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Exhibit 10.10  







 

$220,000,000  


 SECOND AMENDED AND RESTATED CREDIT AGREEMENT  


 dated as of October 3, 2003,  


 Amended and Restated as of December 21, 2004,  


 among  


 BASIC ENERGY SERVICES, L.P., a Delaware limited partnership,

FIRST ENERGY SERVICES COMPANY, a Delaware corporation,

H.B. & R., INC., a Montana corporation,

and

FESCO ALASKA, INC., an Alaska corporation,

collectively as Borrowers,  


 BASIC ENERGY SERVICES, INC.,

BASIC ENERGY SERVICES GP, LLC,

BASIC ENERGY SERVICES LP, LLC,

and

THE OTHER GUARANTORS PARTY HERETO,

as Guarantors,  


 THE LENDERS PARTY HERETO  


 and  


 UBS SECURITIES LLC,

as Arranger,  


 and  


 HIBERNIA NATIONAL BANK,

as Documentation Agent  


 and  


 UBS AG, STAMFORD BRANCH,

as Issuing Bank, Administrative Agent and Collateral Agent  


Cahill Gordon & Reindel LLP

80 Pine Street

New York, New York 10005  



 



  






 
  
 

    TABLE OF CONTENTS    
    



	 
	 
	 	Page

	

ARTICLE I

DEFINITIONS
	

SECTION 1.01.	

Defined Terms	
 	

2
	SECTION 1.02.	Classification of Loans and Borrowings	 	26
	SECTION 1.03.	Terms Generally	 	26
	SECTION 1.04.	Accounting Terms; GAAP	 	26
	

ARTICLE II

THE CREDITS
	

SECTION 2.01.	

Commitments	
 	

27
	SECTION 2.02.	Loans	 	27
	SECTION 2.03.	Borrowing Procedure	 	28
	SECTION 2.04.	Evidence of Debt; Repayment of Loans	 	29
	SECTION 2.05.	Fees	 	29
	SECTION 2.06.	Interest on Loans	 	30
	SECTION 2.07.	Termination and Reduction of Commitments	 	31
	SECTION 2.08.	Interest Elections	 	31
	SECTION 2.09.	Amortization of Term B Borrowings	 	32
	SECTION 2.10.	Optional and Mandatory Prepayments of Loans	 	33
	SECTION 2.11.	Alternate Rate of Interest	 	35
	SECTION 2.12.	Increased Costs	 	36
	SECTION 2.13.	Breakage Payments	 	37
	SECTION 2.14.	Payments Generally; Pro Rata Treatment; Sharing of Setoffs	 	37
	SECTION 2.15.	Taxes	 	38
	SECTION 2.16.	Mitigation Obligations; Replacement of Lenders	 	40
	SECTION 2.17.	Swingline Loans.	 	40
	SECTION 2.18.	Letters of Credit	 	42
	SECTION 2.19.	Joinder of Additional Borrowers	 	47
	SECTION 2.20.	Joint and Several Liability	 	47
	SECTION 2.21.	[Intentionally omitted]	 	48
	SECTION 2.22.	Increase in Revolving Commitments	 	48
	SECTION 2.23.	Term B Loans	 	49
	

ARTICLE III

REPRESENTATIONS AND WARRANTIES
	

SECTION 3.01.	

Organization; Powers	
 	

50
	SECTION 3.02.	Authorization; Enforceability	 	50
	SECTION 3.03.	Governmental Approvals; No Conflicts	 	50
	SECTION 3.04.	Financial Statements	 	50
	SECTION 3.05.	No Claims	 	51
	SECTION 3.06.	Properties	 	51
	SECTION 3.07.	Intellectual Property	 	52
	SECTION 3.08.	Condition and Maintenance of Equipment	 	52
	SECTION 3.09.	Equity Interests and Subsidiaries	 	53
	SECTION 3.10.	Litigation; Compliance with Laws	 	53
	 	 	 	 





