

 

 

Exhibit L

Form of Compliance Certificate

 

 

Exhibit M

Form of Solvency Certificate

 

 

Exhibit N

Form of Lender Addendum

 

 

Exhibit O-1

Form of Additional Borrower Agreement

 

 

Exhibit O-2

Form of Additional Borrower Termination Agreement

 

 

Exhibit P

Confidential Lender Authorization

 

 

 

v

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THIRD AMENDED AND RESTATED CREDIT AGREEMENT

 

This THIRD AMENDED AND RESTATED CREDIT AGREEMENT (this “Agreement”) dated as of
October 3, 2003, amended and restated as of November 17, 2003, and December 31,
2004, and as further amended and restated as of December 15, 2005, among BASIC
ENERGY SERVICES, INC., a Delaware corporation (“Borrower”), the SUBSIDIARY
GUARANTORS PARTY HERETO, as the Subsidiary Guarantors (such term and each other
capitalized term used but not defined herein having the meaning given to it in
Article I), the Lenders, UBS LOAN FINANCE LLC, as swingline lender (in such
capacity, “Swingline Lender”) and as a Lender, BANK OF AMERICA, N.A., as
syndication agent (in such capacity, “Syndication Agent”), HIBERNIA NATIONAL
BANK, as co-documentation agent (in such capacity, a “Documentation Agent”) ,
BNP PARIBAS, as co-documentation (in such capacity, a “Documentation Agent”) and
UBS AG, STAMFORD BRANCH, as issuing bank (in such capacity, “Issuing Bank”), as
administrative agent (in such capacity, “Administrative Agent”) for the Lenders
and as collateral agent (in such capacity, “Collateral Agent”) for the Secured
Parties and the Issuing Bank.

 

WITNESSETH:

 

WHEREAS, this Agreement was originally entered into on October 3, 2003 (the
“Original Credit Agreement”) and amended and restated on each of November 17,
2003 and December 31, 2004, and the parties hereto desire to further amend and
restate this Agreement as herein set forth;

 

WHEREAS, Borrower desires to create (i) a new Class of Term Loans under this
Agreement in an aggregate principal amount of $90.0 million, having terms
identical to the Original Term B Loans and having the same rights and
obligations as the Original Term B Loans as set forth in this Agreement and the
other Loan Documents and (ii) a new Class of Revolving Loans under this
Agreement in an aggregate principal amount of $150.0 million, having terms
identical to the Original Revolving Loans and having the same rights and
obligations as the Original Revolving Loans as set forth in this Agreement and
the other Loan Documents, except in each case, as set forth herein;

 

WHEREAS, each Original Lender who holds Original Term B Loans (other than
Reduced Lenders (as defined below)) and who executes and delivers a counterpart
of this Agreement shall be deemed, upon effectiveness of this Agreement as
amended and restated on the date hereof (the “Third Amendment and Restatement”),
to have exchanged its Original Term B Loans (which Original Term B Loans shall
thereafter be deemed paid in full and extinguished) for Term B Loans in equal
outstanding principal amounts;

 

WHEREAS, each Original Lender who holds outstanding Original Term B Loans in an
amount greater than its Term B Commitment (such Lender, a “Reduced Term Lender”)
and who executes and delivers a counterpart of this Agreement shall be deemed,
upon effectiveness of this Agreement, to have, upon the funding thereof, to have
made Term B Loans in amount equal to its Term B Commitment;

 

WHEREAS, each Original Lender who holds Original Revolving Commitments (other
than Reduced Lenders (as defined below)) and who executes and delivers a
counterpart of this Agreement shall be deemed, upon effectiveness of this
Agreement as amended and restated on the Third Amendment and Restatement Date,
to have exchanged its Original Revolving Commitments (with respect to which any
outstanding Original Revolving Loans shall thereafter be deemed paid in full and
extinguished and which Original Revolving Commitments shall thereafter be deemed
terminated) for Revolving Commitments in equal outstanding principal amounts;

 

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

 

WHEREAS, each Original Lender who holds an Original Revolving Commitment in an
amount greater than its Revolving Commitment (such Lender, a “Reduced Revolving
Lender” and, together with the Reduced Term Lenders, the “Reduced Lenders”) and
who executes and delivers a counterpart of this Agreement shall be deemed, upon
effectiveness of this Agreement, to have made its Revolving Commitment;

 

WHEREAS, a portion of the proceeds from the Term B Loans and Revolving Loans
shall be used on the Third Amendment and Restatement Effective Date (as defined
below) to repay the entire aggregate principal amount of the Original Term B
Loans and Original Revolving Loans held by Original Lenders who do not execute
and deliver a counterpart of this Agreement and to the Reduced Lenders in
accordance with Section 2.23 of this Agreement, together with accrued and unpaid
interest thereon to the Third Amendment and Restatement Effective Date;

 

WHEREAS, Borrower further desires to amend and restate this Agreement to make
other changes as provided herein;

 

WHEREAS, the proceeds of the Loans were or are to be used in accordance with
Section 3.14;

 

NOW, THEREFORE, the Lenders are willing to extend such credit to Borrower and
the Issuing Bank is willing to issue letters of credit for the account of
Borrower on the terms and subject to the conditions set forth herein. 
Accordingly, the parties hereto agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

SECTION 1.01.    DEFINED TERMS.  AS USED IN THIS AGREEMENT, THE FOLLOWING TERMS
SHALL HAVE THE MEANINGS SPECIFIED BELOW:

 

“ABR”, when used in reference to any Loan or Borrowing, is used when such Loan,
or the Loans comprising such Borrowing, are bearing interest at a rate
determined by reference to the Alternate Base Rate.

 

“ABR Borrowing” shall mean a Borrowing comprised of ABR Loans.

 

“ABR Loan” shall mean any ABR Term Loan or ABR Revolving Loan.

 

“ABR Revolving Borrowing” shall mean a Borrowing comprised of ABR Revolving
Loans.

 

“ABR Revolving Loan” shall mean any Revolving Loan bearing interest at a rate
determined by reference to the Alternate Base Rate in accordance with the
provisions of Article II.

 

“ABR Term Loan” shall mean any Term B Loan bearing interest at a rate determined
by reference to the Alternate Base Rate in accordance with the provisions of
Article II.

 

“Acquisition Consideration” shall mean the purchase consideration for any
Permitted Acquisition and all other payments by Borrower or any of its
Subsidiaries in exchange for, or as part of, or in connection with, any
Permitted Acquisition, whether paid in cash or by exchange of Equity Interests
or of assets or otherwise and whether payable at or prior to the consummation of
such Permitted Acquisition or deferred for payment at any future time, whether
or not any such future payment is subject to the occurrence of any contingency,
and includes any and all payments representing the purchase price and any

 

2

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assumptions of Indebtedness, “earn outs” and other agreements to make any
payment the amount of which is, or the terms of payment of which are, in any
respect subject to or contingent upon the revenues, income, cash flow or profits
(or the like) of any person or business.

 

“Adjusted LIBOR Rate” shall mean, with respect to any Eurodollar Borrowing for
any Interest Period, (a) an interest rate per annum (rounded upward, if
necessary, to the next 1/100th of 1%) determined by the Administrative Agent to
be equal to the LIBOR Rate for such Eurodollar Borrowing in effect for such
Interest Period divided by (b) 1 minus the Statutory Reserves (if any) for such
Eurodollar Borrowing for such Interest Period.

 

“Administrative Agent” shall have the meaning assigned to such term in the
preamble hereto and includes each other person appointed as the successor
pursuant to Article X.

 

“Administrative Agent Fees” shall have the meaning assigned to such term in
Section 2.05(b).

 

“Administrative Questionnaire” shall mean an Administrative Questionnaire in the
form of Exhibit A, or such other form as may be supplied from time to time by
the Administrative Agent.

 

“Affiliate” shall mean, when used with respect to a specified person, another
person that directly, or indirectly through one or more intermediaries, Controls
or is Controlled by or is under common Control with the person specified;
provided, however, that, for purposes of Section 6.07, the term “Affiliate”
shall also include any person that directly or indirectly owns more than 10% of
any class of Equity Interests of the person specified or that is an executive
officer or director of the person specified.

 

“Agents” shall mean the Arranger, Documentation Agent, Syndication Agent,
Administrative Agent and the Collateral Agent.

 

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

 

“Alternate Base Rate” shall mean, for any day, a rate per annum (rounded upward,
if necessary, to the next 1/100th of 1%) equal to the greater of (a) the Base
Rate in effect on such day and (b) the Federal Funds Effective Rate in effect on
such day plus 0.50%.  If the Administrative Agent shall have determined (which
determination shall be conclusive absent manifest error) that it is unable to
ascertain the Federal Funds Effective Rate for any reason, including the
inability or failure of the Administrative Agent to obtain sufficient quotations
in accordance with the terms of the definition thereof, the Alternate Base Rate
shall be determined without regard to clause (b) of the preceding sentence until
the circumstances giving rise to such inability no longer exist.  Any change in
the Alternate Base Rate due to a change in the Base Rate or the Federal Funds
Effective Rate shall be effective on the effective date of such change in the
Base Rate or the Federal Funds Effective Rate, respectively.

 

“Applicable Fee” shall mean, for any day, with respect to any Term B Loan or
Revolving Loan, as the case may be, the applicable percentage set forth in Annex
I under the caption “Applicable Fee”.

 

“Applicable Margin” shall mean, for any day, with respect to any Revolving Loan
or Term B Loan, as the case may be, the applicable percentage set forth in Annex
I under the appropriate caption.

 

“Arranger” shall mean UBS Securities LLC.

 

“Asset Sale” shall mean (a) any conveyance, sale, lease, sublease, assignment,
transfer or other disposition (including by way of merger or consolidation and
including any sale and leaseback transaction) of any property (including stock
of any Subsidiary of Borrower by the holder thereof) by Borrower

 

3

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

 

or any of its Subsidiaries to any person other than Borrower or any Subsidiary
Guarantor and (b) any issuance or sale by any Subsidiary of Borrower of its
Equity Interests to any person (other than to Borrower or any Subsidiary
Guarantor).

 

“Assignment and Acceptance” shall mean an assignment and acceptance entered into
by a Lender or, if dated prior to the Third Amendment and Restatement Effective
Date, an Original Lender, and an assignee, and accepted by the Administrative
Agent, in the form of Exhibit B, or such other form as shall be approved by the
Administrative Agent.

 

“Attributable Indebtedness” shall mean, when used with respect to any sale and
leaseback transaction, as at the time of determination, the present value
(discounted at a rate equivalent to Borrower’s then current weighted average
cost of funds for borrowed money as at the time of determination, compounded on
a semi annual basis) of the total obligations of the lessee for rental payments
during the remaining term of the lease included in any such sale and leaseback
transaction.

 

“Base Rate” shall mean, for any day, a rate per annum that is equal to the
corporate base rate of interest established by the Administrative Agent from
time to time; each change in the Base Rate shall be effective on the date such
change is effective.  The corporate base rate is not necessarily the lowest rate
charged by the Administrative Agent to its customers.

 

“Board” shall mean the Board of Governors of the Federal Reserve System of the
United States.

 

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

 

“Borrowing” shall mean (a) Loans of the same Class and Type, made, converted or
continued on the same date and, in the case of Eurodollar Loans, as to which a
single Interest Period is in effect, or (b) a Swingline Loan.

 

“Borrowing Request” shall mean a request by Borrower in accordance with the
terms of Section 2.03 and substantially in the form of Exhibit C-1, or such
other form as shall be approved by the Administrative Agent.

 

“Business Day” shall mean any day other than a Saturday, Sunday or other day on
which banks in New York City are authorized or required by law to close;
provided, however, that when used in connection with a Eurodollar Loan, the term
“Business Day” shall also exclude any day on which banks are not open for
dealings in dollar deposits in the London interbank market.

 

“Capital Expenditures” shall mean, with respect to any person, for any period,
the aggregate amount of all expenditures by such person and its Subsidiaries
during that period for fixed or capital assets or improvements thereto or
replacements thereof that, in accordance with GAAP, are or should be classified
as capital expenditures in the consolidated statement of cash flows of such
person and its Consolidated Subsidiaries; provided, however, that Capital
Expenditures shall not include (x) expenditures made in connection with any
Permitted Acquisition or (y) expenditures by any person prior to the time such
person was acquired pursuant to a Permitted Acquisition.

 

“Capital Lease Obligations” of any person shall mean the obligations of such
person to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) real or personal property, or a combination thereof,
which obligations are required to be classified and accounted for as capital
leases on a balance sheet of such person under GAAP, and the amount of such
obligations shall be the capitalized amount thereof determined in accordance
with GAAP.

 

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“Cash Equivalents” shall mean, as to any person:  (a) securities issued, or
directly, unconditionally and fully guaranteed or insured, by the United States
or any agency or instrumentality thereof (provided that the full faith and
credit of the United States is pledged in support thereof) having maturities of
not more than one year from the date of acquisition by such person; (b) time
deposits and certificates of deposit of any Lender or any commercial bank
having, or which is the principal banking subsidiary of a bank holding company
organized under the laws of the United States, any state thereof or the District
of Columbia having, capital and surplus aggregating in excess of $300.0 million
and a rating of “A” (or such other similar equivalent rating) or higher by at
least one nationally recognized statistical rating organization (as defined in
Rule 436 under the Securities Act) with maturities of not more than one year
from the date of acquisition by such person; (c) repurchase obligations with a
term of not more than 30 days for underlying securities of the types described
in clause (a) above entered into with any bank meeting the qualifications
specified in clause (b) above, which repurchase obligations are secured by a
valid perfected security interest in the underlying securities; (d) commercial
paper issued by any person incorporated in the United States rated at least A-1
or the equivalent thereof by Standard & Poor’s Rating Service (“S&P”) or at
least P-1 or the equivalent thereof by Moody’s Investors Service, Inc.
(“Moody’s”) or an equivalent rating by a nationally recognized rating agency if
both S&P and Moody’s cease publishing ratings of commercial paper issuers
generally, and in each case maturing not more than one year after the date of
acquisition by such person; (e) investments in money market funds substantially
all of whose assets are comprised of securities of the types described in
clauses (a) through (d) above; and (f) demand deposit accounts maintained in the
ordinary course of business.

 

“Casualty Event” shall mean, with respect to any property (including Real
Property) of any person, any loss of title with respect to such property or any
loss of or damage to or destruction of, or any condemnation or other taking
(including by any Governmental Authority) of, such property for which such
person or any of its Subsidiaries receives insurance proceeds or proceeds of a
condemnation award or other compensation in each case to the extent that such
proceeds or other compensation exceeds $250,000.  “Casualty Event” shall include
but not be limited to any taking of all or any part of any Real Property of any
person or any part thereof, in or by condemnation or other eminent domain
proceedings pursuant to any law, or by reason of the temporary requisition of
the use or occupancy of all or any part of any Real Property of any person or
any part thereof by any Governmental Authority, civil or military.

 

“CERCLA” shall mean the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended, 42 U.S.C. § 9601 et seq.

 

A “Change in Control” shall be deemed to have occurred if:

 

(a)           any “person” or “group” (as such terms are used in Sections
13(d) and 14(d) of the Exchange Act), other than one or more Permitted Holders,
is or becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under
the Exchange Act, except that for purposes of this clause such person or group
shall be deemed to have “beneficial ownership” of all securities that any such
person or group has the right to acquire, whether such right is exercisable
immediately or only after the passage of time), directly or indirectly, of
Voting Stock representing 50% or more of the voting power of the total
outstanding Voting Stock of Borrower; or

 

(b)           during any period of two consecutive years, individuals who at the
beginning of such period constituted the Board of Directors of Borrower
(together with any new directors whose election to such Board of Directors or
whose nomination for election was approved by a vote of 66 2/3% of the directors
of Borrower then still in office who were either directors at the beginning of
such period or whose election or nomination for election was previously so

 

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approved) cease for any reason to constitute at least a majority of the Board of
Directors of Borrower.

 

“Change in Law” shall mean (a) the adoption of any law, treaty, order, rule or
regulation after the Closing Date, (b) any change in any law, treaty, order,
rule or regulation or in the interpretation or application thereof by any
Governmental Authority after the Closing Date or (c) compliance by any Lender or
Issuing Bank (or for purposes of Section 2.12(b), by any lending office of such
Lender or by such Lender’s or Issuing Bank’s holding company, if any) with any
request, guideline or directive (whether or not having the force of law) of any
Governmental Authority made or issued after the Closing Date.

 

“Charges” shall have the meaning assigned to such term in Section 11.13.

 

“Class”, when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, are Revolving Loans, Term B Loans
or Swingline Loans and, when used in reference to any Commitment, refers to
whether such Commitment is a Revolving Commitment, Term B Commitment or
Swingline Commitment.

 

“Closing Date” shall mean October 3, 2003.

 

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

 

“Collateral” shall mean, collectively, all of the Security Agreement Collateral
and all other property of whatever kind and nature pledged as collateral under
any Security Document.

 

“Collateral Account” shall mean a collateral account or sub account in the form
of a deposit account established and maintained by the Collateral Agent for the
benefit of the Secured Parties, in accordance with the provisions of
Section 9.01.

 

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

 

“Commercial Letter of Credit” shall mean any letter of credit or similar
instrument issued for the account of Borrower for the benefit of Borrower or any
of its Subsidiaries, for the purpose of providing the primary payment mechanism
in connection with the purchase of materials, goods or services by Borrower or
any of its Subsidiaries in the ordinary course of their businesses.

 

“Commitment” shall mean, with respect to any Lender or Original Lender, such
Lender’s or Original Lender’s Original Revolving Commitment, Revolving
Commitment, Original Term B Commitment, Term B Commitment or Swingline
Commitment.

 

“Commitment Fee” shall have the meaning assigned to such term in
Section 2.05(a).

 

“Companies” shall mean Borrower and its Subsidiaries; and “Company” shall mean
any one of them.

 

“Compliance Certificate” shall mean a certificate of a Financial Officer
substantially in the form of Exhibit L.

 

“Confidential Information Memorandum” shall mean that certain confidential
information memorandum prepared in connection with the syndication of the
Commitments and the Loans.

 

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“Confidential Lender Authorization” shall mean a Confidential Lender
Authorization in the form of Exhibit P.

 

“Consolidated Companies” shall mean Borrower and its Consolidated Subsidiaries.

 

“Consolidated EBITDA” shall mean, for any period, Consolidated Net Income for
such period, adjusted, in each case only to the extent (and in the same
proportion) deducted in determining such Consolidated Net Income (and with
respect to the portion of Consolidated Net Income attributable to any Subsidiary
of Borrower only if a corresponding amount would be permitted at the date of
determination to be distributed to Borrower by such Subsidiary without prior
approval (that has not been obtained), pursuant to the terms of its
organizational documents and all agreements, instruments, judgments, decrees,
orders, statutes, rules and regulations applicable to such Subsidiary or its
stockholders), by (x) adding thereto (i) the amount of Consolidated Interest
Expense, (ii) provision for taxes based on income, (iii) amortization expense,
(iv) depreciation expense, (v) all other non cash items (excluding any non cash
charge that results in an accrual or a reserve for cash charges in any future
period), (vi) amortization of intangibles (including, but not limited to,
goodwill) and organization costs, and (vii) any extraordinary expenses or losses
(including whether or not otherwise includable as a separate item in the
statement of such Consolidated Net Income for such period, losses on sales of
assets outside the ordinary course of business), and (y) subtracting (i) the
aggregate amount of all non cash items, determined on a consolidated basis, to
the extent such items increased Consolidated Net Income for such period,
(ii) interest income and (iii) any extraordinary income or gains (including
whether or not otherwise includable as a separate item in the statement of such
Consolidated Net Income for such period, gains on the sales of assets outside
the ordinary course of business.  Consolidated EBITDA shall be calculated on a
Pro Forma Basis to give effect to any Permitted Acquisition and any Asset Sale
(or series of Asset Sales other than related dispositions of used, worn out,
obsolete or surplus property pursuant to Section 6.05(a)(ii)) resulting in
aggregate sale proceeds of $15.0 million or more consummated during the fiscal
period of the Borrower ended on the Test Period thereof as if each such
Permitted Acquisition had been effected on the first day of such period and as
if each such Asset Sale had been consummated on the day prior to the first day
of such period; provided, however, that no effect shall be given to any
Permitted Acquisition unless the Administrative Agent shall have received
consolidated statements of income for such Test Period, all in form reasonably
satisfactory to the Administrative Agent.

 

“Consolidated Indebtedness” shall mean, as at any date of determination, the
aggregate amount of all Indebtedness (but including in any event the then
outstanding principal amount of all Loans, all Capital Lease Obligations and all
LC Exposure) of Borrower and its Consolidated Subsidiaries on a consolidated
basis as determined in accordance with GAAP.

 

“Consolidated Interest Coverage Ratio” shall mean, for any Test Period, the
ratio of (x) Consolidated EBITDA for such Test Period to (y) Consolidated
Interest Expense (excluding any Non-Cash Interest Expense) less cash interest
income for such Test Period.

 

“Consolidated Interest Expense” shall mean, for any period, the total
consolidated interest expense (whether cash or non-cash) of Borrower and its
Consolidated Subsidiaries determined in accordance with GAAP for the relevant
period, including interest expense with respect to any Funded Debt of Borrower
and its Consolidated Subsidiaries and interest expense for the relevant period
that has been capitalized on the balance sheet of Borrower and its Consolidated
Subsidiaries.

 

“Consolidated Net Income” shall mean, for any period, the consolidated net
income of Borrower and its Consolidated Subsidiaries determined in accordance
with GAAP, but excluding in any event (a) after tax extraordinary gains or
extraordinary losses; (b) after tax gains or losses realized from (i) the
acquisition of any securities, or the extinguishment of any Indebtedness, of
Borrower or any of its

 

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Subsidiaries or (ii) any sales of assets; (c) net earnings or loss of any other
person (other than a Subsidiary of Borrower) in which Borrower or any
Consolidated Subsidiary has an ownership interest, except (in the case of any
such net earnings) to the extent such net earnings shall have actually been
received by Borrower or such Consolidated Subsidiary (subject to the limitation
in clause (d) below) in the form of cash dividends or distributions; (d) the net
income of any Consolidated Subsidiary to the extent that the declaration or
payment of dividends or similar distributions by such Consolidated Subsidiary of
its net income is not at the time of determination permitted without approval
under applicable law or regulation or under such Consolidated Subsidiary’s
organizational documents or any agreement or instrument applicable to such
Consolidated Subsidiary or its stockholders; (e) gains or losses from the
cumulative effect of any change in accounting principles; (f) earnings resulting
from any reappraisal, revaluation or write up of assets; and (g) the income (or
loss) of any person accrued prior to the date it becomes a Subsidiary of
Borrower or any Consolidated Subsidiary or is merged into or consolidated with
Borrower or any Consolidated Subsidiary or that person’s assets are acquired by
Borrower or such Consolidated Subsidiary.

 

“Consolidated Net Worth” of any Person on any date means the sum of the capital
stock and surplus (including earned surplus, capital surplus and the balance of
the current profit and loss account not transferred to surplus) accounts of such
Person on such date which would appear on a balance sheet of such Person on such
date prepared in accordance with GAAP.

 

“Consolidated Subsidiary” shall mean, as to any person, all subsidiaries of such
person which are consolidated with such person for financial reporting purposes
in accordance with GAAP.

 

“Contested Collateral Lien Conditions” shall mean, with respect to any Permitted
Lien of the type described in clauses (a), (b) and (f) of Section 6.02, the
following conditions:

 

(a)           the relevant Company shall cause any proceeding instituted
contesting such Lien to stay the sale or forfeiture of any portion of the
Collateral on account of such Lien;

 

(b)           to the extent such Lien is in an amount in excess of $1,000,000,
the appropriate Loan Party shall maintain cash reserves or, at the option and
upon request of the Administrative Agent, obtain a bond in an amount sufficient
to pay and discharge such Lien and the Administrative Agent’s reasonable
estimate of all interest and penalties related thereto; and

 

(c)           such Lien shall in all respects be subject and subordinate in
priority to the Lien and security interest created and evidenced by the Security
Documents, except if and to the extent that the law or regulation creating,
permitting or authorizing such Lien provides that such Lien is or must be
superior to the Lien and security interest created and evidenced by the Security
Documents.

 

“Contingent Obligation” shall mean, as to any person, any obligation, agreement,
understanding or arrangement of such person guaranteeing or intended to
guarantee any Indebtedness, leases, dividends or other obligations (“primary
obligations”) of any other person (the “primary obligor”) in any manner, whether
directly or indirectly, including, without limitation, any obligation of such
person, whether or not contingent, (a) to purchase any such primary obligation
or any property constituting direct or indirect security therefor; (b) to
advance or supply funds (i) for the purchase or payment of any such primary
obligation or (ii) to maintain working capital or equity capital of the primary
obligor or otherwise to maintain the net worth or solvency of the primary
obligor; (c) to purchase property, securities or services primarily for the
purpose of assuring the owner of any such primary obligation of the ability of
the primary obligor to make payment of such primary obligation; (d) with respect
to bankers’ acceptances and letters of credit, until a reimbursement obligation
arises (which obligation shall constitute Indebtedness); or (e) otherwise to
assure or hold harmless the holder of such primary obligation against loss in
respect thereof;

 

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provided, however, that the term “Contingent Obligation” shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business or any product warranties for deposit or collection in the ordinary
course of business.  The amount of any Contingent Obligation shall be deemed to
be an amount equal to the stated or determinable amount of the primary
obligation in respect of which such Contingent Obligation is made (or, if less,
the maximum amount of such primary obligation for which such person may be
liable, whether severally or jointly, pursuant to the terms of the instrument
evidencing such Contingent Obligation) or, if not stated or determinable, the
maximum reasonably anticipated liability in respect thereof (assuming such
person is required to perform thereunder) as determined by such person in good
faith.

 

“Control” shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a person, whether
through the ownership of voting securities, by contract or otherwise, and the
terms “Controls” and “Controlled” shall have meanings correlative thereto.

 

“Control Agreement” shall have the meaning assigned to such term in the Security
Agreement.

 

“Credit Extension” shall mean, as the context may require, (i) the making of a
Loan by a Lender or (ii) the issuance of any Letter of Credit, or the amendment,
extension or renewal of any existing Letter of Credit, by the Issuing Bank.

 

“Debt Issuance” shall mean the incurrence by Borrower or any of its Subsidiaries
of any Indebtedness after the Closing Date (other than as permitted by
Section 6.01).

 

“Default” shall mean any event, occurrence or condition which is, or upon
notice, lapse of time or both would constitute, an Event of Default.

 

“Disqualified Capital Stock” shall mean any Equity Interest which, by its terms
(or by the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, (a) matures (excluding any
maturity as the result of an optional redemption by the issuer thereof) or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
is redeemable at the option of the holder thereof, in whole or in part, on or
prior to 90 days after the Term B Maturity Date, (b) is convertible into or
exchangeable (unless at the sole option of the issuer thereof) for (i) debt
securities or (ii) any Equity Interests referred to in (a) above, in each case
at any time prior to the 90 days after the Term B Maturity Date, or (c) contains
any repurchase obligation which may come into effect prior to payment in full of
all Obligations.

 

“Dividend” with respect to any person shall mean that such person has declared
or paid a dividend or returned any equity capital to its stockholders or
authorized or made any other distribution, payment or delivery of property
(other than common stock of such person) or cash to its stockholders as such, or
redeemed, retired, purchased or otherwise acquired, directly or indirectly, for
a consideration any shares of any class of its capital stock outstanding (or any
options or warrants issued by such person with respect to its capital stock), or
set aside any funds for any of the foregoing purposes, or shall have permitted
any of its subsidiaries to purchase or otherwise acquire for a consideration any
shares of any class of the capital stock of such person outstanding (or any
options or warrants issued by such person with respect to its capital stock). 
Without limiting the foregoing, “Dividends” with respect to any person shall not
include all payments made or required to be made by such person with respect to
any stock appreciation rights plans, equity incentive or achievement plans or
any similar plans or setting aside of any funds for the foregoing purposes to
the extent such payments do not exceed $5.0 million in the aggregate.

 

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

 

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“dollars” or “$” shall mean lawful money of the United States.

 

“Domestic Subsidiary” shall means any Wholly Owned Subsidiary of Borrower that
is not a Foreign Subsidiary.

 

“Earn Out Escrow” shall mean an escrow account and agreement pursuant to which
Borrower escrows some portion of an Earn Out Obligation with an independent
third party escrow agent.

 

“Earn Out Obligation” shall mean those contingent obligations of Borrower
incurred in favor of a seller (or other third party entitled thereto) under or
with respect to any Permitted Acquisition.

 

“Engagement Letter” shall mean the confidential Engagement Letter, dated
September 16, 2003, between Basic Energy Services, LP and UBS Securities LLC.

 

“Environment” shall mean ambient air, surface water and groundwater (including,
without limitation, potable water, navigable water and wetlands), the land
surface or subsurface strata, natural resources, the workplace or as otherwise
defined in any Environmental Law.

 

“Environmental Claim” shall mean any claim, notice, demand, order, action, suit,
proceeding or other communication alleging liability for investigation,
remediation, removal, cleanup, response, corrective action, damages to natural
resources, personal injury, property damage, fines, penalties or other costs
resulting from, related to or arising out of (i) the presence, Release or
threatened Release in or into the Environment of Hazardous Material at any
location or (ii) any violation of Environmental Law, and shall include any claim
seeking damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from, related to or arising out of the presence,
Release or threatened Release of Hazardous Material or alleged injury or threat
of injury to health, safety or the Environment.

 

“Environmental Law” shall mean any and all applicable present and future
treaties, laws, statutes, ordinances, regulations, rules, decrees, orders,
judgments, consent orders, consent decrees or other binding requirements, and
the common law, relating to protection of public health or the Environment, the
Release or threatened Release of Hazardous Material, natural resources or
natural resource damages, or occupational safety or health.

 

“Environmental Permit” shall mean any permit, license, approval, consent or
other authorization required by or from a Governmental Authority under
Environmental Law.

 

“Equity Interest” shall mean, with respect to any person, any and all shares,
interests, participations or other equivalents, including membership interests
(however designated, whether voting or non voting), of equity of such person,
including, if such person is a partnership, partnership interests (whether
general or limited) and any other interest or participation that confers on a
person the right to receive a share of the profits and losses of, or
distributions of assets of, such partnership (excluding Earn Out Obligations),
whether outstanding on the Closing Date or issued after the Closing Date, but
excluding debt securities convertible or exchangeable into such equity.

 

“Equity Issuance” shall mean, without duplication, any issuance in a registered
offering or sale pursuant to a private placement by Borrower after the Closing
Date of (a) any Equity Interests (including any Equity Interests issued upon
exercise of any warrant or option) or any warrants or options to purchase Equity
Interests or (b) any other security or instrument representing an Equity
Interest (or the right to obtain any Equity Interest) in the issuing or selling
person.

 

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“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as the
same may be amended from time to time.

 

“ERISA Affiliate” shall mean any trade or business (whether or not incorporated)
that, together with Borrower, is treated as a single employer under
Section 414(b) or (c) of the Code, or solely for purposes of Section 302 of
ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.

 

“ERISA Event” shall mean (a) any “reportable event,” as defined in Section 4043
of ERISA or the regulations issued thereunder, with respect to a Plan (other
than an event for which the 30 day notice period is waived by regulation);
(b) the existence with respect to any Plan of an “accumulated funding
deficiency” (as defined in Section 412 of the Code or Section 302 of ERISA),
whether or not waived, the failure to make by its due date a required
installment under Section 412(m) of the Code with respect to any Plan or the
failure to make any required contribution to a Multiemployer Plan; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by any Company or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any Plan;
(e) the receipt by any Company or any of its ERISA Affiliates from the PBGC or a
plan administrator of any notice relating to the intention to terminate any Plan
or Plans or to appoint a trustee to administer any Plan, or the occurrence of
any event or condition which could reasonably be expected to constitute grounds
under ERISA for the termination of, or the appointment of a trustee to
administer, any Plan; (f) the incurrence by any Company or any of its ERISA
Affiliates of any liability with respect to the withdrawal from any Plan or
Multiemployer Plan; (g) the receipt by any Company or its ERISA Affiliates of
any notice, concerning the imposition of Withdrawal Liability or a determination
that a Multiemployer Plan is, or is expected to be, insolvent or in
reorganization, within the meaning of Title IV of ERISA; (h) the making of any
amendment to any Plan which could reasonably be expected to result in the
imposition of a lien or the posting of a bond or other security; and (i) the
occurrence of a nonexempt prohibited transaction (within the meaning of
Section 4975 of the Code or Section 406 of ERISA) which could result in
liability to any Company.

 

“Eurodollar Borrowing” shall mean a Borrowing comprised of Eurodollar Loans.

 

“Eurodollar Loan” shall mean any Eurodollar Revolving Loan or Eurodollar Term B
Loan.

 

“Eurodollar Revolving Borrowing” shall mean a Borrowing comprised of Eurodollar
Revolving Loans.

 

“Eurodollar Revolving Loan” shall mean any Revolving Loan bearing interest at a
rate determined by reference to the Adjusted LIBOR Rate in accordance with the
provisions of Article II.

 

“Eurodollar Term B Borrowing” shall mean a Borrowing comprised of Eurodollar
Term B Loans.

 

“Eurodollar Term B Loan” shall mean any Term B Loan bearing interest at a rate
determined by reference to the Adjusted LIBOR Rate in accordance with the
provisions of Article II.

 

“Event of Default” shall have the meaning assigned to such term in Article VIII.

 

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

 

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“Existing Lien” shall have the meaning assigned to such term in the applicable
Security Document.

 

“Excluded Taxes” shall mean, with respect to the Administrative Agent, any
Lender, the Issuing Bank or any other recipient of any payment to be made by or
on account of any obligation of Borrower hereunder, (a) income or franchise
taxes imposed on (or measured by) its net income by the United States, or by the
jurisdiction under the laws of which such recipient is organized or in which its
principal office is located or, in the case of any Lender, in which its
applicable lending office is located, and (b) in the case of a Foreign Lender
(other than an assignee pursuant to a request by Borrower under Section 2.16),
any withholding tax that is imposed on amounts payable to such Foreign Lender at
the time such Foreign Lender becomes a party to this Agreement (or designates a
new lending office) or is attributable to such Foreign Lender’s failure to
comply with Section 2.15(e), except to the extent that such Foreign Lender (or
its assignor, if any) was entitled, at the time of designation of a new lending
office (or assignment), to receive additional amounts from Borrower with respect
to such withholding tax pursuant to Section 2.15(a) (it being understood and
agreed, for the avoidance of doubt, that any withholding tax imposed on a
Foreign Lender as a result of a Change in Law or regulation or interpretation
thereof occurring after the time such Foreign Lender became a party to this
Agreement shall not be an Excluded Tax).

 

“Federal Funds Effective Rate” shall mean, for any day, the weighted average of
the rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average of the
quotations for the day for such transactions received by the Administrative
Agent from three federal funds brokers of recognized standing selected by it.

 

“Fee Letter” shall mean the confidential Fee Letter, dated November 14, 2005,
among Borrower, UBS AG, Cayman Islands Branch, and UBS Securities LLC.

 

“Fees” shall mean the Commitment Fees, the Administrative Agent Fees, the LC
Participation Fees and the Fronting Fees.

 

“Fesco” shall mean First Energy Services Company, a Delaware corporation.

 

“Fesco AK” shall mean Fesco Alaska, Inc., an Alaska corporation.

 

“Financial Officer” of any person shall mean the Chief Financial Officer,
principal accounting officer, Treasurer or Controller of such person.

 

“FIRREA” shall mean the Federal Institutions Reform, Recovery and Enforcement
Act of 1989.

 

“Foreign Lender” shall mean any Lender that is not, for United States federal
income tax purposes, (i) a citizen or resident of the United States, (ii) a
corporation or entity treated as a corporation created or organized in or under
the laws of the United States, or any political subdivision thereof, (iii) an
estate the income of which is subject to U.S. federal income taxation regardless
of its source or (iv) a trust if a court within the United States is able to
exercise primary supervision over the administration of such trust and one or
more United States persons have the authority to control all substantial
decisions of such trust.

 

“Foreign Subsidiary” shall mean a Subsidiary that is organized under the laws of
a jurisdiction other than the United States or any state thereof or the District
of Columbia.

 

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“Fronting Fees” shall have the meaning assigned to such term in Section 2.05(c).

 

“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 thereunder to extend credit or incur letter of credit obligations over a
period of more than one year from the date of creation thereof, and specifically
including Capital 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, Contingent Obligations in respect of Funded Debt of other
persons.

 

“GAAP” shall mean generally accepted accounting principles in the United States
applied on a consistent basis.

 

“Governmental Authority” shall mean any federal, state, local or foreign court,
central bank or governmental agency, authority, instrumentality or regulatory
body.

 

“Governmental Real Property Disclosure Requirements” shall mean any Requirement
of Law of any Governmental Authority requiring notification of the buyer,
lessee, mortgagee, assignee or other transferee of any Real Property, facility,
establishment or business, or notification, registration or filing to or with
any Governmental Authority, in connection with the sale, lease, mortgage,
assignment or other transfer (including, without limitation, any transfer of
control) of any Real Property, facility, establishment or business, of the
actual or threatened presence or Release in or into the Environment, or the use,
disposal or handling of Hazardous Material on, at, under or near the Real
Property, facility, establishment or business to be sold, leased, mortgaged,
assigned or transferred.

 

“Guaranteed Obligations” shall have the meaning assigned to such term in
Section 7.01.

 

“Guarantees” shall mean the guarantees issued pursuant to Article VII by
Borrower and the Subsidiary Guarantors.

 

“Hazardous Materials” shall mean the following:  hazardous substances; hazardous
wastes; polychlorinated biphenyls (“PCBs”) or any substance or compound
containing PCBs; asbestos or any asbestos containing materials in any form or
condition; radon or any other radioactive materials including any source,
special nuclear or by product material; petroleum, crude oil or any fraction
thereof; and any other pollutant or contaminant chemicals, wastes, materials,
compounds, constituents or substances, subject to regulation or which can give
rise to liability under any Environmental Laws.

 

“HBR” shall mean H.B.&R., Inc., a Montana corporation.

 

“Hedging Agreement” shall mean any Interest Rate Agreement, foreign currency
exchange agreement, commodity price protection agreement or other interest or
currency exchange rate or commodity price hedging arrangement.

 

“Increased Amount Date” shall have the meaning assigned to such term in
Section 2.22(a).

 

“Indebtedness” of any person shall mean, without duplication, (a) all
obligations of such person for borrowed money or advances; (b) all obligations
of such person evidenced by bonds, debentures, notes or similar instruments;
(c) all obligations of such person upon which interest charges are customarily
paid or accrued; (d) all obligations of such person under conditional sale or
other title retention

 

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agreements relating to property purchased by such person; (e) all obligations of
such person issued or assumed as the deferred purchase price of property or
services (excluding trade accounts payable and accrued obligations incurred in
the ordinary course of business on normal trade terms and not overdue by more
than 90 days); (f) all Indebtedness of others secured by (or for which the
holder of such Indebtedness has an existing right, contingent or otherwise, to
be secured by) any Lien on property owned or acquired by such person, whether or
not the obligations secured thereby have been assumed to the extent of the fair
market value of such property; (g) all Capital Lease Obligations, Purchase Money
Obligations and synthetic lease obligations of such person; (h) all obligations
of such person in respect of Hedging Agreements to the extent required to be
reflected on a balance sheet of such person; (i) all Attributable Indebtedness
of such person; (j) all obligations for the reimbursement of any obligor in
respect of letters of credit, letters of guaranty, bankers’ acceptances and
similar credit transactions; and (k) all Contingent Obligations (other than
contingent Earn Out Obligations) of such person in respect of Indebtedness or
obligations of others of the kinds referred to in clauses (a) through (j)
above.  The Indebtedness of any person shall include the Indebtedness of any
other entity (including any partnership in which such person is a general
partner) to the extent such person is liable therefor as a result of such
person’s ownership interest in or other relationship with such entity, except to
the extent that terms of such Indebtedness provide that such person is not
liable therefor.  The Indebtedness of any person shall not include ordinary
course financings of insurance premiums consistent with the past practices of
such person.

 

“Indemnified Taxes” shall mean Taxes other than Excluded Taxes.

 

“Indemnitee” shall have the meaning assigned to such term in Section 11.03(b).

 

“Information” shall have the meaning assigned to such term in Section 11.12.

 

“Intellectual Property” shall have the meaning assigned to such term in
Section 3.07(a).

 

“Interest Election Request” shall mean a request by Borrower to convert or
continue a Revolving Borrowing or Term B Borrowing in accordance with
Section 2.08(b), substantially in the form of Exhibit D.

 

“Interest Payment Date” shall mean (a) with respect to any ABR Loan (other than
a Swingline Loan), the last day of each March, June, September and December to
occur during the period that such Loan is outstanding and the final maturity
date of such Loan, (b) with respect to any Eurodollar Loan, the last day of the
Interest Period applicable to the Borrowing of which such Loan is a part and, in
the case of a Eurodollar Loan with an Interest Period of more than three months’
duration, the last day of such Interest Period that occurs at intervals of three
months’ duration after the first day of such Interest Period, and (c) with
respect to any Swingline Loan, the day that such Loan is required to be repaid.

 

“Interest Period” shall mean, with respect to any Eurodollar Borrowing, the
period commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one, two, three or six months
thereafter, as Borrower may elect; provided that (a) if any Interest Period
would end on a day other than a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless such next succeeding
Business Day would fall in the next calendar month, in which case such Interest
Period shall end on the next preceding Business Day and (b) any Interest Period
that commences on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the last calendar month of
such Interest Period) shall end on the last Business Day of the last calendar
month of such Interest Period.  For purposes hereof, the date of a Borrowing
initially shall be the date on which such Borrowing is made and thereafter shall
be the effective date of the most recent conversion or continuation of such
Borrowing; provided, however, that an Interest Period shall be limited to seven
days to the extent required under Section 2.03(e).

 

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

 

“Investments” shall have the meaning assigned to such term in Section 6.04.

 

“IPO” shall mean the first underwritten public offering by Borrower of its
Equity Interests after the Closing Date pursuant to a registration statement
filed with the Securities and Exchange Commission in accordance with the
Securities Act.

 

“Issuing Bank” shall mean, as the context may require, (a) UBS AG, Stamford
Branch, with respect to Letters of Credit issued by it; (b) any other Lender
that may become an Issuing Bank pursuant to Section 2.18(j), with respect to
Letters of Credit issued by such Lender; or (c) collectively, all of the
foregoing.

 

“Joinder Agreement” shall mean that certain joinder agreement substantially in
the form of Exhibit E.

 

“Landlord Lien Waiver and Access Agreement” shall mean the Landlord Lien Waiver
and Access Agreement, substantially in the form of Exhibit F.

 

“LC Commitment” shall mean the commitment of the Issuing Bank to issue Letters
of Credit pursuant to Section 2.18.  The amount of the LC Commitment shall be
$20.0 million, but in no event exceed the Revolving Commitment.

 

“LC Disbursement” shall mean a payment or disbursement made by the Issuing Bank
pursuant to a Letter of Credit.

 

“LC Exposure” shall mean at any time the sum of (a) the aggregate undrawn amount
of all outstanding Letters of Credit at such time plus (b) the aggregate
principal amount of all Reimbursement Obligations outstanding at such time.  The
LC Exposure of any Revolving Lender at any time shall mean its Pro Rata
Percentage of the aggregate LC Exposure at such time.

 

“LC Participation Fee” shall have the meaning assigned to such term in
Section 2.05(c).

 

“LC Request” shall mean a request by Borrower in accordance with the terms of
Section 2.18(b) and substantially in the form of Exhibit C-2, or such other form
as shall be approved by the Administrative Agent.

 

“LC Sub Account” shall have the meaning assigned to such term in
Section 9.01(d).

 

“Leases” shall mean any and all leases, subleases, tenancies, options,
concession agreements, rental agreements, occupancy agreements, franchise
agreements, access agreements and any other agreements (including all
amendments, extensions, replacements, renewals, modifications and/or guarantees
thereof), whether or not of record and whether now in existence or hereafter
entered into, affecting the use or occupancy of all or any portion of any Real
Property.

 

“Lender Addendum” shall mean with respect to any Original Lender on the Closing
Date, a lender addendum in the form of Exhibit N, executed and delivered by such
Original Lender on the Closing Date as provided in Section 11.14.

 

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“Lender Affiliate” shall mean with respect to any Lender that is a fund that
invests in bank loans, any other fund that invests in commercial loans and is
managed or advised by the same investment advisor as such Lender or by an
Affiliate of such advisor.

 

“Lenders” shall mean (a) the financial institutions that are signatory hereto
(pursuant to the provisions of Section 11.06) and (b) any financial institution
that has become a party hereto pursuant to an Assignment and Acceptance, in each
case, other than any such financial institution that has ceased to be a party
hereto pursuant to another Assignment and Acceptance.  Unless the context
clearly indicates otherwise, the term “Lenders” shall include the Swingline
Lender.

 

“Letter of Credit” shall mean any (i) Standby Letter of Credit and
(ii) Commercial Letter of Credit, in each case, issued or to be issued by an
Issuing Bank for the account of Borrower or a Subsidiary pursuant to
Section 2.18.

 

“Letter of Credit Expiration Date” shall mean the date which is fifteen Business
Days prior to the Revolving Maturity Date.

 

“Leverage Ratio” shall mean, at any date of determination, the ratio of
Consolidated Indebtedness less unrestricted cash as reflected on the most recent
balance sheet of the Consolidated Companies to Consolidated EBITDA for the Test
Period then most recently ended.

 

“LIBOR Rate” shall mean, with respect to any Eurodollar Borrowing for any
Interest Period therefor, the rate per annum determined by the Administrative
Agent to be the arithmetic mean (rounded to the nearest 1/100th of 1%) of the
offered rates for deposits in dollars with a term comparable to such Interest
Period that appears on the Telerate British Bankers Assoc. Interest Settlement
Rates Page (as defined below) at approximately 11:00 a.m., London, England time,
on the second full Business Day preceding the first day of such Interest Period;
provided, however, that (i) if no comparable term for an Interest Period is
available, the LIBOR Rate shall be determined using the weighted average of the
offered rates for the two terms most nearly corresponding to such Interest
Period and (ii) if there shall at any time no longer exist a Telerate British
Bankers Assoc. Interest Settlement Rates Page, “LIBOR Rate” shall mean, with
respect to each day during each Interest Period pertaining to Eurodollar
Borrowings comprising part of the same Borrowing, the rate per annum equal to
the rate at which the Administrative Agent is offered deposits in dollars at
approximately 11:00 a.m., London, England time, two Business Days prior to the
first day of such Interest Period in the London interbank market for delivery on
the first day of such Interest Period for the number of days comprised therein
and in an amount comparable to its portion of the amount of such Eurodollar
Borrowing to be outstanding during such Interest Period.  “Telerate British
Bankers Assoc. Interest Settlement Rates Page” shall mean the display designated
as Page 3750 on the Telerate System Incorporated Service (or such other page as
may replace such page on such service for the purpose of displaying the rates at
which dollar deposits are offered by leading banks in the London interbank
deposit market).

 

“Lien” shall mean, with respect to any property, (a) any mortgage, deed of
trust, lien, pledge, encumbrance, claim, charge, assignment, hypothecation,
security interest or encumbrance of any kind, any other type of preferential
arrangement in respect of such property or any filing of any financing statement
under the UCC or any other similar notice of Lien under any similar notice or
recording statute of any Governmental Authority, including any easement, right
of way or other encumbrance on title to Real Property, in each of the foregoing
cases whether voluntary or imposed by law, and any agreement to give any of the
foregoing; (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement (or any financing lease
having substantially the same economic effect as any of the foregoing) relating
to such property; and (c) in the case of securities, any purchase option, call
or similar right of a third party with respect to such securities.

 

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“Liquidity”  means, as of any date of determination, the sum of (i) all
unrestricted cash balances of Borrower and its consolidated Subsidiaries as of
such date and (ii) the amount by which the aggregate amount of the Revolving
Commitments available to be borrowed without resulting in a Default then exceeds
the aggregate principal amount of the total Revolving Exposure of all Lenders as
of such date.

 

“Loan Documents” shall mean this Agreement, the Letters of Credit, the Notes (if
any), the Security Documents and each Hedging Agreement entered into with any
counterparty that was a Lender or an Affiliate of a Lender at the time such
Hedging Agreement was entered into, and solely for the purposes of
Section 8(e) hereof, the Fee Letter.

 

“Loan Parties” shall mean Borrower and the Subsidiary Guarantors.

 

“Loans” shall mean, as the context may require, an Original Revolving Loan, a
Revolving Loan, an Original Term B Loan, a Term B Loan or a Swingline Loan (and
shall include any Loans under the New Revolving Commitments).

 

“Margin Stock” shall have the meaning assigned to such term in Regulation U.

 

“Material Adverse Effect” shall mean (a) a material adverse effect on the
business, property, results of operations, prospects or condition, financial or
otherwise, of Borrower and its Subsidiaries, taken as a whole; (b) material
impairment of the ability of the Loan Parties to fully and timely perform their
material obligations under any Loan Document; (c) material impairment of the
rights of or benefits or remedies available to the Lenders or the Collateral
Agent under any Loan Document; or (d) a material adverse effect on the
Collateral or the Liens in favor of the Collateral Agent (for its benefit and
for the benefit of the other Secured Parties) on the Collateral or the priority
of such Liens.

 

“Maximum Rate” shall have the meaning assigned to such term in Section 11.13.

 

“Moody’s” shall have the meaning assigned to such term in the definition of
“Cash Equivalents” in Section 1.01.

 

“Mortgage” shall mean an agreement, including, but not limited to, a mortgage,
deed of trust or any other document, creating and evidencing a Lien on a
Mortgaged Property, which shall be in form and substance acceptable to the
Collateral Agent, with such schedules and including such provisions as shall be
necessary to conform such document to applicable local or foreign law or as
shall be customary under applicable local or foreign law.

 

“Mortgaged Property” shall have the meaning assigned to such term in the
Original Credit Agreement.

 

“Multiemployer Plan” shall mean a multiemployer plan within the meaning of
Section 4001(a)(3) or Section 3(37) of ERISA (a) to which any Company or any
ERISA Affiliate is then making or accruing an obligation to make contributions;
(b) to which any Company or any ERISA Affiliate has within the preceding five
plan years made contributions; or (c) with respect to which any Company could
incur liability.

 

“Net Cash Proceeds” shall mean:

 

(a)           with respect to any Asset Sale, the cash proceeds received by any
Loan Party (including cash proceeds subsequently received (as and when received
by any Loan Party) in respect of noncash consideration initially received) net
of (i) selling expenses (including reasonable

 

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brokers’ fees or commissions, legal, accounting and other professional and
transactional fees, transfer and similar taxes and Borrower’s good faith
estimate of income taxes paid or payable in connection with such sale);
(ii) amounts provided as a reserve, in accordance with GAAP, against any
liabilities under any indemnification obligations associated with such Asset
Sale (provided that, to the extent and at the time any such amounts are released
from such reserve, such amounts shall constitute Net Cash Proceeds);
(iii) Borrower’s good faith estimate of payments required to be made with
respect to unassumed liabilities relating to the assets sold within 90 days of
such Asset Sale (provided that, to the extent such cash proceeds are not used to
make payments in respect of such unassumed liabilities within 90 days of such
Asset Sale, such cash proceeds shall constitute Net Cash Proceeds); and (iv) the
principal amount, premium or penalty, if any, interest and other amounts on any
Indebtedness for borrowed money which is secured by a senior Lien on the asset
sold in such Asset Sale and which is repaid with such proceeds (other than any
such Indebtedness assumed by the purchaser of such asset);

 

(b)           with respect to any Debt Issuance or Equity Issuance, the cash
proceeds thereof, net of customary fees, commissions, costs and other expenses
incurred in connection therewith; and

 

(c)           with respect to any Casualty Event, the cash insurance proceeds,
condemnation awards and other compensation received in respect thereof, net of
all reasonable costs and expenses incurred in connection with the collection of
such proceeds, awards or other compensation in respect of such Casualty Event.

 

“New Commitments” means New Revolving Commitments and New Term B Commitments.

 

“New Lender” means a New Revolving Lender and/or a New Term B Lender.

 

“New Revolving Commitments” shall have the meaning assigned to such term in
Section 2.22(a).

 

“New Revolving Lenders” shall have the meaning assigned to such term in
Section 2.22(a).

 

“New Term B Commitment” has the meaning set forth in Section 2.22.

 

“New Term B Lender” means any Person having a New Term B Commitment.

 

“Non-Cash Interest Expense” shall mean, for any Test Period, all amounts
included in Consolidated Interest Expense which will require no cash payment at
any time prior to the Revolving Maturity Date.

 

“Non Guarantor Subsidiary” shall mean each Subsidiary that is not a Subsidiary
Guarantor.

 

“Notes” shall mean any notes evidencing the Original Term B Loans, Term B Loans,
Original Revolving Loans, Revolving Loans or Swingline Loans issued pursuant to
this Agreement, if any, substantially in the form of Exhibit G-1, G-2, G-3, G-4
or G-5.

 

“Obligations” shall mean (a) obligations of Borrower and any and all of the
other Loan Parties from time to time arising under or in respect of the due and
punctual payment of (i) the principal of and premium, if any, and interest
(including interest accruing during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding) on the Loans, when and as due, whether at
maturity, by acceleration, upon one or more dates set

 

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for prepayment or otherwise, (ii) each payment required to be made by Borrower
and any and all of the other Loan Parties under this Agreement in respect of any
Letter of Credit, when and as due, including payments in respect of
Reimbursement Obligations, interest thereon and obligations to provide cash
collateral and (iii) all other monetary obligations, including fees, costs,
expenses and indemnities, whether primary, secondary, direct, contingent, fixed
or otherwise (including monetary obligations incurred during the pendency of any
bankruptcy, insolvency, receivership or other similar proceeding, regardless of
whether allowed or allowable in such proceeding), of Borrower and any and all of
the other Loan Parties under this Agreement and the other Loan Documents,
(b) the due and punctual performance of all covenants, agreements, obligations
and liabilities of Borrower and each Loan Party under or pursuant to this
Agreement and the other Loan Documents, (c) the due and punctual payment and
performance of all obligations of Borrower and any and all of the other Loan
Parties under each Hedging Agreement relating to Loans entered into with any
counterparty that was a Lender, an Original Lender or an Affiliate of a Lender
or Original Lender at the time such Hedging Agreement was entered into and
(d) the due and punctual payment and performance of all obligations in respect
of overdrafts and related liabilities owed to any Lender, Original Lender or any
Affiliate of a Lender or Original Lender, the Administrative Agent or the
Collateral Agent arising from treasury, depositary and cash management services
or in connection with any automated clearinghouse transfer of funds.

 

“Officers’ Certificate” shall mean a certificate executed by the Chairman of the
Board (if an officer), the Chief Executive Officer or the President and one of
the Financial Officers, each in his or her official (and not individual)
capacity.

 

“Original Lenders” shall mean the financial institutions that were parties to
the Original Credit Agreement as “Lenders” thereunder.  Any reference in
Section 4.01 to “Original Lender” shall mean Original Lenders who were party to
the Original Credit Agreement on the Closing Date.

 

“Original Credit Agreement” shall have the meaning set forth in the recitals
hereto.

 

“Original Revolving Borrowing” shall mean a Borrowing comprised of Original
Revolving Loans.

 

“Original Revolving Commitment” shall mean with respect to each Original Lender,
the commitment, if any, of such Original Lender to make a Revolving Loan
hereunder after the Closing Date in the amount set forth on Schedule I to the
Lender Addendum executed and delivered by such Original Lender, in the
Assignment and Acceptance pursuant to which such Original Lender shall have
assumed its Revolving Commitment or in Schedule 1 to the Confidential Lender
Authorization executed and delivered by such Original Lender, as applicable, as
such commitment may be (a) terminated or reduced from time to time pursuant to
Section 2.07 and (b) reduced or increased from time to time pursuant to
assignments by or to such Original Lender pursuant to Section 11.04.  The
initial aggregate amount of the Original Lenders’ Original Revolving Commitments
was $50.0 million.

 

“Original Revolving Loans” shall mean the revolving loans made by the Original
Lenders to operating subsidiaries of Borrower pursuant to Section 2.01(b) of the
Original Credit Agreement.  Each Original Revolving Loan was either an ABR
Revolving Loan or a Eurodollar Revolving Loan.

 

“Original Term B Borrowing” shall mean a Borrowing comprised of Original Term B
Loans.

 

“Original Term B Commitment” shall mean with respect to each Original Lender,
the commitment, if any, of such Original Lender to make a Term B Loan hereunder
on the Closing Date in the amount set forth on Schedule I to the Lender Addendum
executed and delivered by such Original Lender, in the Assignment and Acceptance
pursuant to which such Original Lender shall have assumed its Term B

 

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Commitment or in Schedule 1 to the Confidential Lender Authorization executed
and delivered by such Original Lender, as applicable, as such commitment may be
(a) terminated or reduced from time to time pursuant to Section 2.07 and
(b) reduced or increased from time to time pursuant to assignments by or to such
Original Lender pursuant to Section 11.04.  The initial aggregate amount of the
Original Lenders’ Original Term B Commitments was $170.0 million.

 

“Original Term B Loans” shall mean the term loans made by the Original Lenders
to operating subsidiaries of Borrower pursuant to Section 2.01(a) of the
Original Credit Agreement.  Each Original Term B Loan was either an ABR Term B
Loan or a Eurodollar Term B Loan.

 

“Other Taxes” shall mean any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies
(including interest, fines, penalties and additions to tax) arising from any
payment made or required to be made under any Loan Document or from the
execution, delivery or enforcement of, or otherwise with respect to, any Loan
Document.

 

“Participant” shall have the meaning assigned to such term in Section 11.04(e).

 

“PBGC” shall mean the Pension Benefit Guaranty Corporation referred to and
defined in ERISA.

 

“PCBs” shall have the meaning assigned to such term in the definition of
“Hazardous Materials” in Section 1.01.