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	SECTION 3.11.	Agreements	 	53
	SECTION 3.12.	Federal Reserve Regulations	 	54
	SECTION 3.13.	Investment Company Act; Public Utility Holding Company Act	 	54
	SECTION 3.14.	Use of Proceeds	 	54
	SECTION 3.15.	Taxes	 	54
	SECTION 3.16.	No Material Misstatements	 	54
	SECTION 3.17.	Labor Matters	 	54
	SECTION 3.18.	Solvency	 	55
	SECTION 3.19.	Employee Benefit Plans	 	55
	SECTION 3.20.	Environmental Matters	 	55
	SECTION 3.21.	Insurance	 	56
	SECTION 3.22.	Security Documents	 	56
	SECTION 3.23.	Acquisition Documents; Representations and Warranties in Agreement	 	57
	SECTION 3.24.	No Material Adverse Effect	 	57
	

ARTICLE IV

CONDITIONS TO CREDIT EXTENSIONS
	

SECTION 4.01.	

Conditions to Initial Credit Extension	
 	

58
	SECTION 4.02.	Conditions to All Credit Extensions	 	62
	SECTION 4.03.	Initial Borrowing by Each Additional Borrower	 	63
	SECTION 4.04.	Conditions to Effectiveness of the Amendment and Restatement	 	64
	

ARTICLE V

AFFIRMATIVE COVENANTS
	

SECTION 5.01.	

Financial Statements, Reports, etc.	
 	

64
	SECTION 5.02.	Litigation and Other Notices	 	66
	SECTION 5.03.	Existence; Businesses and Properties	 	66
	SECTION 5.04.	Insurance	 	67
	SECTION 5.05.	Obligations and Taxes	 	67
	SECTION 5.06.	Employee Benefits	 	68
	SECTION 5.07.	Maintaining Records; Access to Properties and Inspections	 	68
	SECTION 5.08.	Use of Proceeds	 	68
	SECTION 5.09.	Compliance with Environmental Laws; Environmental Reports	 	68
	SECTION 5.10.	Interest Rate Protection	 	69
	SECTION 5.11.	Additional Collateral; Additional Guarantors	 	69
	SECTION 5.12.	Security Interests; Further Assurances	 	70
	SECTION 5.13.	Information Regarding Collateral	 	70
	SECTION 5.14.	Post Closing Matters	 	71
	SECTION 5.15.	Post Closing Equity Matter	 	71
	

ARTICLE VI

NEGATIVE COVENANTS
	

SECTION 6.01.	

Indebtedness	
 	

71
	SECTION 6.02.	Liens	 	72
	SECTION 6.03.	Sale and Leaseback Transactions	 	74
	SECTION 6.04.	Investment, Loan and Advances	 	74
	SECTION 6.05.	Mergers, Consolidations, Sales of Assets and Acquisitions	 	75
	SECTION 6.06.	Dividends	 	76
	 	 	 	 



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	SECTION 6.07.	Transactions with Affiliates	 	77
	SECTION 6.08.	Financial Covenants	 	78
	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.	 	78
	SECTION 6.10.	Limitation on Certain Restrictions on Subsidiaries	 	79
	SECTION 6.11.	Limitation on Issuance of Capital Stock	 	79
	SECTION 6.12.	Limitation on Creation of Subsidiaries	 	79
	SECTION 6.13.	Business	 	80
	SECTION 6.14.	Limitation on Accounting Changes	 	80
	SECTION 6.15.	Fiscal Year	 	80
	SECTION 6.16.	Lease Obligations	 	80
	SECTION 6.17.	Limitation on Further Negative Pledges	 	80
	SECTION 6.18.	Limitation on Activities of Holdings	 	80
	

ARTICLE VII

GUARANTEE
	

SECTION 7.01.	

The Guarantee	
 	

80
	SECTION 7.02.	Obligations Unconditional	 	81
	SECTION 7.03.	Reinstatement	 	82
	SECTION 7.04.	Subrogation; Subordination	 	82
	SECTION 7.05.	Remedies	 	82
	SECTION 7.06.	Instrument for the Payment of Money	 	83
	SECTION 7.07.	Continuing Guarantee	 	83
	SECTION 7.08.	General Limitation on Guarantee Obligations	 	83
	

ARTICLE VIII

EVENTS OF DEFAULT
	

SECTION 8.01.	

Events of Default	
 	

83
	

ARTICLE IX

COLLATERAL ACCOUNT; APPLICATION OF COLLATERAL PROCEEDS
	

SECTION 9.01.	

Collateral Account	
 	

85
	SECTION 9.02.	Proceeds of Destruction, Taking and Collateral Dispositions	 	86
	SECTION 9.03.	Application of Proceeds	 	86
	

ARTICLE X

THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT
	

SECTION 10.01.	

Appointment	
 	

87
	SECTION 10.02.	Agent in Its Individual Capacity	 	87
	SECTION 10.03.	Exculpatory Provisions	 	87
	SECTION 10.04.	Reliance by Agent	 	88
	SECTION 10.05.	Delegation of Duties	 	88
	SECTION 10.06.	Successor Agent	 	88
	SECTION 10.07.	Non Reliance on Agent and Other Lenders	 	89
	SECTION 10.08.	No Other Administrative Agent	 	89
	SECTION 10.09.	Indemnification	 	89
	 	 	 	 





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ARTICLE XI

MISCELLANEOUS
	

SECTION 11.01.	

Notices	
 	

90
	SECTION 11.02.	Waivers; Amendment	 	91
	SECTION 11.03.	Expenses; Indemnity	 	92
	SECTION 11.04.	Successors and Assigns	 	93
	SECTION 11.05.	Survival of Agreement	 	96
	SECTION 11.06.	Counterparts; Integration; Effectiveness	 	96
	SECTION 11.07.	Severability	 	97
	SECTION 11.08.	Right of Setoff	 	97
	SECTION 11.09.	Governing Law; Jurisdiction; Consent to Service of Process	 	97
	SECTION 11.10.	Waiver of Jury Trial	 	97
	SECTION 11.11.	Headings	 	98
	SECTION 11.12.	Confidentiality	 	98
	SECTION 11.13.	Interest Rate Limitation	 	98
	SECTION 11.14.	Lender Addendum	 	98
	SECTION 11.15.	Integration	 	98




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	ANNEXES	 
	

Annex I	

Applicable Margin
	Annex II	Amortization Table
	
SCHEDULES	

 
	

Schedule 1.01(a)	

Mortgaged Properties
	Schedule 1.01(b)	Refinancing Indebtedness To Be Repaid
	Schedule 1.01(c)	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 3.23	Acquisition Documents
	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 5.14	Post Closing Matters
	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 Term B Note
	Exhibit G-3	Form of Revolving Note
	Exhibit G-4	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




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SECOND AMENDED AND RESTATED CREDIT AGREEMENT    
    


        This SECOND AMENDED AND RESTATED CREDIT AGREEMENT (this "Agreement") dated as of October 3, 2003, amended
and restated as of November 17, 2003 and as further amended and restated as of December 21, 2004, among BASIC ENERGY SERVICES, L.P., a Delaware limited partnership
("Basic"), FIRST ENERGY SERVICES COMPANY, a Delaware corporation ("Fesco"), H.B.& R., INC., a
Montana corporation ("HBR"), and FESCO ALASKA, INC., an Alaska corporation ("Fesco AK" and
collectively with Basic, Fesco and HBR, the "Borrowers"), BASIC ENERGY SERVICES, INC., a Delaware corporation
("Holdings"), BASIC ENERGY SERVICES GP, LLC ("GP"), BASIC ENERGY SERVICES LP, LLC
("LP"), and THE OTHER GUARANTORS PARTY HERETO, as the 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 SECURITIES LLC, as lead arranger (in such capacity, "Arranger") and as syndication agent (in
such capacity, "Syndication Agent"), UBS LOAN FINANCE LLC, as swingline lender (in such capacity, "Swingline
Lender") and as a Lender, HIBERNIA NATIONAL BANK, as documentation agent (in such capacity, "Documentation Agent") for the
Secured Parties and the Issuing Bank, 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 November 17, 2003, and the parties hereto desire to further amend and restate this Agreement as herein set forth; 