 

“Perfection Certificate” shall mean a certificate in the form of Exhibit H-1 or
any other form approved by the Collateral Agent, as the same shall be
supplemented from time to time by a Perfection Certificate Supplement or
otherwise.

 

“Perfection Certificate Supplement” shall mean a certificate supplement in the
form of Exhibit H-2 or any other form approved by the Collateral Agent.

 

“Permitted Acquisition” shall mean, with respect to Borrower or any Subsidiary
Guarantor, any transaction or series of related transactions for the direct or
indirect (a) acquisition of all or substantially all of the property of any
other person, or of any business or division of any other person;
(b) acquisition of in excess of 50% of the Equity Interests of any other person,
or otherwise causing any other person to become a subsidiary of such person; or
(c) merger or consolidation or any other combination with any other person, if,
at the time of, and after giving effect on a Pro Forma basis to, such
transaction or series of transactions, no Default then exists or would result
therefrom, and

 

(i) the Leverage Ratio as of the end of the most recent fiscal quarter for which
financial statements are available was less than 2.75 to 1.0 and Liquidity is
greater than $10,000,000; or

 

(ii) the Leverage Ratio as of the end of the most recent fiscal quarter for
which financial statements are available and as of the preceding fiscal quarter
was in each case less than 2.75 to 1.0; or

 

(iii) the following conditions are met:

 

(A)          after giving effect to such acquisition on a Pro Forma Basis,
(1) the Borrower shall be in compliance with all covenants set forth in
Section 6.08 as of the most recent Test Period (assuming, for purposes of
Section 6.08, that such acquisition, and all other Permitted Acquisitions
consummated since the first day of the relevant Test Period for each of the
financial covenants set forth in Section 6.08 ending on or prior to the date of
such acquisition, had occurred on the first day of such relevant Test Period),
(2) unless expressly approved by the Administrative

 

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Agent, the Borrower shall have generated positive Consolidated EBITDA for the
Test Period most recently ended prior to the date of consummation of such
acquisition and (3) the relevant Borrower shall have cash on hand/working
capital availability equal to or greater than $10.0 million;

 

(B)           no Company shall, in connection with any such acquisition, assume
or remain liable with respect to any Indebtedness or other liability (including
any material tax or ERISA liability) of the related seller or the business,
person or assets acquired, except to the extent permitted under Section 6.01 and
any other such liabilities or obligations not permitted to be assumed or
otherwise supported by any Company hereunder shall be paid in full or released
as to the business, persons or assets being so acquired on or before the
consummation of such acquisition;

 

(C)           the acquired person shall be engaged in a business of the same or
similar type conducted by Borrower and the Subsidiaries on the Closing Date and
the property acquired in connection with any such acquisition shall be made
subject to the Lien of the Security Documents and shall be free and clear of any
Liens, other than Permitted Liens;

 

(D)          the board of directors or other similar governing body of the
acquired person shall not have indicated publicly its opposition to the
consummation of such acquisition;

 

(E)           all transactions in connection therewith shall be consummated in
accordance with all applicable laws of all applicable Governmental Authorities;

 

(F)           at least 10 Business Days prior to the proposed date of
consummation of the acquisition, Borrower shall have delivered to the Agents and
the Lenders an Officers’ Certificate certifying that (1) such acquisition
complies with this definition (which shall have attached thereto reasonably
detailed backup data and calculations showing such compliance), and (2) such
acquisition could not reasonably be expected to result in a Material Adverse
Effect;

 

(G)           after giving effect to such transaction or series of transactions,
Liquidity shall be at least $10,000,000; and

 

(H)          the Acquisition Consideration for such acquisition shall not exceed
20% of Consolidated Net Worth as of the end of the most recent fiscal quarter
for which financial statements have been delivered, plus the Available
Acquisition Cash (defined below) at the time of such acquisition; provided that
any Equity Interests constituting all or a portion of such Acquisition
Consideration shall be Qualified Capital Stock; for the purposes of this clause
(iii)(H), “Available Acquisition Cash” shall mean a dollar amount equal to the
amount by which Borrower’s unrestricted cash as reflected on its most recent
balance sheet exceeds $5.0 million.

 

“Permitted Holders” shall mean Credit Suisse First Boston, First Reserve
Corporation and their respective Affiliates.

 

“Permitted Liens” shall have the meaning assigned to such term in Section 6.02.

 

“Permitted Subordinated Indebtedness” shall mean unsecured subordinated debt of
Borrower that is expressly subordinated to the Obligations under this Agreement;
provided that (i) the terms of such debt (x) do not provide for any scheduled
repayment, mandatory redemption or sinking fund obligation prior to 90 days
after the Term B Loan Maturity Date and (y) do not materially restrict, limit or
adversely affect the ability of Borrower or any of its subsidiaries to perform
their obligations under any of the Loan Documents and (ii) the covenants, events
of default, subsidiary guarantees, credit support and

 

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subordination terms are customary for similar offerings by issuers with credit
ratings comparable to that of the issuer of such debt and the subordination
terms are otherwise satisfactory to the Administrative Agent.

 

“person” shall mean any natural person, corporation, business, trust, joint
venture, association, company, limited liability company, partnership or
government, or any agency or political subdivision thereof, in any case, whether
acting in a personal, fiduciary or other capacity.

 

“Plan” shall mean any employee pension benefit plan (other than a Multiemployer
Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code
or Section 302 of ERISA which is maintained or contributed to by any Company or
its ERISA Affiliate or with respect to which any Company could incur liability
(including, without limitation, under Section 4069 of ERISA).

 

“Pro Forma Basis” shall mean on a basis in accordance with GAAP and Regulation
S-X and otherwise reasonably satisfactory to the Administrative Agent.

 

“Pro Rata Percentage” of any Revolving Lender at any time shall mean the
percentage of the total Revolving Commitment represented by such Lender’s
Revolving Commitment.

 

“property” shall mean any right, title or interest in or to property or assets
of any kind whatsoever, whether real, personal or mixed and whether tangible or
intangible and including Equity Interests or other ownership interests of any
person and whether now in existence or owned or hereafter entered into or
acquired, including, without limitation, all Real Property.

 

“Purchase Money Obligation” shall mean, for any person, the obligations of such
person in respect of Indebtedness incurred for the purpose of financing all or
any part of the purchase price of any property (including Equity Interests of
any person) or the cost of installation, construction or improvement of any
property or assets and any refinancing thereof; provided, however, that such
Indebtedness is incurred within 90 days after such acquisition of such property
by such person.

 

“Qualified Capital Stock” of any person shall mean any capital stock of such
person that is not Disqualified Capital Stock.

 

“Real Property” shall mean, collectively, all right, title and interest
(including any leasehold estate) in and to any and all parcels of or interests
in real property owned, leased or operated by any person, whether by lease,
license or other means, together with, in each case, all easements,
hereditaments and appurtenances relating thereto, all improvements and
appurtenant fixtures and equipment, all general intangibles and contract rights
and other property and rights incidental to the ownership, lease or operation
thereof.

 

“Reduced Lender” shall have the meaning assigned to such term in the recitals
hereto.

 

“Register” shall have the meaning assigned to such term in Section 11.04(c).

 

“Regulation D” shall mean Regulation D of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.

 

“Regulation S-X” shall mean Regulation S-X promulgated under the Securities Act
as from time to time in effect and all official rulings and interpretations
thereunder or thereof.

 

“Regulation T” shall mean Regulation T of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.

 

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“Regulation U” shall mean Regulation U of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.

 

“Regulation X” shall mean Regulation X of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.

 

“Release” shall mean any spilling, leaking, seepage, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, disposing,
depositing, dispersing, emanating or migrating of any Hazardous Material in,
into, onto or through the Environment.

 

“Reimbursement Obligations” shall mean Borrower’s obligations under
Section 2.18(e) to reimburse LC Disbursements.

 

“Required Lenders” shall mean, at any time, Lenders having Loans, LC Exposure
and unused Revolving and Term B Commitments representing more than 50% of the
sum of all Loans outstanding, LC Exposure and unused Revolving and Term B
Commitments at such time.

 

“Requirements of Law” shall mean, collectively, any and all requirements of any
Governmental Authority including any and all laws, ordinances, rules,
regulations or similar statutes or case law.

 

“Response” shall mean (a) “response” as such term is defined in CERCLA, 42
U.S.C. § 9601(24), and (b) all other actions required by any Governmental
Authority or voluntarily undertaken to:  (i) clean up, remove, treat, abate or
in any other way address any Hazardous Material in the Environment; (ii) prevent
the Release or threat of Release, or minimize the further Release, of any
Hazardous Material; or (iii) perform studies and investigations in connection
with, or as a precondition to, clause (i) or (ii) above.

 

“Responsible Officer” of any corporation shall mean any executive officer or
Financial Officer of such corporation and any other officer or similar official
thereof with responsibility for the administration of the obligations of such
corporation in respect of this Agreement.

 

“Revolving Availability Period” shall mean the period from and including the
Closing Date to but excluding the earlier of the Business Day proceeding the
Revolving Maturity Date and the date of termination of the Revolving
Commitments.

 

“Revolving Borrowing” shall mean a Borrowing comprised of Revolving Loans.

 

“Revolving Commitment” shall mean, with respect to each Lender, the commitment,
if any, of such Lender to make Revolving Loans hereunder up to the amount set
forth on Schedule I to the Lender Addendum executed and delivered by such
Lender, in the Assignment and Acceptance pursuant to which such Lender assumed
its Revolving Commitment or in a joinder agreement pursuant to Section 2.22, as
applicable, as the same may be (a) reduced from time to time pursuant to
Section 2.07 and (b) reduced or increased from time to time pursuant to
assignments by or to such Lender pursuant to Section 11.04 or in a joinder
agreement pursuant to Section 2.22.  The aggregate amount of the Lenders’
Revolving Commitments immediately prior to the Third Amendment and Restatement
Effective Date is $50.0 million and the aggregate amount of the Lenders’
Revolving Commitments on the Third Amendment and Restatement Effective Date is
$150.0 million.

 

“Revolving Exposure” shall mean, with respect to any Lender at any time, the
aggregate principal amount at such time of all outstanding Revolving Loans of
such Lender, plus the aggregate amount at

 

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such time of such Lender’s LC Exposure, plus the aggregate amount at such time
of such Lender’s Swingline Exposure.

 

“Revolving Lender” shall mean a Lender with a Revolving Commitment (including
any New Revolving Lender).

 

“Revolving Loan” shall mean a loan made by a Lender to Borrower pursuant to
Section 2.01(a).

 

“Revolving Maturity Date” shall mean the fifth anniversary of the Third
Amendment and Restatement Effective Date.

 

“S&P” shall have the meaning assigned to such term in the definition of “Cash
Equivalents” in Section 1.01.

 

“Sarbanes Oxley Act” shall mean the United States Sarbanes Oxley Act of 2002, as
from time to time in effect and all rules and regulations promulgated
thereunder.

 

“Secured Parties” shall mean, collectively, the Administrative Agent, the
Collateral Agent, each other Agent, the Lenders and each party to a Hedging
Agreement relating to the Loans if at the date of entering into such Hedging
Agreement such person was a Lender or an Affiliate of a Lender and such person
executes and delivers to the Administrative Agent a letter agreement in form and
substance acceptable to the Administrative Agent pursuant to which such person
(i) appoints the Collateral Agent as its agent under the applicable Loan
Documents and (ii) agrees to be bound by the provisions of Section 9.03.

 

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

 

“Securities Collateral” shall have the meaning assigned to such term in the
Security Agreement.

 

“Security Agreement” shall mean a Security Agreement substantially in the form
of Exhibit I among the Loan Parties and Collateral Agent for the benefit of the
Secured Parties.

 

“Security Agreement Collateral” shall mean all property pledged or granted as
collateral pursuant to the Security Agreement delivered on the Closing Date or
thereafter pursuant to Section 5.11.

 

“Security Documents” shall mean the Security Agreement, the Mortgages, if any,
the Perfection Certificate and each other security document or pledge agreement
delivered in accordance with applicable local or foreign law to grant a valid,
perfected security interest in any property, and all UCC or other financing
statements or instruments of perfection required by this Agreement, any security
agreement or any Mortgage to be filed with respect to the security interests in
property and fixtures created pursuant to the Security Agreement or any Mortgage
and any other document or instrument utilized to pledge as collateral for the
Obligations any property of whatever kind or nature.

 

“Standby Letter of Credit”  shall mean any standby letter of credit or similar
instrument issued for the purpose of supporting (a) workers’ compensation
liabilities of Borrower or any of its Subsidiaries, (b) the obligations of third
party insurers of Borrower or any of its Subsidiaries arising by virtue of the
laws of any jurisdiction requiring third party insurers to obtain such letters
of credit, or (c) performance, payment, deposit or surety obligations of
Borrower or any of its Subsidiaries if required by law or governmental rule or
regulation or in accordance with custom and practice in the industry.

 

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“Statutory Reserves” shall mean, for any Interest Period for any Eurodollar
Borrowing, the average maximum rate at which reserves (including any marginal,
supplemental or emergency reserves) are required to be maintained during such
Interest Period under Regulation D by member banks of the United States Federal
Reserve System in New York City with deposits exceeding one billion dollars
against “Eurodollar liabilities” (as such term is used in Regulation D). 
Eurodollar Borrowings shall be deemed to constitute Eurodollar liabilities and
to be subject to such reserve requirements without benefit of or credit for
proration, exceptions or offsets which may be available from time to time to any
Lender under Regulation D.

 

“subsidiary” shall mean, with respect to any person (the “parent”) at any date,
(i) any person the accounts of which would be consolidated with those of the
parent in the parent’s consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date, (ii) any other
corporation, limited liability company, association or other business entity of
which securities or other ownership interests representing more than 50% of the
voting power of all Equity Interests entitled (without regard to the occurrence
of any contingency) to vote in the election of the board of directors thereof
are, as of such date, owned, controlled or held by the parent and/or one or more
subsidiaries of the parent, (iii) any partnership (a) the sole general partner
or the managing general partner of which is the parent or a subsidiary of the
parent or (b) the only general partners which are the parent and/or one or more
subsidiaries of the parent and (iv) any other person that is otherwise
Controlled by the parent and/or one or more subsidiaries of the parent.

 

“Subsidiary” shall mean any subsidiary of Borrower.

 

“Subsidiary Guarantor” shall mean each Subsidiary listed on Schedule 1.01(a),
and each other Subsidiary that is or becomes a party to this Agreement pursuant
to Section 5.11, other than a Foreign Subsidiary.

 

“Supermajority Lenders” shall mean at any time, Lenders having Loans, LC
Exposure and unused Revolving and Term B Commitments representing at least 66
2/3% of the sum of all Loans outstanding, LC Exposure and unused Revolving and
Term B Commitments at such time.

 

“Swingline Commitment” shall mean the commitment of the Swingline Lender to make
loans pursuant to Section 2.17, as the same may be reduced from time to time
pursuant to Section 2.07 or Section 2.17.

 

“Swingline Exposure” shall mean at any time the aggregate principal amount at
such time of all outstanding Swingline Loans.  The Swingline Exposure of any
Revolving Lender at any time shall equal its Pro Rata Percentage of the
aggregate Swingline Exposure at such time.

 

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

 

“Swingline Loan” shall mean any loan made by the Swingline Lender pursuant to
Section 2.17.

 

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

 

“Tax Return” shall mean all returns, statements, filings, attachments and other
documents or certifications required to be filed in respect of Taxes.

 

“Tax Sharing Agreements” shall mean all tax sharing, tax allocation and other
similar agreements entered into by Borrower or any subsidiary of Borrower.

 

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“Taxes” shall mean (i) any and all present or future taxes, duties, levies,
imposts, assessments, deductions, withholdings or other similar charges, whether
computed on a separate, consolidated, unitary, combined or other basis and any
and all liabilities (including interest, fines, penalties or additions to tax)
with respect to the foregoing, and (ii) any transferee, successor, joint and
several, contractual or other liability (including, without limitation,
liability pursuant to Treasury Regulation § 1.1502-6 (or any similar provision
of state, local or non U.S. law)) in respect of any item described in clause
(i).

 

“Term B Borrowing” shall mean a Borrowing comprised of Term B Loans.

 

“Term B Commitment” shall mean, with respect to each Lender, the commitment, if
any, of such Lender to make a Term B Loan hereunder on the Third Amendment and
Restatement Effective Date in the amount set forth on Schedule I to the Lender
Addendum executed and delivered by such Lender, or in the Assignment and
Acceptance pursuant to which such Lender shall have assumed its Term B
Commitment, as applicable, as the same may be (a) reduced from time to time
pursuant to Section 2.07 and (b) reduced or increased from time to time pursuant
to assignments by or to such Lender pursuant to Section 11.04.  The aggregate
amount of the Lenders’ Term B Commitments on the Third Amendment and Restatement
Effective Date shall be $90.0 million.

 

“Term B Lender” shall mean a Lender with a Term B Commitment or an outstanding
Term B Loan.  Each Term B Loan shall be either an ABR Term Loan or a Eurodollar
Term B Loan.

 

“Term B Loan” shall mean a term loan made by a Lender to Borrower pursuant to
Section 2.01(b).

 

“Term B Loan Repayment Date” shall have the meaning assigned to such term in
Section 2.09(a).

 

“Term B Loans” shall mean the Term B Loans, collectively.

 

“Term B Maturity Date” shall mean the sixth anniversary of the Third Amendment
and Restatement Effective Date or, if such day is not a Business Day, the
immediately preceding Business Day.

 

“Test Period” shall mean, at any time, the four consecutive fiscal quarters of
Borrower then last ended (in each case taken as one accounting period) for which
financial statements have been or are required to be delivered pursuant to
Section 5.01(a) or (b).

 

“Third Amendment and Restatement Effective Date” shall have the meaning assigned
to such term in Section 4.04.

 

“Transactions” shall mean, collectively, the transactions to occur on or prior
to the Third Amendment and Restatement Effective Date pursuant to the Loan
Documents, including (a) the execution and delivery of the Loan Documents and
the initial borrowings hereunder and (b) the payment of all fees and expenses to
be paid on or prior to the Third Amendment and Restatement Effective Date and
owing in connection with the foregoing.

 

“Type,” when used in reference to any Loan or Borrowing, refers to whether the
rate of interest on such Loan, or on the Loans comprising such Borrowing, is
determined by reference to the Adjusted LIBOR Rate or the Alternate Base Rate.

 

“UCC” shall mean the Uniform Commercial Code as in effect in the applicable
state or jurisdiction.

 

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“Voting Stock” shall mean any class or classes of capital stock of Borrower
pursuant to which the holders thereof have the general voting power under
ordinary circumstances to elect at least a majority of the Board of Directors of
Borrower.

 

“Wholly Owned Subsidiary” shall mean, as to any person, (a) any corporation 100%
of whose capital stock (other than directors’ qualifying shares) is at the time
owned by such person and/or one or more Wholly Owned Subsidiaries of such person
and (b) any partnership, association, joint venture, limited liability company
or other entity in which such person and/or one or more Wholly Owned
Subsidiaries of such person have a 100% equity interest at such time.

 

“Withdrawal Liability” shall mean liability to a Multiemployer Plan as a result
of a complete or partial withdrawal from such Multiemployer Plan, as such terms
are defined in Part I of Subtitle E of Title IV of ERISA.

 

SECTION 1.02.    CLASSIFICATION OF LOANS AND BORROWINGS.  FOR PURPOSES OF THIS
AGREEMENT, LOANS MAY BE CLASSIFIED AND REFERRED TO BY CLASS (E.G., A “REVOLVING
LOAN”) OR BY TYPE (E.G., A “EURODOLLAR LOAN”) OR BY CLASS AND TYPE (E.G., A
“EURODOLLAR REVOLVING LOAN”).  BORROWINGS ALSO MAY BE CLASSIFIED AND REFERRED TO
BY CLASS (E.G., A “REVOLVING BORROWING”, “TERM B BORROWING”) OR BY TYPE (E.G., A
“EURODOLLAR BORROWING”) OR BY CLASS AND TYPE (E.G., A “EURODOLLAR REVOLVING
BORROWING”).

 

SECTION 1.03.    TERMS GENERALLY.  THE DEFINITIONS OF TERMS HEREIN SHALL APPLY
EQUALLY TO THE SINGULAR AND PLURAL FORMS OF THE TERMS DEFINED.  WHENEVER THE
CONTEXT MAY REQUIRE, ANY PRONOUN SHALL INCLUDE THE CORRESPONDING MASCULINE,
FEMININE AND NEUTER FORMS.  THE WORDS “INCLUDE”, “INCLUDES” AND “INCLUDING”
SHALL BE DEEMED TO BE FOLLOWED BY THE PHRASE “WITHOUT LIMITATION”.  THE WORD
“WILL” SHALL BE CONSTRUED TO HAVE THE SAME MEANING AND EFFECT AS THE WORD
“SHALL”.  UNLESS THE CONTEXT REQUIRES OTHERWISE (A) ANY DEFINITION OF OR
REFERENCE TO ANY LOAN DOCUMENT, AGREEMENT, INSTRUMENT OF OTHER DOCUMENT HEREIN
SHALL BE CONSTRUED AS REFERRING TO SUCH AGREEMENT, INSTRUMENT OR OTHER DOCUMENT
AS FROM TIME TO TIME AMENDED, SUPPLEMENTED OR OTHERWISE MODIFIED (SUBJECT TO ANY
RESTRICTIONS ON SUCH AMENDMENTS, SUPPLEMENTS OR MODIFICATIONS SET FORTH HEREIN),
(B) ANY REFERENCE HEREIN TO ANY PERSON SHALL BE CONSTRUED TO INCLUDE SUCH
PERSON’S SUCCESSORS AND ASSIGNS, (C) THE WORDS “HEREIN”, “HEREOF” AND
“HEREUNDER”, AND WORDS OF SIMILAR IMPORT, SHALL BE CONSTRUED TO REFER TO THIS
AGREEMENT IN ITS ENTIRETY AND NOT TO ANY PARTICULAR PROVISION HEREOF, (D) 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, AND (E) THE WORDS “ASSET” AND “PROPERTY” SHALL BE CONSTRUED TO
HAVE THE SAME MEANING AND EFFECT AND TO REFER TO ANY AND ALL TANGIBLE AND
INTANGIBLE ASSETS AND PROPERTIES, INCLUDING CASH, SECURITIES, ACCOUNTS AND
CONTRACT RIGHTS.

 

SECTION 1.04.    ACCOUNTING TERMS; GAAP.  EXCEPT AS OTHERWISE EXPRESSLY PROVIDED
HEREIN, ALL FINANCIAL STATEMENTS TO BE DELIVERED PURSUANT TO THIS AGREEMENT
SHALL BE PREPARED IN ACCORDANCE WITH GAAP AS IN EFFECT FROM TIME TO TIME AND ALL
TERMS OF AN ACCOUNTING OR FINANCIAL NATURE SHALL BE CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH GAAP, AS IN EFFECT ON THE DATE HEREOF UNLESS AGREED TO BY
BORROWER AND THE REQUIRED LENDERS.

 

ARTICLE II

 

THE CREDITS

 

SECTION 2.01.    COMMITMENTS.  SUBJECT TO THE TERMS AND CONDITIONS AND RELYING
UPON THE REPRESENTATIONS AND WARRANTIES HEREIN SET FORTH, EACH LENDER AGREES,
SEVERALLY AND NOT JOINTLY:

 

(a)           to make Revolving Loans to Borrower, at any time and from time to
time on or after the Third Amendment and Restatement Effective Date until the
earlier of the Business Day

 

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preceding the Revolving Maturity Date and the termination of the Commitment of
such Lender in accordance with the terms hereof, in an aggregate principal
amount at any time outstanding that will not result in such Lender’s Revolving
Exposure exceeding such Lender’s Revolving Commitment; and

 

(b)           to make a Term B Loan to Borrower on the Third Amendment and
Restatement Effective Date in a principal amount not to exceed its Term B
Commitment.

 

Amounts paid or prepaid in respect of Term B Loans may not be reborrowed. 
Within the limits set forth in clause (a) above and subject to the terms,
conditions and limitations set forth herein, Borrower may borrow, pay or prepay
and reborrow Revolving Loans.

 

SECTION 2.02.    LOANS.

 

(A)           EACH LOAN (OTHER THAN SWINGLINE LOANS) SHALL BE MADE AS PART OF A
BORROWING CONSISTING OF LOANS MADE BY THE LENDERS RATABLY IN ACCORDANCE WITH
THEIR APPLICABLE COMMITMENTS; PROVIDED THAT THE FAILURE OF ANY LENDER TO MAKE
ANY LOAN SHALL NOT IN ITSELF RELIEVE ANY OTHER LENDER OF ITS OBLIGATION TO LEND
HEREUNDER (IT BEING UNDERSTOOD, HOWEVER, THAT NO LENDER SHALL BE RESPONSIBLE FOR
THE FAILURE OF ANY OTHER LENDER TO MAKE ANY LOAN REQUIRED TO BE MADE BY SUCH
OTHER LENDER).  EXCEPT FOR LOANS DEEMED MADE PURSUANT TO SECTION 2.17, (X) ABR
LOANS COMPRISING ANY BORROWING SHALL BE IN AN AGGREGATE PRINCIPAL AMOUNT THAT IS
(I) AN INTEGRAL MULTIPLE OF $1.0 MILLION AND NOT LESS THAN $1.0 MILLION OR
(II) EQUAL TO THE REMAINING AVAILABLE BALANCE OF THE APPLICABLE COMMITMENTS AND
(Y) THE EURODOLLAR LOANS COMPRISING ANY BORROWING SHALL BE IN AN AGGREGATE
PRINCIPAL AMOUNT THAT IS (I) AN INTEGRAL MULTIPLE OF $1.0 MILLION AND NOT LESS
THAN $1.0 MILLION OR (II) EQUAL TO THE REMAINING AVAILABLE BALANCE OF THE
APPLICABLE COMMITMENTS.

 

(B)           SUBJECT TO SECTIONS 2.11 AND 2.12, EACH BORROWING SHALL BE
COMPRISED ENTIRELY OF ABR LOANS OR EURODOLLAR LOANS AS BORROWER MAY REQUEST
PURSUANT TO SECTION 2.03.  EACH LENDER MAY AT ITS OPTION MAKE ANY EURODOLLAR
LOAN BY CAUSING ANY DOMESTIC OR FOREIGN BRANCH OR AFFILIATE OF SUCH LENDER TO
MAKE SUCH LOAN; PROVIDED THAT ANY EXERCISE OF SUCH OPTION SHALL NOT AFFECT THE
OBLIGATION OF BORROWER TO REPAY SUCH LOAN IN ACCORDANCE WITH THE TERMS OF THIS
AGREEMENT.  BORROWINGS OF MORE THAN ONE TYPE MAY BE OUTSTANDING AT THE SAME
TIME; PROVIDED THAT BORROWER SHALL NOT BE ENTITLED TO REQUEST ANY BORROWING
THAT, IF MADE, WOULD RESULT IN MORE THAN SEVEN EURODOLLAR BORROWINGS OUTSTANDING
HEREUNDER AT ANY ONE TIME.  FOR PURPOSES OF THE FOREGOING, BORROWINGS HAVING
DIFFERENT INTEREST PERIODS, REGARDLESS OF WHETHER THEY COMMENCE ON THE SAME
DATE, SHALL BE CONSIDERED SEPARATE BORROWINGS.

 

(C)           EXCEPT WITH RESPECT TO LOANS MADE PURSUANT TO SECTION 2.17, EACH
LENDER SHALL MAKE EACH LOAN TO BE MADE BY IT HEREUNDER ON THE PROPOSED DATE
THEREOF BY WIRE TRANSFER OF IMMEDIATELY AVAILABLE FUNDS TO SUCH ACCOUNT IN NEW
YORK CITY AS THE ADMINISTRATIVE AGENT MAY DESIGNATE NOT LATER THAN 3:00 P.M.,
NEW YORK CITY TIME, AND THE ADMINISTRATIVE AGENT SHALL PROMPTLY CREDIT THE
AMOUNTS SO RECEIVED TO AN ACCOUNT AS DIRECTED BY BORROWER IN THE APPLICABLE
BORROWING REQUEST MAINTAINED WITH THE ADMINISTRATIVE AGENT OR, IF A BORROWING
SHALL NOT OCCUR ON SUCH DATE BECAUSE ANY CONDITION PRECEDENT HEREIN SPECIFIED
SHALL NOT HAVE BEEN MET, RETURN THE AMOUNTS SO RECEIVED TO THE RESPECTIVE
LENDERS.

 

(D)           UNLESS THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED NOTICE FROM A
LENDER PRIOR TO THE PROPOSED TIME OF ANY BORROWING THAT SUCH LENDER WILL NOT
MAKE AVAILABLE TO THE ADMINISTRATIVE AGENT SUCH LENDER’S PORTION OF SUCH
BORROWING, THE ADMINISTRATIVE AGENT MAY ASSUME THAT SUCH LENDER HAS MADE SUCH
PORTION AVAILABLE TO THE ADMINISTRATIVE AGENT ON THE DATE OF SUCH BORROWING IN
ACCORDANCE WITH PARAGRAPH (C) ABOVE, AND THE ADMINISTRATIVE AGENT MAY, IN
RELIANCE UPON SUCH ASSUMPTION, MAKE AVAILABLE TO BORROWER ON SUCH DATE A
CORRESPONDING AMOUNT.  IF THE ADMINISTRATIVE AGENT SHALL HAVE SO MADE FUNDS
AVAILABLE THEN, TO THE EXTENT THAT SUCH LENDER SHALL NOT HAVE MADE SUCH PORTION
AVAILABLE TO

 

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THE ADMINISTRATIVE AGENT, SUCH LENDER AND BORROWER SEVERALLY AGREE TO REPAY TO
THE ADMINISTRATIVE AGENT FORTHWITH ON DEMAND SUCH CORRESPONDING AMOUNT TOGETHER
WITH INTEREST THEREON, FOR EACH DAY FROM THE DATE SUCH AMOUNT IS MADE AVAILABLE
TO BORROWER UNTIL THE DATE SUCH AMOUNT IS REPAID TO THE ADMINISTRATIVE AGENT AT
(I) IN THE CASE OF BORROWER, THE INTEREST RATE APPLICABLE AT THE TIME TO THE
LOANS COMPRISING SUCH BORROWING AND (II) IN THE CASE OF SUCH LENDER, THE GREATER
OF THE FEDERAL FUNDS EFFECTIVE RATE AND A RATE DETERMINED BY THE ADMINISTRATIVE
AGENT IN ACCORDANCE WITH BANKING INDUSTRY RULES ON INTERBANK COMPENSATION.  IF
SUCH LENDER SHALL REPAY TO THE ADMINISTRATIVE AGENT SUCH CORRESPONDING AMOUNT,
SUCH AMOUNT SHALL CONSTITUTE SUCH LENDER’S LOAN AS PART OF SUCH BORROWING FOR
PURPOSES OF THIS AGREEMENT.

 

(E)           NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, BORROWER
SHALL NOT BE ENTITLED TO REQUEST, OR TO ELECT TO CONVERT OR CONTINUE, ANY
BORROWING IF THE INTEREST PERIOD REQUESTED WITH RESPECT THERETO WOULD END AFTER
THE REVOLVING MATURITY DATE OR THE TERM B MATURITY DATE, AS APPLICABLE.

 

SECTION 2.03.    BORROWING PROCEDURE.  TO REQUEST A REVOLVING BORROWING OR TERM
B BORROWING, BORROWER SHALL DELIVER, BY HAND DELIVERY OR TELECOPY, A DULY
COMPLETED AND EXECUTED BORROWING REQUEST TO THE ADMINISTRATIVE AGENT (I) IN THE
CASE OF A EURODOLLAR BORROWING IN DOLLARS, NOT LATER THAN NOON, NEW YORK CITY
TIME, THREE BUSINESS DAYS BEFORE THE DATE OF THE PROPOSED BORROWING OR (II) IN
THE CASE OF AN ABR BORROWING, NOT LATER THAN 1:00 P.M., NEW YORK CITY TIME, ON
THE DATE OF THE PROPOSED BORROWING.  EACH BORROWING REQUEST SHALL BE IRREVOCABLE
AND SHALL SPECIFY THE FOLLOWING INFORMATION IN COMPLIANCE WITH SECTION 2.02:

 

(a)           whether the requested Borrowing is to be a Revolving Borrowing or
a Term B Borrowing;

 

(b)           the aggregate amount of such Borrowing;

 

(c)           the date of such Borrowing, which shall be a Business Day;

 

(d)           whether such Borrowing is to be an ABR Borrowing or a Eurodollar
Borrowing;

 

(e)           in the case of a Eurodollar Borrowing, the initial Interest Period
to be applicable thereto, which shall be a period contemplated by the definition
of the term “Interest Period”;

 

(f)            the location and number of Borrower’s account to which funds are
to be disbursed, which shall comply with the requirements of Section 2.02; and

 

(g)           that the conditions set forth in Sections 4.02 (b)-(e) are
satisfied as of the date of the notice.

 

If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be an ABR Borrowing.  If no Interest Period is specified with
respect to any requested Eurodollar Borrowing, then Borrower shall be deemed to
have selected an Interest Period of one month’s duration.  Promptly following
receipt of a Borrowing Request in accordance with this Section, the
Administrative Agent shall advise each Lender of the details thereof and of the
amount of such Lender’s Loan to be made as part of the requested Borrowing.

 

SECTION 2.04.    EVIDENCE OF DEBT; REPAYMENT OF LOANS.

 

(A)           BORROWER HEREBY UNCONDITIONALLY PROMISES TO PAY (I) TO THE
ADMINISTRATIVE AGENT FOR THE ACCOUNT OF EACH LENDER HOLDING TERM B LOANS, THE
PRINCIPAL AMOUNT OF EACH TERM B LOAN OF SUCH LENDER AS PROVIDED IN SECTION 2.09,
(II) TO THE ADMINISTRATIVE AGENT FOR THE ACCOUNT OF EACH REVOLVING LENDER,

 

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THE THEN UNPAID PRINCIPAL AMOUNT OF EACH REVOLVING LOAN OF SUCH LENDER ON THE
REVOLVING MATURITY DATE AND (III) TO THE SWINGLINE LENDER THE THEN UNPAID
PRINCIPAL AMOUNT OF EACH SWINGLINE LOAN ON THE EARLIER OF THE REVOLVING MATURITY
DATE AND THE FIRST DATE AFTER SUCH SWINGLINE LOAN IS MADE THAT IS THE 15TH OR
LAST DAY OF A CALENDAR MONTH AND IS AT LEAST TWO BUSINESS DAYS AFTER SUCH
SWINGLINE LOAN IS MADE; PROVIDED THAT ON EACH DATE THAT A REVOLVING BORROWING IS
MADE, BORROWER SHALL REPAY ALL SWINGLINE LOANS THAT WERE OUTSTANDING ON THE DATE
SUCH BORROWING WAS REQUESTED.

 

(B)           EACH LENDER SHALL MAINTAIN IN ACCORDANCE WITH ITS USUAL PRACTICE
AN ACCOUNT OR ACCOUNTS EVIDENCING THE INDEBTEDNESS OF BORROWER TO SUCH LENDER
RESULTING FROM EACH LOAN MADE BY SUCH LENDER FROM TIME TO TIME, INCLUDING THE
AMOUNTS OF PRINCIPAL AND INTEREST PAYABLE AND PAID TO SUCH LENDER FROM TIME TO
TIME UNDER THIS AGREEMENT.

 

(C)           THE ADMINISTRATIVE AGENT SHALL MAINTAIN ACCOUNTS IN WHICH IT WILL
RECORD (I) THE AMOUNT OF EACH LOAN MADE HEREUNDER, THE TYPE AND CLASS THEREOF
AND THE INTEREST PERIOD APPLICABLE THERETO; (II) THE AMOUNT OF ANY PRINCIPAL OR
INTEREST DUE AND PAYABLE OR TO BECOME DUE AND PAYABLE FROM BORROWER TO EACH
LENDER HEREUNDER; AND (III) THE AMOUNT OF ANY SUM RECEIVED BY THE ADMINISTRATIVE
AGENT HEREUNDER FOR THE ACCOUNT OF THE LENDERS AND EACH LENDER’S SHARE THEREOF.

 

(D)           THE ENTRIES MADE IN THE ACCOUNTS MAINTAINED PURSUANT TO PARAGRAPHS
(B) AND (C) ABOVE SHALL BE PRIMA FACIE EVIDENCE OF THE EXISTENCE AND AMOUNTS OF
THE OBLIGATIONS THEREIN RECORDED; PROVIDED THAT THE FAILURE OF ANY LENDER OR THE
ADMINISTRATIVE AGENT TO MAINTAIN SUCH ACCOUNTS OR ANY ERROR THEREIN SHALL NOT IN
ANY MANNER AFFECT THE OBLIGATIONS OF BORROWER TO REPAY THE LOANS IN ACCORDANCE
WITH THEIR TERMS.

 

(E)           ANY LENDER MAY REQUEST THAT LOANS OF ANY CLASS MADE BY IT BE
EVIDENCED BY A PROMISSORY NOTE.  IN SUCH EVENT, BORROWER SHALL PREPARE, EXECUTE
AND DELIVER TO SUCH LENDER A PROMISSORY NOTE PAYABLE TO THE ORDER OF SUCH LENDER
(OR, IF REQUESTED BY SUCH LENDER, TO SUCH LENDER AND ITS REGISTERED ASSIGNS) IN
THE FORM OF EXHIBITS G-1, G-2, G-3, G-4 AND G-5, AS THE CASE MAY BE. 
THEREAFTER, THE LOANS EVIDENCED BY SUCH PROMISSORY NOTE AND INTEREST THEREON
SHALL AT ALL TIMES (INCLUDING AFTER ASSIGNMENT PURSUANT TO SECTION 11.04) BE
REPRESENTED BY ONE OR MORE PROMISSORY NOTES IN SUCH FORM PAYABLE TO THE ORDER OF
THE PAYEE NAMED THEREIN (OR, IF SUCH PROMISSORY NOTE IS A REGISTERED NOTE, TO
SUCH PAYEE AND ITS REGISTERED ASSIGNS).

 

SECTION 2.05.    FEES.

 

(A)           COMMITMENT FEE.  BORROWER SHALL PAY TO THE ADMINISTRATIVE AGENT
FOR THE ACCOUNT OF EACH LENDER A COMMITMENT FEE (A “COMMITMENT FEE”) EQUAL TO
THE APPLICABLE FEE PER ANNUM ON THE AVERAGE DAILY UNUSED AMOUNT OF EACH
COMMITMENT OF SUCH LENDER DURING THE PERIOD FROM AND INCLUDING THE CLOSING DATE
TO BUT EXCLUDING THE DATE ON WHICH SUCH COMMITMENT TERMINATES.  ACCRUED
COMMITMENT FEES SHALL BE PAYABLE IN ARREARS ON THE LAST DAY OF MARCH, JUNE,
SEPTEMBER AND DECEMBER OF EACH YEAR AND ON THE DATE ON WHICH THE REVOLVING
COMMITMENTS TERMINATE, COMMENCING ON THE FIRST SUCH DATE TO OCCUR AFTER THE DATE
HEREOF.  ALL COMMITMENT FEES SHALL BE COMPUTED ON THE BASIS OF A YEAR OF 360
DAYS AND SHALL BE PAYABLE FOR THE ACTUAL NUMBER OF DAYS ELAPSED (INCLUDING THE
FIRST DAY BUT EXCLUDING THE LAST DAY).  FOR PURPOSES OF COMPUTING COMMITMENT
FEES WITH RESPECT TO REVOLVING COMMITMENTS, A REVOLVING COMMITMENT OF A LENDER
SHALL BE DEEMED TO BE USED TO THE EXTENT OF THE OUTSTANDING REVOLVING LOANS AND
LC EXPOSURE OF SUCH LENDER (AND THE SWINGLINE EXPOSURE OF SUCH LENDER SHALL BE
DISREGARDED FOR SUCH PURPOSE).

 

(B)           ADMINISTRATIVE AGENT FEES.  BORROWER SHALL PAY TO THE
ADMINISTRATIVE AGENT, FOR ITS OWN ACCOUNT, THE ADMINISTRATIVE FEES SET FORTH IN
THE FEE LETTER OR SUCH OTHER FEES PAYABLE IN THE AMOUNTS AND AT

 

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THE TIMES SEPARATELY AGREED UPON BETWEEN BORROWER AND THE ADMINISTRATIVE AGENT
(THE “ADMINISTRATIVE AGENT FEES”).

 

(C)           LC AND FRONTING FEES.  BORROWER SHALL PAY (I) TO THE
ADMINISTRATIVE AGENT FOR THE ACCOUNT OF EACH REVOLVING LENDER A PARTICIPATION
FEE (“LC PARTICIPATION FEE”) WITH RESPECT TO ITS PARTICIPATIONS IN LETTERS OF
CREDIT, WHICH SHALL ACCRUE AT A RATE EQUAL TO THE APPLICABLE MARGIN FROM TIME TO
TIME USED TO DETERMINE THE INTEREST RATE ON EURODOLLAR REVOLVING LOANS PURSUANT
TO SECTION 2.06 ON THE AVERAGE DAILY AMOUNT OF SUCH LENDER’S LC EXPOSURE
(EXCLUDING ANY PORTION THEREOF ATTRIBUTABLE TO REIMBURSEMENT OBLIGATIONS) DURING
THE PERIOD FROM AND INCLUDING THE CLOSING DATE TO BUT EXCLUDING THE LATER OF THE
DATE ON WHICH SUCH LENDER’S REVOLVING COMMITMENT TERMINATES AND THE DATE ON
WHICH SUCH LENDER CEASES TO HAVE ANY LC EXPOSURE, AND (II) TO THE ISSUING BANK A
FRONTING FEE (“FRONTING FEE”), WHICH SHALL ACCRUE AT THE RATE OF 0.125% PER
ANNUM ON THE AVERAGE DAILY AMOUNT OF THE LC EXPOSURE (EXCLUDING ANY PORTION
THEREOF ATTRIBUTABLE TO REIMBURSEMENT OBLIGATIONS) DURING THE PERIOD FROM AND
INCLUDING THE CLOSING DATE TO BUT EXCLUDING THE LATER OF THE DATE OF TERMINATION
OF THE REVOLVING COMMITMENTS AND THE DATE ON WHICH THERE CEASES TO BE ANY LC
EXPOSURE, AS WELL AS THE ISSUING BANK’S STANDARD FEES WITH RESPECT TO THE
ISSUANCE, AMENDMENT, RENEWAL OR EXTENSION OF ANY LETTER OF CREDIT OR PROCESSING
OF DRAWINGS THEREUNDER.  LC PARTICIPATION FEES AND FRONTING FEES ACCRUED THROUGH
AND INCLUDING THE LAST DAY OF MARCH, JUNE, SEPTEMBER AND DECEMBER OF EACH YEAR
SHALL BE PAYABLE ON THE THIRD BUSINESS DAY FOLLOWING SUCH LAST DAY, COMMENCING
ON THE FIRST SUCH DATE TO OCCUR AFTER THE CLOSING DATE; PROVIDED THAT ALL SUCH
FEES SHALL BE PAYABLE ON THE DATE ON WHICH THE REVOLVING COMMITMENTS TERMINATE
AND ANY SUCH FEES ACCRUING AFTER THE DATE ON WHICH THE REVOLVING COMMITMENTS
TERMINATE SHALL BE PAYABLE ON DEMAND.  ANY OTHER FEES PAYABLE TO THE ISSUING
BANK PURSUANT TO THIS PARAGRAPH SHALL BE PAYABLE WITHIN 10 DAYS AFTER DEMAND. 
ALL LC PARTICIPATION FEES AND FRONTING FEES SHALL BE COMPUTED ON THE BASIS OF A
YEAR OF 360 DAYS AND SHALL BE PAYABLE FOR THE ACTUAL NUMBER OF DAYS ELAPSED
(INCLUDING THE FIRST DAY BUT EXCLUDING THE LAST DAY).

 

(D)           ALL FEES SHALL BE PAID ON THE DATES DUE, IN IMMEDIATELY AVAILABLE
FUNDS, TO THE ADMINISTRATIVE AGENT FOR DISTRIBUTION, IF AND AS APPROPRIATE,
AMONG THE LENDERS, EXCEPT THAT BORROWER SHALL PAY THE FRONTING FEES DIRECTLY TO
THE ISSUING BANK.  ONCE PAID, NONE OF THE FEES SHALL BE REFUNDABLE UNDER ANY
CIRCUMSTANCES.

 

SECTION 2.06.    INTEREST ON LOANS.

 

(A)           SUBJECT TO THE PROVISIONS OF SECTION 2.06(C), THE LOANS COMPRISING
EACH ABR BORROWING, INCLUDING EACH SWINGLINE LOAN, SHALL BEAR INTEREST AT A RATE
PER ANNUM EQUAL TO THE ALTERNATE BASE RATE PLUS THE APPLICABLE MARGIN IN EFFECT
FROM TIME TO TIME.

 

(B)           SUBJECT TO THE PROVISIONS OF SECTION 2.06(C), THE LOANS COMPRISING
EACH EURODOLLAR BORROWING SHALL BEAR INTEREST AT A RATE PER ANNUM EQUAL TO THE
ADJUSTED LIBOR RATE FOR THE INTEREST PERIOD IN EFFECT FOR SUCH BORROWING PLUS
THE APPLICABLE MARGIN IN EFFECT FROM TIME TO TIME.

 

(C)           NOTWITHSTANDING THE FOREGOING, IF ANY PRINCIPAL OF OR INTEREST ON
ANY LOAN OR ANY FEE OR OTHER AMOUNT PAYABLE BY BORROWER HEREUNDER IS NOT PAID
WHEN DUE, WHETHER AT STATED MATURITY, UPON ACCELERATION OR OTHERWISE, SUCH
OVERDUE AMOUNT SHALL BEAR INTEREST, AFTER AS WELL AS BEFORE JUDGMENT, AT A RATE
PER ANNUM EQUAL TO (I) IN THE CASE OF OVERDUE PRINCIPAL OF ANY LOAN, 2% PLUS THE
RATE OTHERWISE APPLICABLE TO SUCH LOAN AS PROVIDED IN THE PRECEDING PARAGRAPHS
OF THIS SECTION OR (II) IN THE CASE OF ANY OTHER AMOUNT, 2% PLUS THE RATE
APPLICABLE TO ABR REVOLVING LOANS AS PROVIDED IN PARAGRAPH (A) OF THIS
SECTION 2.06.

 

(D)           ACCRUED INTEREST ON EACH LOAN SHALL BE PAYABLE IN ARREARS ON EACH
INTEREST PAYMENT DATE FOR SUCH LOAN AND, IN THE CASE OF REVOLVING LOANS, UPON
TERMINATION OF THE REVOLVING COMMITMENTS;

 

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PROVIDED THAT (I) INTEREST ACCRUED PURSUANT TO PARAGRAPH (C) OF THIS
SECTION SHALL BE PAYABLE ON DEMAND, (II) IN THE EVENT OF ANY REPAYMENT OR
PREPAYMENT OF ANY LOAN (OTHER THAN A PREPAYMENT OF AN ABR REVOLVING LOAN PRIOR
TO THE END OF THE REVOLVING AVAILABILITY PERIOD), ACCRUED INTEREST ON THE
PRINCIPAL AMOUNT REPAID OR PREPAID SHALL BE PAYABLE ON THE DATE OF SUCH
REPAYMENT OR PREPAYMENT AND (III) IN THE EVENT OF ANY CONVERSION OF ANY
EURODOLLAR LOAN PRIOR TO THE END OF THE CURRENT INTEREST PERIOD THEREFOR,
ACCRUED INTEREST ON SUCH LOAN SHALL BE PAYABLE ON THE EFFECTIVE DATE OF SUCH
CONVERSION.

 

(E)           ALL INTEREST HEREUNDER SHALL BE COMPUTED ON THE BASIS OF A YEAR OF
360 DAYS, EXCEPT THAT INTEREST COMPUTED BY REFERENCE TO THE ALTERNATE BASE RATE
SHALL BE COMPUTED ON THE BASIS OF A YEAR OF 365 DAYS (OR 366 DAYS IN A LEAP
YEAR), AND IN EACH CASE SHALL BE PAYABLE FOR THE ACTUAL NUMBER OF DAYS ELAPSED
(INCLUDING THE FIRST DAY BUT EXCLUDING THE LAST DAY).  THE APPLICABLE ALTERNATE
BASE RATE OR ADJUSTED LIBOR RATE SHALL BE DETERMINED BY THE ADMINISTRATIVE AGENT
IN ACCORDANCE WITH THE PROVISIONS OF THIS AGREEMENT AND SUCH DETERMINATION SHALL
BE CONCLUSIVE ABSENT MANIFEST ERROR.

 

SECTION 2.07.    TERMINATION AND REDUCTION OF COMMITMENTS.

 

(A)           THE ORIGINAL TERM B COMMITMENTS TERMINATED ON THE CLOSING DATE. 
THE TERM B COMMITMENTS SHALL AUTOMATICALLY TERMINATE AT 5:00 P.M., NEW YORK CITY
TIME, ON THE THIRD AMENDMENT AND RESTATEMENT EFFECTIVE DATE.  THE ORIGINAL
REVOLVING COMMITMENTS TERMINATED ON THE THIRD AMENDMENT AND RESTATEMENT
EFFECTIVE DATE.  THE REVOLVING COMMITMENTS AND THE SWINGLINE COMMITMENT SHALL
AUTOMATICALLY TERMINATE ON THE REVOLVING MATURITY DATE AND THE LC COMMITMENT
SHALL AUTOMATICALLY TERMINATE ON THE DATE THAT IS FIFTEEN BUSINESS DAYS PRIOR TO
THE REVOLVING MATURITY DATE.

 

(B)           BORROWER MAY AT ANY TIME TERMINATE, OR FROM TIME TO TIME REDUCE,
THE COMMITMENTS OF ANY CLASS; PROVIDED THAT (I) EACH REDUCTION OF THE
COMMITMENTS OF ANY CLASS SHALL BE IN AN AMOUNT THAT IS AN INTEGRAL MULTIPLE OF
$1.0 MILLION AND NOT LESS THAN $1.0 MILLION AND (II) THE REVOLVING COMMITMENTS
SHALL NOT BE TERMINATED OR REDUCED IF, AFTER GIVING EFFECT TO ANY CONCURRENT
PREPAYMENT OF THE REVOLVING LOANS IN ACCORDANCE WITH SECTION 2.10, THE SUM OF
THE REVOLVING EXPOSURES WOULD EXCEED THE AGGREGATE AMOUNT OF REVOLVING
COMMITMENTS.

 

(C)           BORROWER SHALL NOTIFY THE ADMINISTRATIVE AGENT OF ANY ELECTION TO
TERMINATE OR REDUCE THE COMMITMENTS UNDER PARAGRAPH (B) OF THIS SECTION AT LEAST
THREE BUSINESS DAYS PRIOR TO THE EFFECTIVE DATE OF SUCH TERMINATION OR
REDUCTION, SPECIFYING SUCH ELECTION AND THE EFFECTIVE DATE THEREOF.  PROMPTLY
FOLLOWING RECEIPT OF ANY NOTICE, THE ADMINISTRATIVE AGENT SHALL ADVISE THE
LENDERS OF THE CONTENTS THEREOF.  EACH NOTICE DELIVERED BY BORROWER PURSUANT TO
THIS SECTION SHALL BE IRREVOCABLE; PROVIDED THAT A NOTICE OF TERMINATION OF THE
COMMITMENTS DELIVERED BY BORROWER MAY STATE THAT SUCH NOTICE IS CONDITIONED UPON
THE EFFECTIVENESS OF OTHER CREDIT FACILITIES, IN WHICH CASE SUCH NOTICE MAY BE
REVOKED BY BORROWER (BY NOTICE TO THE ADMINISTRATIVE AGENT ON OR PRIOR TO THE
SPECIFIED EFFECTIVE DATE) IF SUCH CONDITION IS NOT SATISFIED.  ANY TERMINATION
OR REDUCTION OF THE COMMITMENTS OF ANY CLASS SHALL BE PERMANENT.  EACH REDUCTION
OF THE COMMITMENTS OF ANY CLASS SHALL BE MADE RATABLY AMONG THE LENDERS IN
ACCORDANCE WITH THEIR RESPECTIVE COMMITMENTS OF SUCH CLASS.

 

SECTION 2.08.    INTEREST ELECTIONS.

 

(A)           EACH REVOLVING BORROWING AND TERM B BORROWING INITIALLY SHALL BE
OF THE TYPE SPECIFIED IN THE APPLICABLE BORROWING REQUEST AND, IN THE CASE OF A
EURODOLLAR BORROWING, SHALL HAVE AN INITIAL INTEREST PERIOD AS SPECIFIED IN SUCH
BORROWING REQUEST.  THEREAFTER, BORROWER MAY ELECT TO CONVERT SUCH BORROWING TO
A DIFFERENT TYPE OR TO CONTINUE SUCH BORROWING AND, IN THE CASE OF A EURODOLLAR
BORROWING, MAY ELECT INTEREST PERIODS THEREFOR, ALL AS PROVIDED IN THIS
SECTION.  BORROWER MAY ELECT DIFFERENT OPTIONS WITH RESPECT TO DIFFERENT
PORTIONS OF THE AFFECTED BORROWING, IN WHICH CASE EACH SUCH PORTION SHALL BE
ALLOCATED RATABLY AMONG THE LENDERS HOLDING THE LOANS COMPRISING SUCH BORROWING,
AND THE LOANS

 

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COMPRISING EACH SUCH PORTION SHALL BE CONSIDERED A SEPARATE BORROWING. 
NOTWITHSTANDING ANYTHING TO THE CONTRARY, BORROWER SHALL NOT BE ENTITLED TO
REQUEST ANY CONVERSION OR CONTINUATION THAT, IF MADE, WOULD RESULT IN MORE THAN
SEVEN EURODOLLAR BORROWINGS OUTSTANDING HEREUNDER AT ANY ONE TIME.  THIS
SECTION SHALL NOT APPLY TO SWINGLINE BORROWINGS, WHICH MAY NOT BE CONVERTED OR
CONTINUED.

 

(B)           TO MAKE AN ELECTION PURSUANT TO THIS SECTION, BORROWER SHALL
NOTIFY THE ADMINISTRATIVE AGENT OF SUCH ELECTION BY TELEPHONE BY THE TIME THAT A
BORROWING REQUEST WOULD BE REQUIRED UNDER SECTION 2.03 IF BORROWER WERE
REQUESTING A REVOLVING BORROWING OF THE TYPE RESULTING FROM SUCH ELECTION TO BE
MADE ON THE EFFECTIVE DATE OF SUCH ELECTION.  EACH SUCH TELEPHONIC INTEREST
ELECTION REQUEST SHALL BE IRREVOCABLE AND SHALL BE CONFIRMED PROMPTLY BY HAND
DELIVERY OR TELECOPY TO THE ADMINISTRATIVE AGENT OF A WRITTEN INTEREST ELECTION
REQUEST.

 

(C)           EACH TELEPHONIC AND WRITTEN INTEREST ELECTION REQUEST SHALL
SPECIFY THE FOLLOWING INFORMATION IN COMPLIANCE WITH SECTION 2.02:

 

(I)            THE BORROWING TO WHICH SUCH INTEREST ELECTION REQUEST APPLIES
AND, IF DIFFERENT OPTIONS ARE BEING ELECTED WITH RESPECT TO DIFFERENT PORTIONS
THEREOF, THE PORTIONS THEREOF TO BE ALLOCATED TO EACH RESULTING BORROWING (IN
WHICH CASE THE INFORMATION TO BE SPECIFIED PURSUANT TO CLAUSES (III) AND
(IV) BELOW SHALL BE SPECIFIED FOR EACH RESULTING BORROWING);

 

(II)           THE EFFECTIVE DATE OF THE ELECTION MADE PURSUANT TO SUCH INTEREST
ELECTION REQUEST, WHICH SHALL BE A BUSINESS DAY;

 

(III)          WHETHER THE RESULTING BORROWING IS TO BE AN ABR BORROWING OR A
EURODOLLAR BORROWING; AND

 

(IV)          IF THE RESULTING BORROWING IS A EURODOLLAR BORROWING, THE INTEREST
PERIOD TO BE APPLICABLE THERETO AFTER GIVING EFFECT TO SUCH ELECTION, WHICH
SHALL BE A PERIOD CONTEMPLATED BY THE DEFINITION OF THE TERM “INTEREST PERIOD”.

 

If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then such Borrower shall be deemed to have
selected an Interest Period of one month’s duration.

 

(D)           PROMPTLY FOLLOWING RECEIPT OF AN INTEREST ELECTION REQUEST, THE
ADMINISTRATIVE AGENT SHALL ADVISE EACH LENDER OF THE DETAILS THEREOF AND OF SUCH
LENDER’S PORTION OF EACH RESULTING BORROWING.

 

(E)           IF AN INTEREST ELECTION REQUEST WITH RESPECT TO A EURODOLLAR
BORROWING IS NOT TIMELY DELIVERED PRIOR TO THE END OF THE INTEREST PERIOD
APPLICABLE THERETO, THEN, UNLESS SUCH BORROWING IS REPAID AS PROVIDED HEREIN, AT
THE END OF SUCH INTEREST PERIOD SUCH BORROWING SHALL BE CONVERTED TO AN ABR
BORROWING.  NOTWITHSTANDING ANY CONTRARY PROVISION HEREOF, IF AN EVENT OF
DEFAULT HAS OCCURRED AND IS CONTINUING AND THE ADMINISTRATIVE AGENT, AT THE
REQUEST OF THE REQUIRED LENDERS, SO NOTIFIES BORROWER, THEN, AFTER THE
OCCURRENCE AND DURING THE CONTINUANCE OF SUCH EVENT OF DEFAULT (I) NO
OUTSTANDING BORROWING MAY BE CONVERTED TO OR CONTINUED AS A EURODOLLAR BORROWING
AND (II) UNLESS REPAID, EACH EURODOLLAR BORROWING SHALL BE CONVERTED TO AN ABR
BORROWING AT THE END OF THE INTEREST PERIOD APPLICABLE THERETO.

 

SECTION 2.09.    AMORTIZATION OF TERM B BORROWINGS.