        WHEREAS,
the Borrowers desire to create a new Class of Term Loans under this Agreement in an aggregate principal amount of $170.0 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, 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 "Second 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
Lender") and who executes and delivers a counterpart of this Agreement shall be deemed, upon effectiveness of this Amendment and Restatement, to have, upon the funding thereof,
to have made Term B Loans in amount equal to its Term B Commitment; 


        WHEREAS,
a portion of the proceeds from the Term B Loans shall be used on the Second Amendment and Restatement Effective Date (as defined below) to repay the entire aggregate principal
amount of the Original Term B 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 Second Amendment and Restatement Effective Date; 



        WHEREAS,
the Borrowers further desire to amend and restate this Agreement to increase the Revolving Commitments to $50.0 million and to make certain 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 the Borrowers and the Issuing Bank is willing to issue letters of credit for the account of the Borrowers 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. 



        "Acquired Businesses" shall mean (i) those certain assets of Pennant Service Company, a Colorado corporation, (ii) the
capital stock of Fesco Holdings, Inc., a Delaware corporation and (iii) those certain assets of Parker Windham, Ltd., a Texas corporation, PWI, Inc., a Texas corporation,
PWI Rentals, L.P., a Texas limited partnership, PWI Construction, L.P., a Texas limited partnership, PWI Disposal, L.P., a Texas limited partnership, and Morris B. Windham and Paige Windham,
individuals residing in the State of Texas, each of which were acquired by Basic (the "Acquisitions") with the proceeds of the Loans under the Original
Credit Agreement. 


        "Acquisition Agreements" shall mean (i) the stock purchase agreement dated September 18, 2003 pursuant to which Basic
acquired all of the capital stock of Fesco Holdings, Inc., (ii) the asset purchase agreement dated as of October 3, 2003 pursuant to which Basic acquired certain assets of Parker
Windham, Ltd., a Texas corporation, PWI, Inc., a Texas corporation, PWI Rentals, L.P., a Texas limited partnership, PWI Construction, L.P., a Texas limited partnership, PWI Disposal,
L.P., a Texas limited partnership and (iii) the asset purchase agreement dated as of September 29, 2003 pursuant to which Basic acquired certain assets of Pennant Service Company, a
Colorado corporation. 


        "Acquisition Consideration" shall mean the purchase consideration for any Permitted Acquisition and all other payments by Holdings,
Borrowers or any of their 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 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. 


        "Acquisition Documents" shall mean the collective reference to the Acquisition Agreements, the Pennant LOI and each of the other documents
set forth on Schedule 3.23. 


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        "Acquisitions" shall have the meaning assigned to such term in the definition of "Acquired Businesses" herein. 


        "Additional Borrower" shall have the meaning assigned to such term in Section 2.19
hereto. 


        "Additional Borrower Agreement" shall mean an Additional Borrower Agreement substantially in the form of  Exhibit O-1. 



        "Additional Borrower Termination Agreement" shall mean an Additional Borrower Termination Agreement substantially in the form of  Exhibit O-2. 


        "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 have the meaning assigned to such term in the preamble hereto. 


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        "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 Holdings by the holder thereof) by Holdings, any Borrower or any of
their Subsidiaries to any person other than any Borrower or any Subsidiary Guarantor and (b) any issuance or sale by any Subsidiary of Holdings (other than any Borrower) of its Equity Interests
to any person (other than to any 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 Second 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 the relevant 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. 


        "Basic" shall have the meaning assigned to such term in the preamble hereto. 


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



        "Borrower Agent" shall mean Basic, which for convenience shall act on behalf of Borrowers for purposes of giving and receiving certain
notices and taking certain other actions, as more fully set forth herein. 


        "Borrowers" shall mean Basic, Fesco, HBR and Fesco AK and each other Additional Borrower that becomes a party to this Agreement. 


        "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 Basic 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. 


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        "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. 


        "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)   Holdings
at any time ceases to own, directly or indirectly, 100% of the capital stock of any Borrower; 



        (b)   prior
to an IPO, (i) the Permitted Holders cease to own, or to have the power to vote or direct the voting of, Voting Stock representing at least a majority of
the voting power of the total outstanding Voting Stock of Holdings or (ii) the Permitted Holders cease to own Equity Interests representing at least 40% of the total economic interests of the
Equity Interests of Holdings; 


        (c)   following
an IPO, 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 



5







 




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 Holdings; or 



        (d)   following
an IPO, during any period of two consecutive years, individuals who at the beginning of such period constituted the Board of Directors of Holdings (together
with any new directors whose election to such Board of Directors or whose nomination for election was approved by a vote of 662/3% of the directors of Holdings then still in office who
were either directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute at least a majority of the Board of
Directors of Holdings. 




        "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, the Mortgaged Property 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 any Borrower for the benefit
of any 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 any 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 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 Holdings and its Subsidiaries; and "Company" shall mean any one of
them. 


6







 



        "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. 


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



        "Consolidated Companies" shall mean Holdings 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 Holdings only if a
corresponding amount would be permitted at the date of determination to be distributed to Holdings 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) dividends paid
to Holdings pursuant to Section 6.06(d), (vi) 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), (vii) amortization of intangibles (including, but not limited to, goodwill) and organization costs, and (viii) 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) dividends paid to Holdings pursuant to Section 6.06(c) and (ii) 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, and (iii) interest income, (iv) 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 the Acquisitions, any other 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 $5.0 million or more consummated during the fiscal period of the relevant 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 the Acquisitions or any other 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 Fixed Charge Coverage Ratio" shall mean, for any Test Period, the ratio of (a) Consolidated EBITDA (i) less
maintenance Capital Expenditures, (ii) less cash payments in respect of income taxes, (iii) less for such Test Period scheduled principal payments in respect of Capital Lease Obligations
to (b) Consolidated Fixed Charges for such Test Period. 


        "Consolidated Fixed Charges" shall mean, for any period, the sum, without duplication, of (a) Consolidated Interest Expense less
the sum of (i) Non-Cash Interest Expense and (ii) cash interest income for such period and (b) the scheduled principal amount of all amortization payments on all
Indebtedness (excluding the principal component of all Capital Lease Obligations) of Holdings and its Subsidiaries for such period (as determined on the first day of the respective period). 



        "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 


7







 



Capital
Lease Obligations and all LC Exposure) of Holdings 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 Holdings and its Consolidated Subsidiaries determined in accordance with GAAP for the relevant period, including interest expense with respect to any Funded Debt of Holdings and its Consolidated
Subsidiaries and interest expense for the relevant period that has been capitalized on the balance sheet of Holdings and its Consolidated Subsidiaries. 



        "Consolidated Net Income" shall mean, for any period, the consolidated net income of Holdings 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 Holdings or any of its Subsidiaries or (ii) any sales of assets; (c) net earnings or loss of any other person (other than a
Subsidiary of Holdings) in which Holdings 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 Holdings 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 Holdings or any Consolidated Subsidiary or is merged into or consolidated with Holdings
or any Consolidated Subsidiary or that person's assets are acquired by Holdings or such Consolidated Subsidiary (other than pursuant to the Acquisitions). 


        "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 Borrower 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 $500,000, 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. 



8









   
        "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; 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 Holdings 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 


9







 



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 $2.0 million in the aggregate. 