 

(A)           BORROWER SHALL PAY TO THE ADMINISTRATIVE AGENT, FOR THE ACCOUNT OF
THE LENDERS, ON THE DATES SET FORTH ON ANNEX II, OR IF ANY SUCH DATE IS NOT A
BUSINESS DAY, ON THE NEXT PRECEDING BUSINESS DAY (EACH SUCH DATE BEING A “TERM B
LOAN REPAYMENT DATE”), A PRINCIPAL AMOUNT OF THE TERM B LOANS (AS

 

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ADJUSTED FROM TIME TO TIME PURSUANT TO SECTION 2.10(H)) EQUAL TO THE AMOUNT SET
FORTH ON ANNEX II FOR SUCH DATE, TOGETHER IN EACH CASE WITH ACCRUED AND UNPAID
INTEREST ON THE PRINCIPAL AMOUNT TO BE PAID TO BUT EXCLUDING THE DATE OF SUCH
PAYMENT.

 

(B)           TO THE EXTENT NOT PREVIOUSLY PAID, (I)  ALL TERM B LOANS SHALL BE
DUE AND PAYABLE ON THE TERM B MATURITY DATE.

 

(C)           ANY PREPAYMENT OF A TERM B BORROWING OF ANY CLASS SHALL BE APPLIED
TO REDUCE THE SUBSEQUENT SCHEDULED REPAYMENTS OF THE TERM B BORROWINGS OF SUCH
CLASS TO BE MADE PURSUANT TO THIS SECTION RATABLY.  NOTWITHSTANDING THE
FOREGOING, ANY PREPAYMENT OF EURODOLLAR TERM B BORROWINGS MADE PURSUANT TO
SECTION 2.10 ON A DATE THAT IS (I) THE LAST DAY OF AN INTEREST PERIOD AND
(II) NO MORE THAN FIVE DAYS PRIOR TO A SCHEDULED AMORTIZATION PAYMENT PURSUANT
THIS SECTION 2.09 SHALL BE APPLIED, FIRST, TO REDUCE SUCH SCHEDULED PAYMENT, AND
ANY EXCESS SHALL BE APPLIED AS REQUIRED BY THE PRECEDING SENTENCE.

 

SECTION 2.10.    OPTIONAL AND MANDATORY PREPAYMENTS OF LOANS.

 

(A)           OPTIONAL PREPAYMENTS.  BORROWER SHALL HAVE THE RIGHT AT ANY TIME
AND FROM TIME TO TIME TO PREPAY ANY BORROWING, IN WHOLE OR IN PART, SUBJECT TO
THE REQUIREMENTS OF THIS SECTION; PROVIDED THAT EACH PARTIAL PREPAYMENT SHALL BE
IN AN AMOUNT THAT IS AN INTEGRAL MULTIPLE OF $250,000 AND NOT LESS THAN $1.0
MILLION.

 

(B)           REVOLVING LOAN PREPAYMENTS.

 

(i)            In the event of the termination of all the Revolving Commitments,
Borrower shall, on the date of such termination, repay or prepay all its
outstanding Revolving Borrowings and all outstanding Swingline Loans and replace
all outstanding Letters of Credit and/or deposit an amount equal to the LC
Exposure in the LC Sub Account.

 

(ii)           In the event of any partial reduction of the Revolving
Commitments, then (x) at or prior to the effective date of such reduction, the
Administrative Agent shall notify Borrower and the Revolving Lenders of the sum
of the Revolving Exposures after giving effect thereto and (y) if the sum of the
Revolving Exposures would exceed the aggregate amount of Revolving Commitments
after giving effect to such reduction, then Borrower shall, on the date of such
reduction, first, repay or prepay Swingline Loans, and second, repay or prepay
Revolving Borrowings and third, replace or cash collateralize outstanding
Letters of Credit in accordance with the procedures set forth in
Section 2.18(i), in an amount sufficient to eliminate such excess.

 

(iii)          In the event that the sum of all Lenders’ Revolving Exposures
exceeds the Revolving Commitments then in effect, Borrower shall, without notice
or demand, immediately first, repay or prepay Revolving Borrowings, and second,
replace or cash collateralize outstanding Letters of Credit in accordance with
the procedures set forth in Section 2.18(i).

 

(iv)          In the event that the aggregate LC Exposure exceeds the LC
Commitment then in effect, Borrower shall, without notice or demand, immediately
replace or cash collateralize outstanding Letters of Credit in accordance with
the procedures set forth in Section 2.18(i).

 

(C)           ASSET SALES.  NOT LATER THAN FIVE BUSINESS DAYS FOLLOWING THE
RECEIPT OF ANY NET CASH PROCEEDS OF ANY ASSET SALE, BORROWER OR ANY OF ITS
SUBSIDIARIES SHALL APPLY 100% OF THE NET CASH PROCEEDS RECEIVED WITH RESPECT
THERETO TO MAKE PREPAYMENTS IN ACCORDANCE WITH SECTIONS 2.10(H) AND (I);
PROVIDED THAT:

 

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(I)            NO SUCH PREPAYMENT SHALL BE REQUIRED WITH RESPECT TO (A) ANY
ASSET SALE PERMITTED BY SECTION 6.05(A)(I), (C), (D) OR (G), (B) THE DISPOSITION
OF ASSETS SUBJECT TO A CONDEMNATION OR EMINENT DOMAIN PROCEEDING OR INSURANCE
SETTLEMENT TO THE EXTENT IT DOES NOT CONSTITUTE A CASUALTY EVENT, OR (C) ASSET
SALES FOR FAIR MARKET VALUE RESULTING IN NO MORE THAN $2.0 MILLION IN NET CASH
PROCEEDS PER ASSET SALE (OR SERIES OF RELATED ASSET SALES) AND LESS THAN $7.5
MILLION IN NET CASH PROCEEDS IN ANY FISCAL YEAR, AND IN EACH OF THE CASES OF
(A), (B) AND (C), THE PROCEEDS OF SUCH DISPOSITIONS SHALL NOT BE DEPOSITED IN
THE COLLATERAL ACCOUNT; AND

 

(II)           SO LONG AS NO DEFAULT SHALL THEN EXIST OR WOULD ARISE THEREFROM
AND THE AGGREGATE OF SUCH NET CASH PROCEEDS OF ASSET SALES SHALL NOT EXCEED $7.5
MILLION IN ANY FISCAL YEAR OF BORROWER, SUCH PROCEEDS SHALL NOT BE REQUIRED TO
BE SO APPLIED ON SUCH DATE TO THE EXTENT THAT (A) BORROWER SHALL HAVE DELIVERED
AN OFFICERS’ CERTIFICATE TO THE ADMINISTRATIVE AGENT ON OR PRIOR TO SUCH DATE
STATING THAT SUCH NET CASH PROCEEDS SHALL BE USED TO PURCHASE REPLACEMENT ASSETS
OR ACQUIRE 100% OF THE EQUITY INTERESTS OF ANY PERSON THAT OWNS SUCH ASSETS NO
LATER THAN 180 DAYS FOLLOWING THE DATE OF SUCH ASSET SALE (WHICH OFFICERS’
CERTIFICATE SHALL SET FORTH THE ESTIMATES OF THE PROCEEDS TO BE SO EXPENDED);
AND (B) ALL SUCH NET CASH PROCEEDS IN EXCESS OF $5.0 MILLION IN THE AGGREGATE AT
ANY TIME SHALL BE HELD IN THE COLLATERAL ACCOUNT AND RELEASED THEREFROM ONLY IN
ACCORDANCE WITH THE PROVISIONS OF ARTICLE IX; PROVIDED THAT IF ALL OR ANY
PORTION OF SUCH NET CASH PROCEEDS NOT REQUIRED TO BE APPLIED TO THE PREPAYMENT
OF OUTSTANDING TERM B LOANS SHALL NOT BE UTILIZED TO PURCHASE REPLACEMENT ASSETS
OR ACQUIRE SUCH EQUITY INTERESTS WITHIN SUCH 180 DAY PERIOD, SUCH UNUSED PORTION
SHALL BE APPLIED ON THE LAST DAY OF SUCH PERIOD AS A MANDATORY PREPAYMENT OF
PRINCIPAL OF OUTSTANDING TERM B LOANS AS PROVIDED IN THIS SECTION 2.10(C); AND
PROVIDED, FURTHER, THAT IF THE PROPERTY SUBJECT TO SUCH ASSET SALE CONSTITUTED
COLLATERAL, THEN ALL PROPERTY PURCHASED WITH THE NET CASH PROCEEDS THEREOF
PURSUANT TO THIS SUBSECTION SHALL BE MADE SUBJECT TO THE LIEN OF THE APPLICABLE
SECURITY DOCUMENTS IN FAVOR OF THE COLLATERAL AGENT, FOR ITS BENEFIT AND FOR THE
BENEFIT OF THE OTHER SECURED PARTIES IN ACCORDANCE WITH SECTIONS 5.11 AND 5.12.

 

(D)           DEBT ISSUANCE.  UPON ANY DEBT ISSUANCE AFTER THE CLOSING DATE,
BORROWER SHALL MAKE PREPAYMENTS IN ACCORDANCE WITH SECTIONS 2.10(H) AND (I) IN
AN AGGREGATE PRINCIPAL AMOUNT EQUAL TO 100% OF THE NET CASH PROCEEDS OF SUCH
DEBT ISSUANCE.

 

(E)           EQUITY ISSUANCE.  UPON ANY EQUITY ISSUANCE AFTER THE CLOSING DATE,
BORROWER SHALL MAKE PREPAYMENTS IN ACCORDANCE WITH SECTIONS 2.10(H) AND (I) IN
AN AGGREGATE PRINCIPAL AMOUNT EQUAL TO 50% OF THE NET CASH PROCEEDS OF SUCH
EQUITY ISSUANCE.

 

(F)            CASUALTY EVENTS.  NOT LATER THAN FIVE BUSINESS DAYS FOLLOWING THE
RECEIPT (OR, IF RECEIVED BY THE COLLATERAL AGENT, NOTICE TO BORROWER OF SUCH
RECEIPT) OF ANY NET CASH PROCEEDS FROM A CASUALTY EVENT, BORROWER SHALL APPLY AN
AMOUNT EQUAL TO 100% OF SUCH NET CASH PROCEEDS TO MAKE PREPAYMENTS IN ACCORDANCE
WITH SECTIONS 2.10(H) AND (I); PROVIDED THAT:

 

(I)            SO LONG AS NO DEFAULT SHALL THEN EXIST OR ARISE THEREFROM, SUCH
PROCEEDS SHALL NOT BE REQUIRED TO BE SO APPLIED ON SUCH DATE TO THE EXTENT THAT
(A) IN THE EVENT SUCH NET CASH PROCEEDS SHALL NOT EXCEED $2.5 MILLION, BORROWER
SHALL HAVE DELIVERED AN OFFICERS’ CERTIFICATE TO THE ADMINISTRATIVE AGENT ON OR
PRIOR TO SUCH DATE STATING THAT SUCH PROCEEDS SHALL BE USED; OR (B) IN THE EVENT
THAT SUCH NET CASH PROCEEDS EXCEED $2.5 MILLION, THE ADMINISTRATIVE AGENT HAS
ELECTED BY NOTICE TO BORROWER ON OR PRIOR TO SUCH DATE TO REQUIRE SUCH PROCEEDS
TO BE USED, IN EACH CASE, TO REPAIR, REPLACE OR RESTORE ANY PROPERTY IN RESPECT
OF WHICH SUCH NET CASH PROCEEDS WERE PAID NO LATER THAN 180 DAYS FOLLOWING THE
DATE OF RECEIPT OF SUCH PROCEEDS (WHICH OFFICERS’ CERTIFICATE SHALL SET FORTH
THE ESTIMATES OF THE PROCEEDS TO BE SO EXPENDED); PROVIDED THAT IF THE PROPERTY
SUBJECT TO SUCH CASUALTY EVENT CONSTITUTED COLLATERAL UNDER THE SECURITY
DOCUMENTS, THEN ALL PROPERTY

 

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PURCHASED WITH THE NET CASH PROCEEDS THEREOF PURSUANT TO THIS SUBSECTION SHALL
BE MADE SUBJECT TO THE LIEN OF THE APPLICABLE SECURITY DOCUMENTS IN FAVOR OF THE
COLLATERAL AGENT, FOR ITS BENEFIT AND FOR THE BENEFIT OF THE OTHER SECURED
PARTIES IN ACCORDANCE WITH SECTIONS 5.11 AND 5.12;

 

(II)           ALL SUCH NET CASH PROCEEDS IN EXCESS OF $7.5 MILLION IN THE
AGGREGATE SHALL BE HELD IN THE COLLATERAL ACCOUNT AND RELEASED THEREFROM ONLY IN
ACCORDANCE WITH THE PROVISIONS OF ARTICLE IX;

 

(III)          IF ALL OR ANY PORTION OF SUCH NET CASH PROCEEDS SHALL NOT BE SO
APPLIED WITHIN SUCH 180 DAY PERIOD, SUCH UNUSED PORTION SHALL BE APPLIED ON THE
LAST DAY OF SUCH PERIOD AS A MANDATORY PREPAYMENT OF PRINCIPAL OF OUTSTANDING
TERM B LOANS AS PROVIDED IN THIS SECTION 2.10(F); AND

 

(IV)          IN THE EVENT COLLATERAL AGENT RECEIVES ANY NET CASH PROCEEDS THAT
WOULD OTHERWISE BE FROM A CASUALTY EVENT EXCEPT THAT SUCH PROCEEDS DO NOT EXCEED
$2.5 MILLION, COLLATERAL AGENT WILL PROMPTLY DELIVER SUCH NET CASH PROCEEDS TO
BORROWER.

 

(G)           [INTENTIONALLY OMITTED]

 

(H)           APPLICATION OF PREPAYMENTS.  ANY PREPAYMENTS OF LOANS PURSUANT TO
SECTION 2.10(C), (D), (E) OR (F) SHALL BE APPLIED TO REDUCE SCHEDULED PAYMENTS
OF TERM B LOANS REQUIRED UNDER SECTION 2.09(A) ON A PRO RATA BASIS AMONG THE
PAYMENTS DUE ON EACH TERM B LOAN REPAYMENT DATE BASED ON THE PAYMENTS THEN DUE
ON EACH TERM B LOAN REPAYMENT DATE.  AFTER APPLICATION OF MANDATORY PREPAYMENTS
DESCRIBED ABOVE IN THIS PARAGRAPH (H) AND TO THE EXTENT THERE ARE MANDATORY
PREPAYMENT AMOUNTS REMAINING AFTER SUCH APPLICATION, THE REVOLVING COMMITMENTS
SHALL BE REDUCED RATABLY AMONG THE REVOLVING LENDERS IN ACCORDANCE WITH THEIR
APPLICABLE REVOLVING COMMITMENTS IN AN AGGREGATE AMOUNT EQUAL TO SUCH EXCESS,
AND BORROWER SHALL COMPLY WITH SECTION 2.10(B).

 

Optional prepayments of Term B Loans pursuant to Section 2.10(a) shall be
applied as designated by Borrower.  Other amounts to be applied pursuant to this
Section 2.10 to the prepayment of Term B Loans and Revolving Loans shall be
applied, as applicable, first to reduce outstanding ABR Term Loans and ABR
Revolving Loans, respectively.  Any amounts remaining after each such
application shall be applied to prepay Eurodollar Term B Loans or Eurodollar
Revolving Loans, as applicable.  Notwithstanding the foregoing, if the amount of
any prepayment of Loans required under this Section 2.10 shall be in excess of
the amount of the ABR Loans at the time outstanding, only the portion of the
amount of such prepayment as is equal to the amount of such outstanding ABR
Loans shall be immediately prepaid and, at the election of Borrower, the balance
of such required prepayment shall be either (A) deposited in the Collateral
Account and applied to the prepayment of Eurodollar Loans on the last day of the
then next expiring Interest Period for Eurodollar Loans (with all interest
accruing thereon for the account of Borrower) or (B) prepaid immediately,
together with any amounts owing to the Lenders under Section 2.13. 
Notwithstanding any such deposit in the Collateral Account, interest shall
continue to accrue on such Loans until prepayment.

 

(I)            NOTICE OF PREPAYMENT.  BORROWER SHALL NOTIFY THE ADMINISTRATIVE
AGENT (AND, IN THE CASE OF PREPAYMENT OF A SWINGLINE LOAN, THE SWINGLINE LENDER)
BY TELEPHONE (CONFIRMED BY TELECOPY) OF ANY PREPAYMENT HEREUNDER (I) IN THE CASE
OF PREPAYMENT OF A EURODOLLAR BORROWING, NOT LATER THAN 11:00 A.M., NEW YORK
CITY TIME, THREE BUSINESS DAYS BEFORE THE DATE OF PREPAYMENT, (II) IN THE CASE
OF PREPAYMENT OF AN ABR BORROWING, NOT LATER THAN 11:00 A.M., NEW YORK CITY
TIME, ONE BUSINESS DAY BEFORE THE DATE OF PREPAYMENT OR (III) IN THE CASE OF
PREPAYMENT OF A SWINGLINE LOAN, NOT LATER THAN 11:00 A.M., NEW YORK CITY TIME,
ON THE DATE OF PREPAYMENT.  EACH SUCH NOTICE SHALL BE IRREVOCABLE; PROVIDED
THAT, IF A NOTICE OF PREPAYMENT IS GIVEN IN CONNECTION WITH A CONDITIONAL NOTICE
OF TERMINATION OF THE COMMITMENTS AS

 

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CONTEMPLATED BY SECTION 2.07, THEN SUCH NOTICE OF PREPAYMENT MAY BE REVOKED IF
SUCH TERMINATION IS REVOKED IN ACCORDANCE WITH SECTION 2.07(C).  EACH SUCH
NOTICE SHALL SPECIFY THE PREPAYMENT DATE, THE PRINCIPAL AMOUNT OF EACH BORROWING
OR PORTION THEREOF TO BE PREPAID AND, IN THE CASE OF (A) A MANDATORY PREPAYMENT,
A REASONABLY DETAILED CALCULATION OF THE AMOUNT OF SUCH PREPAYMENT OR (B) AN
OPTIONAL PREPAYMENT OF A TERM B LOAN, REASONABLY DETAILED INSTRUCTIONS
DESIGNATING APPLICATION OF SUCH PREPAYMENT.  PROMPTLY FOLLOWING RECEIPT OF ANY
SUCH NOTICE (OTHER THAN A NOTICE RELATING SOLELY TO SWINGLINE LOANS), THE
ADMINISTRATIVE AGENT SHALL ADVISE THE LENDERS OF THE CONTENTS THEREOF.  EACH
PARTIAL PREPAYMENT OF ANY BORROWING SHALL BE IN AN AMOUNT THAT WOULD BE
PERMITTED IN THE CASE OF AN ADVANCE OF A BORROWING OF THE SAME TYPE AS PROVIDED
IN SECTION 2.02, EXCEPT AS NECESSARY TO APPLY FULLY THE REQUIRED AMOUNT OF A
MANDATORY PREPAYMENT.  EACH PREPAYMENT OF A BORROWING SHALL BE APPLIED RATABLY
TO THE LOANS INCLUDED IN THE PREPAID BORROWING.  PREPAYMENTS SHALL BE
ACCOMPANIED BY ACCRUED INTEREST TO THE EXTENT REQUIRED BY SECTION 2.06.

 

SECTION 2.11.    ALTERNATE RATE OF INTEREST.  IF PRIOR TO THE COMMENCEMENT OF
ANY INTEREST PERIOD FOR A EURODOLLAR BORROWING:

 

(a)           the Administrative Agent determines (which determination shall be
conclusive absent manifest error) that adequate and reasonable means do not
exist for ascertaining the Adjusted LIBOR Rate for such Interest Period; or

 

(b)           the Administrative Agent is advised by the Required Lenders that
the Adjusted LIBOR Rate for such Interest Period will not adequately and fairly
reflect the cost to such Lenders of making or maintaining their Loans included
in such Borrowing for such Interest Period;

 

then the Administrative Agent shall give notice thereof to Borrower and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective
and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such
Borrowing shall be made as an ABR Borrowing.

 

SECTION 2.12.    INCREASED COSTS.

 

(A)           IF ANY CHANGE IN LAW SHALL:

 

(I)            IMPOSE, MODIFY OR DEEM APPLICABLE ANY RESERVE, SPECIAL DEPOSIT OR
SIMILAR REQUIREMENT AGAINST ASSETS OF, DEPOSITS WITH OR FOR THE ACCOUNT OF, OR
CREDIT EXTENDED BY, ANY LENDER (EXCEPT ANY SUCH RESERVE REQUIREMENT REFLECTED IN
THE ADJUSTED LIBOR RATE) OR THE ISSUING BANK; OR

 

(II)           IMPOSE ON ANY LENDER OR THE ISSUING BANK OR THE LONDON INTERBANK
MARKET ANY OTHER CONDITION AFFECTING THIS AGREEMENT OR EURODOLLAR LOANS MADE BY
SUCH LENDER OR ANY LETTER OF CREDIT OR PARTICIPATION THEREIN;

 

and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to increase the cost to such Lender or the
Issuing Bank of participating in, issuing or maintaining any Letter of Credit or
to reduce the amount of any sum received or receivable by such Lender or the
Issuing Bank hereunder (whether of principal, interest or otherwise), then
Borrower will pay to such Lender or the Issuing Bank, as the case may be, such
additional amount or amounts as will compensate such Lender or the Issuing Bank,
as the case may be, for such additional costs incurred or reduction suffered.

 

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(B)           IF ANY LENDER OR THE ISSUING BANK DETERMINES THAT ANY CHANGE IN
LAW REGARDING CAPITAL REQUIREMENTS HAS OR WOULD HAVE THE EFFECT OF REDUCING THE
RATE OF RETURN ON SUCH LENDER’S OR THE ISSUING BANK’S CAPITAL OR ON THE CAPITAL
OF SUCH LENDER’S OR THE ISSUING BANK’S HOLDING COMPANY, IF ANY, AS A CONSEQUENCE
OF THIS AGREEMENT OR THE LOANS MADE BY, OR PARTICIPATIONS IN LETTERS OF CREDIT
HELD BY, SUCH LENDER, OR THE LETTERS OF CREDIT ISSUED BY THE ISSUING BANK, TO A
LEVEL BELOW THAT WHICH SUCH LENDER OR THE ISSUING BANK OR SUCH LENDER’S OR THE
ISSUING BANK’S HOLDING COMPANY COULD HAVE ACHIEVED BUT FOR SUCH CHANGE IN LAW
(TAKING INTO CONSIDERATION SUCH LENDER’S OR THE ISSUING BANK’S POLICIES AND THE
POLICIES OF SUCH LENDER’S OR THE ISSUING BANK’S HOLDING COMPANY WITH RESPECT TO
CAPITAL ADEQUACY), THEN FROM TIME TO TIME BORROWER WILL PAY TO SUCH LENDER OR
THE ISSUING BANK, AS THE CASE MAY BE, SUCH ADDITIONAL AMOUNT OR AMOUNTS AS WILL
COMPENSATE SUCH LENDER OR THE ISSUING BANK OR SUCH LENDER’S OR THE ISSUING
BANK’S HOLDING COMPANY FOR ANY SUCH REDUCTION SUFFERED.

 

(C)           A CERTIFICATE OF A LENDER OR THE ISSUING BANK SETTING FORTH THE
AMOUNT OR AMOUNTS NECESSARY TO COMPENSATE SUCH LENDER OR THE ISSUING BANK OR ITS
HOLDING COMPANY, AS THE CASE MAY BE, AS SPECIFIED IN PARAGRAPH (A) OR (B) OF
THIS SECTION SHALL BE DELIVERED TO BORROWER AND SHALL BE CONCLUSIVE ABSENT
MANIFEST ERROR.  BORROWER SHALL PAY SUCH LENDER OR THE ISSUING BANK, AS THE CASE
MAY BE, THE AMOUNT SHOWN AS DUE ON ANY SUCH CERTIFICATE WITHIN 10 DAYS AFTER
RECEIPT THEREOF.

 

(D)           FAILURE OR DELAY ON THE PART OF ANY LENDER OR THE ISSUING BANK TO
DEMAND COMPENSATION PURSUANT TO THIS SECTION SHALL NOT CONSTITUTE A WAIVER OF
SUCH LENDER’S OR THE ISSUING BANK’S RIGHT TO DEMAND SUCH COMPENSATION; PROVIDED
THAT BORROWER SHALL NOT BE REQUIRED TO COMPENSATE A LENDER OR THE ISSUING BANK
PURSUANT TO THIS SECTION FOR ANY INCREASED COSTS OR REDUCTIONS INCURRED MORE
THAN 180 DAYS PRIOR TO THE DATE THAT SUCH LENDER OR THE ISSUING BANK, AS THE
CASE MAY BE, NOTIFIES BORROWER OF THE CHANGE IN LAW GIVING RISE TO SUCH
INCREASED COSTS OR REDUCTIONS AND OF SUCH LENDER’S OR THE ISSUING BANK’S
INTENTION TO CLAIM COMPENSATION THEREFOR; PROVIDED, FURTHER, THAT, IF THE CHANGE
IN LAW GIVING RISE TO SUCH INCREASED COSTS OR REDUCTIONS IS RETROACTIVE, THEN
THE 180 DAY PERIOD REFERRED TO ABOVE SHALL NOT BEGIN EARLIER THAN THE DATE OF
EFFECTIVENESS OF THE CHANGE IN LAW.

 

SECTION 2.13.    BREAKAGE PAYMENTS.  IN THE EVENT OF (A) THE PAYMENT OR
PREPAYMENT, WHETHER OPTIONAL OR MANDATORY, OF ANY PRINCIPAL OF ANY EURODOLLAR
LOAN OTHER THAN ON THE LAST DAY OF AN INTEREST PERIOD APPLICABLE THERETO
(INCLUDING AS A RESULT OF AN EVENT OF DEFAULT), (B) THE CONVERSION OF ANY
EURODOLLAR LOAN OTHER THAN ON THE LAST DAY OF THE INTEREST PERIOD APPLICABLE
THERETO, (C) THE FAILURE TO BORROW, CONVERT, CONTINUE OR PREPAY ANY REVOLVING
LOAN OR TERM B LOAN ON THE DATE SPECIFIED IN ANY NOTICE DELIVERED PURSUANT
HERETO OR (D) THE ASSIGNMENT OF ANY EURODOLLAR LOAN OTHER THAN ON THE LAST DAY
OF THE INTEREST PERIOD APPLICABLE THERETO AS A RESULT OF A REQUEST BY BORROWER
PURSUANT TO SECTION 2.16, THEN, IN ANY SUCH EVENT, BORROWER SHALL COMPENSATE
EACH LENDER FOR THE LOSS, COST AND EXPENSE ATTRIBUTABLE TO SUCH EVENT.  IN THE
CASE OF A EURODOLLAR LOAN, SUCH LOSS, COST OR EXPENSE TO ANY LENDER SHALL BE
DEEMED TO INCLUDE AN AMOUNT DETERMINED BY SUCH LENDER TO BE THE EXCESS, IF ANY,
OF (I) THE AMOUNT OF INTEREST WHICH WOULD HAVE ACCRUED ON THE PRINCIPAL AMOUNT
OF SUCH LOAN HAD SUCH EVENT NOT OCCURRED, AT THE ADJUSTED LIBOR RATE THAT WOULD
HAVE BEEN APPLICABLE TO SUCH LOAN, FOR THE PERIOD FROM THE DATE OF SUCH EVENT TO
THE LAST DAY OF THE THEN CURRENT INTEREST PERIOD THEREFOR (OR, IN THE CASE OF A
FAILURE TO BORROW, CONVERT OR CONTINUE, FOR THE PERIOD THAT WOULD HAVE BEEN THE
INTEREST PERIOD FOR SUCH LOAN), OVER (II) THE AMOUNT OF INTEREST WHICH WOULD
ACCRUE ON SUCH PRINCIPAL AMOUNT FOR SUCH PERIOD AT THE INTEREST RATE WHICH SUCH
LENDER WOULD BID WERE IT TO BID, AT THE COMMENCEMENT OF SUCH PERIOD, FOR DOLLAR
DEPOSITS OF A COMPARABLE AMOUNT AND PERIOD FROM OTHER BANKS IN THE EURODOLLAR
MARKET.  A CERTIFICATE OF ANY LENDER SETTING FORTH ANY AMOUNT OR AMOUNTS THAT
SUCH LENDER IS ENTITLED TO RECEIVE PURSUANT TO THIS SECTION SHALL BE DELIVERED
TO BORROWER AND SHALL BE CONCLUSIVE ABSENT MANIFEST ERROR.  BORROWER SHALL PAY
SUCH LENDER THE AMOUNT SHOWN AS DUE ON ANY SUCH CERTIFICATE WITHIN 10 DAYS AFTER
RECEIPT THEREOF.

 

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SECTION 2.14.    PAYMENTS GENERALLY; PRO RATA TREATMENT; SHARING OF SETOFFS.

 

(A)           BORROWER SHALL MAKE EACH PAYMENT REQUIRED TO BE MADE BY IT
HEREUNDER OR UNDER ANY OTHER LOAN DOCUMENT (WHETHER OF PRINCIPAL, INTEREST, FEES
OR REIMBURSEMENT OF LC DISBURSEMENTS, OR OF AMOUNTS PAYABLE UNDER SECTION 2.12,
2.13 OR 2.15, OR OTHERWISE) ON OR BEFORE THE TIME EXPRESSLY REQUIRED HEREUNDER
OR UNDER SUCH OTHER LOAN DOCUMENT FOR SUCH PAYMENT (OR, IF NO SUCH TIME IS
EXPRESSLY REQUIRED, PRIOR TO 2:00 P.M., NEW YORK CITY TIME), ON THE DATE WHEN
DUE, IN IMMEDIATELY AVAILABLE FUNDS, WITHOUT SETOFF OR COUNTERCLAIM.  ANY
AMOUNTS RECEIVED AFTER SUCH TIME ON ANY DATE MAY, IN THE DISCRETION OF THE
ADMINISTRATIVE AGENT, BE DEEMED TO HAVE BEEN RECEIVED ON THE NEXT SUCCEEDING
BUSINESS DAY FOR PURPOSES OF CALCULATING INTEREST THEREON.  ALL SUCH PAYMENTS
SHALL BE MADE TO THE ADMINISTRATIVE AGENT AT ITS OFFICES AT 677 WASHINGTON
BOULEVARD, STAMFORD, CONNECTICUT, EXCEPT PAYMENTS TO BE MADE DIRECTLY TO THE
ISSUING BANK OR SWINGLINE LENDER AS EXPRESSLY PROVIDED HEREIN AND EXCEPT THAT
PAYMENTS PURSUANT TO SECTIONS 2.12, 2.13, 2.15 AND 11.03 SHALL BE MADE DIRECTLY
TO THE PERSONS ENTITLED THERETO AND PAYMENTS PURSUANT TO OTHER LOAN DOCUMENTS
SHALL BE MADE TO THE PERSONS SPECIFIED THEREIN.  THE ADMINISTRATIVE AGENT SHALL
DISTRIBUTE ANY SUCH PAYMENTS RECEIVED BY IT FOR THE ACCOUNT OF ANY OTHER PERSON
TO THE APPROPRIATE RECIPIENT PROMPTLY FOLLOWING RECEIPT THEREOF.  IF ANY PAYMENT
UNDER ANY LOAN DOCUMENT SHALL BE DUE ON A DAY THAT IS NOT A BUSINESS DAY, THE
DATE FOR PAYMENT SHALL BE EXTENDED TO THE NEXT SUCCEEDING BUSINESS DAY, AND, IN
THE CASE OF ANY PAYMENT ACCRUING INTEREST, INTEREST THEREON SHALL BE PAYABLE FOR
THE PERIOD OF SUCH EXTENSION.  ALL PAYMENTS UNDER EACH LOAN DOCUMENT SHALL BE
MADE IN DOLLARS.

 

(B)           IF AT ANY TIME INSUFFICIENT FUNDS ARE RECEIVED BY AND AVAILABLE TO
THE ADMINISTRATIVE AGENT TO PAY FULLY ALL AMOUNTS OF PRINCIPAL, REIMBURSEMENT
OBLIGATIONS, INTEREST AND FEES THEN DUE HEREUNDER, SUCH FUNDS SHALL BE APPLIED
(I) FIRST, TOWARDS PAYMENT OF INTEREST AND FEES THEN DUE HEREUNDER, RATABLY
AMONG THE PARTIES ENTITLED THERETO IN ACCORDANCE WITH THE AMOUNTS OF INTEREST
AND FEES THEN DUE TO SUCH PARTIES, AND (II) SECOND, TOWARDS PAYMENT OF PRINCIPAL
AND REIMBURSEMENT OBLIGATIONS THEN DUE HEREUNDER, RATABLY AMONG THE PARTIES
ENTITLED THERETO IN ACCORDANCE WITH THE AMOUNTS OF PRINCIPAL AND REIMBURSEMENT
OBLIGATIONS THEN DUE TO SUCH PARTIES.

 

(C)           IF ANY LENDER SHALL, BY EXERCISING ANY RIGHT OF SETOFF OR
COUNTERCLAIM OR OTHERWISE, OBTAIN PAYMENT IN RESPECT OF ANY PRINCIPAL OF OR
INTEREST ON ANY OF ITS REVOLVING LOANS, TERM B LOANS OR PARTICIPATIONS IN LC
DISBURSEMENTS OR SWINGLINE LOANS RESULTING IN SUCH LENDER RECEIVING PAYMENT OF A
GREATER PROPORTION OF THE AGGREGATE AMOUNT OF ITS REVOLVING LOANS, TERM B LOANS
AND PARTICIPATIONS IN LC DISBURSEMENTS AND SWINGLINE LOANS AND ACCRUED INTEREST
THEREON THAN THE PROPORTION RECEIVED BY ANY OTHER LENDER, THEN THE LENDER
RECEIVING SUCH GREATER PROPORTION SHALL PURCHASE (FOR CASH AT FACE VALUE)
PARTICIPATIONS IN THE REVOLVING LOANS, TERM B LOANS AND PARTICIPATIONS IN LC
DISBURSEMENTS AND SWINGLINE LOANS OF OTHER LENDERS TO THE EXTENT NECESSARY SO
THAT THE BENEFIT OF ALL SUCH PAYMENTS SHALL BE SHARED BY THE LENDERS RATABLY IN
ACCORDANCE WITH THE AGGREGATE AMOUNT OF PRINCIPAL OF AND ACCRUED INTEREST ON
THEIR RESPECTIVE REVOLVING LOANS, TERM B LOANS AND PARTICIPATIONS IN LC
DISBURSEMENTS AND SWINGLINE LOANS; PROVIDED THAT (I) IF ANY SUCH PARTICIPATIONS
ARE PURCHASED AND ALL OR ANY PORTION OF THE PAYMENT GIVING RISE THERETO IS
RECOVERED, SUCH PARTICIPATIONS SHALL BE RESCINDED AND THE PURCHASE PRICE
RESTORED TO THE EXTENT OF SUCH RECOVERY, WITHOUT INTEREST, AND (II) THE
PROVISIONS OF THIS PARAGRAPH SHALL NOT BE CONSTRUED TO APPLY TO ANY PAYMENT MADE
BY BORROWER PURSUANT TO AND IN ACCORDANCE WITH THE EXPRESS TERMS OF THIS
AGREEMENT OR ANY PAYMENT OBTAINED BY A LENDER AS CONSIDERATION FOR THE
ASSIGNMENT OF OR SALE OF A PARTICIPATION IN ANY OF ITS LOANS OR PARTICIPATIONS
IN LC DISBURSEMENTS TO ANY ASSIGNEE OR PARTICIPANT, OTHER THAN TO BORROWER OR
ANY SUBSIDIARY OR AFFILIATE THEREOF (AS TO WHICH THE PROVISIONS OF THIS
PARAGRAPH SHALL APPLY).  BORROWER CONSENTS TO THE FOREGOING AND AGREES, TO THE
EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, THAT ANY LENDER ACQUIRING
A PARTICIPATION PURSUANT TO THE FOREGOING ARRANGEMENTS MAY EXERCISE AGAINST
BORROWER RIGHTS OF SETOFF AND COUNTERCLAIM WITH RESPECT TO SUCH PARTICIPATION AS
FULLY AS IF SUCH LENDER WERE A DIRECT CREDITOR OF BORROWER IN THE AMOUNT OF SUCH
PARTICIPATION.

 

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(D)           UNLESS THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED NOTICE FROM
BORROWER PRIOR TO THE DATE ON WHICH ANY PAYMENT IS DUE TO THE ADMINISTRATIVE
AGENT FOR THE ACCOUNT OF THE LENDERS OR THE ISSUING BANK HEREUNDER THAT BORROWER
WILL NOT MAKE SUCH PAYMENT, THE ADMINISTRATIVE AGENT MAY ASSUME THAT BORROWER
HAS MADE SUCH PAYMENT ON SUCH DATE IN ACCORDANCE HEREWITH AND MAY, IN RELIANCE
UPON SUCH ASSUMPTION, DISTRIBUTE TO THE LENDERS OR THE ISSUING BANK, AS THE CASE
MAY BE, THE AMOUNT DUE.  IN SUCH EVENT, IF BORROWER HAS NOT IN FACT MADE SUCH
PAYMENT, THEN EACH OF THE LENDERS OR THE ISSUING BANK, AS THE CASE MAY BE,
SEVERALLY AGREES TO REPAY TO THE ADMINISTRATIVE AGENT FORTHWITH ON DEMAND THE
AMOUNT SO DISTRIBUTED TO SUCH LENDER OR ISSUING BANK WITH INTEREST THEREON, FOR
EACH DAY FROM AND INCLUDING THE DATE SUCH AMOUNT IS DISTRIBUTED TO IT TO BUT
EXCLUDING THE DATE OF PAYMENT TO THE ADMINISTRATIVE AGENT, AT THE GREATER OF THE
FEDERAL FUNDS EFFECTIVE RATE AND A RATE DETERMINED BY THE ADMINISTRATIVE AGENT
IN ACCORDANCE WITH BANKING INDUSTRY RULES ON INTERBANK COMPENSATION.

 

(E)           IF ANY LENDER SHALL FAIL TO MAKE ANY PAYMENT REQUIRED TO BE MADE
BY IT PURSUANT TO SECTION 2.02(C), 2.14(D), 2.17(D), 2.18(D) OR 11.03(D), THEN
THE ADMINISTRATIVE AGENT MAY, IN ITS DISCRETION (NOTWITHSTANDING ANY CONTRARY
PROVISION HEREOF), APPLY ANY AMOUNTS THEREAFTER RECEIVED BY THE ADMINISTRATIVE
AGENT FOR THE ACCOUNT OF SUCH LENDER TO SATISFY SUCH LENDER’S OBLIGATIONS UNDER
SUCH SECTIONS UNTIL ALL SUCH UNSATISFIED OBLIGATIONS ARE FULLY PAID.

 

SECTION 2.15.    TAXES.

 

(A)           ANY AND ALL PAYMENTS BY OR ON ACCOUNT OF ANY OBLIGATION OF
BORROWER HEREUNDER OR UNDER ANY OTHER LOAN DOCUMENT SHALL BE MADE WITHOUT
SETOFF, COUNTERCLAIM OR OTHER DEFENSE AND FREE AND CLEAR OF AND WITHOUT
DEDUCTION OR WITHHOLDING FOR ANY AND ALL INDEMNIFIED TAXES; PROVIDED THAT IF
BORROWER SHALL BE REQUIRED BY LAW TO DEDUCT ANY INDEMNIFIED TAXES FROM SUCH
PAYMENTS, THEN (I) THE SUM PAYABLE SHALL BE INCREASED AS NECESSARY SO THAT AFTER
MAKING ALL REQUIRED DEDUCTIONS (INCLUDING DEDUCTIONS OR WITHHOLDINGS APPLICABLE
TO ADDITIONAL SUMS PAYABLE UNDER THIS SECTION) THE ADMINISTRATIVE AGENT, LENDER
OR ISSUING BANK (AS THE CASE MAY BE) RECEIVES AN AMOUNT EQUAL TO THE SUM IT
WOULD HAVE RECEIVED HAD NO SUCH DEDUCTIONS OR WITHHOLDINGS BEEN MADE,
(II) BORROWER SHALL MAKE SUCH DEDUCTIONS OR WITHHOLDINGS AND (III) BORROWER
SHALL PAY THE FULL AMOUNT DEDUCTED OR WITHHELD TO THE RELEVANT GOVERNMENTAL
AUTHORITY IN ACCORDANCE WITH APPLICABLE LAW.

 

(B)           IN ADDITION, BORROWER SHALL PAY ANY OTHER TAXES TO THE RELEVANT
GOVERNMENTAL AUTHORITY IN ACCORDANCE WITH APPLICABLE LAW.

 

(C)           BORROWER SHALL INDEMNIFY THE ADMINISTRATIVE AGENT, EACH LENDER AND
THE ISSUING BANK, WITHIN 10 BUSINESS DAYS AFTER WRITTEN DEMAND THEREFOR, FOR THE
FULL AMOUNT OF ANY INDEMNIFIED TAXES OR OTHER TAXES PAID BY THE ADMINISTRATIVE
AGENT, SUCH LENDER OR THE ISSUING BANK, AS THE CASE MAY BE, ON OR WITH RESPECT
TO ANY PAYMENT BY OR ON ACCOUNT OF ANY OBLIGATION OF BORROWER HEREUNDER OR UNDER
ANY OTHER LOAN DOCUMENT (INCLUDING INDEMNIFIED TAXES OR OTHER TAXES IMPOSED OR
ASSERTED ON OR ATTRIBUTABLE TO AMOUNTS PAYABLE UNDER THIS SECTION 2.15) AND ANY
PENALTIES, INTEREST AND REASONABLE EXPENSES ARISING THEREFROM OR WITH RESPECT
THERETO, WHETHER OR NOT SUCH INDEMNIFIED TAXES OR OTHER TAXES WERE CORRECTLY OR
LEGALLY IMPOSED OR ASSERTED BY THE RELEVANT GOVERNMENTAL AUTHORITY.  A
CERTIFICATE AS TO THE AMOUNT OF SUCH PAYMENT OR LIABILITY DELIVERED TO BORROWER
BY A LENDER OR THE ISSUING BANK, OR BY THE ADMINISTRATIVE AGENT ON ITS OWN
BEHALF OR ON BEHALF OF A LENDER OR THE ISSUING BANK, SHALL BE CONCLUSIVE ABSENT
MANIFEST ERROR.

 

(D)           AS SOON AS PRACTICABLE AFTER ANY PAYMENT OF INDEMNIFIED TAXES OR
OTHER TAXES BY BORROWER TO A GOVERNMENTAL AUTHORITY, BORROWER SHALL DELIVER TO
THE ADMINISTRATIVE AGENT THE ORIGINAL OR A CERTIFIED COPY OF A RECEIPT ISSUED BY
SUCH GOVERNMENTAL AUTHORITY EVIDENCING SUCH PAYMENT, A COPY OF THE RETURN
REPORTING SUCH PAYMENT OR OTHER EVIDENCE OF SUCH PAYMENT REASONABLY SATISFACTORY
TO THE ADMINISTRATIVE AGENT.

 

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(E)           ANY FOREIGN LENDER THAT IS ENTITLED TO AN EXEMPTION FROM OR
REDUCTION OF WITHHOLDING TAX UNDER THE LAW OF THE JURISDICTION IN WHICH BORROWER
IS LOCATED, OR ANY TREATY TO WHICH SUCH JURISDICTION IS A PARTY, WITH RESPECT TO
PAYMENTS UNDER THIS AGREEMENT SHALL DELIVER TO BORROWER (WITH A COPY TO THE
ADMINISTRATIVE AGENT), AT THE TIME OR TIMES PRESCRIBED BY APPLICABLE LAW, SUCH
PROPERLY COMPLETED AND EXECUTED DOCUMENTATION PRESCRIBED BY APPLICABLE LAW OR
REASONABLY REQUESTED BY BORROWER AS WILL PERMIT SUCH PAYMENTS TO BE MADE WITHOUT
WITHHOLDING OR AT A REDUCED RATE.  EACH FOREIGN LENDER EITHER (1) (I) AGREES TO
FURNISH EITHER U.S. INTERNAL REVENUE SERVICE FORM W 8ECI OR U.S. INTERNAL
REVENUE SERVICE FORM W 8BEN (OR SUCCESSOR FORM) AND (II) AGREES (FOR THE BENEFIT
OF BORROWER AND THE ADMINISTRATIVE AGENT), TO THE EXTENT IT MAY LAWFULLY DO SO
AT SUCH TIMES, UPON REASONABLE REQUEST BY BORROWER OR THE ADMINISTRATIVE AGENT,
TO PROVIDE A NEW FORM W 8ECI OR FORM W 8BEN (OR SUCCESSOR FORM) UPON THE
EXPIRATION OR OBSOLESCENCE OF ANY PREVIOUSLY DELIVERED FORM TO RECONFIRM ANY
COMPLETE EXEMPTION FROM, OR ANY ENTITLEMENT TO A REDUCTION IN, U.S. FEDERAL
WITHHOLDING TAX WITH RESPECT TO ANY INTEREST PAYMENT HEREUNDER OR (2) IN THE
CASE OF ANY SUCH FOREIGN LENDER THAT IS NOT A “BANK” WITHIN THE MEANING OF
SECTION 881(C)(3)(A) OF THE CODE, (I) AGREES TO FURNISH EITHER (A) A “NON BANK
CERTIFICATE” IN A FORM ACCEPTABLE TO THE ADMINISTRATIVE AGENT AND BORROWER AND
TWO ACCURATE AND COMPLETE ORIGINAL SIGNED COPIES OF INTERNAL REVENUE SERVICE
FORM W 8BEN (OR SUCCESSOR FORM) OR (B) AN INTERNAL REVENUE FORM W 8ECI (OR
SUCCESSOR FORM), CERTIFYING (IN EACH CASE) TO SUCH FOREIGN LENDER’S LEGAL
ENTITLEMENT TO AN EXEMPTION OR REDUCTION FROM U.S. FEDERAL WITHHOLDING TAX WITH
RESPECT TO ALL INTEREST PAYMENTS HEREUNDER AND (II) AGREES (FOR THE BENEFIT OF
BORROWER AND THE ADMINISTRATIVE AGENT) TO THE EXTENT IT MAY LAWFULLY DO SO AT
SUCH TIMES, UPON REASONABLE REQUEST BY BORROWER OR THE ADMINISTRATIVE AGENT, TO
PROVIDE A NEW FORM W 8BEN OR W 8ECI (OR SUCCESSOR FORM) UPON THE EXPIRATION OR
OBSOLESCENCE OF ANY PREVIOUSLY DELIVERED FORM TO RECONFIRM ANY COMPLETE
EXEMPTION FROM, OR ANY ENTITLEMENT TO A REDUCTION IN, U.S. FEDERAL WITHHOLDING
TAX WITH RESPECT TO ANY INTEREST PAYMENT HEREUNDER.

 

(F)            IF THE ADMINISTRATIVE AGENT OR A LENDER (OR AN ASSIGNEE)
DETERMINES IN ITS REASONABLE DISCRETION THAT IT HAS RECEIVED A REFUND OF ANY
INDEMNIFIED TAXES OR OTHER TAXES AS TO WHICH IT HAS BEEN INDEMNIFIED BY BORROWER
OR WITH RESPECT TO WHICH BORROWER HAS PAID ADDITIONAL AMOUNTS PURSUANT TO THIS
SECTION 2.15, IT SHALL PAY OVER SUCH REFUND TO BORROWER (BUT ONLY TO THE EXTENT
OF INDEMNITY PAYMENTS MADE, OR ADDITIONAL AMOUNTS PAID, BY BORROWER UNDER THIS
SECTION 2.15 WITH RESPECT TO THE INDEMNIFIED TAXES OR THE OTHER TAXES GIVING
RISE TO SUCH REFUND), NET OF ALL OUT OF POCKET EXPENSES OF THE ADMINISTRATIVE
AGENT OR SUCH LENDER (OR ASSIGNEE) AND WITHOUT INTEREST (OTHER THAN ANY INTEREST
PAID BY THE RELEVANT GOVERNMENTAL AUTHORITY WITH RESPECT TO SUCH REFUND);
PROVIDED, HOWEVER, THAT BORROWER, UPON THE REQUEST OF THE ADMINISTRATIVE AGENT
OR SUCH LENDER (OR ASSIGNEE), AGREES TO REPAY THE AMOUNT PAID OVER TO BORROWER
(PLUS ANY PENALTIES, INTEREST OR OTHER CHARGES IMPOSED BY THE RELEVANT
GOVERNMENTAL AUTHORITY) TO THE ADMINISTRATIVE AGENT OR SUCH LENDER (OR ASSIGNEE)
IN THE EVENT THE ADMINISTRATIVE AGENT OR SUCH LENDER (OR ASSIGNEE) IS REQUIRED
TO REPAY SUCH REFUND TO SUCH GOVERNMENTAL AUTHORITY.  NOTHING CONTAINED IN THIS
SECTION 2.15(F) SHALL REQUIRE THE ADMINISTRATIVE AGENT OR ANY LENDER (OR
ASSIGNEE) TO MAKE AVAILABLE ITS TAX RETURNS OR ANY OTHER INFORMATION WHICH IT
DEEMS CONFIDENTIAL TO BORROWER OR ANY OTHER PERSON.  NOTWITHSTANDING ANYTHING TO
THE CONTRARY, IN NO EVENT WILL ANY LENDER BE REQUIRED TO PAY ANY AMOUNT TO
BORROWER THE PAYMENT OF WHICH WOULD PLACE SUCH LENDER IN A LESS FAVORABLE NET
AFTER TAX POSITION THAN SUCH LENDER WOULD HAVE BEEN IN HAD THE ADDITIONAL
AMOUNTS GIVING RISE TO SUCH REFUND OF ANY INDEMNIFIED TAXES OR OTHER TAXES NEVER
BEEN PAID IN THE FIRST PLACE.

 

SECTION 2.16.    MITIGATION OBLIGATIONS; REPLACEMENT OF LENDERS.

 

(A)           MITIGATION OF OBLIGATIONS.  IF ANY LENDER REQUESTS COMPENSATION
UNDER SECTION 2.12, OR IF BORROWER IS REQUIRED TO PAY ANY ADDITIONAL AMOUNT TO
ANY LENDER OR ANY GOVERNMENTAL AUTHORITY FOR THE ACCOUNT OF ANY LENDER PURSUANT
TO SECTION 2.15, THEN SUCH LENDER SHALL USE REASONABLE EFFORTS TO DESIGNATE A
DIFFERENT LENDING OFFICE FOR FUNDING OR BOOKING ITS LOANS HEREUNDER OR TO ASSIGN
ITS RIGHTS AND OBLIGATIONS HEREUNDER TO ANOTHER OF ITS OFFICES, BRANCHES OR
AFFILIATES, IF, IN THE REASONABLE JUDGMENT OF SUCH LENDER,

 

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SUCH DESIGNATION OR ASSIGNMENT (I) WOULD ELIMINATE OR REDUCE AMOUNTS PAYABLE
PURSUANT TO SECTION 2.12 OR 2.15, AS THE CASE MAY BE, IN THE FUTURE AND
(II) WOULD NOT SUBJECT SUCH LENDER TO ANY UNREIMBURSED COST OR EXPENSE AND WOULD
NOT OTHERWISE BE DISADVANTAGEOUS TO SUCH LENDER.  BORROWER HEREBY AGREES TO PAY
ALL REASONABLE COSTS AND EXPENSES INCURRED BY ANY LENDER IN CONNECTION WITH ANY
SUCH DESIGNATION OR ASSIGNMENT.

 

(B)           REPLACEMENT OF LENDERS.  IF ANY LENDER REQUESTS COMPENSATION UNDER
SECTION 2.12, OR IF BORROWER IS REQUIRED TO PAY ANY ADDITIONAL AMOUNT TO ANY
LENDER OR ANY GOVERNMENTAL AUTHORITY FOR THE ACCOUNT OF ANY LENDER PURSUANT TO
SECTION 2.15, OR IF ANY LENDER DEFAULTS IN ITS OBLIGATION TO FUND LOANS
HEREUNDER, THEN BORROWER MAY, AT ITS SOLE EXPENSE AND EFFORT, UPON NOTICE TO
SUCH LENDER AND THE ADMINISTRATIVE AGENT, REQUIRE SUCH LENDER TO ASSIGN AND
DELEGATE, WITHOUT RECOURSE (IN ACCORDANCE WITH AND SUBJECT TO THE RESTRICTIONS
CONTAINED IN SECTION 11.04), ALL OF ITS INTERESTS, RIGHTS AND OBLIGATIONS UNDER
THIS AGREEMENT TO AN ASSIGNEE SELECTED BY BORROWER THAT SHALL ASSUME SUCH
OBLIGATIONS (WHICH ASSIGNEE MAY BE ANOTHER LENDER, IF A LENDER ACCEPTS SUCH
ASSIGNMENT); PROVIDED THAT (I) BORROWER SHALL HAVE RECEIVED THE PRIOR WRITTEN
CONSENT OF THE ADMINISTRATIVE AGENT (AND, IF A REVOLVING COMMITMENT IS BEING
ASSIGNED, THE ISSUING BANK AND SWINGLINE LENDER), WHICH CONSENT SHALL NOT
UNREASONABLY BE WITHHELD, (II) SUCH LENDER SHALL HAVE RECEIVED PAYMENT OF AN
AMOUNT EQUAL TO THE OUTSTANDING PRINCIPAL OF ITS LOANS AND PARTICIPATIONS IN LC
DISBURSEMENTS AND SWINGLINE LOANS, ACCRUED INTEREST THEREON, ACCRUED FEES AND
ALL OTHER AMOUNTS PAYABLE TO IT HEREUNDER, FROM THE ASSIGNEE (TO THE EXTENT OF
SUCH OUTSTANDING PRINCIPAL AND ACCRUED INTEREST AND FEES) OR BORROWER (IN THE
CASE OF ALL OTHER AMOUNTS) AND (III) IN THE CASE OF ANY SUCH ASSIGNMENT
RESULTING FROM A CLAIM FOR COMPENSATION UNDER SECTION 2.12 OR PAYMENTS REQUIRED
TO BE MADE PURSUANT TO SECTION 2.15, SUCH ASSIGNMENT WILL RESULT IN A MATERIAL
REDUCTION IN SUCH COMPENSATION OR PAYMENTS.  A LENDER SHALL NOT BE REQUIRED TO
MAKE ANY SUCH ASSIGNMENT AND DELEGATION IF, PRIOR THERETO, AS A RESULT OF A
WAIVER BY SUCH LENDER OR OTHERWISE, THE CIRCUMSTANCES ENTITLING BORROWER TO
REQUIRE SUCH ASSIGNMENT AND DELEGATION CEASE TO APPLY.

 

SECTION 2.17.    SWINGLINE LOANS.

 

(A)           SWINGLINE COMMITMENT.  SUBJECT TO THE TERMS AND CONDITIONS SET
FORTH HEREIN, THE SWINGLINE LENDER AGREES TO MAKE SWINGLINE LOANS TO BORROWER
FROM TIME TO TIME DURING THE REVOLVING AVAILABILITY PERIOD, IN AN AGGREGATE
PRINCIPAL AMOUNT AT ANY TIME OUTSTANDING THAT WILL NOT RESULT IN (I) THE
AGGREGATE PRINCIPAL AMOUNT OF OUTSTANDING SWINGLINE LOANS EXCEEDING $2.5 MILLION
OR (II) THE SUM OF THE TOTAL REVOLVING EXPOSURES EXCEEDING THE TOTAL REVOLVING
COMMITMENTS; PROVIDED THAT THE SWINGLINE LENDER SHALL NOT BE REQUIRED TO MAKE A
SWINGLINE LOAN TO REFINANCE AN OUTSTANDING SWINGLINE LOAN.  WITHIN THE FOREGOING
LIMITS AND SUBJECT TO THE TERMS AND CONDITIONS SET FORTH HEREIN, BORROWER MAY
BORROW, REPAY AND REBORROW SWINGLINE LOANS.

 

(B)           SWINGLINE LOANS.  TO REQUEST A SWINGLINE LOAN, BORROWER SHALL
NOTIFY THE ADMINISTRATIVE AGENT OF SUCH REQUEST BY TELEPHONE (CONFIRMED BY
TELECOPY), NOT LATER THAN 2:00 P.M., NEW YORK CITY TIME, ON THE DAY OF A
PROPOSED SWINGLINE LOAN.  EACH SUCH NOTICE SHALL BE IRREVOCABLE, SHALL SPECIFY
THE REQUESTED DATE (WHICH SHALL BE A BUSINESS DAY) AND AMOUNT OF THE REQUESTED
SWINGLINE LOAN.  THE ADMINISTRATIVE AGENT WILL PROMPTLY ADVISE THE SWINGLINE
LENDER OF ANY SUCH NOTICE RECEIVED FROM BORROWER.  THE SWINGLINE LENDER SHALL
MAKE EACH SWINGLINE LOAN AVAILABLE TO BORROWER BY MEANS OF A CREDIT TO THE
GENERAL DEPOSIT ACCOUNT OF BORROWER WITH THE SWINGLINE LENDER (OR, IN THE CASE
OF A SWINGLINE LOAN MADE TO FINANCE THE REIMBURSEMENT OF AN LC DISBURSEMENT AS
PROVIDED IN SECTION 2.18(E), BY REMITTANCE TO THE ISSUING BANK) BY 3:00 P.M.,
NEW YORK CITY TIME, ON THE REQUESTED DATE OF SUCH SWINGLINE LOAN.  BORROWER
SHALL NOT REQUEST A SWINGLINE LOAN IF AT THE TIME OF AND IMMEDIATELY AFTER
GIVING EFFECT TO SUCH REQUEST A DEFAULT HAS OCCURRED AND IS CONTINUING. 
SWINGLINE LOANS SHALL BE MADE IN MINIMUM AMOUNTS OF $500,000 AND INTEGRAL
MULTIPLES OF $100,000 ABOVE SUCH AMOUNT.