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


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



        "Domestic Subsidiary" shall means any Wholly Owned Subsidiary of Basic that is not a Foreign Subsidiary. 


        "Earn Out Escrow" shall mean an escrow account and agreement pursuant to which any 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 any 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, without limitation, 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, 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. 


10







 



        "Equity Issuance" shall mean, without duplication, any issuance in a registered offering or sale pursuant to a private placement (other
than an equity issuance consisting of Sponsor Securities) by Holdings or any Borrower (other than to Holdings) 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. 


        "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 any 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 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. 


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


11







 



        "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 any 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 Agent 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 Borrowers 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 19, 2004, among Basic Energy Services, L.P., 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 have the meaning assigned to such term in the preamble hereto. 


        "Fesco AK" shall have the meaning assigned to such term in the preamble hereto. 


        "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. 


        "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 


12







 

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 Borrowers, 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 Holdings
and the Subsidiary Guarantors. 


        "Guarantors" shall mean Holdings 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 have the meaning assigned to such term in the preamble hereto. 


        "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. 


        "Holdings" shall have the meaning assigned to such term in the preamble hereto. 


        "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 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 


13







 



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 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 a 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 the relevant 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). 


        "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 Holdings 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. 


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        "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. 


        "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 a 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. 


        "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 a Borrower 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. 


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        "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. 



        "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 Holdings, each Borrower and the Subsidiary Guarantors. 



        "Loans" shall mean, as the context may require, 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 Borrowers and the 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 


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(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 mean (a) each Real Property identified on  Schedule 1.01(a) hereto and (b) each Real Property, if any, which shall be subject to
a Mortgage delivered after the Closing Date pursuant
to Section 5.11(d). 


        "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 brokers' fees or commissions, legal, accounting and other professional and transactional
fees, transfer and similar taxes and Borrowers' 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) Borrowers' 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 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). 



        "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 in the future. 


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        "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, Revolving Loans or Swingline Loans issued pursuant to
this Agreement, if any, substantially in the form of Exhibits G-1, G-2,  G-3 or G-4. 


        "Obligations" shall mean (a) obligations of each 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
for prepayment or otherwise, (ii) each payment required to be made by any 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 any 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 each 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 each 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 4.02 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 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, or in the Assignment and Acceptance
pursuant to which such Original Lender shall have assumed its Term B Commitment, 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 $140.0 million. 


        "Original Term B Loans" shall mean the term loans made by the Original Lenders to the Borrowers 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. 


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        "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 any 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, for any such acquisitions involving Acquisition Consideration under $3.0 million individually, no more than
$15.0 million in the aggregate during any fiscal year during the term hereof and no more than $35.0 million in the aggregate for the period ending on the Term B Maturity Date, no Default
then exists or would result therefrom and, for all other acquisitions, each of the following conditions are met: 



        (i)    no
Default then exists or would result therefrom; 


        (ii)   after
giving effect to such acquisition on a Pro Forma Basis, (A) the relevant 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), (B) unless
expressly approved by the Administrative Agent, the relevant Borrower shall have generated positive Consolidated EBITDA for the Test Period most recently ended prior to the date of consummation of
such acquisition and (C) the relevant Borrower shall have cash on hand/working capital availability equal to or greater than $10.0 million; 


        (iii)  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; 


        (iv)  the
acquired person shall be engaged in a business of the same or similar type conducted by the relevant 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; 



19







 




        (v)   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; 


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


        (vii) with
respect to any acquisition involving Acquisition Consideration of more than $7.5 million, the relevant Borrower shall have provided the Administrative
Agent and the Lenders with (A) historical financial statements for the last three fiscal years, if available, of the person or business to be acquired (audited if available without undue cost
or delay) and unaudited financial statements thereof for the most recent interim period which are available, (B) reasonably detailed projections for the succeeding five years pertaining to the
person or business to be acquired and updated projections for such Borrower after giving effect to such acquisition, (C) a reasonably detailed description of all material information relating
thereto and copies of all material documentation pertaining to such acquisition, and (D) all such other information and data relating to such acquisition or the person or business to be
acquired as may be reasonably requested by the Administrative Agent or the Required Lenders; 



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


        (ix)  the
Acquisition Consideration for such acquisition shall not exceed $20.0 million plus the Available Acquisition Cash (defined below) at the time of such
acquisition, and the aggregate amount of the Acquisition Consideration for all Permitted Acquisitions in any fiscal year shall not exceed the sum of (A) $40.0 million  plus (B) the
aggregate of the amounts of Available Acquisition Cash applied in respect of all Permitted Acquisitions in such fiscal year
plus (C) the Net Cash Proceeds from any Equity Issuance during such fiscal year; 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 (ix), "Available Acquisition Cash" shall
mean a dollar amount equal to the amount by which Basic'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 Basic 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 Holdings or Borrowers or any of
their respective subsidiaries to perform their obligations under any of the Loan Documents and (ii) the covenants, events of default, subsidiary guarantees, credit support and 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. 


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        "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 under the Securities Act 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. 



        "PWI Acquisition" shall mean the acquisition by Basic of certain assets of Parker Windham, Ltd., a Texas corporation,
PWI, Inc., a Texas corporation, PWI Rentals, L.P., a Texas limited partnership, PWI Construction, L.P., a Texas limited partnership, PWI Disposal, L.P., a Texas limited partnership. 


        "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. 


        "Refinancing" shall mean the repayment in full and the termination of any commitment to make extensions of credit under all of the
outstanding indebtedness of Holdings and Borrowers and their respective subsidiaries listed on Schedule 1.01(b). 


        "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. 


        "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. 


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        "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 Borrowers' 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, or in the Assignment and Acceptance
pursuant to which such Lender assumed its Revolving 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' Revolving Commitments immediately prior to the Second Amendment and
Restatement Date is
$30.0 million and the aggregate amount of the Lenders' Revolving Commitments on the Second Amendment and Restatement Effective Date is $50.0 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 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 Loans" shall mean a Loan made by the Lenders to Borrowers pursuant to  Section 2.01(a) or a New Revolving Lender pursuant to Section 2.22. 


        "Revolving Maturity Date" shall mean October 3, 2008. 


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


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        "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. 


        "Second Amendment and Restatement Effective Date" shall have the meaning assigned to such term in  Section 4.04. 



        "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 9.3. 


        "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. 


        "Shareholders' Agreement" shall mean that certain shareholders' agreement dated as of December 21, 2000 among Basic Energy
Services, Inc., DLJMB Funding III, Inc., DLJ ESCII, L.P., Southwest Royalties Holdings, Inc., Southwest Partners III, L.P., Joey D. Fields, Dub W. Harrison and Kenneth V. Huseman,
as amended and provided to the Administrative Agent through the Second Amendment and Restatement Effective Date. 



        "Sponsor Securities" shall mean preferred securities or subordinated debt securities issued or sold to any shareholder that is party to
(or hereafter becomes a party to) the Shareholders' Agreement, or any of their respective controlled affiliates; provided that (i) the terms of
such securities do not provide for any collateral security, subsidiary guaranties, offers to purchase or redeem, scheduled repayment of principal, payment of interest, covenants, events of default,
mandatory redemption or sinking fund obligation prior to three months after maturity of the Term B Loan facility and (ii) the subordination terms are otherwise satisfactory to the
Administrative Agent. 


        "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 the relevant Borrower or any of its Subsidiaries, (b) the obligations of third party insurers of the relevant 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 the relevant
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. 



        "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) 


23







 



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 Holdings. 


        "Subsidiary Guarantor" shall mean each Subsidiary listed on Schedule 1.01(c)
(except for Holdings), 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 662/3% of the sum of all Loans outstanding, LC Exposure and unused Revolving and Term B Commitments at such time. 