 

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(C)           PREPAYMENT.  BORROWER SHALL HAVE THE RIGHT AT ANY TIME AND FROM
TIME TO TIME TO REPAY ANY SWINGLINE LOAN, IN WHOLE OR IN PART, UPON GIVING
WRITTEN OR TELECOPY NOTICE (OR TELEPHONE NOTICE PROMPTLY CONFIRMED BY WRITTEN,
OR TELECOPY NOTICE) TO THE SWINGLINE LENDER AND TO THE ADMINISTRATIVE AGENT
BEFORE 12:00 (NOON), NEW YORK CITY TIME ON THE DATE OF REPAYMENT AT THE
SWINGLINE LENDER’S ADDRESS FOR NOTICES SPECIFIED IN THE SWINGLINE LENDER’S
ADMINISTRATIVE QUESTIONNAIRE.  ALL PRINCIPAL PAYMENTS OF SWINGLINE LOANS SHALL
BE ACCOMPANIED BY ACCRUED INTEREST ON THE PRINCIPAL AMOUNT BEING REPAID TO THE
DATE OF PAYMENT.

 

(D)           PARTICIPATIONS.  THE SWINGLINE LENDER MAY BY WRITTEN NOTICE GIVEN
TO THE ADMINISTRATIVE AGENT NOT LATER THAN 12:00 NOON, NEW YORK CITY TIME, ON
ANY BUSINESS DAY REQUIRE THE REVOLVING LENDERS TO ACQUIRE PARTICIPATIONS ON SUCH
BUSINESS DAY IN ALL OR A PORTION OF THE SWINGLINE LOANS OUTSTANDING.  SUCH
NOTICE SHALL SPECIFY THE AGGREGATE AMOUNT OF SWINGLINE LOANS IN WHICH REVOLVING
LENDERS WILL PARTICIPATE.  PROMPTLY UPON RECEIPT OF SUCH NOTICE, THE
ADMINISTRATIVE AGENT WILL GIVE NOTICE THEREOF TO EACH REVOLVING LENDER,
SPECIFYING IN SUCH NOTICE SUCH LENDER’S PRO RATA PERCENTAGE OF SUCH SWINGLINE
LOAN OR LOANS.  EACH REVOLVING LENDER HEREBY ABSOLUTELY AND UNCONDITIONALLY
AGREES, UPON RECEIPT OF NOTICE AS PROVIDED ABOVE, TO PAY TO THE ADMINISTRATIVE
AGENT, FOR THE ACCOUNT OF THE SWINGLINE LENDER, SUCH LENDER’S PRO RATA
PERCENTAGE OF SUCH SWINGLINE LOAN OR LOANS.  EACH REVOLVING LENDER ACKNOWLEDGES
AND AGREES THAT ITS OBLIGATION TO ACQUIRE PARTICIPATIONS IN SWINGLINE LOANS
PURSUANT TO THIS PARAGRAPH IS ABSOLUTE AND UNCONDITIONAL AND SHALL NOT BE
AFFECTED BY ANY CIRCUMSTANCE WHATSOEVER, INCLUDING THE OCCURRENCE AND
CONTINUANCE OF A DEFAULT OR REDUCTION OR TERMINATION OF THE COMMITMENTS, AND
THAT EACH SUCH PAYMENT SHALL BE MADE WITHOUT ANY OFFSET, ABATEMENT, WITHHOLDING
OR REDUCTION WHATSOEVER (PROVIDED THAT SUCH PAYMENT SHALL NOT CAUSE SUCH
LENDER’S REVOLVING EXPOSURE TO EXCEED SUCH LENDER’S REVOLVING COMMITMENT).  EACH
REVOLVING LENDER SHALL COMPLY WITH ITS OBLIGATION UNDER THIS PARAGRAPH BY WIRE
TRANSFER OF IMMEDIATELY AVAILABLE FUNDS, IN THE SAME MANNER AS PROVIDED IN
SECTION 2.14 WITH RESPECT TO LOANS MADE BY SUCH LENDER (AND SECTION 2.02 SHALL
APPLY, MUTATIS MUTANDIS, TO THE PAYMENT OBLIGATIONS OF THE REVOLVING LENDERS),
AND THE ADMINISTRATIVE AGENT SHALL PROMPTLY PAY TO THE SWINGLINE LENDER THE
AMOUNTS SO RECEIVED BY IT FROM THE REVOLVING LENDERS.  THE ADMINISTRATIVE AGENT
SHALL NOTIFY BORROWER OF ANY PARTICIPATIONS IN ANY SWINGLINE LOAN ACQUIRED
PURSUANT TO THIS PARAGRAPH, AND THEREAFTER PAYMENTS IN RESPECT OF SUCH SWINGLINE
LOAN SHALL BE MADE TO THE ADMINISTRATIVE AGENT AND NOT TO THE SWINGLINE LENDER. 
ANY AMOUNTS RECEIVED BY THE SWINGLINE LENDER FROM BORROWER (OR OTHER PARTY ON
BEHALF OF BORROWER) IN RESPECT OF A SWINGLINE LOAN AFTER RECEIPT BY THE
SWINGLINE LENDER OF THE PROCEEDS OF A SALE OF PARTICIPATIONS THEREIN SHALL BE
PROMPTLY REMITTED TO THE ADMINISTRATIVE AGENT; ANY SUCH AMOUNTS RECEIVED BY THE
ADMINISTRATIVE AGENT SHALL BE PROMPTLY REMITTED BY THE ADMINISTRATIVE AGENT TO
THE REVOLVING LENDERS THAT SHALL HAVE MADE THEIR PAYMENTS PURSUANT TO THIS
PARAGRAPH AND TO THE SWINGLINE LENDER, AS THEIR INTERESTS MAY APPEAR.  THE
PURCHASE OF PARTICIPATIONS IN A SWINGLINE LOAN PURSUANT TO THIS PARAGRAPH SHALL
NOT RELIEVE BORROWER OF ANY DEFAULT IN THE PAYMENT THEREOF.

 

SECTION 2.18.    LETTERS OF CREDIT.

 

(A)           GENERAL.  SUBJECT TO THE TERMS AND CONDITIONS SET FORTH HEREIN,
BORROWER MAY REQUEST THE ISSUING BANK, AND THE ISSUING BANK AGREES, TO ISSUE
LETTERS OF CREDIT FOR ITS OWN ACCOUNT OR THE ACCOUNT OF A SUBSIDIARY IN A FORM
REASONABLY ACCEPTABLE TO THE ADMINISTRATIVE AGENT AND THE ISSUING BANK, AT ANY
TIME AND FROM TIME TO TIME DURING THE REVOLVING AVAILABILITY PERIOD.  THE
ISSUING BANK SHALL HAVE NO OBLIGATION TO ISSUE, AND BORROWER SHALL NOT REQUEST
THE ISSUANCE OF, ANY LETTER OF CREDIT AT ANY TIME IF AFTER GIVING EFFECT TO SUCH
ISSUANCE, THE LC EXPOSURE WOULD EXCEED THE LC COMMITMENT OR THE TOTAL REVOLVING
EXPOSURE WOULD EXCEED THE TOTAL REVOLVING COMMITMENTS.  IN THE EVENT OF ANY
INCONSISTENCY BETWEEN THE TERMS AND CONDITIONS OF THIS AGREEMENT AND THE TERMS
AND CONDITIONS OF ANY FORM OF LETTER OF CREDIT APPLICATION OR OTHER AGREEMENT
SUBMITTED BY BORROWER TO, OR ENTERED INTO BY BORROWER WITH, THE ISSUING BANK
RELATING TO ANY LETTER OF CREDIT, THE TERMS AND CONDITIONS OF THIS AGREEMENT
SHALL CONTROL.

 

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(B)           REQUEST FOR ISSUANCE, AMENDMENT, RENEWAL, EXTENSION; CERTAIN
CONDITIONS.  TO REQUEST THE ISSUANCE OF A LETTER OF CREDIT OR THE AMENDMENT,
RENEWAL OR EXTENSION OF AN OUTSTANDING LETTER OF CREDIT, BORROWER SHALL HAND
DELIVER OR TELECOPY (OR TRANSMIT BY ELECTRONIC COMMUNICATION, IF ARRANGEMENTS
FOR DOING SO HAVE BEEN APPROVED BY THE ISSUING BANK) AN LC REQUEST TO THE
ISSUING BANK AND THE ADMINISTRATIVE AGENT NOT LATER THAN 11:00 A.M. ON THE THIRD
BUSINESS DAY PRECEDING THE REQUESTED DATE OF ISSUANCE, AMENDMENT, RENEWAL OR
EXTENSION (OR SUCH LATER DATE AND TIME AS IS ACCEPTABLE TO THE ISSUING BANK).

 

A request for an initial issuance of a Letter of Credit shall specify in form
and detail satisfactory to the Issuing Bank:

 

(I)            THE PROPOSED ISSUANCE DATE OF THE REQUESTED LETTER OF CREDIT
(WHICH SHALL BE A BUSINESS DAY);

 

(II)           THE AMOUNT THEREOF;

 

(III)          THE EXPIRY DATE THEREOF (WHICH SHALL NOT BE LATER THAN THE CLOSE
OF BUSINESS 15 DAYS PRIOR TO THE REVOLVING MATURITY DATE);

 

(IV)          THE NAME AND ADDRESS OF THE BENEFICIARY THEREOF;

 

(V)           WHETHER THE LETTER OF CREDIT IS TO BE ISSUED FOR ITS OWN ACCOUNT
OR FOR THE ACCOUNT OF A SUBSIDIARY;

 

(VI)          THE DOCUMENTS TO BE PRESENTED BY SUCH BENEFICIARY IN CONNECTION
WITH ANY DRAWING THEREUNDER;

 

(VII)         THE FULL TEXT OF ANY CERTIFICATE TO BE PRESENTED BY SUCH
BENEFICIARY IN CONNECTION WITH ANY DRAWING THEREUNDER; AND

 

(VIII)        SUCH OTHER MATTERS AS THE ISSUING BANK MAY REASONABLY REQUIRE.

 

A request for an amendment, renewal or extension of any outstanding Letter of
Credit shall specify in form and detail satisfactory to the Issuing Bank:

 

(i)            the Letter of Credit to be amended, renewed or extended;

 

(ii)           the proposed date of amendment, renewal or extension thereof
(which shall be a Business Day);

 

(iii)          the nature of the proposed amendment, renewal or extension; and

 

(iv)          such other matters as the Issuing Bank may reasonably require.

 

If requested by the Issuing Bank, Borrower also shall submit a letter of credit
application on the Issuing Bank’s standard form in connection with any request
for a Letter of Credit.  A Letter of Credit shall be issued, amended, renewed or
extended only if (and upon issuance, amendment, renewal or extension of each
Letter of Credit, Borrower shall be deemed to represent and warrant that), after
giving effect to such issuance, amendment, renewal or extension (i) the LC
Exposure shall not exceed $20.0 million and (ii) the total Revolving Exposures
shall not exceed the total Revolving Commitments.  Unless the Issuing Bank shall
agree otherwise, no Letter of Credit shall be in an initial amount less than
$100,000, in the case of a Commercial Letter of Credit, or $500,000, in the case
of a Standby Letter of Credit.

 

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(C)           EXPIRATION DATE.

 

(i)            Each Letter of Credit shall expire at or prior to the close of
business on the earlier of (x) in the case of a Standby Letter of Credit,
(1) the date which is one year after the date of the issuance of such Standby
Letter of Credit (or, in the case of any renewal or extension thereof, one year
after such renewal or extension) and (2) the Letter of Credit Expiration Date
and (y) in the case of a Commercial Letter of Credit, (1) the date that is 180
days after the date of issuance of such Commercial Letter of Credit (or, in the
case of any renewal or extension thereof, 180 days after such renewal or
extension) and (2) the Letter of Credit Expiration Date.

 

(ii)           If Borrower so requests in any Letter of Credit Request, then the
Issuing Bank may, in its sole and absolute discretion, agree to issue a Letter
of Credit that has automatic renewal provisions (each, an “Auto-Renewal Letter
of Credit”); provided that any such Auto-Renewal Letter of Credit must permit
the Issuing Bank to prevent any such renewal at least once in each twelve-month
period (commencing with the date of issuance of such Letter of Credit) by giving
prior notice to the beneficiary thereof not later than a day in each such
twelve-month period to be agreed upon at the time such Letter of Credit is
issued.  Unless otherwise directed by the Issuing Bank, Borrower shall not be
required to make a specific request to the Issuing Bank for any such renewal. 
Once an Auto-Renewal Letter of Credit has been issued, the Revolving Lenders
shall be deemed to have authorized (but may not require) the Issuing Bank to
permit the renewal of such Letter of Credit at any time to an expiry date not
later than the earlier of (x) one year from the date of such renewal and (y) the
Letter of Credit Expiration Date; provided that the Issuing Bank shall not
permit any such renewal if (1) the Issuing Bank has determined that it would
have no obligation at such time to issue such Letter of Credit in its renewed
form under the terms hereof (by reason of the provisions of Section 2.18 or
otherwise), or (2) it has received notice (which may be by telephone or in
writing) on or before the day that is two Business Days before the date which
has been agreed upon pursuant to the proviso of the first sentence of this
paragraph, (A) from the Administrative Agent that any Revolving Lender directly
affected thereby has elected not to permit such renewal or (B) from the
Administrative Agent, any Lender or Borrower that one or more of the applicable
conditions specified in Section 4.01 is not then satisfied.

 

(D)           PARTICIPATIONS.  BY THE ISSUANCE OF A LETTER OF CREDIT (OR AN
AMENDMENT TO A LETTER OF CREDIT INCREASING THE AMOUNT THEREOF) AND WITHOUT ANY
FURTHER ACTION ON THE PART OF THE ISSUING BANK OR THE LENDERS, THE ISSUING BANK
HEREBY IRREVOCABLY GRANTS TO EACH REVOLVING LENDER, AND EACH REVOLVING LENDER
HEREBY ACQUIRES FROM THE ISSUING BANK, A PARTICIPATION IN SUCH LETTER OF CREDIT
EQUAL TO SUCH LENDER’S PRO RATA PERCENTAGE OF THE AGGREGATE AMOUNT AVAILABLE TO
BE DRAWN UNDER SUCH LETTER OF CREDIT.  IN CONSIDERATION AND IN FURTHERANCE OF
THE FOREGOING, EACH REVOLVING LENDER HEREBY ABSOLUTELY AND UNCONDITIONALLY
AGREES TO PAY TO THE ADMINISTRATIVE AGENT, FOR THE ACCOUNT OF THE ISSUING BANK,
SUCH LENDER’S PRO RATA PERCENTAGE OF EACH LC DISBURSEMENT MADE BY THE ISSUING
BANK AND NOT REIMBURSED BY BORROWER ON THE DATE DUE AS PROVIDED IN PARAGRAPH
(E) OF THIS SECTION, OR OF ANY REIMBURSEMENT PAYMENT REQUIRED TO BE REFUNDED TO
BORROWER FOR ANY REASON.  EACH LENDER ACKNOWLEDGES AND AGREES THAT ITS
OBLIGATION TO ACQUIRE PARTICIPATIONS PURSUANT TO THIS PARAGRAPH IN RESPECT OF
LETTERS OF CREDIT IS ABSOLUTE AND UNCONDITIONAL AND SHALL NOT BE AFFECTED BY ANY
CIRCUMSTANCE WHATSOEVER, INCLUDING ANY AMENDMENT, RENEWAL OR EXTENSION OF ANY
LETTER OF CREDIT OR THE OCCURRENCE AND CONTINUANCE OF A DEFAULT OR REDUCTION OR
TERMINATION OF THE COMMITMENTS, AND THAT EACH SUCH PAYMENT SHALL BE MADE WITHOUT
ANY OFFSET, ABATEMENT, WITHHOLDING OR REDUCTION WHATSOEVER.

 

(E)           REIMBURSEMENT.  IF THE ISSUING BANK SHALL MAKE ANY LC DISBURSEMENT
IN RESPECT OF A LETTER OF CREDIT, BORROWER SHALL REIMBURSE SUCH LC DISBURSEMENT
BY PAYING TO THE ISSUING BANK AN AMOUNT EQUAL TO SUCH LC DISBURSEMENT NOT LATER
THAN 3:00 P.M., NEW YORK CITY TIME, ON THE DATE THAT SUCH LC DISBURSEMENT IS
MADE, IF BORROWER SHALL HAVE RECEIVED NOTICE OF SUCH LC DISBURSEMENT PRIOR TO

 

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11:00 A.M., NEW YORK CITY TIME, ON SUCH DATE, OR, IF SUCH NOTICE HAS NOT BEEN
RECEIVED BY BORROWER PRIOR TO SUCH TIME, ON SUCH DATE, THEN NOT LATER THAN
2:00 P.M., NEW YORK CITY TIME ON THE BUSINESS DAY IMMEDIATELY FOLLOWING THE DAY
THAT BORROWER RECEIVES SUCH NOTICE; PROVIDED THAT BORROWER MAY, SUBJECT TO THE
CONDITIONS TO BORROWING SET FORTH HEREIN, REQUEST IN ACCORDANCE WITH
SECTION 2.03 THAT SUCH PAYMENT BE FINANCED WITH AN ABR REVOLVING BORROWING IN AN
EQUIVALENT AMOUNT AND, TO THE EXTENT SO FINANCED, BORROWER’S OBLIGATION TO MAKE
SUCH PAYMENT SHALL BE DISCHARGED AND REPLACED BY THE RESULTING ABR REVOLVING
BORROWING.

 

If Borrower fails to make such payment when due, the Issuing Bank shall notify
the Administrative Agent and the Administrative Agent shall notify each
Revolving Lender of the applicable LC Disbursement, the payment then due from
Borrower in respect thereof and such Lender’s Pro Rata Percentage thereof.  Each
Revolving Lender shall pay by wire transfer of immediately available funds to
the Administrative Agent on such date (or, if such Revolving Lender shall have
received such notice later than 12:00 noon on any day, not later than 11:00 a.m.
on the immediately following Business Day), an amount equal to such Revolving
Lender’s Pro Rata Percentage of the unreimbursed LC Disbursement in the same
manner as provided in Section 2.02 with respect to Loans made by such Lender,
and the Administrative Agent will promptly pay to the Issuing Bank the amounts
so received by it from the Revolving Lenders.  The Administrative Agent will
promptly pay to the Issuing Bank any amounts received by it from Borrower
pursuant to the above paragraph prior to the time that any Revolving Lender
makes any payment pursuant to the preceding sentence; any such amounts received
by the Administrative Agent thereafter will be promptly remitted by the
Administrative Agent to the Revolving Lenders that shall have made such payments
and to the Issuing Bank, as appropriate.

 

If any Revolving Lender shall not have made its Pro Rata Percentage of such LC
Disbursement available to the Administrative Agent as provided above, each of
such Revolving Lender and Borrower severally agrees to pay interest on such
amount, for each day from including the date such amount is required to be paid
in accordance with the foregoing to but excluding the date such amount is paid,
to the Administrative Agent for the account of the Issuing Bank at (i) in the
case of Borrower, the rate per annum set forth in Section 2.18(h) and (ii) in
the case of such Lender, at a rate determined by the Administrative Agent in
accordance with banking industry rules or practices on interbank compensation.

 

(F)            OBLIGATIONS ABSOLUTE.  THE REIMBURSEMENT OBLIGATION OF BORROWER
AS PROVIDED IN SECTION 2.18(E) SHALL BE ABSOLUTE, UNCONDITIONAL AND IRREVOCABLE,
AND SHALL BE PERFORMED STRICTLY IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT
UNDER ANY AND ALL CIRCUMSTANCES WHATSOEVER AND IRRESPECTIVE OF (I) ANY LACK OF
VALIDITY OR ENFORCEABILITY OF ANY LETTER OF CREDIT OR THIS AGREEMENT, OR ANY
TERM OR PROVISION THEREIN; (II) ANY DRAFT OR OTHER DOCUMENT PRESENTED UNDER A
LETTER OF CREDIT PROVING TO BE FORGED, FRAUDULENT, INVALID OR INSUFFICIENT IN
ANY RESPECT OR ANY STATEMENT THEREIN BEING UNTRUE OR INACCURATE IN ANY RESPECT;
(III) PAYMENT BY THE ISSUING BANK UNDER A LETTER OF CREDIT AGAINST PRESENTATION
OF A DRAFT OR OTHER DOCUMENT THAT DOES NOT SUBSTANTIALLY COMPLY WITH THE TERMS
OF SUCH LETTER OF CREDIT; (IV) ANY OTHER EVENT OR CIRCUMSTANCE WHATSOEVER,
WHETHER OR NOT SIMILAR TO ANY OF THE FOREGOING, THAT MIGHT, BUT FOR THE
PROVISIONS OF THIS SECTION 2.18, CONSTITUTE A LEGAL OR EQUITABLE DISCHARGE OF,
OR PROVIDE A RIGHT OF SETOFF AGAINST, THE OBLIGATIONS OF BORROWER HEREUNDER;
(V) THE FACT THAT A DEFAULT OR EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE
CONTINUING; AND (VI) ANY ADVERSE CHANGE IN THE BUSINESS, ASSETS, PROPERTY,
RESULTS OF OPERATIONS, PROSPECTS OR CONDITION, FINANCIAL OR OTHERWISE, OF
BORROWER AND ITS SUBSIDIARIES.  NONE OF THE AGENTS, THE LENDERS, THE ISSUING
BANK OR ANY OF THEIR AFFILIATES, SHALL HAVE ANY LIABILITY OR RESPONSIBILITY BY
REASON OF OR IN CONNECTION WITH THE ISSUANCE OR TRANSFER OF ANY LETTER OF CREDIT
OR ANY PAYMENT OR FAILURE TO MAKE ANY PAYMENT THEREUNDER (IRRESPECTIVE OF ANY OF
THE CIRCUMSTANCES REFERRED TO IN THE PRECEDING SENTENCE), OR ANY ERROR,
OMISSION, INTERRUPTION, LOSS OR DELAY IN TRANSMISSION OR DELIVERY OF ANY DRAFT,
NOTICE OR OTHER COMMUNICATION UNDER OR RELATING TO ANY LETTER OF CREDIT
(INCLUDING ANY DOCUMENT REQUIRED TO MAKE A DRAWING THEREUNDER), ANY ERROR IN
INTERPRETATION OF TECHNICAL TERMS OR ANY CONSEQUENCE ARISING FROM CAUSES

 

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BEYOND THE CONTROL OF THE ISSUING BANK; PROVIDED THAT THE FOREGOING SHALL NOT BE
CONSTRUED TO EXCUSE THE ISSUING BANK FROM LIABILITY TO BORROWER TO THE EXTENT OF
ANY DIRECT DAMAGES (AS OPPOSED TO CONSEQUENTIAL DAMAGES, CLAIMS IN RESPECT OF
WHICH ARE HEREBY WAIVED BY BORROWER TO THE EXTENT PERMITTED BY APPLICABLE LAW)
SUFFERED BY BORROWER THAT ARE CAUSED BY THE ISSUING BANK’S FAILURE TO EXERCISE
CARE WHEN DETERMINING WHETHER DRAFTS AND OTHER DOCUMENTS PRESENTED UNDER A
LETTER OF CREDIT COMPLY WITH THE TERMS THEREOF.  THE PARTIES HERETO EXPRESSLY
AGREE THAT, IN THE ABSENCE OF GROSS NEGLIGENCE OR WILLFUL MISCONDUCT ON THE PART
OF THE ISSUING BANK (AS FINALLY DETERMINED BY A COURT OF COMPETENT
JURISDICTION), THE ISSUING BANK SHALL BE DEEMED TO HAVE EXERCISED CARE IN EACH
SUCH DETERMINATION.  IN FURTHERANCE OF THE FOREGOING AND WITHOUT LIMITING THE
GENERALITY THEREOF, THE PARTIES AGREE THAT, WITH RESPECT TO DOCUMENTS PRESENTED
WHICH APPEAR ON THEIR FACE TO BE IN SUBSTANTIAL COMPLIANCE WITH THE TERMS OF A
LETTER OF CREDIT, THE ISSUING BANK MAY, IN ITS SOLE DISCRETION, EITHER ACCEPT
AND MAKE PAYMENT UPON SUCH DOCUMENTS WITHOUT RESPONSIBILITY FOR FURTHER
INVESTIGATION, REGARDLESS OF ANY NOTICE OR INFORMATION TO THE CONTRARY, OR
REFUSE TO ACCEPT AND MAKE PAYMENT UPON SUCH DOCUMENTS IF SUCH DOCUMENTS ARE NOT
IN STRICT COMPLIANCE WITH THE TERMS OF SUCH LETTER OF CREDIT.

 

(G)           DISBURSEMENT PROCEDURES.  THE ISSUING BANK SHALL, PROMPTLY
FOLLOWING ITS RECEIPT THEREOF, EXAMINE ALL DOCUMENTS PURPORTING TO REPRESENT A
DEMAND FOR PAYMENT UNDER A LETTER OF CREDIT.  THE ISSUING BANK SHALL PROMPTLY
NOTIFY THE ADMINISTRATIVE AGENT AND BORROWER BY TELEPHONE (CONFIRMED BY
TELECOPY) OF SUCH DEMAND FOR PAYMENT AND WHETHER THE ISSUING BANK HAS MADE OR
WILL MAKE AN LC DISBURSEMENT THEREUNDER; PROVIDED THAT ANY FAILURE TO GIVE OR
DELAY IN GIVING SUCH NOTICE SHALL NOT RELIEVE BORROWER OF ITS REIMBURSEMENT
OBLIGATION TO THE ISSUING BANK AND THE REVOLVING LENDERS WITH RESPECT TO ANY
SUCH LC DISBURSEMENT (OTHER THAN WITH RESPECT TO THE TIMING OF SUCH
REIMBURSEMENT OBLIGATION SET FORTH IN SECTION 2.18(E)).

 

(H)           INTERIM INTEREST.  IF THE ISSUING BANK SHALL MAKE ANY LC
DISBURSEMENT, THEN, UNLESS BORROWER SHALL REIMBURSE SUCH LC DISBURSEMENT IN FULL
ON THE DATE SUCH LC DISBURSEMENT IS MADE, THE UNPAID AMOUNT THEREOF SHALL BEAR
INTEREST PAYABLE ON DEMAND, FOR EACH DAY FROM AND INCLUDING THE DATE SUCH LC
DISBURSEMENT IS MADE TO BUT EXCLUDING THE DATE THAT BORROWER REIMBURSES SUCH LC
DISBURSEMENT, AT THE RATE PER ANNUM SET FORTH IN SECTION 2.06(C).  INTEREST
ACCRUED PURSUANT TO THIS PARAGRAPH SHALL BE FOR THE ACCOUNT OF THE ISSUING BANK,
EXCEPT THAT INTEREST ACCRUED ON AND AFTER THE DATE OF PAYMENT BY ANY REVOLVING
LENDER PURSUANT TO PARAGRAPH (E) OF THIS SECTION TO REIMBURSE THE ISSUING BANK
SHALL BE FOR THE ACCOUNT OF SUCH LENDER TO THE EXTENT OF SUCH PAYMENT.

 

(I)            CASH COLLATERALIZATION.  IF ANY EVENT OF DEFAULT SHALL OCCUR AND
BE CONTINUING, ON THE BUSINESS DAY THAT BORROWER RECEIVES NOTICE FROM THE
ADMINISTRATIVE AGENT OR THE REQUIRED LENDERS (OR, IF THE MATURITY OF THE LOANS
HAS BEEN ACCELERATED, REVOLVING LENDERS WITH LC EXPOSURE REPRESENTING GREATER
THAN 50% OF THE TOTAL LC EXPOSURE) DEMANDING THE DEPOSIT OF CASH COLLATERAL
PURSUANT TO THIS PARAGRAPH, BORROWER SHALL DEPOSIT IN THE LC SUB ACCOUNT, IN THE
NAME OF THE COLLATERAL AGENT AND FOR THE BENEFIT OF THE LENDERS, AN AMOUNT IN
CASH EQUAL TO THE LC EXPOSURE AS OF SUCH DATE PLUS ANY ACCRUED AND UNPAID
INTEREST THEREON; PROVIDED THAT THE OBLIGATION TO DEPOSIT SUCH CASH COLLATERAL
SHALL BECOME EFFECTIVE IMMEDIATELY, AND SUCH DEPOSIT SHALL BECOME IMMEDIATELY
DUE AND PAYABLE, WITHOUT DEMAND OR OTHER NOTICE OF ANY KIND, UPON THE OCCURRENCE
OF ANY EVENT OF DEFAULT WITH RESPECT TO BORROWER DESCRIBED IN CLAUSE (G) OR
(H) OF ARTICLE VIII.  EACH SUCH DEPOSIT SHALL BE HELD BY THE COLLATERAL AGENT AS
COLLATERAL FOR THE PAYMENT AND PERFORMANCE OF THE OBLIGATIONS OF BORROWER UNDER
THIS AGREEMENT.  THE COLLATERAL AGENT SHALL HAVE EXCLUSIVE DOMINION AND CONTROL,
INCLUDING THE EXCLUSIVE RIGHT OF WITHDRAWAL, OVER SUCH ACCOUNT.  OTHER THAN ANY
INTEREST EARNED ON THE INVESTMENT OF SUCH DEPOSITS, WHICH INVESTMENTS SHALL BE
MADE AT THE OPTION AND SOLE DISCRETION OF THE COLLATERAL AGENT AND AT THE RISK
AND EXPENSE OF BORROWER, SUCH DEPOSITS SHALL NOT BEAR INTEREST.  INTEREST OR
PROFITS, IF ANY, ON SUCH INVESTMENTS SHALL ACCUMULATE IN SUCH ACCOUNT.  MONEYS
IN SUCH ACCOUNT SHALL BE APPLIED BY THE COLLATERAL AGENT TO REIMBURSE THE
ISSUING BANK FOR LC DISBURSEMENTS FOR WHICH IT HAS NOT BEEN REIMBURSED AND, TO
THE EXTENT NOT SO APPLIED, SHALL

 

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BE HELD FOR THE SATISFACTION OF THE REIMBURSEMENT OBLIGATIONS OF BORROWER FOR
THE LC EXPOSURE AT SUCH TIME OR, IF THE MATURITY OF THE LOANS HAS BEEN
ACCELERATED (BUT SUBJECT TO THE CONSENT OF REVOLVING LENDERS WITH LC EXPOSURE
REPRESENTING GREATER THAN TWO THIRDS OF THE TOTAL LC EXPOSURE), BE APPLIED TO
SATISFY OTHER OBLIGATIONS OF BORROWER UNDER THIS AGREEMENT.  IF BORROWER IS
REQUIRED TO PROVIDE AN AMOUNT OF CASH COLLATERAL HEREUNDER AS A RESULT OF THE
OCCURRENCE OF AN EVENT OF DEFAULT, SUCH AMOUNT PLUS ANY ACCRUED INTEREST OR
REALIZED PROFITS ON SUCH AMOUNTS (TO THE EXTENT NOT APPLIED AS AFORESAID) SHALL
BE RETURNED TO BORROWER WITHIN THREE BUSINESS DAYS AFTER ALL EVENTS OF DEFAULT
HAVE BEEN CURED OR WAIVED.  IF BORROWER IS REQUIRED TO PROVIDE AN AMOUNT OF SUCH
COLLATERAL HEREUNDER PURSUANT TO SECTION 2.10(B), SUCH AMOUNT PLUS ANY ACCRUED
INTEREST OR REALIZED PROFITS ON ACCOUNT OF SUCH AMOUNT (TO THE EXTENT NOT
APPLIED AS AFORESAID) SHALL BE RETURNED TO BORROWER AS AND TO THE EXTENT THAT,
AFTER GIVING EFFECT TO SUCH RETURN, BORROWER WOULD REMAIN IN COMPLIANCE WITH
SECTION 2.10(B) AND NO DEFAULT OR EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE
CONTINUING.

 

(J)            RESIGNATION OR REMOVAL OF THE ISSUING BANK.  THE ISSUING BANK MAY
RESIGN AS ISSUING BANK HEREUNDER AT ANY TIME UPON AT LEAST 30 DAYS’ PRIOR NOTICE
TO THE LENDERS, THE ADMINISTRATIVE AGENT AND BORROWER.  THE ISSUING BANK MAY BE
REPLACED AT ANY TIME BY WRITTEN AGREEMENT AMONG BORROWER, EACH AGENT, THE
REPLACED ISSUING BANK AND THE SUCCESSOR ISSUING BANK.  THE ADMINISTRATIVE AGENT
SHALL NOTIFY THE LENDERS OF ANY SUCH REPLACEMENT OF THE ISSUING BANK OR ANY SUCH
ADDITIONAL ISSUING BANK.  AT THE TIME ANY SUCH RESIGNATION OR REPLACEMENT SHALL
BECOME EFFECTIVE, BORROWER SHALL PAY ALL UNPAID FEES ACCRUED FOR THE ACCOUNT OF
THE REPLACED ISSUING BANK PURSUANT TO SECTION 2.05(C).  FROM AND AFTER THE
EFFECTIVE DATE OF ANY SUCH RESIGNATION OR REPLACEMENT OR ADDITION, AS
APPLICABLE, (I) THE SUCCESSOR OR ADDITIONAL ISSUING BANK SHALL HAVE ALL THE
RIGHTS AND OBLIGATIONS OF THE ISSUING BANK UNDER THIS AGREEMENT WITH RESPECT TO
LETTERS OF CREDIT TO BE ISSUED THEREAFTER AND (II) REFERENCES HEREIN TO THE TERM
“ISSUING BANK” SHALL BE DEEMED TO REFER TO SUCH SUCCESSOR OR SUCH ADDITIONAL OR
ANY PREVIOUS ISSUING BANK, OR TO SUCH SUCCESSOR OR SUCH ADDITIONAL AND ALL
PREVIOUS ISSUING BANKS, AS THE CONTEXT SHALL REQUIRE.  AFTER THE RESIGNATION OR
REPLACEMENT OF AN ISSUING BANK HEREUNDER, THE REPLACED ISSUING BANK SHALL REMAIN
A PARTY HERETO AND SHALL CONTINUE TO HAVE ALL THE RIGHTS AND OBLIGATIONS OF AN
ISSUING BANK UNDER THIS AGREEMENT WITH RESPECT TO LETTERS OF CREDIT ISSUED BY IT
PRIOR TO SUCH RESIGNATION OR REPLACEMENT, BUT SHALL NOT BE REQUIRED TO ISSUE
ADDITIONAL LETTERS OF CREDIT.  IF AT ANY TIME THERE IS MORE THAN ONE ISSUING
BANK HEREUNDER, BORROWER MAY, IN ITS DISCRETION, SELECT WHICH ISSUING BANK IS TO
ISSUE ANY PARTICULAR LETTER OF CREDIT.

 

(K)           ADDITIONAL ISSUING BANKS.  BORROWER MAY, AT ANY TIME AND FROM TIME
TO TIME WITH THE CONSENT OF THE ADMINISTRATIVE AGENT (WHICH CONSENT SHALL NOT BE
UNREASONABLY WITHHELD) AND SUCH LENDER, DESIGNATE ONE OR MORE ADDITIONAL LENDERS
TO ACT AS AN ISSUING BANK UNDER THE TERMS OF THIS AGREEMENT, WITH THE CONSENT OF
THE ADMINISTRATIVE AGENT (WHICH CONSENT SHALL NOT BE UNREASONABLE WITHHELD), THE
ISSUING BANK AND SUCH REVOLVING LENDER.  ANY LENDER DESIGNATED AS AN ISSUING
BANK PURSUANT TO THIS PARAGRAPH (K) SHALL BE DEEMED (IN ADDITION TO BEING A
LENDER) TO BE THE ISSUING BANK WITH RESPECT TO LETTERS OF CREDIT ISSUED OR TO BE
ISSUED BY SUCH LENDER, AND ALL REFERENCES HEREIN AND IN THE OTHER LOAN DOCUMENTS
TO THE TERM “ISSUING BANK” SHALL, WITH RESPECT TO SUCH LETTERS OF CREDIT, BE
DEEMED TO REFER TO SUCH LENDER IN ITS CAPACITY AS ISSUING BANK, AS THE CONTEXT
SHALL REQUIRE.

 

The Issuing Bank shall be under no obligation to issue any Letter of Credit if:

 

(I)            ANY ORDER, JUDGMENT OR DECREE OF ANY GOVERNMENTAL AUTHORITY OR
ARBITRATOR SHALL BY ITS TERMS PURPORT TO ENJOIN OR RESTRAIN THE ISSUING BANK
FROM ISSUING SUCH LETTER OF CREDIT, OR ANY LAW APPLICABLE TO THE ISSUING BANK OR
ANY REQUEST OR DIRECTIVE (WHETHER OR NOT HAVING THE FORCE OF LAW) FROM ANY
GOVERNMENTAL AUTHORITY WITH JURISDICTION OVER THE ISSUING BANK SHALL PROHIBIT,
OR REQUEST THAT THE ISSUING BANK REFRAIN FROM, THE ISSUANCE OF LETTERS OF CREDIT
GENERALLY OR SUCH LETTER OF CREDIT IN PARTICULAR OR SHALL IMPOSE UPON THE
ISSUING BANK WITH RESPECT TO SUCH LETTER OF CREDIT ANY RESTRICTION, RESERVE OR
CAPITAL REQUIREMENT (FOR WHICH THE ISSUING BANK IS NOT

 

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OTHERWISE COMPENSATED HEREUNDER) NOT IN EFFECT ON THE CLOSING DATE, OR SHALL
IMPOSE UPON THE ISSUING BANK ANY UNREIMBURSED LOSS, COST OR EXPENSE WHICH WAS
NOT APPLICABLE ON THE CLOSING DATE AND WHICH THE ISSUING BANK IN GOOD FAITH
DEEMS MATERIAL TO IT; OR

 

(II)           THE ISSUANCE OF SUCH LETTER OF CREDIT WOULD VIOLATE ONE OR MORE
POLICIES OF THE ISSUING BANK.

 

The Issuing Bank shall be under no obligation to amend any Letter of Credit if
(A) the Issuing Bank would have no obligation at such time to issue such Letter
of Credit in its amended form under the terms hereof, or (B) the beneficiary of
such Letter of Credit does not accept the proposed amendment to such Letter of
Credit.

 

SECTION 2.19.    [INTENTIONALLY OMITTED].

 

SECTION 2.20.    [INTENTIONALLY OMITTED].

 

SECTION 2.21.    [INTENTIONALLY OMITTED].

 

SECTION 2.22.    INCREASE IN COMMITMENTS.

 

(A)           AT ANY TIME, BORROWER MAY BY WRITTEN NOTICE TO THE ADMINISTRATIVE
AGENT AND WITHOUT THE CONSENT OF THE OTHER LENDERS HEREUNDER REQUEST AN INCREASE
TO THE EXISTING REVOLVING COMMITMENTS (ANY SUCH INCREASE, AN “INCREMENTAL
REVOLVING COMMITMENT”) OR COMMITMENTS TO MAKE ADDITIONAL TERM B LOANS (ANY SUCH
INCREASE, AN “INCREMENTAL TERM B COMMITMENT”).  THE INCREMENTAL REVOLVING
COMMITMENTS AND THE INCREMENTAL TERM B COMMITMENTS (COLLECTIVELY, THE
“INCREMENTAL COMMITMENTS”) SHALL BE IN MINIMUM AMOUNTS OF AT LEAST $5.0 MILLION
AND THE AGGREGATE AMOUNT OF ALL INCREMENTAL COMMITMENTS SHALL NOT EXCEED $75.0
MILLION.  SUCH NOTICE SHALL SPECIFY THE DATE (AN “INCREASED AMOUNT DATE”) ON
WHICH BORROWER PROPOSES THAT THE INCREMENTAL COMMITMENTS BE MADE AVAILABLE,
WHICH SHALL BE A DATE NOT LESS THAN 5 BUSINESS DAYS AFTER THE DATE ON WHICH SUCH
NOTICE IS DELIVERED TO THE ADMINISTRATIVE AGENT, AND THE AMOUNT OF EACH CLASS OF
INCREMENTAL COMMITMENT.  THE ADMINISTRATIVE AGENT SHALL NOTIFY BORROWER IN
WRITING OF THE IDENTITY OF EACH LENDER OR OTHER FINANCIAL INSTITUTION REASONABLY
ACCEPTABLE TO THE ADMINISTRATIVE AGENT (EACH, AN “INCREMENTAL LENDER”) TO WHOM
THE INCREMENTAL COMMITMENTS HAVE BEEN ALLOCATED AND THE AMOUNTS OF SUCH
ALLOCATIONS; PROVIDED THAT ANY LENDER APPROACHED TO PROVIDE ALL OR A PORTION OF
THE INCREMENTAL COMMITMENTS MAY ELECT OR DECLINE, IN ITS SOLE DISCRETION, TO
PROVIDE AN INCREMENTAL COMMITMENT.  SUCH INCREMENTAL COMMITMENTS SHALL BECOME
EFFECTIVE AS OF SUCH INCREASED AMOUNT DATE; PROVIDED THAT (1) NO DEFAULT OR
EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING OR WOULD RESULT AFTER GIVING
EFFECT TO THE MAKING OF SUCH INCREMENTAL COMMITMENTS AND LOANS OR THE
APPLICATION OF THE PROCEEDS THEREFROM, (2) SUCH INCREASE IN THE COMMITMENTS
SHALL BE EVIDENCED BY ONE OR MORE JOINDER AGREEMENTS (THE “INCREASE JOINDER”)
EXECUTED BY BORROWER, THE ADMINISTRATIVE AGENT AND EACH LENDER MAKING SUCH
INCREMENTAL COMMITMENT, IN FORM AND SUBSTANCE SATISFACTORY TO EACH OF THEM.  THE
INCREASE JOINDER MAY, WITHOUT THE CONSENT OF ANY OTHER LENDERS, EFFECT SUCH
AMENDMENTS TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AS MAY BE NECESSARY OR
APPROPRIATE, IN THE OPINION OF THE ADMINISTRATIVE AGENT, TO EFFECT THE
PROVISIONS OF THIS SECTION 2.22, AND EACH SHALL BE RECORDED IN THE REGISTER,
EACH OF WHICH SHALL BE SUBJECT TO THE REQUIREMENTS SET FORTH IN
SECTION 2.15(E).  IN ADDITION, UNLESS OTHERWISE SPECIFICALLY PROVIDED HEREIN,
ALL REFERENCES IN LOAN DOCUMENTS TO REVOLVING LOANS OR TERM B LOANS SHALL BE
DEEMED, UNLESS THE CONTEXT OTHERWISE REQUIRES, TO INCLUDE REFERENCES TO
REVOLVING LOANS MADE PURSUANT TO INCREMENTAL REVOLVING COMMITMENTS AND LOANS
MADE PURSUANT TO INCREMENTAL TERM B COMMITMENTS (“INCREMENTAL TERM LOANS”),
RESPECTIVELY, MADE PURSUANT TO THIS AGREEMENT.

 

(B)           THE TERMS AND PROVISIONS OF LOANS MADE PURSUANT TO THE INCREMENTAL
COMMITMENTS SHALL BE AS FOLLOWS:

 

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(I)            THE TERMS AND PROVISIONS OF INCREMENTAL TERM LOANS SHALL BE,
EXCEPT AS OTHERWISE SET FORTH HEREIN OR IN THE INCREASE JOINDER, IDENTICAL TO
THE TERM B LOANS (IT BEING UNDERSTOOD THAT INCREMENTAL TERM LOANS MAY BE PART OF
AN EXISTING TRANCHE OF TERM LOANS);

 

(II)           THE TERMS AND PROVISIONS OF REVOLVING LOANS MADE PURSUANT TO
INCREMENTAL REVOLVING COMMITMENTS SHALL BE IDENTICAL TO THE REVOLVING LOANS;

 

(III)          THE WEIGHTED AVERAGE LIFE TO MATURITY OF ALL INCREMENTAL TERM
LOANS SHALL BE NO SHORTER THAN THE WEIGHTED AVERAGE LIFE TO MATURITY OF THE
REVOLVING LOANS AND THE EXISTING TERM B LOANS;

 

(IV)          THE MATURITY DATE OF INCREMENTAL TERM LOANS SHALL NOT BE EARLIER
THAN THE TERM B MATURITY DATE;

 

(V)           THE APPLICABLE MARGINS FOR THE INCREMENTAL TERM LOANS SHALL BE
DETERMINED BY BORROWER AND THE APPLICABLE INCREMENTAL LENDERS; PROVIDED,
HOWEVER, THAT THE APPLICABLE MARGINS FOR THE INCREMENTAL TERM LOANS SHALL NOT BE
GREATER THAN THE HIGHEST APPLICABLE MARGINS THAT MAY, UNDER ANY CIRCUMSTANCES,
BE PAYABLE WITH RESPECT TO TERM B LOANS PLUS 50 BASIS POINTS (AND THE APPLICABLE
MARGINS APPLICABLE TO THE TERM B LOANS SHALL BE INCREASED TO THE EXTENT
NECESSARY TO ACHIEVE THE FOREGOING).

 

(C)           ON ANY INCREASED AMOUNT DATE ON WHICH INCREMENTAL REVOLVING
COMMITMENTS ARE EFFECTED, SUBJECT TO THE SATISFACTION OF THE FOREGOING TERMS AND
CONDITIONS, (I) EACH OF THE EXISTING REVOLVING LENDERS SHALL ASSIGN TO EACH OF
THE INCREMENTAL LENDERS HAVING AN INCREMENTAL REVOLVING COMMITMENT (THE
“INCREMENTAL REVOLVING LENDERS”), AND EACH OF THE INCREMENTAL REVOLVING LENDERS
SHALL PURCHASE FROM EACH OF THE EXISTING REVOLVING LENDERS, AT THE PRINCIPAL
AMOUNT THEREOF, SUCH INTERESTS IN THE OUTSTANDING REVOLVING LOANS AND
PARTICIPATIONS IN LETTERS OF CREDIT AND SWINGLINE LOANS OUTSTANDING ON SUCH
INCREASED AMOUNT DATE THAT WILL RESULT IN, AFTER GIVING EFFECT TO ALL SUCH
ASSIGNMENTS AND PURCHASES, SUCH REVOLVING LOANS AND PARTICIPATIONS IN LETTERS OF
CREDIT AND SWINGLINE LOANS BEING HELD BY EXISTING REVOLVING LENDERS AND
INCREMENTAL REVOLVING LENDERS RATABLY IN ACCORDANCE WITH THEIR REVOLVING
COMMITMENTS AFTER GIVING EFFECT TO THE ADDITION OF SUCH INCREMENTAL REVOLVING
COMMITMENTS TO THE REVOLVING COMMITMENTS, (II) EACH INCREMENTAL REVOLVING
COMMITMENT SHALL BE DEEMED FOR ALL PURPOSES A REVOLVING COMMITMENT AND EACH LOAN
MADE THEREUNDER SHALL BE DEEMED, FOR ALL PURPOSES, A REVOLVING LOAN AND HAVE THE
SAME TERMS AS ANY EXISTING REVOLVING LOAN AND (III) EACH INCREMENTAL REVOLVING
LENDER SHALL BECOME A LENDER WITH RESPECT TO THE REVOLVING COMMITMENTS AND ALL
MATTERS RELATING THERETO.  BORROWER SHALL MAKE ANY PAYMENTS REQUIRED PURSUANT TO
SECTION 2.13 IN CONNECTION WITH ANY ADJUSTMENT OF REVOLVING LOANS PURSUANT TO
THIS SECTION 2.22(B).  ASSIGNMENTS MADE TO EFFECT THIS SECTION 2.22(B) SHALL BE
MADE IN ACCORDANCE WITH SECTION 11.04.  THE ADMINISTRATIVE AGENT SHALL NOTIFY
THE LENDERS PROMPTLY UPON RECEIPT OF BORROWER’S NOTICE OF AN INCREASED AMOUNT
DATE AND, IN RESPECT THEREOF, THE INCREMENTAL REVOLVING COMMITMENTS AND THE
INCREMENTAL REVOLVING LENDERS.

 

(D)           ON ANY INCREASED AMOUNT DATE ON WHICH INCREMENTAL TERM B
COMMITMENTS ARE EFFECTED, SUBJECT TO THE SATISFACTION OF THE FOREGOING TERMS AND
CONDITIONS AND THE CONDITIONS SET FORTH IN SECTION 4.02, (I) EACH INCREMENTAL
LENDER HAVING AN INCREMENTAL TERM B COMMITMENT SHALL MAKE TERM B LOANS TO
BORROWER IN THE AMOUNT OF ITS INCREMENTAL TERM B COMMITMENT, AND (II) EACH
INCREMENTAL TERM B LENDER SHALL BECOME A LENDER WITH RESPECT TO ITS INCREMENTAL
TERM B COMMITMENT AND ALL MATTERS RELATING THERETO.

 

(E)           THE ADMINISTRATIVE AGENT SHALL NOTIFY THE LENDERS PROMPTLY UPON
RECEIPT OF BORROWER’S NOTICE OF AN INCREASED AMOUNT DATE AND, IN RESPECT
THEREOF, THE INCREMENTAL COMMITMENTS AND THE INCREMENTAL LENDERS.

 

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SECTION 2.23.    TERM B LOANS AND REVOLVING LOANS.

 

(A)           TERM B LOANS.

 

(I)            SUBJECT TO THE TERMS AND CONDITIONS HEREOF, EACH ORIGINAL LENDER
WITH AN ORIGINAL TERM B LOAN (OTHER THAN A REDUCED LENDER) WHO EXECUTES AND
DELIVERS A COUNTERPART OF THIS AMENDMENT AND RESTATEMENT SEVERALLY AGREES TO
EXCHANGE ITS ORIGINAL TERM B LOANS FOR A LIKE OUTSTANDING PRINCIPAL AMOUNT OF
TERM B LOANS ON THE THIRD AMENDMENT AND RESTATEMENT EFFECTIVE DATE, WHICH
EXCHANGE SHALL BE DEEMED TO BE THE MAKING OF A TERM B LOAN BY SUCH LENDER FOR
SUCH AMOUNT.

 

(II)           BORROWER SHALL PREPAY ALL ORIGINAL TERM B LOANS OF ORIGINAL
LENDERS THAT DO NOT EXECUTE AND DELIVER A COUNTERPART OF THIS AMENDMENT AND
RESTATEMENT ON THE THIRD AMENDMENT AND RESTATEMENT EFFECTIVE DATE AND THE
REDUCED LENDERS WITH A PORTION OF THE GROSS PROCEEDS OF SUCH TERM B LOANS AND,
BY ITS SIGNATURE BELOW, EACH LENDER EXCHANGING ITS ORIGINAL TERM B LOAN FOR A
TERM B LOAN AND EACH REDUCED LENDER CONSENTS TO SUCH PREPAYMENT.  ANY SUCH
PREPAYMENT SHALL BE EFFECTED ON THE THIRD AMENDMENT AND RESTATEMENT EFFECTIVE
DATE WITHOUT REGARD TO ANY NOTICE REQUIREMENT, MINIMUM PRINCIPAL AMOUNT OR PRO
RATA ALLOCATION PROVISION OTHERWISE APPLICABLE THERETO UNDER THIS AGREEMENT.

 

(III)          BORROWER SHALL PAY ALL ACCRUED AND UNPAID INTEREST UNDER THE
ORIGINAL CREDIT AGREEMENT ON THE ORIGINAL TERM B LOANS TO THE ORIGINAL LENDERS
HOLDING ORIGINAL TERM B LOANS ON THE THIRD AMENDMENT AND RESTATEMENT EFFECTIVE
DATE AND ANY BREAKAGE LOSS OR EXPENSE UNDER SECTION 2.13 OF THIS AGREEMENT.  ON
THE THIRD AMENDMENT AND RESTATEMENT EFFECTIVE DATE, THE ORIGINAL TERM B LOANS
SHALL BE DEEMED PAID IN FULL AND DISCHARGED.

 

(IV)          THE HOLDERS OF THE TERM B LOANS SHALL BE ENTITLED TO THE SAME
GUARANTEES AND SECURITY INTERESTS PURSUANT TO THE SECURITY AGREEMENT AND THE
OTHER SECURITY DOCUMENTS FROM AND AFTER THE THIRD AMENDMENT AND RESTATEMENT
EFFECTIVE DATE AS THE BENEFITS WHICH THE HOLDERS OF THE ORIGINAL TERM B LOANS
HAD BEEN ENTITLED IMMEDIATELY PRIOR TO THE THIRD AMENDMENT AND RESTATEMENT
EFFECTIVE DATE.

 

(B)           REVOLVING LOANS.

 

(I)            SUBJECT TO THE TERMS AND CONDITIONS HEREOF, EACH ORIGINAL LENDER
WITH AN ORIGINAL REVOLVING COMMITMENT (OTHER THAN A REDUCED LENDER) WHO EXECUTES
AND DELIVERS A COUNTERPART OF THIS AMENDMENT AND RESTATEMENT SEVERALLY AGREES TO
EXCHANGE ITS ORIGINAL REVOLVING COMMITMENT FOR A LIKE PRINCIPAL AMOUNT OF
REVOLVING COMMITMENTS ON THE THIRD AMENDMENT AND RESTATEMENT EFFECTIVE DATE.

 

(II)           BORROWER SHALL PREPAY ALL OUTSTANDING ORIGINAL REVOLVING LOANS
WITH A PORTION OF THE GROSS PROCEEDS OF SUCH REVOLVING LOANS AND, BY ITS
SIGNATURE BELOW, EACH LENDER EXCHANGING ITS ORIGINAL REVOLVING COMMITMENT FOR A
REVOLVING COMMITMENT AND EACH REDUCED LENDER CONSENTS TO SUCH PREPAYMENT AND
SUCH TERMINATION OF ITS ORIGINAL REVOLVING COMMITMENT.  ANY SUCH PREPAYMENT OF
ORIGINAL REVOLVING LOANS AND TERMINATION OF ORIGINAL REVOLVING COMMITMENTS SHALL
BE EFFECTED ON THE THIRD AMENDMENT AND RESTATEMENT EFFECTIVE DATE WITHOUT REGARD
TO ANY NOTICE REQUIREMENT, MINIMUM PRINCIPAL AMOUNT OR PRO RATA ALLOCATION
PROVISION OTHERWISE APPLICABLE THERETO UNDER THIS AGREEMENT.

 

(III)          BORROWER SHALL PAY ALL ACCRUED AND UNPAID INTEREST UNDER THE
ORIGINAL CREDIT AGREEMENT ON THE ORIGINAL REVOLVING LOANS TO THE ORIGINAL
LENDERS HOLDING ORIGINAL REVOLVING

 

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LOANS ON THE THIRD AMENDMENT AND RESTATEMENT EFFECTIVE DATE AND ANY BREAKAGE
LOSS OR EXPENSE UNDER SECTION 2.13 OF THIS AGREEMENT.  ON THE THIRD AMENDMENT
AND RESTATEMENT EFFECTIVE DATE, THE ORIGINAL REVOLVING LOANS SHALL BE DEEMED
PAID IN FULL AND DISCHARGED AND THE ORIGINAL REVOLVING COMMITMENTS SHALL BE
DEEMED TERMINATED.

 

(IV)          THE HOLDERS OF THE REVOLVING COMMITMENTS SHALL BE ENTITLED TO THE
SAME GUARANTEES AND SECURITY INTERESTS PURSUANT TO THE SECURITY AGREEMENT AND
THE OTHER SECURITY DOCUMENTS FROM AND AFTER THE THIRD AMENDMENT AND RESTATEMENT
EFFECTIVE DATE AS THE BENEFITS WHICH THE HOLDERS OF THE ORIGINAL REVOLVING LOANS
AND ORIGINAL REVOLVING COMMITMENTS HAD BEEN ENTITLED IMMEDIATELY PRIOR TO THE
THIRD AMENDMENT AND RESTATEMENT EFFECTIVE DATE.

 

ARTICLE III

 

REPRESENTATIONS AND WARRANTIES

 

Each Loan Party represents and warrants to the Administrative Agent, the
Collateral Agent, the Issuing Bank and each of the Lenders that:

 

SECTION 3.01.    ORGANIZATION; POWERS.  EACH COMPANY (A) IS DULY ORGANIZED AND
VALIDLY EXISTING UNDER THE LAWS OF THE JURISDICTION OF ITS ORGANIZATION, (B) HAS
ALL REQUISITE POWER AND AUTHORITY TO CARRY ON ITS BUSINESS AS NOW CONDUCTED AND
TO OWN AND LEASE ITS PROPERTY AND (C) IS QUALIFIED AND IN GOOD STANDING (TO THE
EXTENT SUCH CONCEPT IS APPLICABLE IN THE APPLICABLE JURISDICTION) TO DO BUSINESS
IN EVERY JURISDICTION WHERE SUCH QUALIFICATION IS REQUIRED, EXCEPT IN SUCH
JURISDICTIONS WHERE THE FAILURE TO SO QUALIFY OR BE IN GOOD STANDING,
INDIVIDUALLY OR IN THE AGGREGATE, COULD NOT REASONABLY BE EXPECTED TO RESULT IN
A MATERIAL ADVERSE EFFECT.

 

SECTION 3.02.    AUTHORIZATION; ENFORCEABILITY.  THE TRANSACTIONS TO BE ENTERED
INTO BY EACH LOAN PARTY ARE WITHIN SUCH LOAN PARTY’S POWERS AND HAVE BEEN DULY
AUTHORIZED BY ALL NECESSARY ACTION.  THIS AGREEMENT HAS BEEN DULY EXECUTED AND
DELIVERED BY EACH LOAN PARTY AND CONSTITUTES, AND EACH OTHER LOAN DOCUMENT TO
WHICH ANY LOAN PARTY IS TO BE A PARTY, WHEN EXECUTED AND DELIVERED BY SUCH LOAN
PARTY, WILL CONSTITUTE, A LEGAL, VALID AND BINDING OBLIGATION OF SUCH LOAN
PARTY, ENFORCEABLE IN ACCORDANCE WITH ITS TERMS, SUBJECT TO APPLICABLE
BANKRUPTCY, INSOLVENCY, REORGANIZATION, MORATORIUM OR OTHER LAWS AFFECTING
CREDITORS’ RIGHTS GENERALLY AND SUBJECT TO GENERAL PRINCIPLES OF EQUITY,
REGARDLESS OF WHETHER CONSIDERED IN A PROCEEDING IN EQUITY OR AT LAW.

 

SECTION 3.03.    GOVERNMENTAL APPROVALS; NO CONFLICTS.  EXCEPT AS SET FORTH ON
SCHEDULE 3.03, THE TRANSACTIONS (A) DO NOT REQUIRE ANY CONSENT OR APPROVAL OF,
REGISTRATION OR FILING WITH, OR ANY OTHER ACTION BY, ANY GOVERNMENTAL AUTHORITY,
EXCEPT (I) SUCH AS HAVE BEEN OBTAINED OR MADE AND ARE IN FULL FORCE AND EFFECT,
(II) FILINGS NECESSARY TO PERFECT LIENS CREATED UNDER THE LOAN DOCUMENTS AND
(III) CONSENTS, APPROVALS, REGISTRATIONS, FILINGS OR ACTIONS THE FAILURE OF
WHICH TO OBTAIN OR PERFORM COULD NOT REASONABLY BE EXPECTED TO RESULT IN A
MATERIAL ADVERSE EFFECT, (B) WILL NOT VIOLATE THE CHARTER, BY LAWS OR OTHER
ORGANIZATIONAL DOCUMENTS OF ANY COMPANY OR ANY ORDER OF ANY GOVERNMENTAL
AUTHORITY, (C) WILL NOT VIOLATE, RESULT IN A DEFAULT OR REQUIRE ANY CONSENT OR
APPROVAL UNDER ANY APPLICABLE LAW OR REGULATION, INDENTURE, AGREEMENT OR OTHER
INSTRUMENT BINDING UPON ANY COMPANY OR ITS ASSETS, OR GIVE RISE TO A RIGHT
THEREUNDER TO REQUIRE ANY PAYMENT TO BE MADE BY ANY COMPANY, EXCEPT FOR
VIOLATIONS, DEFAULTS OR THE CREATION OF SUCH RIGHTS THAT COULD NOT REASONABLY BE
EXPECTED TO RESULT IN A MATERIAL ADVERSE EFFECT, AND (D) WILL NOT RESULT IN THE
CREATION OR IMPOSITION OF ANY LIEN ON ANY PROPERTY OF ANY COMPANY, EXCEPT LIENS
CREATED UNDER THE LOAN DOCUMENTS AND PERMITTED LIENS.

 

SECTION 3.04.    FINANCIAL STATEMENTS.  BORROWER HAS HERETOFORE FURNISHED TO THE
LENDERS (I) THE CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2002, 2003 AND
2004 AND RELATED STATEMENTS OF

 

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INCOME, STOCKHOLDERS’ EQUITY AND CASH FLOWS OF BORROWER AS OF AND FOR THE FISCAL
YEARS ENDED DECEMBER 31, 2002, 2003 AND 2004, AUDITED BY AND ACCOMPANIED BY THE
OPINION OF KPMG LLP, INDEPENDENT PUBLIC ACCOUNTANTS, AND (II) THE UNAUDITED
CONSOLIDATED BALANCE SHEETS AND RELATED STATEMENTS OF INCOME, STOCKHOLDERS’
EQUITY AND CASH FLOWS OF BORROWER AS OF AND FOR THE LATEST TWELVE-MONTH AND
NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2005, IN EACH CASE, CERTIFIED BY THE
CHIEF FINANCIAL OFFICER OF BORROWER.  SUCH FINANCIAL STATEMENTS (AND ALL
FINANCIAL STATEMENTS DELIVERED PURSUANT TO SECTION 5.01) HAVE BEEN PREPARED IN
ACCORDANCE WITH GAAP CONSISTENTLY APPLIED AND PRESENT FAIRLY AND ACCURATELY THE
FINANCIAL CONDITION AND RESULTS OF OPERATIONS AND CASH FLOWS OF BORROWER AS OF
SUCH DATES AND FOR SUCH PERIODS.  EXCEPT AS SET FORTH IN SUCH FINANCIAL
STATEMENTS (AND ALL FINANCIAL STATEMENTS DELIVERED PURSUANT TO SECTION 5.01),
THERE ARE NO LIABILITIES OF ANY COMPANY OF ANY KIND, WHETHER ACCRUED,
CONTINGENT, ABSOLUTE, DETERMINED, DETERMINABLE OR OTHERWISE, WHICH COULD
REASONABLY BE EXPECTED TO RESULT IN A MATERIAL ADVERSE EFFECT, AND THERE IS NO
EXISTING CONDITION, SITUATION OR SET OF CIRCUMSTANCES WHICH COULD REASONABLY BE
EXPECTED TO RESULT IN SUCH A LIABILITY, OTHER THAN LIABILITIES UNDER THE LOAN
DOCUMENTS.

 

SECTION 3.05.    NO CLAIMS.  EACH COMPANY OWNS OR HAS RIGHTS TO USE ALL OF THE
COLLATERAL AND ALL RIGHTS WITH RESPECT TO ANY OF THE FOREGOING USED IN,
NECESSARY FOR OR MATERIAL TO EACH COMPANY’S BUSINESS AS CURRENTLY CONDUCTED. 
THE USE BY EACH COMPANY OF SUCH COLLATERAL AND ALL SUCH RIGHTS WITH RESPECT TO
THE FOREGOING DO NOT INFRINGE ON THE RIGHTS OF ANY PERSON OTHER THAN SUCH
INFRINGEMENT WHICH WOULD NOT, INDIVIDUALLY OR IN THE AGGREGATE, RESULT IN A
MATERIAL ADVERSE EFFECT.  NO CLAIM HAS BEEN MADE AND REMAINS OUTSTANDING THAT
ANY COMPANY’S USE OF ANY COLLATERAL DOES OR MAY VIOLATE THE RIGHTS OF ANY THIRD
PERSON THAT WOULD INDIVIDUALLY, OR IN THE AGGREGATE, HAVE A MATERIAL ADVERSE
EFFECT.

 

SECTION 3.06.    PROPERTIES.

 

(A)           EACH COMPANY HAS GOOD TITLE TO, OR VALID LEASEHOLD INTERESTS IN,
ALL ITS PROPERTY MATERIAL TO ITS BUSINESS, EXCEPT FOR MINOR IRREGULARITIES OR
DEFICIENCIES IN TITLE THAT, INDIVIDUALLY OR IN THE AGGREGATE, DO NOT INTERFERE
WITH ITS ABILITY TO CONDUCT ITS BUSINESS AS CURRENTLY CONDUCTED OR TO UTILIZE
SUCH PROPERTY FOR ITS INTENDED PURPOSE.  TITLE TO ALL SUCH PROPERTY HELD BY SUCH
COMPANY IS FREE AND CLEAR OF ALL LIENS EXCEPT FOR PERMITTED LIENS.  THE PROPERTY
OF THE COMPANIES, TAKEN AS A WHOLE, (I) IS IN GOOD OPERATING ORDER, CONDITION
AND REPAIR (ORDINARY WEAR AND TEAR EXCEPTED) (EXCEPT TO THE EXTENT THAT THE
FAILURE TO BE IN SUCH CONDITION COULD NOT REASONABLY BE EXPECTED TO RESULT IN A
MATERIAL ADVERSE EFFECT) AND (II) CONSTITUTES ALL THE PROPERTY WHICH IS REQUIRED
FOR THE BUSINESS AND OPERATIONS OF THE COMPANIES AS PRESENTLY CONDUCTED.

 

(B)           SCHEDULE 3.06(B) CONTAINS A TRUE AND COMPLETE LIST OF EACH
INTEREST IN REAL PROPERTY OWNED BY ANY COMPANY AS OF THE DATE HEREOF AND
DESCRIBES THE TYPE OF INTEREST THEREIN HELD BY SUCH COMPANY. 
SCHEDULE 3.06(B) CONTAINS A TRUE AND COMPLETE LIST OF EACH REAL PROPERTY LEASED,
SUBLEASED OR OTHERWISE OCCUPIED OR UTILIZED BY ANY COMPANY, AS LESSEE,
SUBLESSEE, FRANCHISEE OR LICENSEE, AS OF THE DATE HEREOF AND DESCRIBES THE TYPE
OF INTEREST THEREIN HELD BY SUCH COMPANY AND WHETHER SUCH LEASE, SUBLEASE OR
OTHER INSTRUMENT REQUIRES THE CONSENT OF THE LANDLORD THEREUNDER OR OTHER
PARTIES THERETO TO THE TRANSACTIONS.

 

(C)           (I) NO COMPANY HAS RECEIVED ANY NOTICE OF, NOR HAS ANY KNOWLEDGE
OF, THE OCCURRENCE OR PENDENCY OR CONTEMPLATION OF ANY CASUALTY EVENT AFFECTING
ALL OR ANY PORTION OF THE PROPERTY AND (II) NO MORTGAGE ENCUMBERS IMPROVED REAL
PROPERTY THAT IS LOCATED IN AN AREA THAT HAS BEEN IDENTIFIED BY THE SECRETARY OF
HOUSING AND URBAN DEVELOPMENT AS AN AREA HAVING SPECIAL FLOOD HAZARDS AND WITH
RESPECT TO WHICH FLOOD INSURANCE HAS BEEN MADE AVAILABLE UNDER THE NATIONAL
FLOOD INSURANCE ACT OF 1968.

 

SECTION 3.07.    INTELLECTUAL PROPERTY.

 

(A)           OWNERSHIP/NO CLAIMS.  EACH LOAN PARTY OWNS, OR IS LICENSED TO USE,
ALL PATENTS, PATENT APPLICATIONS, TRADEMARKS, TRADE NAMES, SERVICE MARKS,
COPYRIGHTS, TECHNOLOGY, TRADE SECRETS, PROPRIETARY

 

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INFORMATION, DOMAIN NAMES, KNOW HOW AND PROCESSES NECESSARY FOR THE CONDUCT OF
ITS BUSINESS AS CURRENTLY CONDUCTED (THE “INTELLECTUAL PROPERTY”), EXCEPT FOR
THOSE THE FAILURE TO OWN OR LICENSE WHICH, INDIVIDUALLY OR IN THE AGGREGATE,
COULD NOT REASONABLY BE EXPECTED TO RESULT IN A MATERIAL ADVERSE EFFECT.  NO
CLAIM HAS BEEN ASSERTED AND IS PENDING BY ANY PERSON CHALLENGING OR QUESTIONING
THE USE OF ANY SUCH INTELLECTUAL PROPERTY OR THE VALIDITY OR EFFECTIVENESS OF
ANY SUCH INTELLECTUAL PROPERTY, NOR DOES ANY LOAN PARTY KNOW OF ANY VALID BASIS
FOR ANY SUCH CLAIM.  THE USE OF SUCH INTELLECTUAL PROPERTY BY EACH LOAN PARTY
DOES NOT INFRINGE THE RIGHTS OF ANY PERSON, EXCEPT FOR SUCH CLAIMS AND
INFRINGEMENTS THAT, INDIVIDUALLY OR IN THE AGGREGATE, COULD NOT REASONABLY BE
EXPECTED TO RESULT IN A MATERIAL ADVERSE EFFECT.

 

(B)           REGISTRATIONS.  EXCEPT PURSUANT TO LICENSES AND OTHER USER
AGREEMENTS ENTERED INTO BY EACH LOAN PARTY IN THE ORDINARY COURSE OF BUSINESS
THAT ARE LISTED IN SCHEDULES 15(A) AND 15(B) ANNEXED TO THE PERFECTION
CERTIFICATE (AS SUCH TERM IS DEFINED IN THE SECURITY AGREEMENT), ON AND AS OF
THE DATE HEREOF (I) EACH LOAN PARTY OWNS AND POSSESSES THE RIGHT TO USE, AND HAS
DONE NOTHING TO AUTHORIZE OR ENABLE ANY OTHER PERSON TO USE, ANY COPYRIGHT,
PATENT OR TRADEMARK (AS SUCH TERMS ARE DEFINED IN THE SECURITY AGREEMENT) LISTED
IN SCHEDULES 15(A) AND 15(B) ANNEXED TO THE PERFECTION CERTIFICATE AND (II) ALL
REGISTRATIONS LISTED IN SCHEDULES 15(A) AND 15(B) ANNEXED TO THE PERFECTION
CERTIFICATE ARE VALID AND IN FULL FORCE AND EFFECT, EXCEPT FOR SUCH LACK OF
RIGHTS OR FAILURES TO REGISTER THAT, INDIVIDUALLY OR IN THE AGGREGATE, COULD NOT
REASONABLY BE EXPECTED TO RESULT IN A MATERIAL ADVERSE EFFECT.

 

(C)           NO VIOLATIONS OR PROCEEDINGS.  TO EACH LOAN PARTY’S KNOWLEDGE, ON
AND AS OF THE DATE HEREOF, (I) EXCEPT AS SET FORTH IN SCHEDULE 3.07(C) ANNEXED
HERETO, THERE IS NO MATERIAL VIOLATION BY OTHERS OF ANY RIGHT OF SUCH LOAN PARTY
WITH RESPECT TO ANY COPYRIGHT, PATENT OR TRADEMARK LISTED IN SCHEDULES 15(A) AND
15(B) ANNEXED TO THE PERFECTION CERTIFICATE, RESPECTIVELY, PLEDGED BY IT UNDER
THE NAME OF SUCH LOAN PARTY, (II) SUCH LOAN PARTY IS NOT INFRINGING UPON ANY
COPYRIGHT, PATENT OR TRADEMARK OF ANY OTHER PERSON OTHER THAN SUCH INFRINGEMENT
THAT, INDIVIDUALLY OR IN THE AGGREGATE, WOULD NOT (OR WOULD NOT REASONABLY BE
EXPECTED TO) RESULT IN A MATERIAL ADVERSE EFFECT ON THE VALUE OR UTILITY OF THE
INTELLECTUAL PROPERTY OR ANY PORTION THEREOF MATERIAL TO THE USE AND OPERATION
OF THE COLLATERAL AND (III) NO PROCEEDINGS HAVE BEEN INSTITUTED OR ARE PENDING
AGAINST SUCH LOAN PARTY OR, TO SUCH LOAN PARTY’S KNOWLEDGE, THREATENED, AND NO
CLAIM AGAINST SUCH LOAN PARTY HAS BEEN RECEIVED BY SUCH LOAN PARTY, ALLEGING ANY
SUCH VIOLATION, EXCEPT AS MAY BE SET FORTH IN THIS SECTION 3.07(C).

 

SECTION 3.08.    CONDITION AND MAINTENANCE OF EQUIPMENT.  THE EQUIPMENT OF EACH
COMPANY IS IN GOOD REPAIR, WORKING ORDER AND CONDITION, REASONABLE WEAR AND TEAR
EXCEPTED.  EACH COMPANY SHALL CAUSE THE EQUIPMENT TO BE MAINTAINED AND PRESERVED
IN GOOD REPAIR, WORKING ORDER AND CONDITION, REASONABLE WEAR AND TEAR EXCEPTED,
AND SHALL AS QUICKLY AS COMMERCIALLY PRACTICABLE MAKE OR CAUSE TO BE MADE ALL
REPAIRS, REPLACEMENTS AND OTHER IMPROVEMENTS WHICH ARE NECESSARY OR APPROPRIATE
IN THE CONDUCT OF EACH COMPANY’S ORDINARY COURSE OF BUSINESS.

 

SECTION 3.09.    EQUITY INTERESTS AND SUBSIDIARIES.

 

(A)           SCHEDULE 3.09(A) SETS FORTH A LIST OF (I) ALL THE SUBSIDIARIES AND
THEIR JURISDICTION OF ORGANIZATION AS OF THE THIRD AMENDMENT AND RESTATEMENT
EFFECTIVE DATE AND (II) THE NUMBER OF SHARES OF EACH CLASS OF EACH SUBSIDIARIES’
EQUITY INTERESTS OUTSTANDING, ON THE THIRD AMENDMENT AND RESTATEMENT EFFECTIVE
DATE AND THE NUMBER OF SHARES COVERED BY ALL OUTSTANDING OPTIONS, WARRANTS,
RIGHTS OF CONVERSION OR PURCHASE AND SIMILAR RIGHTS AT THE THIRD AMENDMENT AND
RESTATEMENT EFFECTIVE DATE.  ALL EQUITY INTERESTS OF EACH COMPANY ARE DULY AND
VALIDLY ISSUED AND ARE FULLY PAID AND NONASSESSABLE AND (OTHER THAN SHARES OF
BORROWER) ARE OWNED BY BORROWER, DIRECTLY OR INDIRECTLY, THROUGH WHOLLY OWNED
SUBSIDIARIES.  EACH LOAN PARTY IS THE RECORD AND BENEFICIAL OWNER OF, AND HAS
GOOD AND MARKETABLE TITLE TO, THE EQUITY INTERESTS PLEDGED BY IT UNDER THE
SECURITY AGREEMENT, FREE OF ANY AND ALL LIENS, RIGHTS OR CLAIMS OF OTHER
PERSONS, EXCEPT THE SECURITY INTEREST CREATED BY THE SECURITY AGREEMENT, AND
THERE ARE NO OUTSTANDING

 

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WARRANTS, OPTIONS OR OTHER RIGHTS TO PURCHASE, OR SHAREHOLDER, VOTING TRUST OR
SIMILAR AGREEMENTS OUTSTANDING WITH RESPECT TO, OR PROPERTY THAT IS CONVERTIBLE
INTO, OR THAT REQUIRES THE ISSUANCE OR SALE OF, ANY SUCH EQUITY INTERESTS.

 

(B)           NO CONSENT OF ANY PERSON INCLUDING ANY OTHER GENERAL OR LIMITED
PARTNER, ANY OTHER MEMBER OF A LIMITED LIABILITY COMPANY, ANY OTHER SHAREHOLDER
OR ANY OTHER TRUST BENEFICIARY IS NECESSARY OR DESIRABLE IN CONNECTION WITH THE
CREATION, PERFECTION OR FIRST PRIORITY STATUS OF THE SECURITY INTEREST OF THE
COLLATERAL AGENT IN ANY EQUITY INTERESTS PLEDGED TO THE COLLATERAL AGENT FOR THE
BENEFIT OF THE SECURED PARTIES UNDER THE SECURITY AGREEMENT OR THE EXERCISE BY
THE COLLATERAL AGENT OF THE VOTING OR OTHER RIGHTS PROVIDED FOR IN THE SECURITY
AGREEMENT OR THE EXERCISE OF REMEDIES IN RESPECT THEREOF.

 

(C)           AN ACCURATE ORGANIZATION CHART, SHOWING THE OWNERSHIP STRUCTURE OF
BORROWER AND EACH SUBSIDIARY ON THE THIRD AMENDMENT AND RESTATEMENT EFFECTIVE
DATE, AND AFTER GIVING EFFECT TO THE TRANSACTION, IS SET FORTH ON
SCHEDULE 3.09(C).

 

SECTION 3.10.    LITIGATION; COMPLIANCE WITH LAWS.

 

(A)           THERE ARE NO ACTIONS, SUITS OR PROCEEDINGS AT LAW OR IN EQUITY BY
OR BEFORE ANY GOVERNMENTAL AUTHORITY NOW PENDING OR, TO THE KNOWLEDGE OF ANY
COMPANY, THREATENED AGAINST OR AFFECTING ANY COMPANY OR ANY BUSINESS, PROPERTY
OR RIGHTS OF ANY SUCH PERSON (I) THAT INVOLVE ANY LOAN DOCUMENT OR THE
TRANSACTIONS OR (II) AS TO WHICH THERE IS A REASONABLE POSSIBILITY OF AN ADVERSE
DETERMINATION AND THAT, IF ADVERSELY DETERMINED, COULD REASONABLY BE EXPECTED,
INDIVIDUALLY OR IN THE AGGREGATE, TO RESULT IN A MATERIAL ADVERSE EFFECT.

 

(B)           EXCEPT FOR MATTERS COVERED BY SECTION 3.20, NO COMPANY OR ANY OF
ITS PROPERTY IS IN VIOLATION OF, NOR WILL THE CONTINUED OPERATION OF THEIR
PROPERTY AS CURRENTLY CONDUCTED VIOLATE, ANY REQUIREMENTS OF LAW (INCLUDING ANY
ZONING OR BUILDING ORDINANCE, CODE OR APPROVAL OR ANY BUILDING PERMITS) OR ANY
RESTRICTIONS OF RECORD OR AGREEMENTS AFFECTING THE REAL PROPERTY OR IS IN
DEFAULT WITH RESPECT TO ANY JUDGMENT, WRIT, INJUNCTION, DECREE OR ORDER OF ANY
GOVERNMENTAL AUTHORITY, WHERE SUCH VIOLATION OR DEFAULT COULD REASONABLY BE
EXPECTED TO RESULT IN A MATERIAL ADVERSE EFFECT.

 

SECTION 3.11.    AGREEMENTS.

 

(A)           NO COMPANY IS A PARTY TO ANY AGREEMENT OR INSTRUMENT OR SUBJECT TO
ANY CORPORATE OR OTHER CONSTITUTIONAL RESTRICTION THAT HAS RESULTED OR COULD
REASONABLY BE EXPECTED TO RESULT IN A MATERIAL ADVERSE EFFECT.

 

(B)           NO COMPANY IS IN DEFAULT IN ANY MANNER UNDER ANY PROVISION OF ANY
INDENTURE OR OTHER AGREEMENT OR INSTRUMENT EVIDENCING INDEBTEDNESS, OR ANY OTHER
AGREEMENT OR INSTRUMENT TO WHICH IT IS A PARTY OR BY WHICH IT OR ANY OF ITS
PROPERTY ARE OR MAY BE BOUND, WHERE SUCH DEFAULT COULD REASONABLY BE EXPECTED TO
RESULT IN A MATERIAL ADVERSE EFFECT.

 

(C)           SCHEDULE 3.11(C) ACCURATELY AND COMPLETELY LISTS ALL MATERIAL
AGREEMENTS (OTHER THAN LEASES OF REAL PROPERTY SET FORTH ON SCHEDULE 3.06(B)) TO
WHICH ANY COMPANY IS A PARTY WHICH ARE IN EFFECT ON THE DATE HEREOF IN
CONNECTION WITH THE OPERATION OF THE BUSINESS CONDUCTED THEREBY AND BORROWER HAS
DELIVERED TO THE ADMINISTRATIVE AGENT COMPLETE AND CORRECT COPIES OF ALL SUCH
MATERIAL AGREEMENTS, INCLUDING ANY AMENDMENTS, SUPPLEMENTS OR MODIFICATIONS WITH
RESPECT THERETO.

 

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SECTION 3.12.    FEDERAL RESERVE REGULATIONS.

 

(A)           NO COMPANY IS ENGAGED PRINCIPALLY, OR AS ONE OF ITS IMPORTANT
ACTIVITIES, IN THE BUSINESS OF EXTENDING CREDIT FOR THE PURPOSE OF BUYING OR
CARRYING MARGIN STOCK.

 

(B)           NO PART OF THE PROCEEDS OF ANY LOAN OR ANY LETTER OF CREDIT WILL
BE USED, WHETHER DIRECTLY OR INDIRECTLY, AND WHETHER IMMEDIATELY, INCIDENTALLY
OR ULTIMATELY, FOR ANY PURPOSE THAT ENTAILS A VIOLATION OF, OR THAT IS
INCONSISTENT WITH, THE PROVISIONS OF THE REGULATIONS OF THE BOARD, INCLUDING
REGULATION T, U OR X.  THE PLEDGE OF THE SECURITIES COLLATERAL PURSUANT TO THE
SECURITY AGREEMENT DOES NOT VIOLATE SUCH REGULATIONS.

 

SECTION 3.13.    INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING COMPANY ACT.  NO
COMPANY IS (A) AN “INVESTMENT COMPANY” OR A COMPANY “CONTROLLED” BY AN
“INVESTMENT COMPANY,” AS DEFINED IN, OR SUBJECT TO REGULATION UNDER, THE
INVESTMENT COMPANY ACT OF 1940, AS AMENDED, OR (B) A “HOLDING COMPANY,” AN
“AFFILIATE” OF A “HOLDING COMPANY” OR A “SUBSIDIARY COMPANY” OF A “HOLDING
COMPANY,” AS DEFINED IN, OR SUBJECT TO REGULATION UNDER, THE PUBLIC UTILITY
HOLDING COMPANY ACT OF 1935, AS AMENDED.

 

SECTION 3.14.    USE OF PROCEEDS.  BORROWER WILL USE THE PROCEEDS OF THE
REVOLVING LOANS FOR WORKING CAPITAL AND GENERAL CORPORATE PURPOSES (INCLUDING TO
EFFECT PERMITTED ACQUISITIONS).  THE PROCEEDS OF THE TERM B LOANS SHALL BE USED
TO REPAY THE ORIGINAL TERM B LOANS.

 

SECTION 3.15.    TAXES.  EACH COMPANY HAS (A) TIMELY FILED OR CAUSED TO BE
TIMELY FILED ALL FEDERAL TAX RETURNS AND ALL MATERIAL, STATE, LOCAL AND FOREIGN
TAX RETURNS OR MATERIALS REQUIRED TO HAVE BEEN FILED BY IT AND ALL SUCH TAX
RETURNS ARE TRUE AND CORRECT IN ALL MATERIAL RESPECTS AND (B) DULY AND TIMELY
PAID OR CAUSED TO BE DULY AND TIMELY PAID ALL TAXES (WHETHER OR NOT SHOWN ON ANY
TAX RETURN) DUE AND PAYABLE BY IT AND ALL ASSESSMENTS RECEIVED BY IT, EXCEPT
TAXES (I) THAT ARE BEING CONTESTED IN GOOD FAITH BY APPROPRIATE PROCEEDINGS AND
FOR WHICH SUCH COMPANY SHALL HAVE SET ASIDE ON ITS BOOKS ADEQUATE RESERVES IN
ACCORDANCE WITH GAAP OR (II) WHICH COULD NOT, INDIVIDUALLY OR IN THE AGGREGATE,
HAVE A MATERIAL ADVERSE EFFECT; PROVIDED THAT ANY SUCH CONTEST OF TAXES WITH
RESPECT TO COLLATERAL SHALL ALSO SATISFY THE CONTESTED COLLATERAL LIEN
CONDITIONS.  EACH COMPANY HAS MADE ADEQUATE PROVISION IN ACCORDANCE WITH GAAP
FOR ALL TAXES NOT YET DUE AND PAYABLE.  EACH COMPANY IS UNAWARE OF ANY PROPOSED
OR PENDING TAX ASSESSMENTS, DEFICIENCIES OR AUDITS THAT COULD BE REASONABLY
EXPECTED TO, INDIVIDUALLY OR IN THE AGGREGATE, RESULT IN A MATERIAL ADVERSE
EFFECT.

 

SECTION 3.16.    NO MATERIAL MISSTATEMENTS.  NO INFORMATION, REPORT, FINANCIAL
STATEMENT, EXHIBIT OR SCHEDULE FURNISHED BY OR ON BEHALF OF ANY COMPANY TO THE
ADMINISTRATIVE AGENT OR ANY LENDER IN CONNECTION WITH THE NEGOTIATION OF ANY
LOAN DOCUMENT OR INCLUDED THEREIN OR DELIVERED PURSUANT THERETO (INCLUDING THE
CONFIDENTIAL INFORMATION MEMORANDUM) CONTAINED, CONTAINS OR WILL CONTAIN, ANY
MATERIAL MISSTATEMENT OF FACT OR OMITTED, OMITS OR WILL OMIT TO STATE ANY
MATERIAL FACT NECESSARY TO MAKE THE STATEMENTS THEREIN, TAKEN AS A WHOLE, IN THE
LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY WERE, ARE OR WILL BE MADE, NOT
MISLEADING AS OF THE DATE SUCH INFORMATION IS DATED OR CERTIFIED; PROVIDED THAT
TO THE EXTENT ANY SUCH INFORMATION, REPORT, FINANCIAL STATEMENT, EXHIBIT OR
SCHEDULE WAS BASED UPON OR CONSTITUTES A FORECAST OR PROJECTION, EACH COMPANY
REPRESENTS ONLY THAT IT ACTED IN GOOD FAITH AND UTILIZED REASONABLE ASSUMPTIONS
AND DUE CARE IN THE PREPARATION OF SUCH INFORMATION, REPORT, FINANCIAL
STATEMENT, EXHIBIT OR SCHEDULE.

 

SECTION 3.17.    LABOR MATTERS.  AS OF THE DATE HEREOF AND THE THIRD AMENDMENT
AND RESTATEMENT EFFECTIVE DATE, THERE ARE NO STRIKES, LOCKOUTS OR SLOWDOWNS
AGAINST ANY COMPANY PENDING OR, TO THE KNOWLEDGE OF ANY COMPANY, THREATENED. 
THE HOURS WORKED BY AND PAYMENTS MADE TO EMPLOYEES OF ANY COMPANY HAVE NOT BEEN
IN VIOLATION OF THE FAIR LABOR STANDARDS ACT OR ANY OTHER APPLICABLE FEDERAL,

 

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STATE, LOCAL OR FOREIGN LAW DEALING WITH SUCH MATTERS IN ANY MANNER WHICH COULD
REASONABLY BE EXPECTED TO RESULT IN A MATERIAL ADVERSE EFFECT.  ALL PAYMENTS DUE
FROM ANY COMPANY, OR FOR WHICH ANY CLAIM MAY BE MADE AGAINST ANY COMPANY, ON
ACCOUNT OF WAGES AND EMPLOYEE HEALTH AND WELFARE INSURANCE AND OTHER BENEFITS,
HAVE BEEN PAID OR ACCRUED AS A LIABILITY ON THE BOOKS OF SUCH COMPANY EXCEPT
WHERE THE FAILURE TO DO SO COULD NOT REASONABLY BE EXPECTED TO RESULT IN A
MATERIAL ADVERSE EFFECT.  THE CONSUMMATION OF THE TRANSACTIONS WILL NOT GIVE
RISE TO ANY RIGHT OF TERMINATION OR RIGHT OF RENEGOTIATION ON THE PART OF ANY
UNION UNDER ANY COLLECTIVE BARGAINING AGREEMENT TO WHICH ANY COMPANY IS BOUND.

 

SECTION 3.18.    SOLVENCY.  IMMEDIATELY AFTER THE CONSUMMATION OF THE
TRANSACTIONS TO OCCUR ON THE THIRD AMENDMENT AND RESTATEMENT EFFECTIVE DATE AND
IMMEDIATELY FOLLOWING THE MAKING OF EACH LOAN AND AFTER GIVING EFFECT TO THE
APPLICATION OF THE PROCEEDS OF EACH LOAN, (A) THE FAIR VALUE OF THE ASSETS OF
EACH LOAN PARTY (INDIVIDUALLY AND ON A CONSOLIDATED BASIS WITH ITS SUBSIDIARIES)
WILL EXCEED ITS DEBTS AND LIABILITIES, SUBORDINATED, CONTINGENT OR OTHERWISE;
(B) THE PRESENT FAIR SALEABLE VALUE OF THE PROPERTY OF EACH LOAN PARTY
(INDIVIDUALLY AND ON A CONSOLIDATED BASIS WITH ITS SUBSIDIARIES) WILL BE GREATER
THAN THE AMOUNT THAT WILL BE REQUIRED TO PAY THE PROBABLE LIABILITY OF ITS DEBTS
AND OTHER LIABILITIES, SUBORDINATED, CONTINGENT OR OTHERWISE, AS SUCH DEBTS AND
OTHER LIABILITIES BECOME ABSOLUTE AND MATURED; (C) EACH LOAN PARTY (INDIVIDUALLY
AND ON A CONSOLIDATED BASIS WITH ITS SUBSIDIARIES) WILL BE ABLE TO PAY ITS DEBTS
AND LIABILITIES, SUBORDINATED, CONTINGENT OR OTHERWISE, AS SUCH DEBTS AND
LIABILITIES BECOME ABSOLUTE AND MATURED; AND (D) EACH LOAN PARTY (INDIVIDUALLY
AND ON A CONSOLIDATED BASIS WITH ITS SUBSIDIARIES) WILL NOT HAVE UNREASONABLY
SMALL CAPITAL WITH WHICH TO CONDUCT ITS BUSINESS IN WHICH IT IS ENGAGED AS SUCH
BUSINESS IS NOW CONDUCTED AND IS PROPOSED TO BE CONDUCTED FOLLOWING THE THIRD
AMENDMENT AND RESTATEMENT EFFECTIVE DATE.

 

SECTION 3.19.    EMPLOYEE BENEFIT PLANS.  EACH COMPANY AND ITS ERISA AFFILIATES
IS IN COMPLIANCE IN ALL MATERIAL RESPECTS WITH THE APPLICABLE PROVISIONS OF
ERISA AND THE CODE AND THE REGULATIONS AND PUBLISHED INTERPRETATIONS
THEREUNDER.  NO ERISA EVENT HAS OCCURRED OR IS REASONABLY EXPECTED TO OCCUR
THAT, WHEN TAKEN TOGETHER WITH ALL OTHER SUCH ERISA EVENTS, COULD REASONABLY BE
EXPECTED TO RESULT IN MATERIAL LIABILITY OF ANY COMPANY OR ANY OF ITS ERISA
AFFILIATES OR THE IMPOSITION OF A LIEN ON ANY OF THE ASSETS OF A COMPANY.  THE
PRESENT VALUE OF ALL ACCUMULATED BENEFIT OBLIGATIONS OF ALL UNDERFUNDED PLANS
(BASED ON THE ASSUMPTIONS USED FOR PURPOSES OF STATEMENT OF FINANCIAL ACCOUNTING
STANDARDS NO. 87) DID NOT, AS OF THE DATE OF THE MOST RECENT FINANCIAL
STATEMENTS REFLECTING SUCH AMOUNTS, EXCEED BY MORE THAN $250,000 THE FAIR MARKET
VALUE OF THE ASSETS OF ALL SUCH UNDERFUNDED PLANS.  USING ACTUARIAL ASSUMPTIONS
AND COMPUTATION METHODS CONSISTENT WITH SUBPART 1 OF SUBTITLE E OF TITLE IV OF
ERISA, THE AGGREGATE LIABILITIES OF EACH COMPANY OR ITS ERISA AFFILIATES TO ALL
MULTIEMPLOYER PLANS IN THE EVENT OF A COMPLETE WITHDRAWAL THEREFROM, AS OF THE
CLOSE OF THE MOST RECENT FISCAL YEAR OF EACH SUCH MULTIEMPLOYER PLAN, COULD NOT
REASONABLY BE EXPECTED TO RESULT IN A MATERIAL ADVERSE EFFECT.

 

SECTION 3.20.    ENVIRONMENTAL MATTERS.

 

(A)           EXCEPT AS SET FORTH IN THIS SCHEDULE 3.20 AND EXCEPT AS,
INDIVIDUALLY OR IN THE AGGREGATE, COULD NOT REASONABLY BE EXPECTED TO RESULT IN
A MATERIAL ADVERSE EFFECT:

 

(1)           THE COMPANIES AND THEIR BUSINESSES, OPERATIONS AND REAL PROPERTY
ARE AND IN THE LAST SIX YEARS HAVE BEEN IN COMPLIANCE WITH, AND THE COMPANIES
HAVE NO LIABILITY UNDER, ENVIRONMENTAL LAW;

 

(2)           THE COMPANIES HAVE OBTAINED ALL ENVIRONMENTAL PERMITS REQUIRED FOR
THE CONDUCT OF THEIR BUSINESSES AND OPERATIONS, AND THE OWNERSHIP, OPERATION AND
USE OF THEIR ASSETS, UNDER ENVIRONMENTAL LAW, ALL SUCH ENVIRONMENTAL PERMITS ARE
VALID AND IN GOOD STANDING AND, UNDER THE CURRENTLY EFFECTIVE BUSINESS PLAN OF
THE COMPANIES, NO EXPENDITURES OR OPERATIONAL

 

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ADJUSTMENTS WILL BE REQUIRED IN ORDER TO RENEW OR MODIFY SUCH ENVIRONMENTAL
PERMITS DURING THE NEXT FIVE YEARS;

 

(3)           THERE HAS BEEN NO RELEASE OR THREATENED RELEASE OF HAZARDOUS
MATERIAL ON, AT, UNDER OR FROM ANY REAL PROPERTY OR FACILITY PRESENTLY OR
FORMERLY OWNED, LEASED OR OPERATED BY THE COMPANIES OR THEIR PREDECESSORS IN
INTEREST THAT COULD RESULT IN LIABILITY BY THE COMPANIES UNDER ENVIRONMENTAL
LAW;

 

(4)           THERE IS NO ENVIRONMENTAL CLAIM PENDING OR, TO THE KNOWLEDGE OF
THE COMPANIES, THREATENED AGAINST THE COMPANIES, OR RELATING TO THE REAL
PROPERTY CURRENTLY OR FORMERLY OWNED, LEASED OR OPERATED BY THE COMPANIES OR
RELATING TO THE OPERATIONS OF THE COMPANIES, AND THERE ARE NO ACTIONS,
ACTIVITIES, CIRCUMSTANCES, CONDITIONS, EVENTS OR INCIDENTS THAT COULD FORM THE
BASIS OF SUCH AN ENVIRONMENTAL CLAIM; AND

 

(5)           NO PERSON WITH AN INDEMNITY OR CONTRIBUTION OBLIGATION TO THE
COMPANIES RELATING TO COMPLIANCE WITH OR LIABILITY UNDER ENVIRONMENTAL LAW IS IN
DEFAULT WITH RESPECT TO SUCH OBLIGATION.

 

(B)           EXCEPT AS SET FORTH IN SCHEDULE 3.20:

 

(1)           NO COMPANY IS OBLIGATED TO PERFORM ANY ACTION OR OTHERWISE INCUR
ANY EXPENSE UNDER ENVIRONMENTAL LAW PURSUANT TO ANY ORDER, DECREE, JUDGMENT OR
AGREEMENT BY WHICH IT IS BOUND OR HAS ASSUMED BY CONTRACT OR AGREEMENT, AND NO
COMPANY IS CONDUCTING OR FINANCING ANY RESPONSE PURSUANT TO ANY ENVIRONMENTAL
LAW WITH RESPECT TO ANY REAL PROPERTY OR ANY OTHER LOCATION;

 

(2)           NO REAL PROPERTY OR FACILITY OWNED, OPERATED OR LEASED BY THE
COMPANIES AND, TO THE KNOWLEDGE OF THE COMPANIES, NO REAL PROPERTY OR FACILITY
FORMERLY OWNED, OPERATED OR LEASED BY THE COMPANIES OR ANY OF THEIR PREDECESSORS
IN INTEREST IS (I) LISTED OR PROPOSED FOR LISTING ON THE NATIONAL PRIORITIES
LIST PROMULGATED PURSUANT TO CERCLA OR (II) LISTED ON THE COMPREHENSIVE
ENVIRONMENTAL RESPONSE, COMPENSATION AND LIABILITY INFORMATION SYSTEM
PROMULGATED PURSUANT TO CERCLA OR (III) INCLUDED ON ANY SIMILAR LIST MAINTAINED
BY ANY GOVERNMENTAL AUTHORITY INCLUDING, WITHOUT LIMITATION, ANY SUCH LIST
RELATING TO PETROLEUM;

 

(3)           NO LIEN HAS BEEN RECORDED OR, TO THE KNOWLEDGE OF ANY COMPANY,
THREATENED UNDER ANY ENVIRONMENTAL LAW WITH RESPECT TO ANY REAL PROPERTY OR
ASSETS OF THE COMPANIES;

 

(4)           THE EXECUTION, DELIVERY AND PERFORMANCE OF THIS AGREEMENT AND THE
CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY WILL NOT REQUIRE ANY
NOTIFICATION, REGISTRATION, FILING, REPORTING, DISCLOSURE, INVESTIGATION,
REMEDIATION OR CLEANUP PURSUANT TO ANY GOVERNMENTAL REAL PROPERTY DISCLOSURE
REQUIREMENTS OR ANY OTHER ENVIRONMENTAL LAW; AND

 

(5)           THE COMPANIES HAVE MADE AVAILABLE TO LENDERS ALL MATERIAL RECORDS
AND FILES IN THE POSSESSION, CUSTODY OR CONTROL OF, OR OTHERWISE REASONABLY
AVAILABLE TO, THE COMPANIES CONCERNING COMPLIANCE WITH OR LIABILITY UNDER
ENVIRONMENTAL LAW INCLUDING, WITHOUT LIMITATION, THOSE CONCERNING THE EXISTENCE
OF HAZARDOUS MATERIAL AT REAL PROPERTY OR FACILITIES CURRENTLY OR FORMERLY
OWNED, OPERATED, LEASED OR USED BY THE COMPANIES.

 

SECTION 3.21.    INSURANCE.  SCHEDULE 3.21 SETS FORTH A TRUE, COMPLETE AND
CORRECT DESCRIPTION OF ALL INSURANCE MAINTAINED BY EACH COMPANY AS OF THE THIRD
AMENDMENT AND RESTATEMENT EFFECTIVE DATE.  AS OF EACH SUCH DATE, SUCH INSURANCE
IS IN FULL FORCE AND EFFECT AND ALL PREMIUMS HAVE BEEN DULY

 

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PAID.  EACH COMPANY HAS INSURANCE IN SUCH AMOUNTS AND COVERING SUCH RISKS AND
LIABILITIES AS ARE IN ACCORDANCE WITH NORMAL INDUSTRY PRACTICE.

 

SECTION 3.22.    SECURITY DOCUMENTS.

 

(A)           THE SECURITY AGREEMENT IS EFFECTIVE TO CREATE IN FAVOR OF THE
COLLATERAL AGENT FOR THE BENEFIT OF THE SECURED PARTIES, A LEGAL, VALID AND
ENFORCEABLE SECURITY INTEREST IN AND LIEN ON THE SECURITY AGREEMENT COLLATERAL
AND, WHEN (I) FINANCING STATEMENTS AND OTHER FILINGS IN APPROPRIATE FORM ARE
FILED IN THE OFFICES SPECIFIED ON SCHEDULE 7 TO THE PERFECTION CERTIFICATE AND
(II) UPON THE TAKING OF POSSESSION OR CONTROL BY THE COLLATERAL AGENT OF THE
SECURITY AGREEMENT COLLATERAL WITH RESPECT TO WHICH A SECURITY INTEREST MAY BE
PERFECTED ONLY BY POSSESSION OR CONTROL (WHICH POSSESSION OR CONTROL SHALL BE
GIVEN TO THE COLLATERAL AGENT TO THE EXTENT POSSESSION OR CONTROL BY THE
COLLATERAL AGENT IS REQUIRED BY EACH SECURITY AGREEMENT), THE LIEN CREATED BY
THE SECURITY AGREEMENT SHALL CONSTITUTE A FULLY PERFECTED LIEN ON, AND SECURITY
INTEREST IN, ALL RIGHT, TITLE AND INTEREST OF THE GRANTORS THEREUNDER IN THE
SECURITY AGREEMENT COLLATERAL (OTHER THAN (A) THE INTELLECTUAL PROPERTY
COLLATERAL (AS DEFINED IN THE SECURITY AGREEMENT) AND (B) SUCH SECURITY
AGREEMENT COLLATERAL IN WHICH A SECURITY INTEREST CANNOT BE PERFECTED UNDER THE
UCC AS IN EFFECT AT THE RELEVANT TIME IN THE RELEVANT JURISDICTION), IN EACH
CASE SUBJECT TO NO LIENS OTHER THAN PERMITTED LIENS.

 

(B)           WHEN THE SECURITY AGREEMENT OR A SHORT FORM THEREOF IS FILED IN
THE UNITED STATES PATENT AND TRADEMARK OFFICE AND THE UNITED STATES COPYRIGHT
OFFICE, THE LIEN CREATED BY SUCH SECURITY AGREEMENT SHALL CONSTITUTE A FULLY
PERFECTED LIEN ON, AND SECURITY INTEREST IN, ALL RIGHT, TITLE AND INTEREST OF
THE GRANTORS THEREUNDER IN THE INTELLECTUAL PROPERTY COLLATERAL (AS DEFINED IN
SUCH SECURITY AGREEMENT), IN EACH CASE SUBJECT TO NO LIENS OTHER THAN PERMITTED
LIENS.

 

(C)           EACH MORTGAGE EXECUTED AND DELIVERED PRIOR TO THE DATE HEREOF IS
EFFECTIVE TO CREATE, IN FAVOR OF THE COLLATERAL AGENT, FOR ITS BENEFIT AND THE
BENEFIT OF THE SECURED PARTIES, A LEGAL, VALID AND ENFORCEABLE FIRST PRIORITY
LIEN ON AND SECURITY INTEREST IN ALL OF THE LOAN PARTIES’ RIGHT, TITLE AND
INTEREST IN AND TO THE MORTGAGED PROPERTIES THEREUNDER AND THE PROCEEDS THEREOF,
AND THE MORTGAGES SHALL CONSTITUTE FULLY PERFECTED LIENS ON, AND SECURITY
INTERESTS IN, ALL RIGHT, TITLE AND INTEREST OF THE LOAN PARTIES IN THE MORTGAGED
PROPERTIES AND THE PROCEEDS THEREOF, IN EACH CASE PRIOR AND SUPERIOR IN RIGHT TO
ANY OTHER PERSON, OTHER THAN LIENS REASONABLY ACCEPTABLE TO ADMINISTRATIVE
AGENT.

 

(D)           EACH SECURITY DOCUMENT DELIVERED PURSUANT TO SECTIONS 5.11 AND
5.12 WILL, UPON EXECUTION AND DELIVERY THEREOF, BE EFFECTIVE TO CREATE IN FAVOR
OF THE COLLATERAL AGENT, FOR THE BENEFIT OF THE SECURED PARTIES, A LEGAL, VALID
AND ENFORCEABLE SECURITY INTEREST IN AND LIEN ON ALL OF THE LOAN PARTIES’ RIGHT,
TITLE AND INTEREST IN AND TO THE COLLATERAL THEREUNDER, AND WHEN ALL APPROPRIATE
FILINGS OR RECORDINGS ARE MADE IN THE APPROPRIATE OFFICES AS MAY BE REQUIRED
UNDER APPLICABLE LAW, SUCH SECURITY DOCUMENT WILL CONSTITUTE A FULLY PERFECTED
LIEN ON, AND SECURITY INTEREST IN, ALL RIGHT, TITLE AND INTEREST OF THE LOAN
PARTIES IN SUCH COLLATERAL, IN EACH CASE SUBJECT TO NO LIENS OTHER THAN THE
APPLICABLE PERMITTED LIENS.

 

SECTION 3.23.    NO MATERIAL ADVERSE EFFECT.  SINCE DECEMBER 31, 2004, THERE HAS
BEEN NO EVENT, CHANGE OR OCCURRENCE THAT, INDIVIDUALLY OR IN THE AGGREGATE, HAS
HAD OR COULD REASONABLY BE EXPECTED TO RESULT IN A MATERIAL ADVERSE EFFECT.

 

SECTION 3.24.    ANTI-TERRORISM LAW.

 

(A)           NO LOAN PARTY AND, TO THE KNOWLEDGE OF THE LOAN PARTIES, NONE OF
ITS AFFILIATES IS IN VIOLATION OF ANY REQUIREMENT OF LAW RELATING TO TERRORISM
OR MONEY LAUNDERING (“ANTI-TERRORISM LAWS”), INCLUDING EXECUTIVE ORDER NO. 13224
ON TERRORIST FINANCING, EFFECTIVE SEPTEMBER 24, 2001 (THE

 

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“EXECUTIVE ORDER”), AND THE UNITING AND STRENGTHENING AMERICA BY PROVIDING
APPROPRIATE TOOLS REQUIRED TO INTERCEPT AND OBSTRUCT TERRORISM ACT OF 2001,
PUBLIC LAW 107-56.

 

(B)           NO LOAN PARTY AND TO THE ACTUAL KNOWLEDGE OF THE LOAN PARTIES, NO
AFFILIATE OR BROKER OR OTHER AGENT OF ANY LOAN PARTY ACTING OR BENEFITING IN ANY
CAPACITY IN CONNECTION WITH THE LOANS IS ANY OF THE FOLLOWING:

 

(I)            A PERSON THAT IS LISTED IN THE ANNEX TO, OR IS OTHERWISE SUBJECT
TO THE PROVISIONS OF, THE EXECUTIVE ORDER;

 

(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;

 

(III)          A PERSON WITH WHICH ANY LENDER IS PROHIBITED FROM DEALING OR
OTHERWISE ENGAGING IN ANY TRANSACTION BY ANY ANTI-TERRORISM LAW;

 

(IV)          A PERSON THAT COMMITS, THREATENS OR CONSPIRES TO COMMIT OR
SUPPORTS “TERRORISM” AS DEFINED IN THE EXECUTIVE ORDER; OR

 

(V)           A PERSON THAT IS NAMED AS A “SPECIALLY DESIGNATED NATIONAL AND
BLOCKED PERSON” ON THE MOST CURRENT LIST PUBLISHED BY THE U.S. TREASURY
DEPARTMENT OFFICE OF FOREIGN ASSETS CONTROL (“OFAC”) AT ITS OFFICIAL WEBSITE OR
ANY REPLACEMENT WEBSITE OR OTHER REPLACEMENT OFFICIAL PUBLICATION OF SUCH LIST.

 

(C)           NO LOAN PARTY AND, TO THE ACTUAL KNOWLEDGE OF THE LOAN PARTIES, NO
BROKER OR OTHER AGENT OF ANY LOAN PARTY ACTING IN ANY CAPACITY IN CONNECTION
WITH THE LOANS (I) CONDUCTS ANY BUSINESS OR ENGAGES IN MAKING OR RECEIVING ANY
CONTRIBUTION OF FUNDS, GOODS OR SERVICES TO OR FOR THE BENEFIT OF ANY PERSON
DESCRIBED IN PARAGRAPH (B) ABOVE, (II) DEALS IN, OR OTHERWISE ENGAGES IN ANY
TRANSACTION RELATING TO, ANY PROPERTY OR INTERESTS IN PROPERTY BLOCKED PURSUANT
TO THE EXECUTIVE ORDER, OR (III) ENGAGES IN OR CONSPIRES TO ENGAGE IN ANY
TRANSACTION THAT EVADES OR AVOIDS, OR HAS THE PURPOSE OF EVADING OR AVOIDING, OR
ATTEMPTS TO VIOLATE, ANY OF THE PROHIBITIONS SET FORTH IN ANY ANTI-TERRORISM
LAW.

 

ARTICLE IV

 

CONDITIONS TO CREDIT EXTENSIONS

 

SECTION 4.01.    CONDITIONS TO INITIAL CREDIT EXTENSION.  THE FOLLOWING
CONDITIONS PRECEDENT TO THE OBLIGATION OF EACH ORIGINAL LENDER TO FUND THE
INITIAL CREDIT EXTENSION REQUESTED TO BE MADE BY IT WERE SATISFIED ON THE
CLOSING DATE.

 

(a)           Loan Documents.  All legal matters incident to this Agreement, the
Borrowings and extensions of credit hereunder and the other Loan Documents shall
be satisfactory to the Original Lenders, to the Issuing Bank and to the
Administrative Agent and there shall have been delivered to the Administrative
Agent an executed counterpart of each of the Loan Documents, including this
Agreement and the Security Agreement, each Mortgage, the Perfection Certificate
and each other applicable Loan Document.

 

(b)           Corporate Documents.  The Administrative Agent shall have
received:

 

(i)            a certificate of the Secretary or Assistant Secretary or general
partner of each Loan Party dated the Closing Date and certifying (A) that
attached thereto is a true

 

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and complete copy of the certificate or articles of incorporation or other
constitutive documents, including all amendments thereto certified as of a
recent date by the Secretary of State of the state of its organization, (B) that
attached thereto is a true and complete copy of the by laws of such Loan Party
as in effect on the Closing Date and at all times since a date prior to the date
of the resolutions described in clause (C) below, (C) that attached thereto is a
true and complete copy of resolutions duly adopted by the board of directors of
such Loan Party authorizing the execution, delivery and performance of the Loan
Documents to which such person is a party and, in the case of Borrower, the
borrowings hereunder, and that such resolutions have not been modified,
rescinded or amended and are in full force and effect, and (D) as to the
incumbency and specimen signature of each officer executing any Loan Document or
any other document delivered in connection herewith on behalf of such Loan Party
(together with a certificate of another officer as to the incumbency and
specimen signature of the Secretary or Assistant Secretary executing the
certificate in this clause (i));

 

(ii)           a long form certificate as to the good standing of each Loan
Party as of a recent date, from such Secretary of State; and

 

(iii)          such other documents as the Original Lenders, the Issuing Bank or
the Administrative Agent may reasonably request.

 

(c)           Officers’ Certificate.  The Administrative Agent shall have
received a certificate, dated the Closing Date and signed by the Chief Executive
Officer and the Chief Financial Officer of Borrower, confirming compliance with
the conditions precedent set forth in paragraphs (b), (c), (d) and (e) of
Section 4.02.

 

(d)           The Original Lenders shall be satisfied with the capitalization,
the terms and conditions of any equity arrangements and the corporate or other
organizational structure of the Companies.  The Original Lenders shall be
satisfied that Borrower and its subsidiaries have adequate working capital and
capital expenditure funds and availability.

 

(e)           Financial Statements; Pro Forma Balance Sheet; Projections.  The
Original Lenders shall have received and shall be satisfied with the form and
substance of the financial statements described in Section 3.04 and with the
forecasts of the financial performance of Borrower, the Acquired Business and
their respective Subsidiaries.

 

(f)            Indebtedness.  After giving effect to the Transactions and the
other transactions contemplated hereby, no Company shall have outstanding any
Indebtedness, preferred stock or minority interests other than (i) the Loans and
extensions of credit hereunder, (ii) up to $8.0 million of Purchase Money
Obligations and the other Indebtedness listed on Schedule 6.01(b),
(iii) Indebtedness owed to Borrower or any Guarantor and (iv) preferred stock to
be converted, exchanged or extended in term as set forth in Section 5.15.

 

(g)           Opinions of Counsel.  The Administrative Agent shall have
received, on behalf of itself, the other Agents, the Arranger, the Original
Lenders and the Issuing Bank, a favorable written opinion of (i) Andrews Kurth
LLP, special counsel for the Loan Parties, substantially to the effect set forth
in Exhibit J-1, (ii) each local counsel listed on Schedule 4.01(g),
substantially to the effect set forth in Exhibit J-2, and any legal opinions
delivered under the Acquisition Documents, in each case (A) dated the Closing
Date, (B) addressed to the Agents, the Issuing Bank and the Original Lenders and
(C) covering such other matters relating to the Loan Documents and the
Transactions as the Administrative Agent shall reasonably request, and (iii) a
copy

 

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of each legal opinion delivered under the other Transaction Documents, and
Borrower shall use its best efforts to deliver reliance letters from the party
delivering such opinion authorizing the Agents, Original Lenders and the Issuing
Bank to rely thereon as if such opinion were addressed to them.

 

(h)           Solvency Certificate, Other Reports and Transaction Structure.

 

(I)            THE ORIGINAL LENDERS SHALL HAVE RECEIVED ALL OTHER REPORTS AND
OPINIONS OF APPRAISERS, CONSULTANTS OR OTHER ADVISORS RETAINED BY IT TO REVIEW
THE BUSINESS, OPERATION OR CONDITION OF BORROWER AND ITS SUBSIDIARIES GIVING
EFFECT TO THE TRANSACTIONS, AND SHALL BE SATISFIED WITH SUCH REPORTS AND
OPINIONS.

 

(II)           THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED A SOLVENCY
CERTIFICATE IN THE FORM OF EXHIBIT M, DATED THE CLOSING DATE AND SIGNED BY THE
CHIEF FINANCIAL OFFICER OF BORROWER AND AN EQUIVALENT OFFICER FOR EACH BORROWER.

 

(III)          THE ORIGINAL LENDERS SHALL HAVE REVIEWED, AND BE SATISFIED WITH,
THE OWNERSHIP, CORPORATE, LEGAL, TAX, MANAGEMENT AND CAPITAL STRUCTURE OF
BORROWER AND ITS SUBSIDIARIES (AFTER GIVING EFFECT TO THE TRANSACTIONS) AND ANY
SECURITIES ISSUED, AND ANY INDEMNITIES, EMPLOYMENT AND OTHER ARRANGEMENTS
ENTERED INTO, IN CONNECTION WITH THE TRANSACTIONS.

 

(i)            Requirements of Law.  The Original Lenders shall be satisfied
that the Transactions shall be in full compliance with all material Requirements
of Law, including without limitation Regulations T, U and X of the Board.  The
Original Lenders shall have received satisfactory evidence of compliance with
all applicable Requirements of Law, including all applicable environmental laws
and regulations.

 

(j)            Consents.  The Original Lenders shall be satisfied that all
requisite Governmental Authorities and third parties shall have approved or
consented to the Transactions, and there shall be no governmental or judicial
action, actual or threatened, that has or would have, singly or in the
aggregate, a reasonable likelihood of restraining, preventing or imposing
burdensome conditions on the Transactions or the other transactions contemplated
hereby.

 

(k)           Litigation.  There shall be no litigation, public or private, or
administrative proceedings, governmental investigation or other legal or
regulatory developments, actual or threatened, that, singly or in the aggregate,
could reasonably be expected to result in a Material Adverse Effect, or could
materially and adversely affect the ability of Borrower and the Subsidiaries to
fully and timely perform their respective obligations under the Transaction
Documents, or the ability of the parties to consummate the financings
contemplated hereby or the other Transactions.

 

(l)            Sources and Uses.  The sources and uses of the Loans shall be as
set forth in Section 3.14.

 

(m)          Fees.  The Arranger and Administrative Agent shall have received
all Fees and other amounts due and payable on or prior to the Closing Date,
including, to the extent invoiced, reimbursement or payment of all out of pocket
expenses (including the legal fees and expenses of Cahill Gordon & Reindel LLP,
special counsel to the Agents, and the fees and expenses of any local counsel,
appraisers, consultants and other advisors) required to be reimbursed or paid by
Borrower hereunder or under any other Loan Document.

 

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(n)           Personal Property Requirements.  The Collateral Agent shall have
received:

 

(i)            all certificates, agreements or instruments representing or
evidencing the Pledged Securities and the Pledged Intercompany Notes (each as
defined in the Security Agreement) accompanied by instruments of transfer and
stock powers endorsed in blank shall have been delivered to the Collateral
Agent;

 

(ii)           all other certificates, agreements, including control agreements,
or instruments necessary to perfect the Collateral Agent’s security interest in
all Chattel Paper, all Instruments, all Deposit Accounts and all Investment
Property of each Loan Party (as each such term is defined in the Security
Agreement and to the extent required by Section 3.3 of the Security Agreement);

 

(iii)          UCC financing statement s in appropriate form for filing under
the UCC, filings with the United States Patent, Trademark and Copyright offices
and such other documents under applicable Requirements of Law in each
jurisdiction as may be necessary or appropriate or, in the opinion of the
Collateral Agent, desirable to perfect the Liens created, or purported to be
created, by the Security Documents and, with respect to all UCC financing
statement s required to be filed pursuant to the Loan Documents, evidence
satisfactory to the Administrative Agent that Borrower has retained, at its sole
cost and expense, a service provider acceptable to the Administrative Agent for
the tracking of all such financing statements and notification to the
Administrative Agent, of, among other things, the upcoming lapse or expiration
thereof;

 

(iv)          certified copies of UCC, tax and judgment lien searches,
bankruptcy and pending lawsuit searches or equivalent reports or searches,
listing all effective financing statements, lien notices or comparable documents
that name any Loan Party as debtor and that are filed in those state and county
jurisdictions in which any property of any Loan Party is located and the state
and county jurisdictions in which any Loan Party is organized or maintains its
principal place of business, none of which encumber the Collateral covered or
intended to be covered by the Security Documents (other than those relating to
Liens acceptable to the Collateral Agent);

 

(v)           with respect to each Real Property set forth on Schedule 4.01(n),
such Loan Party shall use its commercially reasonable efforts to obtain a
Landlord Lien Waiver and Access Agreement; and

 

(vi)          evidence acceptable to the Collateral Agent of payment by the Loan
Parties of all applicable recording taxes, fees, charges, costs and expenses
required for the recording of the Security Documents.

 

(o)           Real Property Requirements.  The Collateral Agent shall have
received:

 

(i)            a Mortgage encumbering each Mortgaged Property that, together
with any improvements thereon, individually has a fair market value of at least
$2.0 million, in favor of the Collateral Agent, for the benefit of the Secured
Parties, duly executed and acknowledged by each Loan Party that is the owner or
holder of any interest in such Mortgaged Property, and otherwise in proper form
for recording in the recording office of each political subdivision where such
Mortgaged Property is situated, together with such certificates, affidavits,
questionnaires or returns as shall be required in connection with the recording
or filing thereof to create a lien under applicable law, and such UCC 1

 

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financing statements, all of which shall be in form and substance reasonably
satisfactory to the Collateral Agent, and any other instruments necessary to
grant a mortgage lien under the laws of any applicable jurisdiction, all of
which Mortgages and instruments shall be duly recorded or filed in such manner
and in such places as are required by law to establish, perfect, preserve and
protect the Liens in favor of the Collateral Agent required to be granted
pursuant to the Mortgages and all taxes, fees and other charges payable in
connection therewith shall be paid in full.  Such Mortgages shall constitute
valid and enforceable perfected Liens subject only to Liens reasonably
acceptable to the Administrative Agent;

 

(ii)           with respect to each Mortgaged Property, such consents,
approvals, amendments, supplements, estoppels, tenant subordination agreements,
access agreements or other instruments as necessary or required to consummate
the Transactions or as shall reasonably be deemed necessary by the Collateral
Agent in order for the owner or holder of the fee or leasehold interest
constituting such Mortgaged Property to grant the Lien contemplated by the
Mortgage with respect to such Mortgaged Property;

 

(iii)          with respect to each Mortgage, a policy of title insurance (on
ALTA 1992 form) (or commitment to issue a title policy) insuring (or committing
to insure) the Lien of such Mortgage as a valid first mortgage Lien on the
Mortgaged Property and fixtures described therein in the amount set forth on
Schedule 4.01(o)(iii) hereto with respect to such Mortgaged Property 115% of the
fair market value of such Mortgaged Property, which policies (each, a “Title
Policy”) shall (A) be issued by the Title Company, (B) to the extent necessary,
include such reinsurance arrangements (with provisions for direct access, if
necessary) as shall be reasonably acceptable to the Collateral Agent,
(C) contain a “tie in” or “cluster” endorsement (if available under applicable
law) (i.e., policies which insure against losses regardless of location or
allocated value of the insured property up to a stated maximum coverage amount),
(D) have been supplemented by such endorsements (or where such endorsements are
not available, opinions of special counsel, architects or other professionals
reasonably acceptable to the Collateral Agent to the extent that such opinions
can be obtained at a cost which is reasonable with respect to the value of the
Mortgaged Property subject to such Mortgage) as shall be reasonably requested by
the Collateral Agent (including, without limitation, endorsements on matters
relating to usury, first loss, last dollar, zoning, contiguity, revolving
credit, doing business, non imputation, public road access, survey, variable
rate, environmental lien and so called comprehensive coverage over covenants and
restrictions), and (E) contain no exceptions to title other than exceptions
acceptable to the Collateral Agent;

 

(iv)          with respect to each Mortgaged Property, such affidavits,
certificates, information (including financial data) and instruments of
indemnification (including, without limitation, a so called “gap”
indemnification) as shall be required to induce the Title Company to issue the
Title Policy/ies and endorsements contemplated in subparagraph (iii) above;

 

(v)           evidence reasonably acceptable to the Collateral Agent of payment
by Borrower of all Title Policy premiums, search and examination charges, escrow
charges, and related charges, mortgage recording taxes, fees, charges, costs and
expenses required for the recording of the Mortgages and issuance of the Title
Policies referred to subparagraph (iii) above;

 

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(vi)          with respect to each Real Property or Mortgaged Property, copies
of all Leases in which Borrower or any Subsidiary holds the lessor’s interest or
other agreements relating to possessory interests, if any.  To the extent any of
the foregoing affect any Mortgaged Property, such agreement shall be subordinate
to the Lien of the Mortgage to be recorded against such Mortgaged Property,
either expressly by its terms or pursuant to a subordination, non disturbance
and attornment agreement, and shall otherwise be acceptable to the Collateral
Agent;

 

(vii)         with respect to each Mortgaged Property, each Borrower and each
Subsidiary shall have made all notification, registrations and filings, to the
extent required by, and in accordance with, all Governmental Real Property
Disclosure Requirements applicable to such Mortgaged Property;

 

(viii)        Surveys with respect to each Mortgaged Property; and

 

(ix)           with respect to each Mortgaged Property, local counsel opinions
in form and substance reasonably satisfactory to the Collateral Agent;

 

(x)            with respect to each Mortgaged Property, policies or certificates
of insurance, all as required by the Mortgage related thereto and Section 5.04
hereof, which policies or insurance shall comply with the insurance requirements
contained in Section 5.04 hereof; and

 

(xi)           a Real Property Officer’s Certificate in form and substance
reasonably satisfactory to the Collateral Agent;.

 

(p)           Insurance.  The Administrative Agent shall have received a copy
of, or a certificate as to coverage under, the insurance policies required by
Section 5.04 and the applicable provisions of the Security Documents, each of
which shall be endorsed or otherwise amended to include a “standard” or “New
York” lender’s loss payable endorsement and to name the Collateral Agent as
additional insured, in form and substance satisfactory to the Administrative
Agent.

 

(q)           EBITDA.  The Original Lenders shall have received a written
certificate of the Chief Executive Officer and the Chief Financial Officer
Borrower that the Consolidated EBITDA for the last four quarter period ending
more than 30 days prior to the Closing Date (last twelve months ended July 31,
2003) calculated on a pro forma basis consistent with the requirements set forth
in Section 5.01(a) was not less than $37.0 million.

 

SECTION 4.02.    CONDITIONS TO ALL CREDIT EXTENSIONS.  THE OBLIGATION OF EACH
LENDER AND EACH ISSUING BANK TO MAKE ANY CREDIT EXTENSION SHALL BE SUBJECT TO,
AND TO THE SATISFACTION OF, EACH OF THE CONDITIONS PRECEDENT SET FORTH BELOW.

 

(a)           Notice.  The Administrative Agent shall have received a Borrowing
Request as required by Section 2.03 (or such notice shall have been deemed given
in accordance with Section 2.03) if Loans are being requested or, in the case of
the issuance, amendment, extension or renewal of a Letter of Credit, the Issuing
Bank and the Administrative Agent shall have received a notice requesting the
issuance, amendment, extension or renewal of such Letter of Credit as required
by Section 2.18(b) or, in the case of the Borrowing of a Swingline Loan, the
Swingline Lender and the Administrative Agent shall have received a notice
requesting such Swingline Loan as required by Section 2.17(b).

 

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(b)           No Default.  Borrower and each other Loan Party shall be in
compliance in all material respects with all the terms and provisions set forth
herein and in each other Loan Document on its part to be observed or performed,
and, at the time of and immediately after such Credit Extension, no Default
shall have occurred and be continuing on such date or after giving effect to the
Credit Extension requested to be made on such date.

 

(c)           Representations and Warranties.  Each of the representations and
warranties made by any Loan Party set forth in Article III hereof or in any
other Loan Document shall be true and correct in all material respects (except
that any representation and warranty that is qualified as to “materiality” or
“Material Adverse Effect” shall be true and correct in all respects) on and as
of the date of such Credit Extension with the same effect as though made on and
as of such date, except to the extent such representations and warranties
expressly relate to an earlier date.

 

(d)           No Material Adverse Effect.  There has been no event, condition
and/or contingency that has had or is reasonably likely to have a Material
Adverse Effect.

 

(e)           No Legal Bar.  No order, judgment or decree of any Governmental
Authority shall purport to restrain any Lender from making any Loans to be made
by it.  No injunction or other restraining order shall have been issued, shall
be pending or noticed with respect to any action, suit or proceeding seeking to
enjoin or otherwise prevent the consummation of, or to recover any damages or
obtain relief as a result of, the transactions contemplated by this Agreement or
the making of Loans hereunder.

 

Each of the delivery of a Borrowing Request or notice requesting the issuance,
amendment, extension or renewal of a Letter of Credit and the acceptance by
Borrower of the proceeds of such Credit Extension shall constitute a
representation and warranty by Borrower and each other Loan Party that on the
date of such Credit Extension (both immediately before and after giving effect
to such Credit Extension and the application of the proceeds thereof) the
conditions contained in this Section 4.02 have been satisfied.  Borrower shall
provide such information (including calculations in reasonable detail of the
covenants in Section 6.08) as the Administrative Agent may reasonably request to
confirm that the conditions in this Section 4.02 have been satisfied.

 

SECTION 4.03.    INTENTIONALLY OMITTED.

 

SECTION 4.04.    CONDITIONS TO EFFECTIVENESS OF THE AMENDMENT AND RESTATEMENT. 
THIS THIRD AMENDED AND RESTATED CREDIT AGREEMENT SHALL BECOME EFFECTIVE ON AND
AS OF THE FIRST DATE (THE “THIRD AMENDMENT AND RESTATEMENT EFFECTIVE DATE”) ON
WHICH ALL OF THE FOLLOWING CONDITIONS PRECEDENT SHALL HAVE BEEN SATISFIED:

 

(a)           Expenses.  All of the reasonable fees and expenses of counsel for
the Agents in connection with the amendment and restatement shall have been paid
in full.

 

(b)           No Default or Event of Default.  No Default or Event of Default
shall have occurred and be continuing on the Third Amendment and Restatement
Effective Date.

 

(c)           Representations and Warranties.  Each of the representations and
warranties made in or pursuant to Article III or which are contained in any
other Loan Document shall be true and correct in all material respects on and as
of the Third Amendment and Restatement Effective Date as if made on and as of
such date (unless stated to relate to a specific earlier date, in which case
such representations and warranties shall be true and correct in all material
respects as of such earlier date).

 

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(d)           Authorization.  The execution, delivery and performance of this
Agreement shall have been duly authorized by all necessary action on the part of
Borrower and the Subsidiary Guarantors, and the Administrative Agent shall have
received satisfactory evidence thereof.

 

(e)           Opinions and Certificates.  The Administrative Agent shall have
received opinions and certificates dated the Third Amendment and Restatement
Effective Date, in form and substance satisfactory to the Administrative Agent
and including a representation by the Chief Financial Officer of Borrower that,
as of the Third Amendment and Restatement Effective Date, no tax or judgment
liens have been filed against any Loan Party or any of their respective
properties since the Closing Date.

 

(f)            Initial Public Offering.  Borrower shall have consummated the
initial public offering of its common stock pursuant to the registration
statement on Form S-1 (Registration No. 333-127517), as amended, filed with the
Securities and Exchange Commission under the Securities Act of 1933, as amended.

 

ARTICLE V

 

AFFIRMATIVE COVENANTS

 

Each Loan Party covenants and agrees with each Lender that so long as this
Agreement shall remain in effect (except for provisions which by their terms
survive termination, such as indemnification provisions) and until the
Commitments have been terminated and the principal of and interest on each Loan,
all Fees and all other expenses or amounts payable under any Loan Document shall
have been paid in full and all Letters of Credit have been canceled or have
expired or been fully cash collateralized and all amounts drawn thereunder have
been reimbursed in full, unless the Required Lenders shall otherwise consent in
writing, each Loan Party will, and will cause each of its subsidiaries to:

 

SECTION 5.01.    FINANCIAL STATEMENTS, REPORTS, ETC.  BORROWER WILL FURNISH TO
THE ADMINISTRATIVE AGENT AND EACH LENDER:

 

(a)           Annual Reports.  Within 120 days after the end of each fiscal
year, (i) the consolidated balance sheet of Borrower and its Subsidiaries as of
the end of such fiscal year and related consolidated statements of income, cash
flows and stockholders’ equity for such fiscal year, and notes thereto, all
prepared in accordance with Regulation S-X under the Securities Act and
accompanied by an opinion of KPMG LLP or other independent public accountants of
recognized national standing satisfactory to the Administrative Agent (which
opinion shall not be qualified as to scope or contain any going concern or other
qualification), stating that such financial statements fairly present, in all
material respects, the consolidated financial condition, results of operations,
cash flows and changes in stockholders’ equity of the Consolidated Companies as
of the end of and for such fiscal year in accordance with GAAP consistently
applied, (ii) a management report in a form reasonably satisfactory to the
Administrative Agent setting forth, on a consolidated basis, the financial
condition, results of operations and cash flows of the Consolidated Companies as
of the end of and for such fiscal year, as compared to the Consolidated
Companies’ budgeted financial conditions, results of operations and cash flows,
and (iii) a management’s discussion and analysis of the financial condition and
results of operations for such fiscal year, as compared to the previous fiscal
year;

 

(b)           Quarterly Reports.  Within 45 days after the end of each of the
first three fiscal quarters of each fiscal year, (i) the consolidated balance
sheet of Borrower and its Subsidiaries as of the end of such fiscal quarter and
related consolidated statements of income and cash flows for

 

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such fiscal quarter and for the then elapsed portion of the fiscal year, in
comparative form with the consolidated statements of income and cash flows for
the comparable periods in the previous fiscal year, all prepared in accordance
with Regulation S-X under the Securities Act and accompanied by a certificate of
a Financial Officer stating that such financial statements fairly present, in
all material respects, the consolidated financial condition, results of
operations and cash flows of the Consolidated Companies as of the date and for
the periods specified in accordance with GAAP consistently applied, and on a
basis consistent with audited financial statements referred to in clause (a) if
this Section, subject to normal year end audit adjustments, and (ii) a
management’s discussion and analysis of the financial condition and results of
operations for such fiscal quarter and the then elapsed portion of the fiscal
year, as compared to the comparable periods in the previous fiscal year;

 

(c)           [Intentionally omitted];

 

(d)           Financial Officer’s Certificate.  (i) Concurrently with any
delivery of financial statements under paragraph (a) or (b) above, a Compliance
Certificate of a Financial Officer certifying that no Default has occurred or,
if such a Default has occurred, specifying the nature and extent thereof and any
corrective action taken or proposed to be taken with respect thereto;
(ii) concurrently with any delivery of financial statements under subparagraph
(a) or (b) above, a certificate of a Financial Officer setting forth
computations in reasonable detail satisfactory to the Administrative Agent
demonstrating compliance with the covenants contained in Section 6.08; and
(iii) in the case of paragraph (a) above, a report of the accounting firm
opining on or certifying such financial statements stating that in the course of
its regular audit of the financial statements of Borrower and its Subsidiaries,
which audit was conducted in accordance with GAAP, such accounting firm obtained
no knowledge that any Default has occurred or, if in the opinion of such
accounting firm such a Default has occurred, specifying the nature and extent
thereof;

 

(e)           Financial Officer’s Certificate Regarding Collateral. 
Concurrently with any delivery of financial statements under paragraph (a),
above, a Perfection Certificate or Perfection Certificate Supplement;

 

(f)            Public Reports.  Promptly after the same become publicly
available, copies of all periodic and other reports, proxy statements and other
materials filed by any Company with the Securities and Exchange Commission, or
any Governmental Authority succeeding to any or all of the functions of said
Commission, or with any national securities exchange, or distributed to holders
of its Indebtedness pursuant to the terms of the documentation governing such
Indebtedness (or any trustee, agent or other representative therefor), as the
case may be;

 

(g)           Management Letters.  Promptly after the receipt thereof by any
Company, a copy of any “management letter” received by any such person from its
certified public accountants and the management’s responses thereto;

 

(h)           Budgets.  No later than the second day of each fiscal year of
Borrower and its Subsidiaries, a budget in form reasonably satisfactory to the
Administrative Agent (including budgeted statements of income, sources and uses
of cash and balance sheets of the Consolidated Companies) for each fiscal month
of such fiscal year prepared in detail and on a consolidated basis, with
appropriate presentation and discussion of the principal assumptions upon which
such budgets are based, accompanied by the statement of a Financial Officer of
Borrower to the effect that the budget of the Consolidated Companies is a
reasonable estimate for the period covered thereby;

 

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(i)            Annual Meetings with Lenders.  Within 120 days after the close of
each fiscal year of Borrower shall, at the request of the Administrative Agent
or Required Lenders, hold a meeting (at a mutually agreeable location and time)
with all Lenders who choose to attend such meeting at which meeting shall be
reviewed the financial results of the previous fiscal year and the financial
condition of the Companies and the budgets presented for the current fiscal year
of the Companies; and

 

(j)            Other Information.  Promptly, from time to time, such other
information regarding the operations, business affairs and financial condition
of any Company, or compliance with the terms of any Loan Document, as the
Administrative Agent or any Lender may reasonably request.

 

SECTION 5.02.    LITIGATION AND OTHER NOTICES.  FURNISH TO THE ADMINISTRATIVE
AGENT AND EACH LENDER PROMPT WRITTEN NOTICE OF THE FOLLOWING:

 

(a)           any Default, specifying the nature and extent thereof and the
corrective action (if any) taken or proposed to be taken with respect thereto;

 

(b)           the filing or commencement of, or any threat or notice of
intention of any person to file or commence, any action, suit or proceeding,
whether at law or in equity by or before any Governmental Authority, (i) against
any Company or any Affiliate thereof that could reasonably be expected to result
in a Material Adverse Effect or (ii) with respect to any Loan Document;

 

(c)           any development that has resulted in, or could reasonably be
expected to result in a Material Adverse Effect;

 

(d)           the occurrence of a Casualty Event and will ensure that the Net
Cash Proceeds of any such event (whether in the form of insurance proceeds,
condemnation awards or otherwise) are collected and applied in accordance with
the applicable provisions of this Agreement and the Security Documents; and

 

(e)           (i) the incurrence of any material Lien (other than Permitted
Liens) on, or claim asserted against any of the Collateral or (ii) the
occurrence of any other event which could materially affect the value of the
Collateral.

 

SECTION 5.03.    EXISTENCE; BUSINESSES AND PROPERTIES.

 

(A)           DO OR CAUSE TO BE DONE ALL THINGS NECESSARY TO PRESERVE, RENEW AND
KEEP IN FULL FORCE AND EFFECT ITS LEGAL EXISTENCE, EXCEPT AS OTHERWISE EXPRESSLY
PERMITTED UNDER SECTION 6.05 OR, IN THE CASE OF ANY SUBSIDIARY, WHERE THE
FAILURE TO PERFORM SUCH OBLIGATIONS, INDIVIDUALLY OR IN THE AGGREGATE, COULD NOT
REASONABLY BE EXPECTED TO RESULT IN A MATERIAL ADVERSE EFFECT.

 

(B)           DO OR CAUSE TO BE DONE ALL THINGS NECESSARY TO OBTAIN, PRESERVE,
RENEW, EXTEND AND KEEP IN FULL FORCE AND EFFECT THE RIGHTS, LICENSES, PERMITS,
FRANCHISES, AUTHORIZATIONS, PATENTS, COPYRIGHTS, TRADEMARKS AND TRADE NAMES
MATERIAL TO THE CONDUCT OF ITS BUSINESS; MAINTAIN AND OPERATE SUCH BUSINESS IN
SUBSTANTIALLY THE MANNER IN WHICH IT IS PRESENTLY CONDUCTED AND OPERATED; COMPLY
WITH ALL APPLICABLE REQUIREMENTS OF LAW (INCLUDING ANY AND ALL ZONING, BUILDING,
ENVIRONMENTAL LAW, ORDINANCE, CODE OR APPROVAL OR ANY BUILDING PERMITS OR ANY
RESTRICTIONS OF RECORD OR AGREEMENTS AFFECTING THE REAL PROPERTY) AND DECREES
AND ORDERS OF ANY GOVERNMENTAL AUTHORITY, WHETHER NOW IN EFFECT OR HEREAFTER
ENACTED, EXCEPT WHERE THE FAILURE TO COMPLY, INDIVIDUALLY OR IN THE AGGREGATE,
COULD NOT REASONABLY BE EXPECTED TO RESULT IN A MATERIAL ADVERSE EFFECT; PAY AND
PERFORM ITS OBLIGATIONS UNDER ALL LEASES AND LOAN DOCUMENTS; AND AT

 

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ALL TIMES MAINTAIN AND PRESERVE ALL PROPERTY MATERIAL TO THE CONDUCT OF SUCH
BUSINESS AND KEEP SUCH PROPERTY IN GOOD REPAIR, WORKING ORDER AND CONDITION AND
FROM TIME TO TIME MAKE, OR CAUSE TO BE MADE, ALL NEEDFUL AND PROPER REPAIRS,
RENEWALS, ADDITIONS, IMPROVEMENTS AND REPLACEMENTS THERETO NECESSARY IN ORDER
THAT THE BUSINESS CARRIED ON IN CONNECTION THEREWITH MAY BE PROPERLY CONDUCTED
IN THE ORDINARY COURSE AT ALL TIMES; PROVIDED THAT NOTHING IN THIS
SECTION 5.03(B) SHALL PREVENT (I) SALES OF ASSETS, CONSOLIDATIONS OR MERGERS BY
OR INVOLVING ANY COMPANY IN ACCORDANCE WITH SECTION 6.05; (II) THE WITHDRAWAL BY
ANY COMPANY OF ITS QUALIFICATION AS A FOREIGN CORPORATION IN ANY JURISDICTION
WHERE SUCH WITHDRAWAL, INDIVIDUALLY OR IN THE AGGREGATE, COULD NOT REASONABLY BE
EXPECTED TO RESULT IN A MATERIAL ADVERSE EFFECT; OR (III) THE ABANDONMENT BY ANY
COMPANY OF ANY RIGHTS, FRANCHISES, LICENSES, TRADEMARKS, TRADE NAMES, COPYRIGHTS
OR PATENTS THAT SUCH PERSON REASONABLY DETERMINES ARE NOT USEFUL TO ITS
BUSINESS.

 

SECTION 5.04.    INSURANCE.

 

(A)           KEEP ITS INSURABLE PROPERTY ADEQUATELY INSURED AT ALL TIMES BY
FINANCIALLY SOUND AND REPUTABLE INSURERS; MAINTAIN SUCH OTHER INSURANCE, TO SUCH
EXTENT AND AGAINST SUCH RISKS, INCLUDING FIRE AND OTHER RISKS INSURED AGAINST BY
EXTENDED COVERAGE, AS IS CUSTOMARY WITH COMPANIES IN THE SAME OR SIMILAR
BUSINESSES OPERATING IN THE SAME OR SIMILAR LOCATIONS, INCLUDING PUBLIC
LIABILITY INSURANCE AGAINST CLAIMS FOR PERSONAL INJURY OR DEATH OR PROPERTY
DAMAGE OCCURRING UPON, IN, ABOUT OR IN CONNECTION WITH THE USE OF ANY PROPERTY
OWNED, OCCUPIED OR CONTROLLED BY IT; AND MAINTAIN SUCH OTHER INSURANCE AS MAY BE
REQUIRED BY LAW; AND, WITH RESPECT TO THE COLLATERAL, OTHERWISE MAINTAIN ALL
INSURANCE COVERAGE REQUIRED UNDER EACH APPLICABLE SECURITY DOCUMENT, SUCH
POLICIES TO BE IN SUCH FORM AND AMOUNTS AND HAVING SUCH COVERAGE AS MAY BE
REASONABLY SATISFACTORY TO THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT.

 

(B)           ALL SUCH INSURANCE SHALL (I) PROVIDE THAT NO CANCELLATION,
MATERIAL REDUCTION IN AMOUNT OR MATERIAL CHANGE IN COVERAGE THEREOF SHALL BE
EFFECTIVE UNTIL AT LEAST 30 DAYS AFTER RECEIPT BY THE COLLATERAL AGENT OF
WRITTEN NOTICE THEREOF, (II) NAME THE COLLATERAL AGENT AS MORTGAGEE (IN THE CASE
OF PROPERTY INSURANCE) OR ADDITIONAL INSURED (IN THE CASE OF LIABILITY
INSURANCE) OR LOSS PAYEE (IN THE CASE OF CASUALTY INSURANCE), AS APPLICABLE,
(III) IF REASONABLY REQUESTED BY THE COLLATERAL AGENT, INCLUDE A BREACH OF
WARRANTY CLAUSE AND (IV) BE REASONABLY SATISFACTORY IN ALL OTHER RESPECTS TO THE
COLLATERAL AGENT.

 

(C)           NOTIFY THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT
IMMEDIATELY WHENEVER ANY SEPARATE INSURANCE CONCURRENT IN FORM OR CONTRIBUTING
IN THE EVENT OF LOSS WITH THAT REQUIRED TO BE MAINTAINED UNDER THIS SECTION 5.04
IS TAKEN OUT BY ANY COMPANY; AND PROMPTLY DELIVER TO THE ADMINISTRATIVE AGENT
AND THE COLLATERAL AGENT A DUPLICATE ORIGINAL COPY OF SUCH POLICY OR POLICIES.

 

(D)           OBTAIN FLOOD INSURANCE IN SUCH TOTAL AMOUNT AS THE ADMINISTRATIVE
AGENT OR THE REQUIRED LENDERS MAY FROM TIME TO TIME REQUIRE, IF AT ANY TIME THE
AREA IN WHICH ANY IMPROVEMENTS LOCATED ON ANY REAL PROPERTY COVERED BY A
MORTGAGE IS DESIGNATED A “FLOOD HAZARD AREA” IN ANY FLOOD INSURANCE RATE MAP
PUBLISHED BY THE FEDERAL EMERGENCY MANAGEMENT AGENCY (OR ANY SUCCESSOR AGENCY)
AND OTHERWISE COMPLY WITH THE NATIONAL FLOOD INSURANCE PROGRAM AS SET FORTH IN
THE FLOOD DISASTER PROTECTION ACT OF 1975, AS AMENDED FROM TIME TO TIME.

 

(E)           DELIVER TO THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT AND
THE LENDERS A REPORT OF A REPUTABLE INSURANCE BROKER WITH RESPECT TO SUCH
INSURANCE AND SUCH SUPPLEMENTAL REPORTS WITH RESPECT THERETO AS THE
ADMINISTRATIVE AGENT OR THE COLLATERAL AGENT MAY FROM TIME TO TIME REASONABLY
REQUEST.

 

SECTION 5.05.    OBLIGATIONS AND TAXES.

 

(A)           PAY ITS INDEBTEDNESS AND OTHER OBLIGATIONS PROMPTLY AND IN
ACCORDANCE WITH THEIR TERMS AND PAY AND DISCHARGE PROMPTLY WHEN DUE ALL TAXES,
ASSESSMENTS AND GOVERNMENTAL CHARGES OR LEVIES IMPOSED UPON IT OR UPON ITS
INCOME OR PROFITS OR IN RESPECT OF ITS PROPERTY, BEFORE THE SAME SHALL BECOME

 

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DELINQUENT OR IN DEFAULT, AS WELL AS ALL LAWFUL CLAIMS FOR LABOR, MATERIALS AND
SUPPLIES OR OTHERWISE THAT, IF UNPAID, MIGHT GIVE RISE TO A LIEN OTHER THAN A
PERMITTED LIEN UPON SUCH PROPERTIES OR ANY PART THEREOF; PROVIDED THAT SUCH
PAYMENT AND DISCHARGE SHALL NOT BE REQUIRED WITH RESPECT TO ANY SUCH TAX,
ASSESSMENT, CHARGE, LEVY OR CLAIM SO LONG AS THE VALIDITY OR AMOUNT THEREOF
SHALL BE CONTESTED IN GOOD FAITH BY APPROPRIATE PROCEEDINGS AND THE APPLICABLE
COMPANY SHALL HAVE SET ASIDE ON ITS BOOKS ADEQUATE RESERVES WITH RESPECT THERETO
IN ACCORDANCE WITH GAAP AND SUCH CONTEST OPERATES TO SUSPEND COLLECTION OF THE
CONTESTED OBLIGATION, TAX, ASSESSMENT OR CHARGE AND ENFORCEMENT OF A LIEN OTHER
THAN A PERMITTED LIEN AND, IN THE CASE OF COLLATERAL, THE APPLICABLE COMPANY
SHALL HAVE OTHERWISE COMPLIED WITH THE CONTESTED COLLATERAL LIEN CONDITIONS.

 

(B)           TIMELY AND CORRECTLY FILE ALL MATERIAL TAX RETURNS REQUIRED TO BE
FILED BY IT.

 

SECTION 5.06.    EMPLOYEE BENEFITS.  COMPLY IN ALL MATERIAL RESPECTS WITH THE
APPLICABLE PROVISIONS OF ERISA AND THE CODE AND (B) FURNISH TO THE
ADMINISTRATIVE AGENT (X) AS SOON AS POSSIBLE AFTER, AND IN ANY EVENT WITHIN 10
DAYS AFTER ANY RESPONSIBLE OFFICER OF THE COMPANIES OR THEIR ERISA AFFILIATES OR
ANY ERISA AFFILIATE KNOWS OR HAS REASON TO KNOW THAT, ANY ERISA EVENT HAS
OCCURRED THAT, ALONE OR TOGETHER WITH ANY OTHER ERISA EVENT, COULD REASONABLY BE
EXPECTED TO RESULT IN A MATERIAL ADVERSE EFFECT OR THE IMPOSITION OF A LIEN, A
STATEMENT OF A FINANCIAL OFFICER OF BORROWER SETTING FORTH DETAILS AS TO SUCH
ERISA EVENT AND THE ACTION, IF ANY, THAT THE COMPANIES PROPOSE TO TAKE WITH
RESPECT THERETO, AND (Y) UPON REQUEST BY THE ADMINISTRATIVE AGENT, COPIES OF: 
(I) EACH SCHEDULE B (ACTUARIAL INFORMATION) TO THE ANNUAL REPORT (FORM 5500
SERIES) FILED BY ANY COMPANY OR ANY ERISA AFFILIATE WITH THE INTERNAL REVENUE
SERVICE WITH RESPECT TO EACH PLAN; (II) THE MOST RECENT ACTUARIAL VALUATION
REPORT FOR EACH PLAN; (III) ALL NOTICES RECEIVED BY ANY COMPANY OR ANY ERISA
AFFILIATE FROM A MULTIEMPLOYER PLAN SPONSOR OR ANY GOVERNMENTAL AGENCY
CONCERNING AN ERISA EVENT; AND (IV) SUCH OTHER DOCUMENTS OR GOVERNMENTAL REPORTS
OR FILINGS RELATING TO ANY PLAN (OR EMPLOYEE BENEFIT PLAN SPONSORED OR
CONTRIBUTED TO BY ANY COMPANY) AS THE ADMINISTRATIVE AGENT SHALL REASONABLY
REQUEST.

 

SECTION 5.07.    MAINTAINING RECORDS; ACCESS TO PROPERTIES AND INSPECTIONS. 
KEEP PROPER BOOKS OF RECORD AND ACCOUNT IN WHICH FULL, TRUE AND CORRECT ENTRIES
IN CONFORMITY WITH GAAP AND ALL REQUIREMENTS OF LAW ARE MADE OF ALL DEALINGS AND
TRANSACTIONS IN RELATION TO ITS BUSINESS AND ACTIVITIES.  EACH COMPANY WILL
PERMIT ANY REPRESENTATIVES DESIGNATED BY THE ADMINISTRATIVE AGENT OR ANY LENDER
TO VISIT AND INSPECT THE FINANCIAL RECORDS AND THE PROPERTY OF SUCH COMPANY AT
REASONABLE TIMES AND AS OFTEN AS REASONABLY REQUESTED AND TO MAKE EXTRACTS FROM
AND COPIES OF SUCH FINANCIAL RECORDS, AND PERMIT ANY REPRESENTATIVES DESIGNATED
BY THE ADMINISTRATIVE AGENT OR ANY LENDER TO DISCUSS THE AFFAIRS, FINANCES AND
CONDITION OF ANY COMPANY WITH THE OFFICERS THEREOF AND, AFTER REASONABLE NOTICE
TO SUCH COMPANY, THE INDEPENDENT ACCOUNTANTS THEREFOR.

 

SECTION 5.08.    USE OF PROCEEDS.  USE THE PROCEEDS OF THE LOANS AND REQUEST THE
ISSUANCE OF LETTERS OF CREDIT ONLY FOR THE PURPOSES SET FORTH IN SECTION 3.14.

 

SECTION 5.09.    COMPLIANCE WITH ENVIRONMENTAL LAWS; ENVIRONMENTAL REPORTS.

 

(A)           COMPLY, AND CAUSE ALL LESSEES AND OTHER PERSONS OCCUPYING REAL
PROPERTY OWNED, OPERATED OR LEASED BY ANY COMPANY TO COMPLY, IN ALL MATERIAL
RESPECTS WITH ALL ENVIRONMENTAL LAWS AND ENVIRONMENTAL PERMITS APPLICABLE TO ITS
OPERATIONS AND REAL PROPERTY; OBTAIN AND RENEW ALL MATERIAL ENVIRONMENTAL
PERMITS APPLICABLE TO ITS OPERATIONS AND REAL PROPERTY; AND CONDUCT ANY RESPONSE
IN ACCORDANCE WITH ENVIRONMENTAL LAWS; PROVIDED THAT NO COMPANY SHALL BE
REQUIRED TO UNDERTAKE ANY RESPONSE TO THE EXTENT THAT ITS OBLIGATION TO DO SO IS
BEING CONTESTED IN GOOD FAITH AND BY PROPER PROCEEDINGS AND APPROPRIATE RESERVES
ARE BEING MAINTAINED WITH RESPECT TO SUCH CIRCUMSTANCES IN ACCORDANCE WITH GAAP.

 

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(B)           IF A DEFAULT CAUSED BY REASON OF A BREACH OF SECTION 3.20 OR
SECTION 5.09(A) SHALL HAVE OCCURRED AND BE CONTINUING FOR MORE THAN 20 DAYS
WITHOUT THE COMPANIES COMMENCING ACTIVITIES REASONABLY LIKELY TO CURE SUCH
DEFAULT, AT THE WRITTEN REQUEST OF THE REQUIRED LENDERS THROUGH THE
ADMINISTRATIVE AGENT, PROVIDE TO THE LENDERS WITHIN 45 DAYS AFTER SUCH REQUEST,
AT THE EXPENSE OF BORROWER, AN ENVIRONMENTAL ASSESSMENT REPORT REGARDING THE
MATTERS WHICH ARE THE SUBJECT OF SUCH DEFAULT, INCLUDING WHERE APPROPRIATE, ANY
SOIL AND/OR GROUNDWATER SAMPLING, PREPARED BY AN ENVIRONMENTAL CONSULTING FIRM
AND IN THE FORM AND SUBSTANCE REASONABLY ACCEPTABLE TO THE ADMINISTRATIVE AGENT
AND INDICATING THE PRESENCE OR ABSENCE OF HAZARDOUS MATERIALS AND THE ESTIMATED
COST OF ANY COMPLIANCE OR RESPONSE TO ADDRESS THEM.

 

SECTION 5.10.    INTEREST RATE PROTECTION.  BORROWER SHALL MAINTAIN OR CAUSE TO
BE MAINTAINED THROUGH MAY 28, 2006, INTEREST RATE AGREEMENTS ACCEPTABLE TO THE
ADMINISTRATIVE AGENT THAT RESULT IN AT LEAST $65,000,000 OF THE AGGREGATE
PRINCIPAL AMOUNT OF BORROWER’S CONSOLIDATED INDEBTEDNESS BEING EFFECTIVELY
SUBJECT TO A FIXED OR MAXIMUM INTEREST RATE ACCEPTABLE TO THE ADMINISTRATIVE
AGENT.

 

SECTION 5.11.    ADDITIONAL COLLATERAL; ADDITIONAL GUARANTORS.

 

(A)           SUBJECT TO THIS SECTION 5.11, WITH RESPECT TO ANY PROPERTY
ACQUIRED ON OR AFTER THE DATE HEREOF BY BORROWER OR ANY OTHER LOAN PARTY THAT IS
INTENDED TO BE SUBJECT TO THE LIEN CREATED BY ANY OF THE SECURITY DOCUMENTS BUT
IS NOT SO SUBJECT (BUT, IN ANY EVENT, EXCLUDING ANY PROPERTY DESCRIBED IN
PARAGRAPH (B) OF THIS SUBSECTION) PROMPTLY (AND IN ANY EVENT WITHIN 30 DAYS
AFTER THE ACQUISITION THEREOF:  (I) EXECUTE AND DELIVER TO THE ADMINISTRATIVE
AGENT AND THE COLLATERAL AGENT SUCH AMENDMENTS OR SUPPLEMENTS TO THE RELEVANT
SECURITY DOCUMENTS OR SUCH OTHER DOCUMENTS AS THE ADMINISTRATIVE AGENT OR THE
COLLATERAL AGENT SHALL DEEM NECESSARY OR ADVISABLE TO GRANT TO THE COLLATERAL
AGENT, FOR ITS BENEFIT AND FOR THE BENEFIT OF THE OTHER SECURED PARTIES, A LIEN
ON SUCH PROPERTY SUBJECT TO NO LIENS OTHER THAN PERMITTED LIENS, AND (II) TAKE
ALL ACTIONS NECESSARY TO CAUSE SUCH LIEN TO BE DULY PERFECTED TO THE EXTENT
REQUIRED BY SUCH SECURITY DOCUMENT IN ACCORDANCE WITH ALL APPLICABLE
REQUIREMENTS OF LAW, INCLUDING, WITHOUT LIMITATION, THE FILING OF FINANCING
STATEMENTS IN SUCH JURISDICTIONS AS MAY BE REASONABLY REQUESTED BY THE
ADMINISTRATIVE AGENT.  BORROWER SHALL OTHERWISE TAKE SUCH ACTIONS AND EXECUTE
AND/OR DELIVER TO THE COLLATERAL AGENT SUCH DOCUMENTS AS THE ADMINISTRATIVE
AGENT OR THE COLLATERAL AGENT SHALL REQUIRE TO CONFIRM THE VALIDITY, PERFECTION
AND PRIORITY OF THE LIEN OF THE SECURITY DOCUMENTS AGAINST SUCH AFTER-ACQUIRED
PROPERTIES OR ASSETS.

 

(B)           WITH RESPECT TO ANY PERSON THAT IS OR BECOMES A WHOLLY OWNED
SUBSIDIARY (OTHER THAN ANY NON-GUARANTOR SUBSIDIARY OR ANY FOREIGN SUBSIDIARY
THAT IS NOT A DIRECT SUBSIDIARY OF A LOAN PARTY) PROMPTLY (AND IN ANY EVENT
WITHIN 30 DAYS AFTER SUCH PERSON BECOMES A SUBSIDIARY) (I) DELIVER TO THE
COLLATERAL AGENT THE CERTIFICATES, IF ANY, REPRESENTING THE EQUITY INTERESTS OF
SUCH SUBSIDIARY (PROVIDED THAT WITH RESPECT TO ANY FOREIGN SUBSIDIARY OF
BORROWER, IN NO EVENT SHALL MORE THAN 66% OF THE EQUITY INTERESTS OF ANY FOREIGN
SUBSIDIARY BE SUBJECT TO ANY LIEN OR PLEDGED UNDER ANY SECURITY DOCUMENT),
TOGETHER WITH UNDATED STOCK POWERS OR OTHER APPROPRIATE INSTRUMENTS OF TRANSFER
EXECUTED AND DELIVERED IN BLANK BY A DULY AUTHORIZED OFFICER OF SUCH
SUBSIDIARY’S PARENT, AS THE CASE MAY BE, AND ALL INTERCOMPANY NOTES OWING FROM
SUCH SUBSIDIARY TO ANY LOAN PARTY TOGETHER WITH INSTRUMENTS OF TRANSFER EXECUTED
AND DELIVERED IN BLANK BY A DULY AUTHORIZED OFFICER OF SUCH SUBSIDIARY, AND
(II) CAUSE SUCH NEW SUBSIDIARY (OTHER THAN ANY NON-GUARANTOR SUBSIDIARY OR ANY
FOREIGN SUBSIDIARY) (A) TO EXECUTE A JOINDER AGREEMENT OR SUCH COMPARABLE
DOCUMENTATION AND A JOINDER AGREEMENT TO THE SECURITY AGREEMENT, AND (B) TO TAKE
ALL ACTIONS NECESSARY OR ADVISABLE IN THE OPINION OF THE ADMINISTRATIVE AGENT OR
THE COLLATERAL AGENT TO CAUSE THE LIEN CREATED BY THE SECURITY AGREEMENT TO BE
DULY PERFECTED TO THE EXTENT REQUIRED BY SUCH AGREEMENT IN ACCORDANCE WITH ALL
APPLICABLE REQUIREMENTS OF LAW, INCLUDING, WITHOUT LIMITATION, THE FILING OF
FINANCING STATEMENTS IN SUCH JURISDICTIONS AS MAY BE REASONABLY REQUESTED BY THE
ADMINISTRATIVE AGENT OR THE COLLATERAL AGENT.

 

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(C)           IF AT ANY TIME ANY TWO OR MORE WHOLLY OWNED SUBSIDIARIES IN THE
AGGREGATE (OTHER THAN ANY FOREIGN SUBSIDIARY OF BORROWER THAT IS NOT A
“FIRST-TIER” FOREIGN SUBSIDIARY) NOT OTHERWISE SUBJECT TO SECTION 5.11(B) HAVE
ASSETS HAVING EITHER A BOOK VALUE OR FAIR MARKET VALUE IN EXCESS OF $10,000,000,
THEN BORROWER SHALL, AND SHALL CAUSE ONE OR MORE OF SUCH SUBSIDIARIES TO, COMPLY
WITH SECTION 5.11(B) WITHIN THE TIME FRAMES SET FORTH IN SUCH SUBSECTION SO THAT
NO TWO OR MORE SUCH SUBSIDIARIES HOLD ASSETS HAVING EITHER A BOOK VALUE OR FAIR
MARKET VALUE IN EXCESS OF $10,000,000.

 

SECTION 5.12.    SECURITY INTERESTS; FURTHER ASSURANCES.  PROMPTLY, UPON THE
REASONABLE REQUEST OF THE ADMINISTRATIVE AGENT, THE COLLATERAL AGENT OR ANY
LENDER, AT BORROWER’S EXPENSE, EXECUTE, ACKNOWLEDGE AND DELIVER, OR CAUSE THE
EXECUTION, ACKNOWLEDGMENT AND DELIVERY OF, AND THEREAFTER REGISTER, FILE OR
RECORD, OR CAUSE TO BE REGISTERED, FILED OR RECORDED, IN AN APPROPRIATE
GOVERNMENTAL OFFICE, ANY DOCUMENT OR INSTRUMENT SUPPLEMENTAL TO OR CONFIRMATORY
OF THE SECURITY DOCUMENTS OR OTHERWISE DEEMED BY THE ADMINISTRATIVE AGENT OR THE
COLLATERAL AGENT REASONABLY NECESSARY OR DESIRABLE FOR THE CONTINUED VALIDITY,
PERFECTION AND PRIORITY OF THE LIENS ON THE COLLATERAL COVERED THEREBY SUPERIOR
TO AND PRIOR TO THE RIGHTS OF ALL THIRD PERSONS OTHER THAN THE HOLDERS OF
EXISTING LIENS AND SUBJECT TO NO OTHER LIENS EXCEPT AS PERMITTED BY THE
APPLICABLE SECURITY DOCUMENT, OR OBTAIN ANY CONSENTS, INCLUDING, WITHOUT
LIMITATION, LANDLORD OR SIMILAR LIEN WAIVERS AND CONSENTS, AS MAY BE NECESSARY
OR APPROPRIATE IN CONNECTION THEREWITH.  DELIVER OR CAUSE TO BE DELIVERED TO THE
ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT FROM TIME TO TIME SUCH OTHER
DOCUMENTATION, CONSENTS, AUTHORIZATIONS, APPROVALS AND ORDERS IN FORM AND
SUBSTANCE REASONABLY SATISFACTORY TO THE ADMINISTRATIVE AGENT AND THE COLLATERAL
AGENT AS THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT SHALL REASONABLY DEEM
NECESSARY TO PERFECT OR MAINTAIN THE LIENS ON THE COLLATERAL PURSUANT TO THE
SECURITY DOCUMENTS.  UPON THE EXERCISE BY THE ADMINISTRATIVE AGENT, THE
COLLATERAL AGENT OR THE LENDERS OF ANY POWER, RIGHT, PRIVILEGE OR REMEDY
PURSUANT TO ANY LOAN DOCUMENT WHICH REQUIRES ANY CONSENT, APPROVAL,
REGISTRATION, QUALIFICATION OR AUTHORIZATION OF ANY GOVERNMENTAL AUTHORITY
EXECUTE AND DELIVER ALL APPLICATIONS, CERTIFICATIONS, INSTRUMENTS AND OTHER
DOCUMENTS AND PAPERS THAT THE ADMINISTRATIVE AGENT, THE COLLATERAL AGENT OR THE
LENDERS MAY BE SO REQUIRED TO OBTAIN.  IF THE ADMINISTRATIVE AGENT, THE
COLLATERAL AGENT OR THE REQUIRED LENDERS DETERMINE THAT THEY ARE REQUIRED BY LAW
OR REGULATION TO HAVE APPRAISALS PREPARED IN RESPECT OF THE REAL PROPERTY OF ANY
LOAN PARTY CONSTITUTING COLLATERAL, BORROWER SHALL PROVIDE TO THE ADMINISTRATIVE
AGENT APPRAISALS THAT SATISFY THE APPLICABLE REQUIREMENTS OF THE REAL ESTATE
APPRAISAL REFORM AMENDMENTS OF FIRREA AND ARE OTHERWISE IN FORM AND SUBSTANCE
SATISFACTORY TO THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT.

 

SECTION 5.13.    INFORMATION REGARDING COLLATERAL.

 

(A)           FURNISH TO THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT
PROMPT WRITTEN NOTICE OF ANY CHANGE (I) IN ANY LOAN PARTY’S CORPORATE NAME OR IN
ANY TRADE NAME USED TO IDENTIFY IT IN THE CONDUCT OF ITS BUSINESS OR IN THE
OWNERSHIP OF ITS PROPERTIES, (II) IN THE LOCATION OF ANY LOAN PARTY’S CHIEF
EXECUTIVE OFFICE, ITS PRINCIPAL PLACE OF BUSINESS, ANY OFFICE IN WHICH IT
MAINTAINS BOOKS OR RECORDS RELATING TO COLLATERAL OWNED BY IT OR ANY OFFICE OR
FACILITY AT WHICH COLLATERAL OWNED BY IT IS LOCATED (INCLUDING THE ESTABLISHMENT
OF ANY SUCH NEW OFFICE OR FACILITY), (III) IN ANY LOAN PARTY’S IDENTITY OR
CORPORATE STRUCTURE, (IV) IN ANY LOAN PARTY’S FEDERAL TAXPAYER IDENTIFICATION
NUMBER OR (V) IN ANY LOAN PARTY’S JURISDICTION OF ORGANIZATION.  BORROWER AGREES
NOT TO EFFECT OR PERMIT ANY CHANGE REFERRED TO IN THE PRECEDING SENTENCE UNLESS
ALL FILINGS HAVE BEEN MADE UNDER THE UCC OR OTHERWISE THAT ARE REQUIRED IN ORDER
FOR THE COLLATERAL AGENT TO CONTINUE AT ALL TIMES FOLLOWING SUCH CHANGE TO HAVE
A VALID, LEGAL AND PERFECTED SECURITY INTEREST IN ALL THE COLLATERAL.  BORROWER
ALSO AGREES PROMPTLY TO NOTIFY THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT
IF ANY MATERIAL PORTION OF THE COLLATERAL IS SUBJECT TO A CASUALTY EVENT.

 

(B)           EACH YEAR, AT THE TIME OF DELIVERY OF ANNUAL FINANCIAL STATEMENTS
WITH RESPECT TO THE PRECEDING FISCAL YEAR PURSUANT TO CLAUSE (A) OF
SECTION 5.01, DELIVER TO THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT A
CERTIFICATE OF A FINANCIAL OFFICER AND THE CHIEF LEGAL OFFICER OF EACH BORROWER
AND A

 

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PERFECTION CERTIFICATE SUPPLEMENT CONFIRMING THAT THERE HAS BEEN NO CHANGE IN
SUCH INFORMATION SINCE THE DATE OF THE PERFECTION CERTIFICATE DELIVERED ON THE
CLOSING DATE OR THE DATE OF THE MOST RECENT CERTIFICATE DELIVERED PURSUANT TO
THIS SECTION 5.13(B) AND (II) CERTIFYING THAT ALL UCC FINANCING STATEMENTS
(INCLUDING FIXTURE FILINGS, AS APPLICABLE) OR OTHER APPROPRIATE FILINGS,
RECORDINGS OR REGISTRATIONS, INCLUDING ALL REFILINGS, RERECORDINGS AND
REREGISTRATIONS, CONTAINING A DESCRIPTION OF THE COLLATERAL HAVE BEEN FILED OF
RECORD IN EACH GOVERNMENTAL, MUNICIPAL OR OTHER APPROPRIATE OFFICE IN EACH
JURISDICTION IDENTIFIED PURSUANT TO CLAUSE (I) ABOVE TO THE EXTENT NECESSARY TO
PROTECT AND PERFECT THE SECURITY INTERESTS AND LIENS UNDER THE SECURITY
DOCUMENTS FOR A PERIOD OF NOT LESS THAN 18 MONTHS AFTER THE DATE OF SUCH
CERTIFICATE (EXCEPT AS NOTED THEREIN WITH RESPECT TO ANY CONTINUATION STATEMENTS
TO BE FILED WITHIN SUCH PERIOD).

 

ARTICLE VI

 

NEGATIVE COVENANTS

 

Each Loan Party covenants and agrees with each Lender that, so long as this
Agreement shall remain in effect (except for provisions which by their terms
survive termination, such as indemnification provisions) and until the
Commitments have been terminated and the principal of and interest on each Loan,
all Fees and all other expenses or amounts payable under any Loan Document have
been paid in full and all Letters of Credit have been canceled or have expired
or been fully cash collateralized and all amounts drawn thereunder have been
reimbursed in full, unless the Required Lenders shall otherwise consent in
writing, no Loan Party will, nor will they cause or permit any Subsidiaries to:

 

SECTION 6.01.    INDEBTEDNESS.  INCUR, CREATE, ASSUME OR PERMIT TO EXIST,
DIRECTLY OR INDIRECTLY, ANY INDEBTEDNESS, EXCEPT:

 

(a)           Indebtedness incurred pursuant to this Agreement and the other
Loan Documents;

 

(b)           (i) Indebtedness actually outstanding on the date hereof and
listed on Schedule 6.01(b) or (ii) refinancings or renewals thereof; provided
that (A) any such refinancing Indebtedness is in an aggregate principal amount
not greater than the aggregate principal amount of the Indebtedness being
renewed or refinanced, plus the amount of any premiums required to be paid
thereon and fees and expenses associated therewith, (B) such refinancing
Indebtedness has a later or equal final maturity and longer or equal weighted
average life than the Indebtedness being renewed or refinanced and (C) the
covenants, events of default subordination and other provisions thereof
(including any guarantees thereof) shall be, in the aggregate, no less favorable
to the Lenders than those contained in the Indebtedness being renewed or
refinanced;

 

(c)           Indebtedness of any Company under Interest Rate Agreements entered
into in order to fix the effective rate of interest on the Loans in compliance
with Section 5.10 and such other non speculative Interest Rate Agreements which
may be entered into from time to time by any Company and which such Company in
good faith believes will provide protection against fluctuations in interest
rates with respect to floating rate Indebtedness then outstanding, and permitted
to remain outstanding, pursuant to the other provisions of this Section 6.01;

 

(d)           Indebtedness under Hedging Agreements (other than Interest Rate
Agreements) entered into from time to time by any Company in accordance with
Section 6.04(c);

 

(e)           intercompany Indebtedness of the Companies outstanding to the
extent permitted by Sections 6.04(e) and (i);

 

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(f)            Indebtedness in respect of Purchase Money Obligations and Capital
Lease Obligations and refinancings or renewals thereof, in an aggregate amount
not to exceed $50.0 million at any time outstanding;

 

(g)           Permitted Subordinated Indebtedness; provided that the proceeds
thereof are applied in accordance with Sections 2.10(d) and (h).

 

(h)           Indebtedness in respect of workers’ compensation claims, self
insurance obligations, performance bonds, surety appeal or similar bonds and
completion guarantees provided by a Company in the ordinary course of its
business;

 

(i)            Contingent Obligations of any Loan Party in respect of
Indebtedness otherwise permitted under Section 6.01; and

 

(j)            other unsecured Indebtedness of the Companies not to exceed $25.0
million in aggregate principal amount at any time outstanding.

 

SECTION 6.02.    Liens.  Create, incur, assume or permit to exist, directly or
indirectly, any Lien on any property now owned or hereafter acquired by it or on
any income or revenues or rights in respect of any thereof, except (the
“Permitted Liens”):

 

(a)           inchoate Liens for taxes, assessments or governmental charges or
levies not yet due and payable or delinquent and Liens for taxes, assessments or
governmental charges or levies, which (i) are being contested in good faith by
appropriate proceedings for which adequate reserves have been established in
accordance with GAAP, which proceedings (or orders entered in connection with
such proceedings) have the effect of preventing the forfeiture or sale of the
property or assets subject to any such Lien, or (ii) in the case of any such
charge or claim which has or may become a Lien against any of the Collateral,
such Lien and the contest thereof shall satisfy the Contested Collateral Lien
Conditions.

 

(b)           Liens in respect of property of any Company imposed by law, which
were incurred in the ordinary course of business and do not secure Indebtedness
for borrowed money, such as carriers’, warehousemen’s, materialmen’s,
landlords’, workmen’s, suppliers’, repairmen’s and mechanics’ Liens and other
similar Liens arising in the ordinary course of business, and (i) which do not
in the aggregate materially detract from the value of the property of the
Companies, taken as a whole, and do not materially impair the use thereof in the
operation of the business of the Companies, taken as a whole, (ii) which are
being contested in good faith by appropriate proceedings for which adequate
reserves have been established in accordance with GAAP, which proceedings (or
orders entered in connection with such proceedings) have the effect of
preventing the forfeiture or sale of the property or assets subject to any such
Lien, and (iii) in the case of any such Lien which has or may become a Lien
against any of the Collateral, such Lien and the contest thereof shall satisfy
the Contested Collateral Lien Conditions.

 

(c)           Liens in existence on the date hereof and set forth on Schedule
6.02(c); provided that (i) the aggregate principal amount of the Indebtedness,
if any, secured by such Liens does not increase; and (ii) such Liens do not
encumber any property other than the property subject thereto on the date
hereof;

 

(d)           easements, rights of way, restrictions (including zoning
restrictions), covenants, encroachments, protrusions and other similar charges
or encumbrances, and minor title deficiencies on or with respect to any Real
Property, in each case whether now or hereafter in existence,

 

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not (i) securing Indebtedness, (ii) individually or in the aggregate materially
impairing the value or marketability of such Real Property and (iii)
individually or in the aggregate materially interfering with the conduct of the
business of the Companies at such Real Property;

 

(e)           Liens arising out of judgments or awards not resulting in a
Default or an Event of Default;

 

(f)            Liens (other than any Lien imposed by ERISA) (i) imposed by law
or deposits made in connection therewith in the ordinary course of business in
connection with workers’ compensation, unemployment insurance and other types of
social security, (ii) incurred in the ordinary course of business to secure the
performance of tenders, statutory obligations (other than excise taxes), surety,
stay, customs and appeal bonds, statutory bonds, bids, leases, government
contracts, trade contracts, performance and return of money bonds and other
similar obligations (exclusive of obligations for the payment of borrowed money)
or (iii) arising by virtue of deposits made in the ordinary course of business
to secure liability for premiums to insurance carriers; provided that (w) with
respect to clauses (i), (ii) and (iii) hereof, such Liens are for amounts not
yet due and payable or delinquent or, to the extent such amounts are so due and
payable, such amounts are being contested in good faith by appropriate
proceedings for which adequate reserves have been established in accordance with
GAAP, which proceedings for orders entered in connection with such proceedings
have the effect of preventing the forfeiture or sale of the property or assets
subject to any such Lien, (x) to the extent such Liens are not imposed by law,
such Liens shall in no event encumber any property other than cash and Cash
Equivalents, (y) in the case of any such Lien against any of the Collateral,
such Lien and the contest thereof shall satisfy the Contested Collateral Lien
Conditions and (z) the aggregate amount of deposits at any time pursuant to
clause (ii) and clause (iii) shall not exceed $1,000,000 in the aggregate;

 

(g)           Leases with respect to the assets or properties of any Company, in
each case entered into in the ordinary course of such Company’s business so long
as such Leases are subordinate in all respects to the Liens granted and
evidenced by the Security Documents and do not, individually or in the
aggregate, (i) interfere in any material respect with the ordinary conduct of
the business of any Company or (ii) materially impair the use (for its intended
purposes) or the value of the property subject thereto;

 

(h)           Liens arising out of conditional sale, title retention,
consignment or similar arrangements for the sale of goods entered into by any
Company in the ordinary course of business in accordance with the past practices
of such Company;

 

(i)            Liens arising pursuant to Purchase Money Obligations or Capital
Lease Obligations incurred pursuant to Section 6.01(f); provided that (i) the
Indebtedness secured by any such Lien (including refinancings thereof) does not
exceed 100% of the cost of the property being acquired or leased at the time of
the incurrence of such Indebtedness and (ii) any such Liens attach only to the
property being financed pursuant to such Purchase Money Obligations or Capital
Lease Obligations and do not encumber any other property of any Company;

 

(j)            bankers’ Liens, rights of setoff and other similar Liens existing
solely with respect to cash and Cash Equivalents on deposit in one or more
accounts maintained by any Company, in each case granted in the ordinary course
of business in favor of the bank or banks with which such accounts are
maintained, securing amounts owing to such bank with respect to cash management
and operating account arrangements, including those involving pooled accounts
and netting arrangements; provided that in no case shall any such Liens secure
(either directly or indirectly) the repayment of any Indebtedness;

 

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(k)           Liens on property of a person existing at the time such person is
acquired or merged with or into or consolidated with any Company (and not
created in anticipation or contemplation thereof); provided that such Liens do
not extend to property not subject to such Liens at the time of acquisition
(other than improvements thereon) and are no more favorable to the lienholders
than the existing Lien;

 

(l)            Liens granted pursuant to the Security Documents;

 

(m)          licenses of Intellectual Property granted by any Company in the
ordinary course of business and not interfering in any material respect with the
ordinary conduct of the business of such Company;

 

(n)           other Liens incurred in the ordinary course of business of any
Company with respect to obligations (other than Indebtedness) that do not in the
aggregate exceed $5.0 million at any time outstanding; and

 

(o)           the filing of financing statements solely as a precautionary
measure in connection with operating leases or consignment of goods;

 

provided, however, that no Liens shall be permitted to exist, directly or
indirectly, on any Securities Collateral.

 

SECTION 6.03.    Sale and Leaseback Transactions.  Enter into any arrangement,
directly or indirectly, with any person whereby it shall sell or transfer any
property, real or personal, used or useful in its business, whether now owned or
hereafter acquired, and thereafter rent or lease such property or other property
which it intends to use for substantially the same purpose or purposes as the
property being sold or transferred unless (i) the sale of such property is
permitted by Section 6.05 and (ii) any Liens arising in connection with its use
of such property are permitted by Section 6.02.

 

SECTION 6.04.    Investment, Loan and Advances.  Directly or indirectly, lend
money or credit or make advances to any person, or purchase or acquire any
stock, obligations or securities of, or any other interest in, or make any
capital contribution to, any other person, or purchase or own a futures contract
or otherwise become liable for the purchase or sale of currency or other
commodities at a future date in the nature of a futures contract (all of the
foregoing, collectively, “Investments”), except that the following shall be
permitted:

 

(a)           Investments outstanding on the Closing Date and identified on
Schedule 6.04(b);

 

(b)           the Companies may (i) acquire and hold accounts receivables owing
to any of them if created or acquired in the ordinary course of business and
payable or dischargeable in accordance with customary terms, (ii) acquire and
hold cash and Cash Equivalents, (iii) endorse negotiable instruments for
collection in the ordinary course of business or (iv) make lease, utility and
other similar deposits in the ordinary course of business;

 

(c)           Borrower may enter into Interest Rate Agreements to the extent
permitted by Section 6.01(c) and may enter into and perform its obligations
under Hedging Agreements entered into in the ordinary course of business and so
long as any such Hedging Agreement is not speculative in nature and is (i)
related to income derived from foreign operations of any Company or otherwise
related to purchases permitted hereunder from foreign suppliers or (ii) entered
into to protect such Companies against fluctuations in the prices of raw
materials used in their businesses;

 

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(d)           any Company may make intercompany loans to any Loan Party and any
Loan Party may make intercompany loans and advances to any other Loan Party;
provided that such loan shall be evidenced by a promissory note and shall be
pledged (and delivered) by such Loan Party that is the lender of such
intercompany loan as Collateral pursuant to the Security Agreement, provided
further that (i) no Loan Party may make loans to any Foreign Subsidiary or Non
Guarantor Subsidiary pursuant to this paragraph (e) and (ii) any loans made by
any Foreign Subsidiary or Non Guarantor Subsidiary to any Loan Party pursuant to
this paragraph (e) shall be subordinated to the obligations of the Loan Parties
pursuant to an intercompany note in substantially the form of Exhibit K;

 

(e)           Borrower and the Subsidiaries may make loans and advances
(including payroll, travel and entertainment related advances) in the ordinary
course of business to their respective employees (other than any loans or
advances to any director or executive officer (or equivalent thereof) that would
be in violation of Section 402 of the Sarbanes Oxley Act) so long as the
aggregate principal amount thereof at any time outstanding (determined without
regard to any write downs or write offs of such loans and advances) shall not
exceed $50,000 individually and $250,000 in the aggregate outstanding at one
time;

 

(f)            Borrower and the Subsidiaries may sell or transfer amounts to the
extent permitted by Section 6.05;

 

(g)           Borrower may establish (i) Wholly Owned Subsidiaries to the extent
permitted by Section 6.12 and (ii) non Wholly Owned Subsidiaries and/or joint
ventures to the extent that Investments in such non Wholly Owned Subsidiaries
and/or joint ventures shall not exceed $10.0 million at any time outstanding,
after taking into account amounts returned in cash (including upon disposition);

 

(h)           Investments (other than as described in Section 6.04(e)) (i) by
Borrower in any Subsidiary Guarantor, (ii) by any Company in Borrower or any
Subsidiary Guarantor and (iii) by a Subsidiary Guarantor in another Subsidiary
Guarantor;

 

(i)            Investments in securities of trade creditors or customers in the
ordinary course of business and consistent with such Company’s past practices
that are received in settlement of bona fide disputes or pursuant to any plan of
reorganization or liquidation or similar arrangement upon the bankruptcy or
insolvency of such trade creditors or customers;

 

(j)            Investments made by Borrower or any Subsidiary as a result of
consideration received in connection with an Asset Sale made in compliance with
Section 6.05;

 

(k)           Borrower may make loans to senior management of Borrower and the
Subsidiary Guarantors for purposes of purchasing the capital stock of Borrower
in an aggregate principal amount not to exceed $2.5 million at any one time
outstanding; and

 

(l)            scheduled payments of Earn Out Obligations of $5.0 million
individually and $10.0 million in any fiscal year of Borrower.

 

SECTION 6.05.    Mergers, Consolidations, Sales of Assets and Acquisitions. 
Wind up, liquidate or dissolve its affairs or enter into any transaction of
merger or consolidation, or convey, sell, lease or otherwise dispose of (or
agree to do any of the foregoing at any future time) all or any part of its
property or assets, or purchase or otherwise acquire (in one or a series of
related transactions) any part of the property or assets of any person (or agree
to do any of the foregoing at any future time), except that:

 

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(a)           (i) purchases or other acquisitions of inventory, materials,
equipment and intangible assets in the ordinary course of business shall be
permitted, (ii) subject to Section 2.10(c), Asset Sales of used, worn out,
obsolete or surplus property by any Company in the ordinary course of business
and the abandonment or other Asset Sale of Intellectual Property that is, in the
reasonable judgment of Borrower, no longer economically practicable to maintain
or useful in the conduct of the business of the Companies taken as a whole shall
be permitted and (iii) subject to Section 2.10(c), the sale, lease or other
disposal of any assets shall be permitted; provided that the aggregate
consideration received in respect of all Asset Sales pursuant to this clause
(a)(iii) shall not exceed $5,000,000 individually or $15,000,000 in any four
consecutive fiscal quarters of Borrower;

 

(b)           Investments in connection with any such transaction may be made to
the extent permitted by Section 6.04;

 

(c)           Borrower and the Subsidiaries may sell Cash Equivalents in the
ordinary course of business;

 

(d)           Borrower and the Subsidiaries may lease (as lessee or lessor) real
or personal property and may guaranty such lease, in each case, in the ordinary
course of business and in accordance with the applicable Security Documents;

 

(e)           Borrower and the Subsidiaries may consummate Permitted
Acquisitions;

 

(f)            any Loan Party may transfer property or lease to or acquire or
lease property from any Loan Party and any Loan Party may be merged into another
Loan Party (as long as such Loan Party is the surviving corporation of such
merger and remains a direct or indirect Wholly Owned Subsidiary of Borrower) or
any other Wholly Owned Subsidiary Guarantor; provided that the Lien on and
security interest in such property granted or to be granted in favor of the
Collateral Agent under the Security Documents shall be maintained or created in
accordance with the provisions of Section 5.11 or Section 5.12, as applicable;

 

(g)           any Subsidiary may dissolve, liquidate or wind up its affairs at
any time; provided that such dissolution, liquidation or winding up, as
applicable, could not reasonably be expected to have a Material Adverse Effect;
and

 

(h)           Asset Sales by any Company to any other Company shall be
permitted; provided that such Asset Sale involving a Subsidiary that it is not a
Loan Party be made in compliance with Section 6.05(a).

 

To the extent the Required Lenders (or all Lenders, as applicable) waive the
provisions of this Section 6.05 with respect to the sale of any Collateral, or
any Collateral is sold as permitted by this Section 6.05, such Collateral
(unless sold to a Company) shall be sold free and clear of the Liens created by
the Security Documents, and the Agents shall take all actions deemed appropriate
in order to effect the foregoing.

 

SECTION 6.06.    Dividends.  Authorize, declare or pay, directly or indirectly,
any Dividends with respect to any Company, except that:

 

(a)           any Subsidiary of Borrower (i) may pay cash Dividends to Borrower
or any Wholly Owned Subsidiary of Borrower and (ii) if such Subsidiary is not a
Wholly Owned Subsidiary of Borrower, may pay cash Dividends to its shareholders
generally so long as Borrower or its Subsidiary which owns the equity interest
or interests in the Subsidiary paying such Dividends

 

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receives at least its proportionate share thereof (based upon its relative
holdings of equity interests in the Subsidiary paying such Dividends and taking
into account the relative preferences, if any, of the various classes of equity
interests in such Subsidiary); and

 

(b)           Borrower may pay cash Dividends from time to time after the Third
Amendment and Restatement Effective Date in an aggregate amount not to exceed
$10,000,000 for any fiscal year, so long as no (i) Event of Default exists or
(ii) (on a pro forma basis after giving effect to payment of such Dividends)
Default would result therefrom at the time of declaration thereof.

 

SECTION 6.07.    Transactions with Affiliates.  Enter into, directly or
indirectly, any transaction or series of related transactions, whether or not in
the ordinary course of business, with any Affiliate of any Company (other than
between or among Borrower and the Subsidiary Guarantors), other than in the
ordinary course of business and on terms and conditions substantially as
favorable to such Company as would reasonably be obtained by such Company at
that time in a comparable arm’s length transaction with a person other than an
Affiliate, except that:

 

(a)           Dividends may be paid to the extent provided in Section 6.06;

 

(b)           loans may be made and other transactions may be entered into
between and among any Company and its Affiliates to the extent permitted by
Sections 6.01 and 6.04; and

 

(c)           customary fees may be paid to non officer directors of Borrower
and customary indemnities may be provided to all directors of Borrower.

 

SECTION 6.08.    Financial Covenants.

 

(A)           MAXIMUM LEVERAGE RATIO.  PERMIT THE LEVERAGE RATIO, AS OF THE LAST
DAY OF ANY TEST PERIOD ENDING DURING ANY PERIOD SET FORTH IN THE TABLE BELOW, TO
EXCEED THE RATIO SET FORTH OPPOSITE SUCH PERIOD IN THE TABLE BELOW:

 

 

 

Leverage Ratio

 

October 1, 2005 - March 31, 2007

 

3.50 to 1.00

 

April 1, 2007 and thereafter

 

3.25 to 1.00

 

 

(B)           MINIMUM INTEREST COVERAGE RATIO.  PERMIT THE CONSOLIDATED INTEREST
COVERAGE RATIO, AS OF THE LAST DAY OF ANY TEST PERIOD, TO BE LESS THAN 3.00 TO
1.0.

 

(C)           LIMITATION ON CAPITAL EXPENDITURES.  MAKE ANY CAPITAL EXPENDITURES
IN ANY PERIOD OF FOUR CONSECUTIVE QUARTERS IN EXCESS OF 20% OF CONSOLIDATED NET
WORTH (DETERMINED AS OF THE LAST DAY OF THE MOST RECENT QUARTER FOR WHICH
FINANCIAL STATEMENTS HAVE BEEN DELIVERED); PROVIDED, HOWEVER, THAT THE FOREGOING
LIMITATION SHALL NOT APPLY IF (I) LIQUIDITY (DETERMINED AS OF SUCH DAY) IS
GREATER THAN $10.0 MILLION AND (II) EITHER:

 

(A)          (1) NO DEFAULT OR EVENT OF DEFAULT THEN EXISTS THAT HAS NOT BEEN
CURED OR WAIVED, AND (2) THE LEVERAGE RATIO (DETERMINED AS OF SUCH DAY) IS LESS
THAN 2.75 TO 1.0; OR

 

(B)                                 THE LEVERAGE RATIO IS LESS THAN 2.75 TO 1.0
FOR BOTH THE QUARTER ENDING ON SUCH DAY (DETERMINED AS OF SUCH DAY) AND FOR THE
PRECEDING QUARTER (DETERMINED AS OF THE LAST DAY OF SUCH PRECEDING QUARTER).

 

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SECTION 6.09.    Limitation on Modifications or Prepayment of Indebtedness;
Modifications of Certificate of Incorporation, or Other Constitutive Documents,
By laws and Certain Other Agreements, etc.  (i) Optionally prepay, retire,
redeem, purchase, defease or exchange, or make or arrange for any mandatory
prepayment, retirement, redemption, purchase or defeasance of, any outstanding
Indebtedness (other than (1) any refinancing of Indebtedness permitted by this
Agreement, (2) the Obligations and (3) the conversion or exchange of
Indebtedness for or into Equity Interest); (ii) amend or modify, or permit the
amendment or modification of, any provision of existing Indebtedness or of any
agreement (including any purchase agreement, indenture, loan agreement or
security agreement) relating thereto other than any amendments or modifications
to Indebtedness which do not in any way materially adversely affect the
interests of the Lenders and are otherwise permitted under Section 6.01(b);
(iii) make (or give any notice in respect thereof) any voluntary or optional
payment or prepayment on or redemption or acquisition for value of, or any
prepayment or redemption as a result of any asset sale, change of control or
similar event of, any indebtedness outstanding under any document or agreement
relating to any Permitted Subordinated Indebtedness; (iv) amend or modify, or
permit the amendment or modification of, any provision of any document or
agreement relating to any Permitted Subordinated Indebtedness other than
amendments or modifications which do not in any way materially adversely affect
the interests of the Lenders; or (v) amend, modify or change its articles of
incorporation or other constitutive documents (including by the filing or
modification of any certificate of designation) or by laws, or any agreement
entered into by it, with respect to its capital stock (including the
Shareholders’ Agreement, any other shareholders’ agreement, limited liability
company operating agreement or limited partnership agreement), or enter into any
new agreement with respect to its capital stock, other than any amendments,
modifications, agreements or changes pursuant to this clause (v) or any such new
agreements pursuant to this clause (v) which do not in any way materially
adversely affect in any material respect the interests of the Lenders; and
provided that Borrower may issue such capital stock as is not prohibited by
Section 6.11 or any other provision of this Agreement and may amend articles of
incorporation or other constitutive documents to authorize any such capital
stock.

 

SECTION 6.10.    Limitation on Certain Restrictions on Subsidiaries.  Directly
or indirectly, create or otherwise cause or suffer to exist or become effective
any encumbrance or restriction on the ability of any Subsidiary to (a) pay
dividends or make any other distributions on its Equity Interests owned by
Borrower or any Subsidiary of Borrower, or pay any Indebtedness owed to Borrower
or a Subsidiary of Borrower, (b) make loans or advances to Borrower or any of
Borrower’s Subsidiaries or (c) transfer any of its properties to Borrower or any
of Borrower’s Subsidiaries, except for such encumbrances or restrictions
existing under or by reason of (i) applicable law; (ii) this Agreement and the
other Loan Documents; (iii) any document or agreement relating to Permitted
Subordinated Indebtedness; (iv) customary provisions restricting subletting or
assignment of any lease governing a leasehold interest of Borrower or a
Subsidiary of Borrower; (v) customary provisions restricting assignment of any
agreement entered into by Borrower or a Subsidiary of Borrower in the ordinary
course of business; (vi) any holder of a Lien permitted by Section 6.02 may
restrict the transfer of the asset or assets subject thereto; (vii) restrictions
which are not more restrictive than those contained in this Agreement contained
in any documents governing any Indebtedness incurred after the Closing Date in
accordance with the provisions of this Agreement; (viii) customary restrictions
and conditions contained in any agreement relating to the sale of any property
permitted under Section 6.05 pending the consummation of such sale; (ix) any
agreement in effect at the time such Subsidiary becomes a Subsidiary of
Borrower, so long as such agreement was not entered into in contemplation of
such person becoming a Subsidiary of Borrower; or (x) in the case of any joint
venture which is not a Loan Party in respect of any matters referred to in
clauses (b) and (c) above, restrictions in such person’s organizational or
governing documents or pursuant to any joint venture agreement or stockholders
agreements solely to the extent of the Equity Interests of or assets held in the
subject joint venture or other entity.

 

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SECTION 6.11.    Limitation on Issuance of Capital Stock.

 

(A)           WITH RESPECT TO BORROWER, ISSUE ANY EQUITY INTEREST THAT IS NOT
QUALIFIED CAPITAL STOCK.

 

(B)           BORROWER WILL NOT, AND WILL NOT PERMIT ANY SUBSIDIARY TO, ISSUE
ANY EQUITY INTEREST (INCLUDING BY WAY OF SALES OF TREASURY STOCK) OR ANY OPTIONS
OR WARRANTS TO PURCHASE, OR SECURITIES CONVERTIBLE INTO, EQUITY INTEREST, EXCEPT
(I) FOR STOCK SPLITS, STOCK DIVIDENDS AND ADDITIONAL EQUITY INTERESTS ISSUANCES
WHICH DO NOT DECREASE THE PERCENTAGE OWNERSHIP OF BORROWER OR ANY SUBSIDIARIES
IN ANY CLASS OF THE EQUITY INTEREST OF SUCH SUBSIDIARY; (II) SUBSIDIARIES OF
BORROWER FORMED AFTER THE CLOSING DATE PURSUANT TO SECTION 6.12 MAY ISSUE EQUITY
INTERESTS TO BORROWER OR THE SUBSIDIARY OF BORROWER WHICH IS TO OWN SUCH STOCK;
AND (III) BORROWER MAY ISSUE COMMON STOCK THAT IS QUALIFIED CAPITAL STOCK TO
BORROWER.  ALL EQUITY INTERESTS ISSUED IN ACCORDANCE WITH THIS SECTION 6.11(B)
SHALL, TO THE EXTENT REQUIRED BY SECTION 5.12 OR THE SECURITY AGREEMENT, BE
DELIVERED TO THE COLLATERAL AGENT FOR PLEDGE PURSUANT TO THE SECURITY AGREEMENT.

 

SECTION 6.12.    Limitation on Creation of Subsidiaries.  Establish, create or
acquire any additional Subsidiaries without the prior written consent of the
Required Lenders; provided that Borrower may establish, create or acquire one or
more Wholly Owned Subsidiaries of Borrower or one of its Wholly Owned
Subsidiaries without such consent so long as (a) 100% of the Equity Interest of
any new Subsidiary is upon the creation or establishment of any such new
Subsidiary pledged and delivered to the Collateral Agent for the benefit of the
Secured Parties under the Security Agreement, (other than non-Wholly Owned
Subsidiaries acquired in connection with a Permitted Acquisition or pursuant to
Investments pursuant to Section 6.04(h)); (b) upon the creation or establishment
of any such new Wholly Owned Subsidiary, such Subsidiary becomes a party to the
applicable Security Documents and shall become a Subsidiary Guarantor hereunder
and execute a Joinder Agreement and the other Loan Documents all in accordance
with Section 5.11(a) above and (c) such new Subsidiary is a Domestic Subsidiary.

 

SECTION 6.13.    Business.  With respect to Borrower and its Subsidiaries,
engage (directly or indirectly) in any business other than those businesses in
which each of Borrower and its Subsidiaries, respectively, is engaged on the
Third Amendment and Restatement Effective Date (or which are substantially
related thereto or are reasonable extensions thereof).

 

SECTION 6.14.    Limitation on Accounting Changes.  Make or permit any change in
accounting policies or reporting practices, without the consent of the Required
Lenders, which consent shall not be unreasonably withheld, except changes that,
in the aggregate, could not reasonably be expected to result in a Material
Adverse Effect or are required by GAAP.

 

SECTION 6.15.    Fiscal Year.  Change its fiscal year end to a date other than
December 31.

 

SECTION 6.16.    Lease Obligations.  Create, incur, assume or suffer to exist
any obligations as lessee for the rental or hire of real or personal property of
any kind under leases or agreements to lease having an original term of one year
or more that would cause the direct and contingent liabilities of Borrower and
its Subsidiaries, on a consolidated basis, in respect of all such obligations to
exceed $5.0 million payable in any period of 12 consecutive months.

 

SECTION 6.17.    Limitation on Further Negative Pledges.  Except with respect to
prohibitions against other encumbrances on specific property encumbered to
secured payment of particular Indebtedness permitted hereunder or prohibitions
in license agreements under which Borrower or any of its Subsidiaries is the
licensee, enter into any agreement to create, incur, assume or suffer to exist
any Lien upon any of its property, assets or revenues, whether now owned or
hereafter acquired, except pursuant to (a) the Loan Documents, (b) any other
agreement that does not restrict in any manner (directly or indirectly)

 

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Liens created pursuant to the Loan Documents on property or assets of Borrower
or any of its Subsidiaries (whether now owned or hereafter acquired) securing
the Loans or any Interest Rate Agreement and does not require the direct or
indirect granting of any Lien securing any Indebtedness or other obligation by
virtue of the granting of Liens on or pledge of property of Borrower of any of
its Subsidiaries to secure the Loans, any Interest Rate Agreement or any other
Obligations and (c) any industrial revenue or development bonds, acquisition
agreement or operating leases of real property and equipment entered into in the
ordinary course of business.  Notwithstanding any of the foregoing, Indebtedness
incurred by a Non Guarantor Subsidiary may contain a provision that no Lien on
the assets of such Non Guarantor Subsidiary may exist unless such Indebtedness
is equally and ratably secured with any other Indebtedness secured by such
assets.

 

SECTION 6.18.    Anti-Terrorism Law; Anti-Money Laundering.

 

(A)           DIRECTLY OR INDIRECTLY, (I) KNOWINGLY CONDUCT ANY BUSINESS OR
ENGAGE IN MAKING OR RECEIVING ANY CONTRIBUTION OF FUNDS, GOODS OR SERVICES TO OR
FOR THE BENEFIT OF ANY PERSON DESCRIBED IN SECTION 3.24, (II) KNOWINGLY DEAL IN,
OR OTHERWISE ENGAGE IN ANY TRANSACTION RELATING TO, ANY PROPERTY OR INTERESTS IN
PROPERTY BLOCKED PURSUANT TO THE EXECUTIVE ORDER OR ANY OTHER ANTI-TERRORISM
LAW, OR (III) KNOWINGLY 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 ANY ANTI-TERRORISM LAW (AND THE
LOAN PARTIES SHALL DELIVER TO THE LENDERS ANY CERTIFICATION OR OTHER EVIDENCE
REQUESTED FROM TIME TO TIME BY ANY LENDER IN ITS REASONABLE DISCRETION,
CONFIRMING THE LOAN PARTIES’ COMPLIANCE WITH THIS SECTION 6.18).

 

(B)           KNOWINGLY CAUSE OR PERMIT ANY OF THE FUNDS OF SUCH LOAN PARTY THAT
ARE USED TO REPAY THE LOANS TO BE DERIVED FROM ANY UNLAWFUL ACTIVITY WITH THE
RESULT THAT THE MAKING OF THE LOANS WOULD BE IN VIOLATION OF ANY REQUIREMENT OF
LAW.

 

ARTICLE VII

 

GUARANTEE

 

SECTION 7.01.    The Guarantee.  The Subsidiary Guarantors hereby jointly and
severally guarantee as a primary obligor and not as a surety to each Secured
Party and their respective successors and assigns the prompt payment in full
when due (whether at stated maturity, by acceleration or otherwise) of the
principal of and interest (including any interest, fees, costs or charges that
would accrue but for the provisions of the Title 11 of the United States Code
after any bankruptcy or insolvency petition under Title 11 of the United States
Code) on the Loans made by the Lenders to, and the Notes held by each Lender of,
Borrower, and all other Obligations from time to time owing to the Secured
Parties by any Loan Party under any Loan Document or Interest Rate Agreement
relating to the Loans, in each case strictly in accordance with the terms
thereof (such obligations being herein collectively called the “Guaranteed
Obligations”).  The Subsidiary Guarantors hereby jointly and severally agree
that if Borrower or other Subsidiary Guarantor(s) shall fail to pay in full when
due (whether at stated maturity, by acceleration or otherwise) any of the
Guaranteed Obligations, the Subsidiary Guarantors will promptly pay the same,
without any demand or notice whatsoever, and that in the case of any extension
of time of payment or renewal of any of the Guaranteed Obligations, the same
will be promptly paid in full when due (whether at extended maturity, by
acceleration or otherwise) in accordance with the terms of such extension or
renewal.

 

SECTION 7.02.    Obligations Unconditional.  The obligations of the Subsidiary
Guarantors under Section 7.01 shall constitute a guaranty of payment and are
absolute, irrevocable and unconditional, joint and several, irrespective of the
value, genuineness, validity, regularity or enforceability of the

 

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Guaranteed Obligations of Borrower under this Agreement, the Notes, if any, or
any other agreement or instrument referred to herein or therein, or any
substitution, release or exchange of any other guarantee of or security for any
of the Guaranteed Obligations, and, to the fullest extent permitted by
applicable law, irrespective of any other circumstance whatsoever that might
otherwise constitute a legal or equitable discharge or defense of a surety or
guarantor (except for payment in full).  Without limiting the generality of the
foregoing, it is agreed that the occurrence of any one or more of the following
shall not alter or impair the liability of the Subsidiary Guarantors hereunder
which shall remain absolute, irrevocable and unconditional under any and all
circumstances as described above:

 

(I)            AT ANY TIME OR FROM TIME TO TIME, WITHOUT NOTICE TO THE
SUBSIDIARY GUARANTORS, THE TIME FOR ANY PERFORMANCE OF OR COMPLIANCE WITH ANY OF
THE GUARANTEED OBLIGATIONS SHALL BE EXTENDED, OR SUCH PERFORMANCE OR COMPLIANCE
SHALL BE WAIVED;

 

(II)           ANY OF THE ACTS MENTIONED IN ANY OF THE PROVISIONS OF THIS
AGREEMENT OR THE NOTES, IF ANY, OR ANY OTHER AGREEMENT OR INSTRUMENT REFERRED TO
HEREIN OR THEREIN SHALL BE DONE OR OMITTED;

 

(III)          THE MATURITY OF ANY OF THE GUARANTEED OBLIGATIONS SHALL BE
ACCELERATED, OR ANY OF THE GUARANTEED OBLIGATIONS SHALL BE AMENDED IN ANY
RESPECT, OR ANY RIGHT UNDER THE LOAN DOCUMENTS OR ANY OTHER AGREEMENT OR
INSTRUMENT REFERRED TO HEREIN OR THEREIN SHALL BE AMENDED OR WAIVED IN ANY
RESPECT OR ANY OTHER GUARANTEE OF ANY OF THE GUARANTEED OBLIGATIONS OR ANY
SECURITY THEREFOR SHALL BE RELEASED OR EXCHANGED IN WHOLE OR IN PART OR
OTHERWISE DEALT WITH;

 

(IV)          ANY LIEN OR SECURITY INTEREST GRANTED TO, OR IN FAVOR OF, ISSUING
BANK OR ANY LENDER OR AGENT AS SECURITY FOR ANY OF THE GUARANTEED OBLIGATIONS
SHALL FAIL TO BE PERFECTED; OR

 

(V)           THE RELEASE OF ANY OTHER GUARANTOR.

 

The Subsidiary Guarantors hereby expressly waive diligence, presentment, demand
of payment, protest and all notices whatsoever, and any requirement that any
Subsidiary Guarantor thereof exhaust any right, power or remedy or proceed
against Borrower under this Agreement or the Notes, if any, or any other
agreement or instrument referred to herein or therein, or against any other
person under any other guarantee of, or security for, any of the Guaranteed
Obligations.  The Subsidiary Guarantors waive any and all notice of the
creation, renewal, extension, waiver, termination or accrual of any of the
Guaranteed Obligations and notice of or proof of reliance by any Secured Party
upon this Guarantee or acceptance of this Guarantee, and the Guaranteed
Obligations, and any of them, shall conclusively be deemed to have been created,
contracted or incurred in reliance upon this Guarantee, and all dealings between
Borrower and the Secured Parties shall likewise be conclusively presumed to have
been had or consummated in reliance upon this Guarantee.  This Guarantee shall
be construed as a continuing, absolute, irrevocable and unconditional guarantee
of payment without regard to any right of offset with respect to the Guaranteed
Obligations at any time or from time to time held by Secured Parties, and the
obligations and liabilities of the Subsidiary Guarantors hereunder shall not be
conditioned or contingent upon the pursuit by the Secured Parties or any other
person at any time of any right or remedy against Borrower or against any other
person which may be or become liable in respect of all or any part of the
Guaranteed Obligations or against any collateral security or guarantee therefor
or right of offset with respect thereto.  This Guarantee shall remain in full
force and effect and be binding in accordance with and to the extent of its
terms upon the Subsidiary Guarantors and the successors and assigns thereof, and
shall inure to the benefit of the Lenders, and their respective successors and
assigns, notwithstanding that from time to time during the term of this
Agreement there may be no Guaranteed Obligations outstanding.

 

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SECTION 7.03.    Reinstatement.  The obligations of the Subsidiary Guarantors
under this Article VII shall be automatically reinstated if and to the extent
that for any reason any payment by or on behalf of Borrower or other Loan Party
in respect of the Guaranteed Obligations is rescinded or must be otherwise
restored by any holder of any of the Guaranteed Obligations, whether as a result
of any proceedings in bankruptcy or reorganization or otherwise.  The Subsidiary
Guarantors jointly and severally agree that they will indemnify each Secured
Party on demand for all reasonable costs and expenses (including reasonable fees
of counsel) incurred by such Secured Party in connection with such rescission or
restoration, including any such costs and expenses incurred in defending against
any claim alleging that such payment constituted a preference, fraudulent
transfer or similar payment under any bankruptcy, insolvency or similar law,
other than any costs or expenses resulting from the bad faith or willful
misconduct of such Secured Party.

 

SECTION 7.04.    Subrogation; Subordination.  Each Guarantor hereby agrees that
until the indefeasible payment and satisfaction in full in cash of all
Guaranteed Obligations and the expiration and termination of the Commitments of
the Lenders under this Agreement it shall not exercise any right or remedy
arising by reason of any performance by it of its guarantee in Section 7.01,
whether by subrogation or otherwise, against Borrower or any other Guarantor of
any of the Guaranteed Obligations or any security for any of the Guaranteed
Obligations.  The payment of any amounts due with respect to any Indebtedness of
Borrower or any other Guarantor now or hereafter owing to any Guarantor or
Borrower by reason of any payment by such Guarantor under the Guarantee in this
Article VII is hereby subordinated to the prior indefeasible payment in full in
cash of the Guaranteed Obligations.  In addition, any Indebtedness of Borrower
now or hereafter held by any Guarantor is hereby subordinated in right of
payment in full in cash to the Guaranteed Obligations.  Each Guarantor agrees
that it will not demand, sue for or otherwise attempt to collect any such
Indebtedness of Borrower to such Guarantor until the Obligations shall have been
indefeasibly paid in full in cash.  If, notwithstanding the foregoing sentence,
any Guarantor shall prior to the indefeasible payment in full in cash of the
Guaranteed Obligations collect, enforce or receive any amounts in respect of
such Indebtedness, such amounts shall be collected, enforced and received by
such Guarantor as trustee for the Secured Parties and be paid over to
Administrative Agent on account of the Guaranteed Obligations without affecting
in any manner the liability of such Guarantor under the other provisions of the
guaranty contained herein.

 

SECTION 7.05.    Remedies.  The Subsidiary Guarantors jointly and severally
agree that, as between the Subsidiary Guarantors and the Lenders, the
obligations of Borrower under this Agreement and the Notes, if any, may be
declared to be forthwith due and payable as provided in Article VIII (and shall
be deemed to have become automatically due and payable in the circumstances
provided in said Article VIII) for purposes of Section 7.01, notwithstanding any
stay, injunction or other prohibition preventing such declaration (or such
obligations from becoming automatically due and payable) as against Borrower and
that, in the event of such declaration (or such obligations being deemed to have
become automatically due and payable), such obligations (whether or not due and
payable by Borrower) shall forthwith become due and payable by the Subsidiary
Guarantors for purposes of Section 7.01.

 

SECTION 7.06.    Instrument for the Payment of Money.  Each Guarantor hereby
acknowledges that the guarantee in this Article VII constitutes an instrument
for the payment of money, and consents and agrees that any Lender or Agent, at
its sole option, in the event of a dispute by such Guarantor in the payment of
any moneys due hereunder, shall have the right to bring a motion action under
New York CPLR Section 3213.

 

SECTION 7.07.    Continuing Guarantee.  The guarantee in this Article VII is a
continuing guarantee of payment, and shall apply to all Guaranteed Obligations
whenever arising.

 

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SECTION 7.08.    General Limitation on Guarantee Obligations.  In any action or
proceeding involving any state corporate law, or any state, federal or foreign
bankruptcy, insolvency, reorganization or other law affecting the rights of
creditors generally, if the obligations of any Guarantor under Section 7.01
would otherwise be held or determined to be void, voidable, invalid or
unenforceable, or subordinated to the claims of any other creditors, on account
of the amount of its liability under Section 7.01, then, notwithstanding any
other provision to the contrary, the amount of such liability shall, without any
further action by such Guarantor, any Loan Party or any other person, be
automatically limited and reduced to the highest amount that is valid and
enforceable and not subordinated to the claims of other creditors as determined
in such action or proceeding.

 

ARTICLE VIII

 

EVENTS OF DEFAULT

 

SECTION 8.01.    Events of Default.  In case of the happening of any of the
following events (“Events of Default”):

 

(a)           default shall be made in the payment of any principal of any Loan
or any Reimbursement Obligation when and as the same shall become due and
payable, whether at the due date thereof (including a Term B Loan Repayment
Date) or at a date fixed for prepayment thereof or by acceleration thereof or
otherwise;

 

(b)           default shall be made in the payment of any interest on any Loan
or any Fee or any other amount (other than an amount referred to in (a) above)
due under any Loan Document, when and as the same shall become due and payable,
and such default shall continue unremedied for a period of 10 Business Days;

 

(c)           any representation or warranty made or deemed made in or in
connection with any Loan Document or the borrowings or issuances of Letters of
Credit hereunder, or any representation, warranty, statement or information
contained in any report, certificate, financial statement or other instrument
furnished in connection with or pursuant to any Loan Document, shall prove to
have been false or misleading in any material respect when so made, deemed made
or furnished;

 

(d)           default shall be made in the due observance or performance by any
Company of any covenant, condition or agreement contained in Section 5.02, 5.03
or 5.08 or in Article VI;

 

(e)           default shall be made in the due observance or performance by any
Company of any covenant, condition or agreement contained in any Loan Document
(other than those specified in (a), (b) or (d) above) and such default shall
continue unremedied or shall not be waived for a period of 30 days after written
notice thereof from the Administrative Agent or any Lender to Borrower;

 

(f)            any Company shall (i) fail to pay any principal or interest,
regardless of amount, due in respect of any Indebtedness (other than the
Obligations), when and as the same shall become due and payable, or (ii) fail to
observe or perform (after applicable grace periods, if any) any other term,
covenant, condition or agreement contained in any agreement or instrument
evidencing or governing any such Indebtedness if the effect of any failure
referred to in this clause (ii) is to cause, or to permit the holder or holders
of such Indebtedness or a trustee on its or their behalf (with or without the
giving of notice, the lapse of time or both) to cause, such Indebtedness to
become due prior to its stated maturity; provided that it shall not constitute
an Event of Default

 

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pursuant to this paragraph (f) unless the aggregate amount of all such
Indebtedness referred to in clauses (i) and (ii) exceeds $1.0 million at any one
time;

 

(g)           an involuntary proceeding shall be commenced or an involuntary
petition shall be filed in a court of competent jurisdiction seeking (i) relief
in respect of any Company, or of a substantial part of the property or assets of
any Company, under Title 11 of the United States Code, as now constituted or
hereafter amended, or any other federal, state or foreign bankruptcy,
insolvency, receivership or similar law; (ii) the appointment of a receiver,
trustee, custodian, sequestrator, conservator or similar official for any
Company or for a substantial part of the property or assets of any Company; or
(iii) the winding up or liquidation of any Company; and such proceeding or
petition shall continue undismissed for 60 days or an order or decree approving
or ordering any of the foregoing shall be entered;

 

(h)           any Company shall (i) voluntarily commence any proceeding or file
any petition seeking relief under Title 11 of the United States Code, as now
constituted or hereafter amended, or any other federal, state or foreign
bankruptcy, insolvency, receivership or similar law; (ii) consent to the
institution of, or fail to contest in a timely and appropriate manner, any
proceeding or the filing of any petition described in (g) above; (iii) apply for
or consent to the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for any Company or for a substantial part of the
property or assets of any Company; (iv) file an answer admitting the material
allegations of a petition filed against it in any such proceeding; (v) make a
general assignment for the benefit of creditors; (vi) become unable, admit in
writing its inability or fail generally to pay its debts as they become due;
(vii) take any action for the purpose of effecting any of the foregoing; or
(viii) wind up or liquidate;

 

(i)            one or more judgments for the payment of money in an aggregate
amount in excess of $2.5 million shall be rendered against any Company or any
combination thereof and the same shall remain undischarged for a period of 30
consecutive days during which execution shall not be effectively stayed, or any
action shall be legally taken by a judgment creditor to levy upon assets or
properties of any Company to enforce any such judgment;

 

(j)            an ERISA Event shall have occurred that, in the opinion of the
Required Lenders, when taken together with all other such ERISA Events, could
reasonably be expected to result in a Material Adverse Effect or the imposition
of a Lien on any assets of a Company;

 

(k)           any security interest and Lien purported to be created by any
Security Document shall cease to be in full force and effect, or shall cease to
give the Collateral Agent, for the benefit of the Secured Parties, the Liens,
rights, powers and privileges purported to be created and granted under such
Security Documents (including a perfected first priority security interest in
and Lien on, all of the Collateral thereunder (except as otherwise expressly
provided in such Security Document)) in favor of the Collateral Agent, or shall
be asserted by Borrower or any other Loan Party not to be, a valid, perfected,
first priority (except as otherwise expressly provided in this Agreement or such
Security Document) security interest in or Lien on the Collateral covered
thereby unless such occurrence results solely from action of the Collateral
Agent or any Lender and involves no Default by Borrower or any Guarantor
hereunder or under any Security Document;

 

(l)            the Guarantees shall cease to be in full force effect;

 

(m)          any Loan Document or any material provisions thereof shall at any
time and for any reason be declared by a court of competent jurisdiction to be
null and void, or a proceeding

 

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shall be commenced by any Loan Party or any other person, or by any Governmental
Authority, seeking to establish the invalidity or unenforceability thereof
(exclusive of questions of interpretation of any provision thereof), or any Loan
Party shall repudiate or deny that it has any liability or obligation for the
payment of principal or interest or other obligations purported to be created
under any Loan Document;

 

(n)           there shall have occurred a Change in Control; or

 

(o)           any Loan Party shall be prohibited or otherwise restrained from
conducting the business theretofore conducted by it in any manner that has or
could reasonably be expected to result in a Material Adverse Effect by virtue of
any determination, ruling, decision, decree or order of any court or
Governmental Authority of competent jurisdiction;

 

then, and in every such event (other than an event with respect to Borrower
described in paragraph (g) or (h) above), and at any time thereafter during the
continuance of such event, the Administrative Agent may, and at the request of
the Required Lenders shall, by notice to Borrower, take either or both of the
following actions, at the same or different times:  (i) terminate forthwith the
Commitments and (ii) declare the Loans and Reimbursement Obligations then
outstanding to be forthwith due and payable in whole or in part, whereupon the
principal of the Loans and Reimbursement Obligations so declared to be due and
payable, together with accrued interest thereon and any unpaid accrued Fees and
all other liabilities of Borrower accrued hereunder and under any other Loan
Document, shall become forthwith due and payable, without presentment, demand,
protest or any other notice of any kind, all of which are hereby expressly
waived by Borrower and the Subsidiary Guarantors, anything contained herein or
in any other Loan Document to the contrary notwithstanding; and in any event
with respect to Borrower described in paragraph (g) or (h) above, the
Commitments shall automatically terminate and the principal of the Loans and
Reimbursement Obligations then outstanding, together with accrued interest
thereon and any unpaid accrued Fees and all other liabilities of Borrower
accrued hereunder and under any other Loan Document, shall automatically become
due and payable, without presentment, demand, protest or any other notice of any
kind, all of which are hereby expressly waived by Borrower and the Subsidiary
Guarantors, anything contained herein or in any other Loan Document to the
contrary notwithstanding.

 

ARTICLE IX

 

COLLATERAL ACCOUNT; APPLICATION OF COLLATERAL PROCEEDS

 

SECTION 9.01.    Collateral Account.

 

(A)           THE COLLATERAL AGENT IS HEREBY AUTHORIZED TO ESTABLISH AND
MAINTAIN AT ITS OFFICE AT 677 WASHINGTON BOULEVARD, STAMFORD, CONNECTICUT 06901,
IN THE NAME OF THE COLLATERAL AGENT AND PURSUANT TO A CONTROL AGREEMENT, A
RESTRICTED DEPOSIT ACCOUNT DESIGNATED “BASIC ENERGY SERVICES COLLATERAL
ACCOUNT”.  EACH LOAN PARTY SHALL DEPOSIT INTO THE COLLATERAL ACCOUNT FROM TIME
TO TIME (I) THE CASH PROCEEDS OF ANY OF THE COLLATERAL (INCLUDING PURSUANT TO
ANY DISPOSITION THEREOF) TO THE EXTENT CONTEMPLATED HEREIN OR IN ANY OTHER LOAN
DOCUMENT, (II) THE CASH PROCEEDS OF ANY CASUALTY EVENT WITH RESPECT TO
COLLATERAL, TO THE EXTENT CONTEMPLATED HEREIN OR IN ANY OTHER LOAN DOCUMENT, AND
(III) ANY CASH SUCH LOAN PARTY IS REQUIRED TO PLEDGE AS ADDITIONAL COLLATERAL
SECURITY HEREUNDER PURSUANT TO THE LOAN DOCUMENTS.

 

(B)           THE BALANCE FROM TIME TO TIME IN THE COLLATERAL ACCOUNT SHALL
CONSTITUTE PART OF THE COLLATERAL AND SHALL NOT CONSTITUTE PAYMENT OF THE
OBLIGATIONS UNTIL APPLIED AS HEREINAFTER PROVIDED.  SO LONG AS NO EVENT OF
DEFAULT HAS OCCURRED AND IS CONTINUING OR WILL RESULT THEREFROM, THE COLLATERAL
AGENT SHALL WITHIN TWO BUSINESS DAYS OF RECEIVING A REQUEST OF THE APPLICABLE
LOAN PARTY FOR RELEASE OF CASH PROCEEDS (I) FROM THE COLLATERAL ACCOUNT
CONSTITUTING NET CASH PROCEEDS RELATING TO ANY CASUALTY EVENT OR ASSET

 

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SALE REMIT SUCH CASH PROCEEDS ON DEPOSIT IN THE COLLATERAL ACCOUNT TO OR UPON
THE ORDER OF SUCH LOAN PARTY, SO LONG AS SUCH LOAN PARTY HAS SATISFIED THE
CONDITIONS RELATING THERETO SET FORTH IN SECTION 9.02 AND (II)  WITH RESPECT TO
THE LC SUB ACCOUNT, REMIT SUCH NET CASH PROCEEDS ON DEPOSIT IN THE LC SUB
ACCOUNT TO OR UPON THE ORDER OF SUCH LOAN PARTY AT SUCH TIME AS ALL LETTERS OF
CREDIT SHALL HAVE BEEN TERMINATED AND ALL OF THE LIABILITIES IN RESPECT OF THE
LETTERS OF CREDIT HAVE BEEN PAID IN FULL.  AT ANY TIME FOLLOWING THE OCCURRENCE
AND DURING THE CONTINUANCE OF AN EVENT OF DEFAULT, THE COLLATERAL AGENT MAY
(AND, IF INSTRUCTED BY THE REQUIRED LENDERS AS SPECIFIED HEREIN, SHALL) IN ITS
(OR THEIR) DISCRETION APPLY OR CAUSE TO BE APPLIED (SUBJECT TO COLLECTION) THE
BALANCE FROM TIME TO TIME OUTSTANDING TO THE CREDIT OF THE COLLATERAL ACCOUNT TO
THE PAYMENT OF THE OBLIGATIONS IN THE MANNER SPECIFIED IN SECTION 9.03 HEREOF
SUBJECT, HOWEVER, IN THE CASE OF AMOUNTS DEPOSITED IN THE LC SUB ACCOUNT, TO THE
PROVISIONS OF SECTIONS 2.18(I) AND 9.03.  THE LOAN PARTIES SHALL HAVE NO RIGHT
TO WITHDRAW, TRANSFER OR OTHERWISE RECEIVE ANY FUNDS DEPOSITED IN THE COLLATERAL
ACCOUNT EXCEPT TO THE EXTENT SPECIFICALLY PROVIDED HEREIN.

 

(C)           AMOUNTS ON DEPOSIT IN THE COLLATERAL ACCOUNT SHALL BE INVESTED
FROM TIME TO TIME IN CASH EQUIVALENTS AS THE APPLICABLE LOAN PARTY (OR, AFTER
THE OCCURRENCE AND DURING THE CONTINUANCE OF AN EVENT OF DEFAULT, THE COLLATERAL
AGENT) SHALL DETERMINE, WHICH CASH EQUIVALENTS SHALL BE HELD IN THE NAME AND BE
UNDER THE CONTROL OF THE COLLATERAL AGENT (OR ANY SUB AGENT); PROVIDED THAT AT
ANY TIME AFTER THE OCCURRENCE AND DURING THE CONTINUANCE OF AN EVENT OF DEFAULT,
THE COLLATERAL AGENT MAY (AND, IF INSTRUCTED BY THE REQUIRED LENDERS AS
SPECIFIED HEREIN, SHALL) IN ITS (OR THEIR) DISCRETION AT ANY TIME AND FROM TIME
TO TIME ELECT TO LIQUIDATE ANY SUCH CASH EQUIVALENTS AND TO APPLY OR CAUSE TO BE
APPLIED THE PROCEEDS THEREOF TO THE PAYMENT OF THE OBLIGATIONS IN THE MANNER
SPECIFIED IN SECTION 9.03 HEREOF.

 

(D)           AMOUNTS DEPOSITED INTO THE COLLATERAL ACCOUNT AS COVER FOR
LIABILITIES IN RESPECT OF LETTERS OF CREDIT UNDER ANY PROVISION OF THIS
AGREEMENT REQUIRING SUCH COVER SHALL BE HELD BY THE ADMINISTRATIVE AGENT IN A
SEPARATE SUB ACCOUNT DESIGNATED AS THE “LC SUB ACCOUNT” (THE “LC SUB ACCOUNT”)
AND, NOTWITHSTANDING ANY OTHER PROVISION HEREOF TO THE CONTRARY, ALL AMOUNTS
HELD IN THE LC SUB ACCOUNT SHALL CONSTITUTE COLLATERAL SECURITY FIRST FOR THE
LIABILITIES IN RESPECT OF LETTERS OF CREDIT OUTSTANDING FROM TIME TO TIME AND
SECOND FOR THE OTHER OBLIGATIONS HEREUNDER UNTIL SUCH TIME AS ALL LETTERS OF
CREDIT SHALL HAVE BEEN TERMINATED AND ALL OF THE LIABILITIES IN RESPECT OF
LETTERS OF CREDIT HAVE BEEN PAID IN FULL.

 

SECTION 9.02.    Proceeds of Destruction, Taking and Collateral Dispositions. 
So long as no Event of Default shall have occurred and be continuing, in the
event the applicable Loan Party elects to reinvest Net Cash Proceeds in respect
of any Asset Sale or Casualty Event in accordance with the provisions of
Sections 2.10(c) and 2.10(f) as applicable, the Collateral Agent shall receive
at least 10 days’ prior notice of each request for payment and shall not release
any part of such Net Cash Proceeds, until the applicable Loan Party has
furnished to the Collateral Agent (i) an Officers’ Certificate setting forth: 
(A) a brief description of the reinvestment to be made, (B) the dollar amount of
the expenditures to be made, or costs incurred by such Loan Party in connection
with such reinvestment and (C) evidence that the properties or assets acquired
in connection with such reinvestment have a fair market value at least equal to
the amount of such Net Cash Proceeds requested to be released from the
Collateral Account and (ii) all security agreements and Mortgages and other
items required by the provisions of Sections 5.11 and 5.12 to, among other
things, subject such reinvestment properties or assets to the Lien of the
Security Documents in favor of the Collateral Agent, for its benefit and for the
benefit of the other Secured Parties.

 

SECTION 9.03.    Application of Proceeds.  The proceeds received by the
Collateral Agent in respect of any sale of, collection from or other realization
upon all or any part of the Collateral pursuant to the exercise by the
Collateral Agent of its remedies shall be applied, together with any other sums
then held by the Collateral Agent pursuant to this Agreement, promptly by the
Collateral Agent as follows:

 

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(a)           First, to the payment of all reasonable costs and expenses, fees,
commissions and taxes of such sale, collection or other realization including,
without limitation, compensation to the Collateral Agent and its agents and
counsel, and all expenses, liabilities and advances made or incurred by the
Collateral Agent in connection therewith, together with interest on each such
amount at the highest rate then in effect under this Agreement from and after
the date such amount is due, owing or unpaid until paid in full;

 

(b)           Second, to the payment of all other reasonable costs and expenses
of such sale, collection or other realization including, without limitation,
compensation to the other Secured Parties and their agents and counsel and all
costs, liabilities and advances made or incurred by the other Secured Parties in
connection therewith, together with interest on each such amount at the highest
rate then in effect under this Agreement from and after the date such amount is
due, owing or unpaid until paid in full;

 

(c)           Third, without duplication of amounts applied pursuant to clauses
(a) and (b) above, to the indefeasible payment in full in cash, pro rata, of (i)
interest, principal and other amounts constituting Obligations (other than the
obligations arising under the Hedging Agreements and the principal amount of
Reimbursement Obligations) in each case equally and ratably in accordance with
the respective amounts thereof then due and owing and (ii) the Obligations
arising under the Hedging Agreements in accordance with the terms of the Hedging
Agreements;

 

(d)           Fourth, to the indefeasible payment in full in cash, pro rata, of
the principal amount of Reimbursement Obligations; and

 

(e)           Fifth, the balance, if any, to the person lawfully entitled
thereto (including the applicable Loan Party or its successors or assigns).

 

In the event that any such proceeds are insufficient to pay in full the items
described in clauses (a) through (e) of this Section 9.03, the Loan Parties
shall remain jointly and severally liable for any deficiency.

 

ARTICLE X

 

THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT

 

SECTION 10.01. Appointment.  Each Lender hereby irrevocably designates and
appoints each of the Administrative Agent and the Collateral Agent as an agent
of such Lender under this Agreement and the other Loan Documents.  Each Lender
irrevocably authorizes each Agent, in such capacity, through its agents or
employees, to take such actions on its behalf under the provisions of this
Agreement and the other Loan Documents and to exercise such powers and perform
such duties as are expressly delegated to such Agent by the terms of this
Agreement and the other Loan Documents, together with such actions and powers as
are reasonably incidental thereto.

 

SECTION 10.02. Agent in Its Individual Capacity.  Each person serving as an
Agent hereunder shall have the same rights and powers in its capacity as a
Lender as any other Lender and may exercise the same as though it were not an
Agent, and such person and its Affiliates may accept deposits from, lend money
to and generally engage in any kind of business with Borrower or any Subsidiary
or other Affiliate thereof as if it were not an Agent hereunder.

 

SECTION 10.03. Exculpatory Provisions.  No Agent shall have any duties or
obligations except those expressly set forth in the Loan Documents.  Without
limiting the generality of the foregoing,

 

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(a) no Agent shall be subject to any fiduciary or other implied duties,
regardless of whether a Default has occurred and is continuing, (b) no Agent
shall have any duty to take any discretionary action or exercise any
discretionary powers, except discretionary rights and powers expressly
contemplated by the Loan Documents that such Agent is required to exercise in
writing by the Required Lenders (or such other number or percentage of the
Lenders as shall be necessary under the circumstances as provided in
Section 11.02), and (c) except as expressly set forth in the Loan Documents, no
Agent shall have any duty to disclose or shall be liable for the failure to
disclose, any information relating to Borrower or any of its Subsidiaries that
is communicated to or obtained by the bank serving as such Agent or any of its
Affiliates in any capacity.  No Agent shall be liable for any action taken or
not taken by it with the consent or at the request of the Required Lenders (or
such other number or percentage of the Lenders as shall be necessary under the
circumstances as provided in Section 11.02) or in the absence of its own gross
negligence or willful misconduct.  No Agent shall be deemed to have knowledge of
any Default unless and until written notice thereof is given to such Agent by
Borrower or a Lender, and no Agent shall be responsible for or have any duty to
ascertain or inquire into (i) any statement, warranty or representation made in
or in connection with any Loan Document, (ii) the contents of any certificate,
report or other document delivered thereunder or in connection therewith, (iii)
the performance or observance of any of the covenants, agreements or other terms
or conditions set forth in any Loan Document, (iv) the validity, enforceability,
effectiveness or genuineness of any Loan Document or any other agreement,
instrument or document or (v) the satisfaction of any condition set forth in
Article IV or elsewhere in any Loan Document.

 

SECTION 10.04. Reliance by Agent.  Each Agent shall be entitled to rely upon,
and shall not incur any liability for relying upon, any notice, request,
certificate, consent, statement, instrument, document or other writing believed
by it to be genuine and to have been signed or sent by a proper person.  Each
Agent also may rely upon any statement made to it orally or by telephone and
believed by it to be made by a proper person, and shall not incur any liability
for relying thereon.  Each Agent may consult with legal counsel (who may be
counsel for Borrower), independent accountants and other advisors selected by
it, and shall not be liable for any action taken or not taken by it in
accordance with the advice of any such counsel, accountants or advisors.

 

SECTION 10.05. Delegation of Duties.  Each Agent may perform any and all its
duties and exercise its rights and powers by or through any one or more sub
agents appointed by such Agent.  Each Agent and any such sub agent may perform
any and all its duties and exercise its rights and powers through their
respective Affiliates.  The exculpatory provisions of the preceding paragraphs
shall apply to any such sub agent and to the Affiliates of each Agent and any
such sub agent, and shall apply to their respective activities in connection
with the syndication of the credit facilities provided for herein as well as
activities as Agent.

 

SECTION 10.06. Successor Agent.  Each Agent may resign as such at any time upon
at least 30 days’ prior notice to the Lenders, the Issuing Bank and Borrower. 
Upon any such resignation, the Required Lenders shall have the right, in
consultation with Borrower, to appoint a successor Agent from among the
Lenders.  If no successor shall have been so appointed by the Required Lenders
and shall have accepted such appointment within 30 days after the retiring Agent
gives notice of its resignation, then the retiring Agent may, on behalf of the
Lenders and the Issuing Bank, appoint a successor Agent, which successor shall
be a commercial banking institution organized under the laws of the United
States (or any State thereof) or a United States branch or agency of a
commercial banking institution, in each case, having combined capital and
surplus of at least $250 million; provided that if such retiring Agent is unable
to find a commercial banking institution which is willing to accept such
appointment and which meets the qualifications set forth above, the retiring
Agent’s resignation shall nevertheless thereupon become effective, and the
Lenders shall assume and perform all of the duties of the Agent hereunder until
such time, if any, as the Required Lenders appoint a successor Agent.

 

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Upon the acceptance of its appointment as an Agent hereunder by a successor,
such successor shall succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations hereunder.  The fees payable by
Borrower to a successor Agent shall be the same as those payable to its
predecessor unless otherwise agreed between Borrower and such successor.  After
an Agent’s resignation hereunder, the provisions of this Article X and Section
11.03 shall continue in effect for the benefit of such retiring Agent, its sub
agents and their respective Affiliates in respect of any actions taken or
omitted to be taken by any of them while it was acting as Agent.

 

SECTION 10.07. Non Reliance on Agent and Other Lenders.  Each Lender
acknowledges that it has, independently and without reliance upon any Agent or
any other Lender and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement.  Each Lender also acknowledges that it will, independently and
without reliance upon any Agent or any other Lender and based on such documents
and information as it shall from time to time deem appropriate, continue to make
its own decisions in taking or not taking action under or based upon this
Agreement, any other Loan Document or related agreement or any document
furnished hereunder or thereunder.

 

SECTION 10.08. No Other Administrative Agent.  The Lenders identified in this
Agreement, the Syndication Agent and the Documentation Agent shall not have any
right, power, obligation, liability, responsibility or duty under this Agreement
other than those applicable to all Lenders.  Without limiting the foregoing,
neither the Syndication Agent nor the Documentation Agent shall have or be
deemed to have a fiduciary relationship with any Lender.  Each Lender hereby
makes the same acknowledgments with respect to the Syndication Agent and the
Documentation Agent as it makes with respect to the Administrative Agent or any
other Lender in this Article X.  Notwithstanding the foregoing, the parties
hereto acknowledge that the Documentation Agent and the Syndication Agent hold
such titles in name only, and that such titles confer no additional rights or
obligations relative to those conferred on any Lender hereunder.

 

SECTION 10.09. Indemnification.  The Lenders severally agree to indemnify each
Agent in its capacity as such (to the extent not reimbursed by Borrower or the
Subsidiary Guarantors and without limiting the obligation of Borrower or the
Subsidiary Guarantors to do so), ratably according to their respective
outstanding Loans and Commitments in effect on the date on which indemnification
is sought under this Section (or, if indemnification is sought after the date
upon which all Commitments shall have terminated and the Loans and Reimbursement
Obligations shall have been paid in full, ratably in accordance with such
outstanding Loans and Commitments as in effect immediately prior to such date),
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind whatsoever that may at any time (whether before or after the payment of the
Loans and Reimbursement Obligations) be imposed on, incurred by or asserted
against such Agent in any way relating to or arising out of, the Commitments,
this Agreement, any of the other Loan Documents or any documents contemplated by
or referred to herein or therein or the transactions contemplated hereby or
thereby or any action taken or omitted by such Agent under or in connection with
any of the foregoing; provided that no Lender shall be liable for the payment of
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements that are found by a
final and nonappealable decision of a court of competent jurisdiction to have
resulted from such Agent’s gross negligence or willful misconduct.  The
agreements in this Section shall survive the payment of the Loans and all other
amounts payable hereunder.

 

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ARTICLE XI

 

MISCELLANEOUS

 

SECTION 11.01. Notices.  Notices and other communications provided for herein
shall be in writing and shall be delivered by hand or overnight courier service,
mailed by certified or registered mail or sent by telecopy, as follows:

 

(a)           if to any Loan Party, to Borrower at:

 

Basic Energy Services, Inc.
400 W. Illinois
Midland, Texas  79701
Attention:  Kenneth V. Huseman
Telecopy No.:   (432) 620 5501
Telephone No.: (432) 620 5500
E mail:  ken.huseman@basicenergyservices.com

 

with a copy to:

 

Andrews Kurth LLP
600 Travis, Suite 4200
Houston, Texas  77002
Attention:  Douglas Dillon, Esq.
Telecopy No.:   (713) 220 4285
Telephone No.: (713) 220 4200
E mail:  ddillon@akllp.com

 

(b)           if to the Administrative Agent or the Collateral Agent, to it at:

 

UBS AG, Stamford Branch
677 Washington Boulevard
Stamford, Connecticut  06901
Attention:  Joselin Fernandes
Telecopy No.:  (203) 719-4308;

 

with a copy to:

 

Cahill Gordon & Reindel llp
80 Pine Street
New York, New York  10005
Attention:  Michael E. Michetti, Esq.
Telecopy:  (212) 269 5420
Telephone:  (212) 701 3000
E mail:  mmichetti@cahill.com

 

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(c)           if to the Documentation Agent, to it at:

 

Hibernia National Bank
313 Carondelet Street, 10th Floor
New Orleans, Louisiana  70130
Attention:  Energy/Maritime Division
Telecopy No.:  (504) 533-5434

 

(d)           if to a Lender, to it at its address (or telecopy number) set
forth on the applicable Lender Addendum or in the Assignment and Acceptance
pursuant to which such Lender shall have become a party hereto.

 

All notices and other communications given to any party hereto in accordance
with the provisions of this Agreement shall be deemed to have been given on the
date of receipt if delivered by hand or overnight courier service or sent by
telecopy or by certified or registered mail, in each case delivered, sent or
mailed (properly addressed) to such party as provided in this Section 11.01 or
in accordance with the latest unrevoked direction from such party given in
accordance with this Section 11.01 and failure to deliver courtesy copies of
notices and other communications shall in no event affect the validity or
effectiveness of such notices and other communications.

 

SECTION 11.02. Waivers; Amendment.

 

(A)           NO FAILURE OR DELAY BY ANY AGENT, THE COLLATERAL AGENT, THE
ISSUING BANK OR ANY LENDER IN EXERCISING ANY RIGHT OR POWER HEREUNDER OR UNDER
ANY OTHER LOAN DOCUMENT SHALL OPERATE AS A WAIVER THEREOF, NOR SHALL ANY SINGLE
OR PARTIAL EXERCISE OF ANY SUCH RIGHT OR POWER, OR ANY ABANDONMENT OR
DISCONTINUANCE OF STEPS TO ENFORCE SUCH A RIGHT OR POWER, PRECLUDE ANY OTHER OR
FURTHER EXERCISE THEREOF OR THE EXERCISE OF ANY OTHER RIGHT OR POWER.  THE
RIGHTS AND REMEDIES OF EACH AGENT, THE ISSUING BANK AND THE LENDERS HEREUNDER
AND UNDER THE OTHER LOAN DOCUMENTS ARE CUMULATIVE AND ARE NOT EXCLUSIVE OF ANY
RIGHTS OR REMEDIES THAT THEY WOULD OTHERWISE HAVE.  NO WAIVER OF ANY PROVISION
OF ANY LOAN DOCUMENT OR CONSENT TO ANY DEPARTURE BY ANY LOAN PARTY THEREFROM
SHALL IN ANY EVENT BE EFFECTIVE UNLESS THE SAME SHALL BE PERMITTED BY PARAGRAPH
(B) OF THIS SECTION 11.02, AND THEN SUCH WAIVER OR CONSENT SHALL BE EFFECTIVE
ONLY IN THE SPECIFIC INSTANCE AND FOR THE PURPOSE FOR WHICH GIVEN.  WITHOUT
LIMITING THE GENERALITY OF THE FOREGOING, THE MAKING OF A LOAN OR ISSUANCE OF A
LETTER OF CREDIT SHALL NOT BE CONSTRUED AS A WAIVER OF ANY DEFAULT, REGARDLESS
OF WHETHER ANY AGENT, ANY LENDER OR THE ISSUING BANK MAY HAVE HAD NOTICE OR
KNOWLEDGE OF SUCH DEFAULT AT THE TIME.

 

(B)           NEITHER THIS AGREEMENT NOR ANY OTHER LOAN DOCUMENT NOR ANY
PROVISION HEREOF OR THEREOF MAY BE WAIVED, AMENDED OR MODIFIED EXCEPT, IN THE
CASE OF THIS AGREEMENT, PURSUANT TO AN AGREEMENT OR AGREEMENTS IN WRITING
ENTERED INTO BY BORROWER AND THE REQUIRED LENDERS OR, IN THE CASE OF ANY OTHER
LOAN DOCUMENT, PURSUANT TO AN AGREEMENT OR AGREEMENTS IN WRITING ENTERED INTO BY
THE ADMINISTRATIVE AGENT AND THE LOAN PARTY OR LOAN PARTIES THAT ARE PARTIES
THERETO, IN EACH CASE WITH THE WRITTEN CONSENT OF THE REQUIRED LENDERS; PROVIDED
THAT NO SUCH AGREEMENT SHALL:

 

(I)      INCREASE THE COMMITMENT OF ANY LENDER WITHOUT THE WRITTEN CONSENT OF
SUCH LENDER;

 

(II)     REDUCE THE PRINCIPAL AMOUNT OF ANY LOAN OR LC DISBURSEMENT OR REDUCE
THE RATE OF INTEREST THEREON, OR REDUCE ANY FEES PAYABLE HEREUNDER, WITHOUT THE
WRITTEN CONSENT OF EACH LENDER AFFECTED THEREBY;

 

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(III)    POSTPONE OR EXTEND THE MATURITY OF ANY LOAN, OR ANY SCHEDULED DATE OF
PAYMENT OF OR THE INSTALLMENT OTHERWISE DUE ON THE PRINCIPAL AMOUNT OF ANY TERM
B LOAN UNDER SECTION 2.09, OR THE REQUIRED DATE OF PAYMENT OF ANY REIMBURSEMENT
OBLIGATION, OR ANY DATE FOR THE PAYMENT OF ANY INTEREST OR FEES PAYABLE
HEREUNDER, OR REDUCE THE AMOUNT OF, WAIVE OR EXCUSE ANY SUCH PAYMENT, OR
POSTPONE THE SCHEDULED DATE OF EXPIRATION OF ANY COMMITMENT OR POSTPONE THE
SCHEDULED DATE OF EXPIRATION OF ANY LETTER OF CREDIT BEYOND THE REVOLVING
MATURITY DATE, WITHOUT THE WRITTEN CONSENT OF EACH LENDER AFFECTED THEREBY;

 

(IV)    CHANGE SECTION 2.14(B) OR (C) IN A MANNER THAT WOULD ALTER THE PRO RATA
SHARING OF PAYMENTS OR SETOFFS REQUIRED THEREBY, WITHOUT THE WRITTEN CONSENT OF
EACH LENDER;

 

(V)     CHANGE THE PERCENTAGE SET FORTH IN THE DEFINITION OF “REQUIRED LENDERS”
OR ANY OTHER PROVISION OF ANY LOAN DOCUMENT (INCLUDING THIS SECTION) SPECIFYING
THE NUMBER OR PERCENTAGE OF LENDERS (OR LENDERS OF ANY CLASS) REQUIRED TO WAIVE,
AMEND OR MODIFY ANY RIGHTS THEREUNDER OR MAKE ANY DETERMINATION OR GRANT ANY
CONSENT THEREUNDER, WITHOUT THE WRITTEN CONSENT OF EACH LENDER (OR EACH LENDER
OF SUCH CLASS, AS THE CASE MAY BE);

 

(VI)    RELEASE BORROWER OR ANY SUBSIDIARY GUARANTOR FROM ITS GUARANTEE (EXCEPT
AS EXPRESSLY PROVIDED IN ARTICLE VII), OR LIMIT ITS LIABILITY IN RESPECT OF SUCH
GUARANTEE, WITHOUT THE WRITTEN CONSENT OF EACH LENDER;

 

(VII)   RELEASE ALL OR A SUBSTANTIAL PORTION OF THE COLLATERAL FROM THE LIENS OF
THE SECURITY DOCUMENTS OR ALTER THE RELATIVE PRIORITIES OF THE OBLIGATIONS
ENTITLED TO THE LIENS OF THE SECURITY DOCUMENTS (EXCEPT IN CONNECTION WITH
SECURING ADDITIONAL OBLIGATIONS EQUALLY AND RATABLY WITH THE OTHER OBLIGATIONS),
IN EACH CASE WITHOUT THE WRITTEN CONSENT OF EACH LENDER; OR

 

(VIII)  CHANGE ANY PROVISIONS OF ANY LOAN DOCUMENT IN A MANNER THAT BY ITS TERMS
ADVERSELY AFFECTS THE RIGHTS IN RESPECT OF PAYMENTS DUE TO LENDERS HOLDING LOANS
OF ANY CLASS DIFFERENTLY THAN THOSE HOLDING LOANS OF ANY OTHER CLASS, WITHOUT
THE WRITTEN CONSENT OF LENDERS HOLDING A MAJORITY IN INTEREST OF THE OUTSTANDING
LOANS AND UNUSED COMMITMENTS OF EACH AFFECTED CLASS;

 

provided, further, that (1) no such agreement shall amend, modify or otherwise
affect the rights or duties of the Administrative Agent, the Collateral Agent,
the Issuing Bank or the Swingline Lender without the prior written consent of
the Administrative Agent, the Issuing Bank or the Swingline Lender, as the case
may be, (2) any waiver, amendment or modification of this Agreement that by its
terms affects the rights or duties under this Agreement of the Revolving Lenders
(but not the Term B Lenders), or the Term B Lenders (but not the Revolving
Lenders) may be effected by an agreement or agreements in writing entered into
by Borrower and requisite percentage in interest of the affected Class of
Lenders that would be required to consent thereto under this Section if such
Class of Lenders were the only Class of Lenders hereunder at the time and (3)
any waiver, amendment or modification of this Agreement that by its terms
affects the rights or duties under this Agreement of the Revolving Lenders (but
not the Term B Lenders) at a time in which an Affiliate of the Administrative
Agent is a Revolving Lender shall also require the approval of at least one
Revolving Lender not affiliated with the Administrative Agent (if any such
Revolving Lenders exist at such time).  Notwithstanding the foregoing, any
provision of this Agreement may be amended by an agreement in writing entered
into by Borrower, the Required Lenders and the Administrative Agent (and, if
their rights or obligations are affected thereby, the Issuing Bank and the
Swingline Lender) if (x) by the terms of such agreement the Commitment of each
Lender not consenting to the amendment provided for therein shall terminate upon
the effectiveness of such amendment and (y) at the time such amendment becomes
effective, each Lender not consenting thereto receives payment in full of

 

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the principal of and interest accrued on each Loan made by it and all other
amounts owing to it or accrued for its account under this Agreement.

 

(C)           IF, IN CONNECTION WITH ANY PROPOSED CHANGE, WAIVER, DISCHARGE OR
TERMINATION OF THE PROVISIONS OF THIS AGREEMENT AS CONTEMPLATED BY SECTION
11.02(B) (OTHER THAN CLAUSE (III) OF SUCH SECTION), THE CONSENT OF THE
SUPERMAJORITY LENDERS IS OBTAINED BUT THE CONSENT OF ONE OR MORE OF SUCH OTHER
LENDERS WHOSE CONSENT IS REQUIRED IS NOT OBTAINED, THEN BORROWER SHALL HAVE THE
RIGHT TO REPLACE ALL, BUT NOT LESS THAN ALL, OF SUCH NON CONSENTING LENDER OR
LENDERS (SO LONG AS ALL NON CONSENTING LENDERS ARE SO REPLACED) WITH ONE OR MORE
PERSONS PURSUANT TO SECTION 2.16 SO LONG AS AT THE TIME OF SUCH REPLACEMENT EACH
SUCH NEW LENDER CONSENTS TO THE PROPOSED CHANGE, WAIVER, DISCHARGE OR
TERMINATION; PROVIDED, HOWEVER, THAT BORROWER SHALL NOT HAVE THE RIGHT TO
REPLACE A LENDER SOLELY AS A RESULT OF THE EXERCISE OF SUCH LENDER’S RIGHTS (AND
THE WITHHOLDING OF ANY REQUIRED CONSENT BY SUCH LENDER) PURSUANT TO CLAUSE (III)
OF SECTION 11.02(B).

 

SECTION 11.03. Expenses; Indemnity.

 

(A)           BORROWER AGREES TO PROMPTLY PAY ALL REASONABLE OUT OF POCKET COSTS
AND EXPENSES (INCLUDING BUT NOT LIMITED TO EXPENSES INCURRED IN CONNECTION WITH
DUE DILIGENCE AND TRAVEL, COURIER, REPRODUCTION, PRINTING AND DELIVERY EXPENSES)
(I) INCURRED BY THE ADMINISTRATIVE AGENT AND COLLATERAL AGENT, THE SWINGLINE
LENDER AND THE ISSUING BANK IN CONNECTION WITH THE SYNDICATION OF THE CREDIT
FACILITIES PROVIDED FOR HEREIN AND THE PREPARATION, EXECUTION, DELIVERY AND
ADMINISTRATION OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND THE PERFECTION
AND MAINTENANCE OF THE LIENS SECURING THE COLLATERAL OR IN CONNECTION WITH ANY
AMENDMENTS, CONSENTS, ENFORCEMENT COSTS, DOCUMENTARY TAXES OR WAIVERS OF THE
PROVISIONS HEREOF OR THEREOF (WHETHER OR NOT THE TRANSACTIONS HEREBY OR THEREBY
CONTEMPLATED SHALL BE CONSUMMATED) OR (II) INCURRED BY THE AGENTS OR AFTER THE
OCCURRENCE AND DURING THE CONTINUATION OF AN EVENT OF DEFAULT ANY LENDER IN
CONNECTION WITH THE ENFORCEMENT OR PROTECTION OF ITS RIGHTS IN CONNECTION WITH
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS OR IN CONNECTION WITH THE LOANS MADE
OR LETTERS OF CREDIT ISSUED HEREUNDER, INCLUDING THE REASONABLE FEES, CHARGES
AND DISBURSEMENTS OF CAHILL GORDON & REINDEL LLP, COUNSEL FOR THE ADMINISTRATIVE
AGENT AND THE COLLATERAL AGENT, AND ANY AUDITORS, ACCOUNTANTS, CONSULTANTS,
APPRAISERS OR OTHER ADVISORS AND, IN CONNECTION WITH ANY SUCH ENFORCEMENT OR
PROTECTION, THE FEES, CHARGES AND DISBURSEMENTS OF ANY OTHER COUNSEL FOR THE
AGENTS OR ANY LENDER.

 

(B)           THE LOAN PARTIES AGREE, JOINTLY AND SEVERALLY, TO INDEMNIFY THE
AGENTS, EACH LENDER, THE ISSUING BANK AND THE SWINGLINE LENDER, EACH AFFILIATE
OF ANY OF THE FOREGOING PERSONS AND EACH OF THEIR RESPECTIVE PARTNERS,
CONTROLLING PERSONS, DIRECTORS, OFFICERS, TRUSTEES, EMPLOYEES AND AGENTS (EACH
SUCH PERSON BEING CALLED AN “INDEMNITEE”) AGAINST, AND TO HOLD EACH INDEMNITEE
HARMLESS FROM, ALL REASONABLE OUT OF POCKET COSTS AND ANY AND ALL LOSSES,
CLAIMS, DAMAGES, LIABILITIES, PENALTIES, JUDGMENTS, SUITS AND RELATED EXPENSES,
INCLUDING REASONABLE COUNSEL FEES, CHARGES AND DISBURSEMENTS, INCURRED BY OR
ASSERTED AGAINST ANY INDEMNITEE ARISING OUT OF, IN ANY WAY CONNECTED WITH, OR AS
A RESULT OF (I) THE EXECUTION, DELIVERY, PERFORMANCE, ADMINISTRATION OR
ENFORCEMENT OF THE LOAN DOCUMENTS, (II) ANY ACTUAL OR PROPOSED USE OF THE
PROCEEDS OF THE LOANS OR ISSUANCE OF LETTERS OF CREDIT, (III) ANY CLAIM,
LITIGATION, INVESTIGATION OR PROCEEDING RELATING TO ANY OF THE FOREGOING,
WHETHER OR NOT ANY INDEMNITEE IS A PARTY THERETO, OR (IV) ANY ACTUAL OR ALLEGED
PRESENCE OR RELEASE OR THREATENED RELEASE OF HAZARDOUS MATERIALS, ON, AT, UNDER
OR FROM ANY PROPERTY OWNED, LEASED OR OPERATED BY ANY COMPANY, OR ANY
ENVIRONMENTAL CLAIM RELATED IN ANY WAY TO ANY COMPANY; PROVIDED THAT SUCH
INDEMNITY SHALL NOT, AS TO ANY INDEMNITEE, BE AVAILABLE TO THE EXTENT THAT SUCH
LOSSES, CLAIMS, DAMAGES, LIABILITIES OR RELATED EXPENSES ARE DETERMINED BY A
COURT OF COMPETENT JURISDICTION BY FINAL AND NONAPPEALABLE JUDGMENT TO HAVE
RESULTED FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH INDEMNITEE.

 

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(C)           THE PROVISIONS OF THIS SECTION 11.03 SHALL REMAIN OPERATIVE AND IN
FULL FORCE AND EFFECT REGARDLESS OF THE EXPIRATION OF THE TERM OF THIS
AGREEMENT, THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY, THE
REPAYMENT OF ANY OF THE LOANS OR REIMBURSEMENT OBLIGATIONS, THE EXPIRATION OF
THE COMMITMENTS, THE EXPIRATION OF ANY LETTER OF CREDIT, THE INVALIDITY OR
UNENFORCEABILITY OF ANY TERM OR PROVISION OF THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT, OR ANY INVESTIGATION MADE BY OR ON BEHALF OF THE AGENTS, THE ISSUING
BANK OR ANY LENDER.  ALL AMOUNTS DUE UNDER THIS SECTION 11.03 SHALL BE PAYABLE
ON WRITTEN DEMAND THEREFOR ACCOMPANIED BY REASONABLE DOCUMENTATION WITH RESPECT
TO ANY REIMBURSEMENT, INDEMNIFICATION OR OTHER AMOUNT REQUESTED.

 

(D)           TO THE EXTENT THAT BORROWER FAILS TO PROMPTLY PAY ANY AMOUNT
REQUIRED TO BE PAID BY IT TO THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT,
THE ISSUING BANK OR THE SWINGLINE LENDER UNDER PARAGRAPH (A) OR (B) OF THIS
SECTION, EACH LENDER SEVERALLY AGREES TO PAY TO THE AGENTS, THE ISSUING BANK OR
THE SWINGLINE LENDER, AS THE CASE MAY BE, SUCH LENDER’S PRO RATA SHARE
(DETERMINED AS OF THE TIME THAT THE APPLICABLE UNREIMBURSED EXPENSE OR INDEMNITY
PAYMENT IS SOUGHT) OF SUCH UNPAID AMOUNT; PROVIDED THAT THE UNREIMBURSED EXPENSE
OR INDEMNIFIED LOSS, CLAIM, DAMAGE, LIABILITY OR RELATED EXPENSE, AS THE CASE
MAY BE, WAS INCURRED BY OR ASSERTED AGAINST ANY OF THE AGENTS, THE ISSUING BANK
OR THE SWINGLINE LENDER IN ITS CAPACITY AS SUCH.  FOR PURPOSES HEREOF, A
LENDER’S “PRO RATA SHARE” SHALL BE DETERMINED BASED UPON ITS SHARE OF THE SUM OF
THE TOTAL REVOLVING EXPOSURE, OUTSTANDING TERM B LOANS AND UNUSED COMMITMENTS AT
THE TIME.

 

SECTION 11.04. Successors and Assigns.

 

(A)           THE PROVISIONS OF THIS AGREEMENT SHALL BE BINDING UPON AND INURE
TO THE BENEFIT OF THE PARTIES HERETO AND THEIR RESPECTIVE SUCCESSORS AND ASSIGNS
PERMITTED HEREBY (INCLUDING ANY AFFILIATE OF THE ISSUING BANK THAT ISSUES ANY
LETTER OF CREDIT), EXCEPT THAT BORROWER MAY NOT ASSIGN OR OTHERWISE TRANSFER ANY
OF ITS RIGHTS OR OBLIGATIONS HEREUNDER WITHOUT THE PRIOR WRITTEN CONSENT OF THE
AGENTS AND EACH LENDER (AND ANY ATTEMPTED ASSIGNMENT OR TRANSFER BY BORROWER
WITHOUT SUCH CONSENT SHALL BE NULL AND VOID).  NOTHING IN THIS AGREEMENT,
EXPRESSED OR IMPLIED, SHALL BE CONSTRUED TO CONFER UPON ANY PERSON (OTHER THAN
THE PARTIES HERETO, THEIR RESPECTIVE SUCCESSORS AND ASSIGNS PERMITTED HEREBY
(INCLUDING ANY AFFILIATE OF THE ISSUING BANK THAT ISSUES ANY LETTER OF CREDIT)
AND, TO THE EXTENT EXPRESSLY CONTEMPLATED HEREBY, THE AFFILIATES OF EACH OF THE
ADMINISTRATIVE AGENT, THE ISSUING BANK AND THE LENDERS) ANY LEGAL OR EQUITABLE
RIGHT, REMEDY OR CLAIM UNDER OR BY REASON OF THIS AGREEMENT.

 

(B)           ANY LENDER SHALL HAVE THE RIGHT AT ANY TIME TO ASSIGN TO ONE OR
MORE BANKS, INSURANCE COMPANIES, INVESTMENT COMPANIES OR FUNDS OR OTHER
INSTITUTIONS (OTHER THAN BORROWER OR ANY AFFILIATE OR SUBSIDIARY THEREOF) ALL OR
A PORTION OF ITS RIGHTS AND OBLIGATIONS UNDER THIS AGREEMENT (INCLUDING ALL OR A
PORTION OF ITS COMMITMENT AND THE LOANS AT THE TIME OWING TO IT); PROVIDED THAT
(I) EXCEPT IN THE CASE OF AN ASSIGNMENT TO A LENDER, AN AFFILIATE OF A LENDER OR
A LENDER AFFILIATE, EACH OF BORROWER AND THE ADMINISTRATIVE AGENT (AND, IN THE
CASE OF AN ASSIGNMENT OF ALL OR A PORTION OF A REVOLVING COMMITMENT OR ANY
LENDER’S OBLIGATIONS IN RESPECT OF ITS LC EXPOSURE OR SWINGLINE EXPOSURE, THE
ISSUING BANK AND THE SWINGLINE LENDER) MUST GIVE THEIR PRIOR WRITTEN CONSENT TO
SUCH ASSIGNMENT (WHICH CONSENT SHALL NOT BE UNREASONABLY WITHHELD OR DELAYED),
(II) EXCEPT IN THE CASE OF AN ASSIGNMENT TO A LENDER, AN AFFILIATE OF A LENDER
OR A LENDER AFFILIATE, ANY ASSIGNMENT MADE IN CONNECTION WITH THE SYNDICATION OF
THE COMMITMENT AND LOANS BY THE ARRANGER OR AN ASSIGNMENT OF THE ENTIRE
REMAINING AMOUNT OF THE ASSIGNING LENDER’S COMMITMENT OR LOANS, THE AMOUNT OF
THE COMMITMENT OR LOANS OF THE ASSIGNING LENDER SUBJECT TO EACH SUCH ASSIGNMENT
(DETERMINED AS OF THE DATE THE ASSIGNMENT AND ACCEPTANCE WITH RESPECT TO SUCH
ASSIGNMENT IS DELIVERED TO THE ADMINISTRATIVE AGENT) SHALL NOT BE LESS THAN (X)
IN THE CASE OF REVOLVING LOANS, $2.5 MILLION, AND (Y) IN THE CASE OF TERM B
COMMITMENTS AND TERM B LOANS, $1.0 MILLION UNLESS EACH OF BORROWER AND THE
ADMINISTRATIVE AGENT OTHERWISE CONSENT, (III) EACH PARTIAL ASSIGNMENT SHALL BE
MADE AS AN ASSIGNMENT OF A PROPORTIONATE PART OF ALL THE ASSIGNING LENDER’S
RIGHTS AND OBLIGATIONS UNDER THIS

 

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AGREEMENT, EXCEPT THAT THIS CLAUSE (III) SHALL NOT BE CONSTRUED TO PROHIBIT THE
ASSIGNMENT OF A PROPORTIONATE PART OF ALL THE ASSIGNING LENDER’S RIGHTS AND
OBLIGATIONS IN RESPECT OF ONE CLASS OF COMMITMENTS OR LOANS, (IV) THE PARTIES TO
EACH ASSIGNMENT SHALL EXECUTE AND DELIVER TO THE ADMINISTRATIVE AGENT AN
ASSIGNMENT AND ACCEPTANCE IN THE FORM OF EXHIBIT B, TOGETHER WITH A PROCESSING
AND RECORDATION FEE OF $3,500, AND (V) THE ASSIGNEE, IF IT SHALL NOT BE A
LENDER, SHALL DELIVER TO THE ADMINISTRATIVE AGENT AN ADMINISTRATIVE
QUESTIONNAIRE; AND PROVIDED, FURTHER, THAT ANY CONSENT OF BORROWER OTHERWISE
REQUIRED UNDER THIS PARAGRAPH SHALL NOT BE REQUIRED IF AN EVENT OF DEFAULT HAS
OCCURRED AND IS CONTINUING OR PRIOR TO THE DATE ON WHICH THE SYNDICATION AGENT
SHALL HAVE NOTIFIED BORROWER THAT THE PRIMARY SYNDICATION OF THE COMMITMENTS HAS
BEEN COMPLETED (IN WHICH CASE THE ADMINISTRATIVE AGENT SHALL CONSULT WITH
BORROWER).  SUBJECT TO ACCEPTANCE AND RECORDING THEREOF PURSUANT TO PARAGRAPH
(D) OF THIS SECTION, FROM AND AFTER THE EFFECTIVE DATE SPECIFIED IN EACH
ASSIGNMENT AND ACCEPTANCE THE ASSIGNEE THEREUNDER SHALL BE A PARTY HERETO AND,
TO THE EXTENT OF THE INTEREST ASSIGNED BY SUCH ASSIGNMENT AND ACCEPTANCE, HAVE
THE RIGHTS AND OBLIGATIONS OF A LENDER UNDER THIS AGREEMENT (PROVIDED THAT ANY
LIABILITY OF BORROWER TO SUCH ASSIGNEE UNDER SECTION 2.12, 2.13 OR 2.15 SHALL BE
LIMITED TO THE AMOUNT, IF ANY, THAT WOULD HAVE BEEN PAYABLE THEREUNDER BY
BORROWER IN THE ABSENCE OF SUCH ASSIGNMENT, EXCEPT TO THE EXTENT ANY SUCH
AMOUNTS ARE ATTRIBUTABLE TO A CHANGE IN LAW OCCURRING AFTER THE DATE OF SUCH
ASSIGNMENT), AND THE ASSIGNING LENDER THEREUNDER SHALL, TO THE EXTENT OF THE
INTEREST ASSIGNED BY SUCH ASSIGNMENT AND ACCEPTANCE, BE RELEASED FROM ITS
OBLIGATIONS UNDER THIS AGREEMENT (AND, IN THE CASE OF AN ASSIGNMENT AND
ACCEPTANCE COVERING ALL OF THE ASSIGNING LENDER’S RIGHTS AND OBLIGATIONS UNDER
THIS AGREEMENT, SUCH LENDER SHALL CEASE TO BE A PARTY HERETO BUT SHALL CONTINUE
TO BE ENTITLED TO THE BENEFITS OF SECTIONS 2.12, 2.13, 2.15 AND 11.03).

 

(C)           THE ADMINISTRATIVE AGENT, ACTING FOR THIS PURPOSE AS AN AGENT OF
BORROWER, SHALL MAINTAIN AT ONE OF ITS OFFICES A COPY OF EACH ASSIGNMENT AND
ACCEPTANCE DELIVERED TO IT AND A REGISTER FOR THE RECORDATION OF THE NAMES AND
ADDRESSES OF THE LENDERS, AND THE COMMITMENT OF, AND PRINCIPAL AMOUNT OF THE
LOANS AND LC DISBURSEMENTS OWING TO, EACH LENDER PURSUANT TO THE TERMS HEREOF
FROM TIME TO TIME (THE “REGISTER”).  THE ENTRIES IN THE REGISTER SHALL BE
CONCLUSIVE IN THE ABSENCE OF MANIFEST ERROR, AND THE ADMINISTRATIVE AGENT, THE
ISSUING BANK AND THE LENDERS MAY TREAT EACH PERSON WHOSE NAME IS RECORDED IN THE
REGISTER PURSUANT TO THE TERMS HEREOF AS A LENDER HEREUNDER FOR ALL PURPOSES OF
THIS AGREEMENT, NOTWITHSTANDING NOTICE TO THE CONTRARY.  THE REGISTER SHALL BE
AVAILABLE FOR INSPECTION BY BORROWER, THE ISSUING BANK, THE COLLATERAL AGENT,
THE SWINGLINE LENDER AND ANY LENDER (WITH RESPECT TO ITS OWN INTEREST ONLY), AT
ANY REASONABLE TIME AND FROM TIME TO TIME UPON REASONABLE PRIOR NOTICE.

 

(D)           UPON ITS RECEIPT OF A DULY COMPLETED ASSIGNMENT AND ACCEPTANCE
EXECUTED BY AN ASSIGNING LENDER AND AN ASSIGNEE, THE ASSIGNEE’S COMPLETED
ADMINISTRATIVE QUESTIONNAIRE (UNLESS THE ASSIGNEE SHALL ALREADY BE A LENDER
HEREUNDER), THE PROCESSING AND RECORDATION FEE REFERRED TO IN PARAGRAPH (B) OF
THIS SECTION AND ANY WRITTEN CONSENT TO SUCH ASSIGNMENT REQUIRED BY PARAGRAPH
(B) OF THIS SECTION, THE ADMINISTRATIVE AGENT SHALL ACCEPT SUCH ASSIGNMENT AND
ACCEPTANCE AND RECORD THE INFORMATION CONTAINED THEREIN IN THE REGISTER.  NO
ASSIGNMENT SHALL BE EFFECTIVE FOR PURPOSES OF THIS AGREEMENT UNLESS IT HAS BEEN
RECORDED IN THE REGISTER AS PROVIDED IN THIS PARAGRAPH.

 

(E)           ANY LENDER SHALL HAVE THE RIGHT AT ANY TIME, WITHOUT THE CONSENT
OF BORROWER, THE ADMINISTRATIVE AGENT, THE ISSUING BANK OR THE SWINGLINE LENDER,
SELL PARTICIPATIONS TO ONE OR MORE BANKS OR OTHER ENTITIES (A “PARTICIPANT”) IN
ALL OR A PORTION OF SUCH LENDER’S RIGHTS AND OBLIGATIONS UNDER THIS AGREEMENT
(INCLUDING ALL OR A PORTION OF ITS COMMITMENT AND THE LOANS OWING TO IT);
PROVIDED THAT (I) SUCH LENDER’S OBLIGATIONS UNDER THIS AGREEMENT SHALL REMAIN
UNCHANGED, (II) SUCH LENDER SHALL REMAIN SOLELY RESPONSIBLE TO THE OTHER PARTIES
HERETO FOR THE PERFORMANCE OF SUCH OBLIGATIONS AND (III) BORROWER, THE
ADMINISTRATIVE AGENT, THE ISSUING BANK AND THE OTHER LENDERS SHALL CONTINUE TO
DEAL SOLELY AND DIRECTLY WITH SUCH LENDER IN CONNECTION WITH SUCH LENDER’S
RIGHTS AND OBLIGATIONS UNDER THIS AGREEMENT.  ANY AGREEMENT OR INSTRUMENT
PURSUANT TO WHICH A LENDER SELLS SUCH A PARTICIPATION SHALL PROVIDE THAT SUCH
LENDER SHALL RETAIN THE SOLE RIGHT TO ENFORCE THE LOAN DOCUMENTS AND TO APPROVE
ANY AMENDMENT,

 

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MODIFICATION OR WAIVER OF ANY PROVISION OF THE LOAN DOCUMENTS; PROVIDED THAT
SUCH AGREEMENT OR INSTRUMENT MAY PROVIDE THAT SUCH LENDER WILL NOT, WITHOUT THE
CONSENT OF THE PARTICIPANT, AGREE TO ANY AMENDMENT, MODIFICATION OR WAIVER
DESCRIBED IN CLAUSE (I), (II) OR (III) OF THE FIRST PROVISO TO SECTION 11.02(B)
THAT AFFECTS SUCH PARTICIPANT.  SUBJECT TO PARAGRAPH (F) OF THIS SECTION,
BORROWER AGREES THAT EACH PARTICIPANT SHALL BE ENTITLED TO THE BENEFITS OF
SECTIONS 2.12, 2.13 AND 2.15 TO THE SAME EXTENT AS IF IT WERE A LENDER AND HAD
ACQUIRED ITS INTEREST BY ASSIGNMENT PURSUANT TO PARAGRAPH (B) OF THIS SECTION. 
TO THE EXTENT PERMITTED BY LAW, EACH PARTICIPANT ALSO SHALL BE ENTITLED TO THE
BENEFITS OF SECTION 11.08 AS THOUGH IT WERE A LENDER; PROVIDED THAT SUCH
PARTICIPANT AGREES TO BE SUBJECT TO SECTION 2.14(C) AS THOUGH IT WERE A LENDER. 
EACH LENDER SHALL, ACTING FOR THIS PURPOSE AS AN AGENT OF BORROWER, MAINTAIN AT
ONE OF ITS OFFICES A REGISTER FOR THE RECORDATION OF THE NAMES AND ADDRESSES OF
ITS PARTICIPANTS, AND THE AMOUNT AND TERMS OF ITS PARTICIPATIONS, PROVIDED THAT
NO LENDER SHALL BE REQUIRED TO DISCLOSE OR SHARE THE INFORMATION CONTAINED IN
SUCH REGISTER WITH BORROWER OR ANY OTHER PARTY, EXCEPT AS REQUIRED BY APPLICABLE
LAW.

 

(F)            A PARTICIPANT SHALL NOT BE ENTITLED TO RECEIVE ANY GREATER
PAYMENT UNDER SECTION 2.12, 2.13 OR 2.15 THAN THE APPLICABLE LENDER WOULD HAVE
BEEN ENTITLED TO RECEIVE WITH RESPECT TO THE PARTICIPATION SOLD TO SUCH
PARTICIPANT, UNLESS THE SALE OF THE PARTICIPATION TO SUCH PARTICIPANT IS MADE
WITH THE PRIOR WRITTEN CONSENT OF BORROWER (WHICH CONSENT SHALL NOT BE
UNREASONABLY WITHHELD OR DELAYED).  A PARTICIPANT THAT WOULD BE A FOREIGN LENDER
IF IT WERE A LENDER SHALL NOT BE ENTITLED TO THE BENEFITS OF SECTION 2.15 UNLESS
BORROWER IS NOTIFIED OF THE PARTICIPATION SOLD TO SUCH PARTICIPANT AND SUCH
PARTICIPANT AGREES, FOR THE BENEFIT OF BORROWER, TO COMPLY WITH SECTIONS 2.15(E)
AND (F) AS THOUGH IT WERE A LENDER.

 

(G)           ANY LENDER MAY AT ANY TIME PLEDGE OR ASSIGN A SECURITY INTEREST IN
ALL OR ANY PORTION OF ITS RIGHTS UNDER THIS AGREEMENT TO SECURE OBLIGATIONS OF
SUCH LENDER, INCLUDING ANY PLEDGE OR ASSIGNMENT TO SECURE OBLIGATIONS TO A
FEDERAL RESERVE BANK, AND THIS SECTION SHALL NOT APPLY TO ANY SUCH PLEDGE OR
ASSIGNMENT OF A SECURITY INTEREST; PROVIDED THAT NO SUCH PLEDGE OR ASSIGNMENT OF
A SECURITY INTEREST SHALL RELEASE A LENDER FROM ANY OF ITS OBLIGATIONS HEREUNDER
OR SUBSTITUTE ANY SUCH PLEDGEE OR ASSIGNEE FOR SUCH LENDER AS A PARTY HERETO. 
IN THE CASE OF ANY LENDER THAT IS A FUND THAT INVESTS IN BANK LOANS, SUCH LENDER
MAY, WITHOUT THE CONSENT OF BORROWER OR THE ADMINISTRATIVE AGENT, COLLATERALLY
ASSIGN OR PLEDGE ALL OR ANY PORTION OF ITS RIGHTS UNDER THIS AGREEMENT,
INCLUDING THE LOANS AND NOTES OR ANY OTHER INSTRUMENT EVIDENCING ITS RIGHTS AS A
LENDER UNDER THIS AGREEMENT, TO ANY HOLDER OF, TRUSTEE FOR, OR ANY OTHER
REPRESENTATIVE OF HOLDERS OF, OBLIGATIONS OWED OR SECURITIES ISSUED, BY SUCH
FUND, AS SECURITY FOR SUCH OBLIGATIONS OR SECURITIES.

 

SECTION 11.05. Survival of Agreement.  All covenants, agreements,
representations and warranties made by the Loan Parties in the Loan Documents
and in the certificates or other instruments delivered in connection with or
pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the other parties hereto and shall survive the
execution and delivery of the Loan Documents and the making of any Loans and
issuance of any Letters of Credit, regardless of any investigation made by any
such other party or on its behalf and notwithstanding that the Agents, the
Issuing Bank or any Lender may have had notice or knowledge of any Default or
incorrect representation or warranty at the time any credit is extended
hereunder, and shall continue in full force and effect as long as the principal
of or any accrued interest on any Loan or any fee or any other amount payable
under this Agreement is outstanding and unpaid or any Letter of Credit is
outstanding and so long as the Commitments have not expired or terminated.  The
provisions of Sections 2.12, 2.13, 2.14, 2.15 and 11.03 and Article X shall
survive and remain in full force and effect regardless of the consummation of
the transactions contemplated hereby, the repayment of the Loans, the payment of
the Reimbursement Obligations, the expiration or termination of the Letters of
Credit and the Commitments or the termination of this Agreement or any provision
hereof.

 

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SECTION 11.06. Counterparts; Integration; Effectiveness.  This Agreement may be
executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract.  This Agreement, the other
Loan Documents, the Fee Letter and the Engagement Letter constitute the entire
contract among the parties relating to the subject matter hereof and supersede
any and all previous agreements and understandings, oral or written, relating to
the subject matter hereof, including the Original Credit Agreement, except to
the extent set forth in Section 11.05 of the Original Credit Agreement.  Except
as provided in Section 4.04, this Agreement shall become effective when it shall
have been executed by the Administrative Agent and when the Administrative Agent
shall have received counterparts hereof which, when taken together, bear the
signatures of each of the other parties hereto, and thereafter shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns.  Borrower, the Subsidiary Guarantors, the Agents and the
Lenders agree that (a) all obligations under the Original Credit Agreement, as
amended and restated hereby, shall continue to exist under and be evidenced by
this Agreement and the other Loan Documents and shall constitute Obligations
except to the extent prepaid and exchanged in accordance with Section 2.23 and
(b) except as expressly stated herein or amended, the other Loan Documents are
ratified and confirmed as remaining unmodified and in full force and effect with
respect to all Obligations.  Delivery of an executed counterpart of a signature
page of this Agreement by telecopy shall be effective as delivery of a manually
executed counterpart of this Agreement.  Notwithstanding the foregoing, each
Lender by signing a Confidential Lender Authorization with the Administrative
Agent shall be deemed to have consented to the Administrative Agent signing this
Agreement on its behalf pursuant to the provisions thereof and, effective upon
the Administrative Agent signing a counterpart of such Confidential Lender
Authorization, shall be further deemed in this Agreement and the other Loan
Documents to have been a signatory hereto.  Each Lender signatory to a
Confidential Lender Authorization agrees that such Lender shall not be entitled
to receive a copy of any other Lender’s Confidential Lender Authorization.

 

SECTION 11.07. Severability.  Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.

 

SECTION 11.08. Right of Setoff.  If an Event of Default shall have occurred and
be continuing, each Lender and each of its Affiliates are hereby authorized at
any time and from time to time, to the fullest extent permitted by law, to set
off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other obligations at any time owing
by such Lender or Affiliate to or for the credit or the account of Borrower
against any of and all the obligations of Borrower now or hereafter existing
under this Agreement held by such Lender, irrespective of whether or not such
Lender shall have made any demand under this Agreement and although such
obligations may be unmatured.  The rights of each Lender under this Section are
in addition to other rights and remedies (including other rights of setoff)
which such Lender may have.

 

SECTION 11.09. Governing Law; Jurisdiction; Consent to Service of Process.

 

(A)           THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED
BY THE LAW OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAW
PRINCIPLES THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION.

 

(B)           EACH LOAN PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS,
FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE SUPREME
COURT OF THE STATE OF NEW YORK SITTING IN NEW YORK

 

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COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW
YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENT, OR FOR RECOGNITION OR
ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY
AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE OR, TO THE EXTENT
PERMITTED BY LAW, IN SUCH FEDERAL COURT.  EACH OF THE PARTIES HERETO AGREES THAT
A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE
ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER
PROVIDED BY LAW.  NOTHING IN THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT SHALL
AFFECT ANY RIGHT THAT THE ADMINISTRATIVE AGENT, THE ISSUING BANK OR ANY LENDER
MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT AGAINST ANY LOAN PARTY OR ITS PROPERTIES IN THE
COURTS OF ANY JURISDICTION.

 

(C)           EACH LOAN PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO
THE FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION WHICH IT
MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (B) OF THIS SECTION 11.09.  EACH
OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION
OR PROCEEDING IN ANY SUCH COURT.

 

Each party to this Agreement irrevocably consents to service of process in the
manner provided for notices in Section 11.01.  Nothing in this Agreement or any
other Loan Document will affect the right of any party to this Agreement to
serve process in any other manner permitted by applicable law.

 

SECTION 11.10. Waiver of Jury Trial.  EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO
(A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES
THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.

 

SECTION 11.11. Headings.  Article and Section headings and the Table of Contents
used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.

 

SECTION 11.12. Confidentiality.  Each of the Administrative Agent, the Issuing
Bank and the Lenders agrees to maintain the confidentiality of the Information
(as defined below), except that Information may be disclosed (a) to its and its
Lender Affiliates’ directors, officers, employees and agents, including
accountants, legal counsel and other advisors (it being understood that the
persons to whom such disclosure is made will be informed of the confidential
nature of such Information and instructed to keep such Information confidential
pursuant to the terms hereof), (b) to the extent requested by any regulatory
authority or self-regulatory body, (c) to the extent required by applicable laws
or regulations or by any subpoena or similar legal process, (d) to any other
party to this Agreement, (e) in connection with the exercise of any remedies
hereunder or any suit, action or proceeding relating to this Agreement or any
other Loan Document or the enforcement of rights hereunder or thereunder, (f)
subject to an agreement containing provisions substantially the same as those of
this Section 11.12, to (i) any assignee of or

 

101

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Participant in, or any prospective assignee of or Participant in, any of its
rights or obligations under this Agreement or (ii) any actual or prospective
counterparty (or its advisors) to any swap or derivative transaction relating to
Borrower and its obligations, (g) with the consent of Borrower or (h) to the
extent such Information (i) is publicly available at the time of disclosure or
becomes publicly available other than as a result of a breach of this Section
11.12 or (ii) becomes available to the Administrative Agent, the Issuing Bank or
any Lender on a nonconfidential basis from a source other than Borrower or any
Subsidiary.  For the purposes of this Section, “Information” means all
information received from Borrower or any Subsidiary relating to Borrower or any
Subsidiary or its business that is clearly identified at the time of delivery as
confidential, other than any such information that is available to the
Administrative Agent, the Issuing Bank or any Lender on a nonconfidential basis
prior to disclosure by Borrower or any Subsidiary.  Any person required to
maintain the confidentiality of Information as provided in this Section 11.12
shall be considered to have complied with its obligation to do so if such person
has exercised the same degree of care to maintain the confidentiality of such
Information as such person would accord to its own confidential information.

 

SECTION 11.13. Interest Rate Limitation.  Notwithstanding anything herein to the
contrary, if at any time the interest rate applicable to any Loan, together with
all fees, charges and other amounts which are treated as interest on such Loan
under applicable law (collectively, the “Charges”), shall exceed the maximum
lawful rate (the “Maximum Rate”) which may be contracted for, charged, taken,
received or reserved by the Lender holding such Loan in accordance with
applicable law, the rate of interest payable in respect of such Loan hereunder,
together with all Charges payable in respect thereof, shall be limited to the
Maximum Rate and, to the extent lawful, the interest and Charges that would have
been payable in respect of such Loan but were not payable as a result of the
operation of this Section shall be cumulated and the interest and Charges
payable to such Lender in respect of other Loans or periods shall be increased
(but not above the Maximum Rate therefor) until such cumulated amount, together
with interest thereon at the Federal Funds Effective Rate to the date of
repayment, shall have been received by such Lender.

 

SECTION 11.14. Lender Addendum.  Each Original Lender to become a party to this
Agreement on the Closing Date shall do so by delivering to the Administrative
Agent a Lender Addendum duly executed by such Original Lender, Borrower and the
Administrative Agent.

 

SECTION 11.15. Integration.  This Agreement and the other Loan Documents
constitute the entire contract among the parties relating to the subject matter
hereof and supersede any and all previous agreements and understandings, oral or
written, relating to the subject matter hereof.  Borrower, the Subsidiary
Guarantors, the Agents and the Lenders agree that (a) all obligations under the
Original Credit Agreement, as amended and restated hereby, shall continue to
exist under and be evidenced by this Agreement and the other Loan Documents and
shall constitute Obligations (except to the extent prepaid and exchanged in
accordance with Section 2.23) and (b) except as expressly stated herein or
amended, the other Loan Documents are ratified and confirmed as remaining
unmodified and in full force and effect with respect to all Obligations.

 

SECTION 11.16. USA PATRIOT Act Notice.  Each Lender that is subject to the Act
(as hereinafter defined) and the Administrative Agent (for itself and not on
behalf of any Lender) hereby notifies Borrower that pursuant to the requirements
of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)) (the “Act”), it is required to obtain, verify and record information that
identifies Borrower, which information includes the name, address and tax
identification number of Borrower and other information regarding Borrower that
will allow such Lender or the Administrative Agent, as applicable, to identify
Borrower in accordance with the Act.  This notice is given in accordance with
the requirements of the Act and is effective as to the Lenders and the
Administrative Agent.

 

102

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[Signature Pages Follow]

 

103

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

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.

 

 

BASIC ENERGY SERVICES, INC.

 

 

 

 

 

 

 

By:

/s/ Kenneth V. Huseman

 

 

Name:

Kenneth V. Huseman

 

 

Title:

President

 

 

 

 

 

 

 

FIRST ENERGY SERVICES COMPANY,

 

as a Subsidiary Guarantor

 

 

 

 

 

 

 

By:

/s/ Kenneth V. Huseman

 

 

Name:

Kenneth V. Huseman

 

 

Title:

President

 

 

 

 

 

 

 

H. B. & R., INC., as a Subsidiary Guarantor

 

 

 

 

 

 

 

By:

/s/ Kenneth V. Huseman

 

 

Name:

Kenneth V. Huseman

 

 

Title:

President

 

 

 

 

 

 

 

FESCO ALASKA, INC., as a Subsidiary Guarantor

 

 

 

 

 

 

 

By:

/s/ Kenneth V. Huseman

 

 

Name:

Kenneth V. Huseman

 

 

Title:

President

 

 

 

 

BASIC ENERGY SERVICES, L.P.,

 

as a Subsidiary Guarantor

 

 

 

 

 

 

 

By:

BASIC ENERGY SERVICES GP, LLC,

 

 

its General Partner

 

 

 

 

 

 

 

By:

/s/ Kenneth V. Huseman

 

 

Name:

Kenneth V. Huseman

 

 

Title:

President

 

1

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

 

 

BASIC ENERGY SERVICES GP, LLC,

 

as a Subsidiary Guarantor

 

 

 

 

 

 

 

By:

/s/ Kenneth V. Huseman

 

 

Name:

Kenneth V. Huseman

 

 

Title:

President

 

 

 

 

 

 

 

BASIC ENERGY SERVICES LP, LLC,

 

as a Subsidiary Guarantor

 

 

 

 

 

 

 

By:

/s/ Scott Kinnamon

 

 

Name:

Scott Kinnamon

 

 

Title:

President

 

 

 

 

 

 

 

BASIC ESA, INC., as a Subsidiary Guarantor

 

 

 

 

 

 

 

By:

/s/ Kenneth V. Huseman

 

 

Name:

Kenneth V. Huseman

 

 

Title:

President

 

 

 

 

 

 

 

WESTERN OIL WELL SERVICE CO.,

 

as a Subsidiary Guarantor

 

 

 

 

 

 

 

By:

/s/ Kenneth V. Huseman

 

 

Name:

Kenneth V. Huseman

 

 

Title:

President

 

 

 

 

 

 

 

BASIC MARINE SERVICES, INC.,

 

as a Subsidiary Guarantor

 

 

 

 

 

 

 

By:

/s/ Kenneth V. Huseman

 

 

Name:

Kenneth V. Huseman

 

 

Title:

President

 

2

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

 

 

ENERGY AIR DRILLING SERVICE CO.,

 

as a Subsidiary Guarantor

 

 

 

 

 

 

 

By:

/s/ Kenneth V. Huseman

 

 

Name:

Kenneth V. Huseman

 

 

Title:

President

 

 

 

 

 

 

 

R&R HOT OIL SERVICE INC.,

 

as a Subsidiary Guarantor

 

 

 

 

 

 

 

By:

/s/ Kenneth V. Huseman

 

 

Name:

Kenneth V. Huseman

 

 

Title:

President

 

 

 

 

 

 

 

OILWELL FRACTURING SERVICES, INC.,

 

as a Subsidiary Guarantor

 

 

 

 

 

 

 

By:

/s/ Kenneth V. Huseman

 

 

Name:

Kenneth V. Huseman

 

 

Title:

President

 

3

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

 

 

UBS AG, STAMFORD BRANCH, as Issuing Bank,
Administrative Agent and Collateral Agent

 

 

 

 

 

 

 

By:

/s/ Irja R. Otsa

 

 

Name:

Irja R. Otsa

 

 

Title:

Associate Director, Banking
Products Services, US

 

 

 

 

 

 

 

By:

/s/ Christopher M. Aitkin

 

 

Name:

Christopher M. Aitkin

 

 

Title:

Associate Director, Banking
Products Services, US

 

 

 

 

 

 

 

UBS LOAN FINANCE LLC, as a Lender and Swingline
Lender

 

 

 

 

 

 

 

By:

/s/ Irja R. Otsa

 

 

Name:

Irja R. Otsa

 

 

Title:

Associate Director, Banking
Products Services, US

 

 

 

 

 

 

 

By:

/s/ Christopher M. Aitkin

 

 

Name:

Christopher M. Aitkin

 

 

Title:

Associate Director, Banking
Products Services, US

 

4

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

 

 

BANK OF AMERICA, N.A., as Syndication Agent

 

 

 

 

 

 

 

By:

/s/ David A. Batson

 

 

Name:

David A. Batson

 

 

Title:

Vice President

 

5

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

 

 

HIBERNIA NATIONAL BANK, as a Documentation
Agent

 

 

 

 

 

 

 

By:

/s/ Stephen H. Birnbaum

 

 

Name:

Stephen H. Birnbaum

 

 

Title:

Vice President

 

6

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

 

 

BNP PARIBAS, as a Documentation Agent

 

 

 

 

 

 

 

By:

/s/ Mark A. Cox

 

 

Name:

Mark A. Cox

 

 

Title:

Director

 

 

 

By:

/s/ Greg Smothers

 

 

Name:

Greg Smothers

 

 

Title:

Vice President

 

 

7

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

 

Annex I

 

Applicable Margin

 

Applicable

 

Revolving Loans

 

Term B Loans

 

 

 

Leverage Ratio

 

Eurodollar

 

ABR

 

Eurodollar

 

ABR

 

Applicable Fee

 

 

 

 

 

 

 

 

 

 

 

 

 

Level I < 1.0:1.0

 

1.5

%

0.50

%

2.00

%

1.00

%

0.375

%

 

 

 

 

 

 

 

 

 

 

 

 

Level II < 2.0:1.0 but > 1.0:1.0

 

1.75

%

0.75

%

2.00

%

1.00

%

0.375

%

 

 

 

 

 

 

 

 

 

 

 

 

Level III < 2.75:1.0 but > 2.0:1.0

 

2.00

%

1.00

%

2.00

%

1.00

%

0.375

%

 

 

 

 

 

 

 

 

 

 

 

 

Level IV > 2.75:1.0

 

2.25

%

1.25

%

2.00

%

1.00

%

0.50

%

 

Each change in the Applicable Margin or Applicable Fee resulting from a change
in the Leverage Ratio shall be effective with respect to all Loans and Letters
of Credit outstanding on and after the date of delivery to the Administrative
Agent of the financial statements and certificates required by Section 5.01(a)
or (b) and Section 5.01(d), respectively, indicating such change until the date
immediately preceding the next date of delivery of such financial statements and
certificates indicating another such change.

 

Notwithstanding the foregoing:

 

(a) from the Third Amendment and Restatement Effective Date to the date of
delivery to the Administrative Agent of the financial statements and certificate
required by Section 5.01(a) and Section 5.01(d) for the fiscal year ending
December 31, 2005, (i) the Applicable Margin for Revolving Loans shall be 1.75%
with respect to Eurodollar Revolving Loans and 0.75% with respect to ABR
Revolving Loans and (ii) the Applicable Fee shall be 0.50%; and

 

(b) the Leverage Ratio shall be deemed to be in Level IV at any time (i)during
which the Borrower has failed to deliver the financial statements and
certificates required by Section 5.01(a) or (b) and Section 5.01(d),
respectively, and (ii) during the existence of an Event of Default.

 

I-1

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

 

Annex II

 

Amortization Table

 

Payment Date

 

Installment Amount

 

March 31, 2006

 

$

250,000.00

 

June 30, 2006

 

$

250,000.00

 

September 30, 2006

 

$

250,000.00

 

December 31, 2006

 

$

250,000.00

 

March 31, 2007

 

$

250,000.00

 

June 30, 2007

 

$

250,000.00

 

September 30, 2007

 

$

250,000.00

 

December 31, 2007

 

$

250,000.00

 

March 31, 2008

 

$

250,000.00

 

June 30, 2008

 

$

250,000.00

 

September 30, 2008

 

$

250,000.00

 

December 31, 2008

 

$

250,000.00

 

March 31, 2009

 

$

250,000.00

 

June 30, 2009

 

$

250,000.00

 

September 30, 2009

 

$

250,000.00

 

December 31, 2009

 

$

250,000.00

 

March 31, 2010

 

$

250,000.00

 

June 30, 2010

 

$

250,000.00

 

September 30, 2010

 

$

250,000.00

 

December 31, 2010

 

$

250,000.00

 

March 31, 2011

 

$

250,000.00

 

June 30, 2011

 

$

21,187,500.00

 

September 30, 2011

 

$

21,187,500.00

 

Term B Maturity Date

 

$

42,375,000.00

 

 

II-1

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