        "Survey" shall mean a survey of any Mortgaged Property (and all improvements thereon) (i) prepared by a surveyor or engineer
licensed to perform surveys in the state where such Mortgaged Property is located, (ii) dated (or redated) not earlier than six months prior to the date of delivery thereof unless there shall
have occurred within six months prior to such date of delivery any exterior construction on the site of such Mortgaged Property, in which event such survey shall be dated (or redated) after the
completion of such construction or if such construction shall not have been completed as of such date of delivery, not earlier than 20 days prior to such date of delivery,
(iii) certified by the surveyor (in a manner reasonably acceptable to the Administrative Agent) to the Administrative Agent, the Collateral Agent and the Title Company, (iv) complying in
all respects with the minimum detail requirements of the American Land Title Association as such requirements are in effect on the date of preparation of such survey and (v) sufficient for the
Title Company to remove all standard survey exceptions from the title insurance policy (or commitment) relating to such Mortgaged Property and issue the endorsements of the type required by  Section 4.01(o)(iii)
. 


        "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. 


24









  





        "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 Holdings or any
subsidiary of Holdings. 


        "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
Second 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 Second Amendment and Restatement Effective Date shall be
$170.0 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 the term loans made by the Lenders to Borrowers 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 October 3, 2009, 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 Holdings 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). 



        "Title Company" shall mean any title insurance company as shall be retained by the relevant Borrower and reasonably acceptable to the
Administrative Agent. 


        "Title Policy" shall have the meaning assigned to such term in  Section 4.01(o)(iii). 


        "Transaction Documents" shall mean the Acquisition Documents and the Loan Documents. 



        "Transactions" shall mean, collectively, the transactions to occur on or prior to the Closing Date pursuant to the Transaction Documents,
including (a) the consummation of the Acquisitions; (b) the execution and delivery of the Loan Documents and the initial borrowings hereunder; (c) the 


25







 



Refinancing;
and (d) the payment of all fees and expenses to be paid on or prior to the Closing 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. 


        "Voting Stock" shall mean any class or classes of capital stock of Holdings 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 Holdings. 



        "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 Agent and the Required Lenders. 


26







 


 
 

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 Borrowers on a joint and several basis, at any time and from time to time after the Closing Date until the earlier of the Business Day
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 Borrowers on the Second Amendment and Restatement Effective Date in a principal amount not to exceed its Term B Commitment, on a joint and
several basis on the Closing 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, Borrowers 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 Agent 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 any 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
Agent 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 Agent 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 by at least 10:00 a.m., New York City time, on the date of any Borrowing that such Lender
will not make available 


27







 



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 the relevant 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 the Administrative Agent, such Lender and the
relevant 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 the relevant Borrower until the date such amount is repaid to the Administrative Agent at (i) in the case of any 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 Agent 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, the relevant 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"; provided that until the date on which the Syndication Agent shall have notified Borrower Agent that the primary syndication of the Commitments
has been completed, the Interest Period shall be seven days; 


        (f)    the
location and number of the relevant 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 Revolving Borrowing, then the relevant Borrower shall be deemed to have selected an Interest Period of one month's duration (subject to the proviso in clause (e) above). 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. 


28







 

        SECTION 2.04.    Evidence of Debt; Repayment of Loans.    (a)
Borrowers hereby jointly and severally and unconditionally promise 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, 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, Borrowers shall, jointly and severally, 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 each 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 the relevant 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 Borrowers 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, Borrowers 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 and G-4, 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.    Borrowers agree, jointly and severally, to 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.    Borrowers agree, jointly and severally, to pay to the Administrative Agent, for
its own account, the administrative fees set forth in the Fee Letter or such 


29







 



other
fees payable in the amounts and at the times separately agreed upon between the Basic and the Administrative Agent (the "Administrative Agent
Fees"). 


        (c)    LC and Fronting Fees.    Borrowers agree, jointly and severally, to 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 Borrowers 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. 


        Notwithstanding
the foregoing, if any principal of or interest on any Loan or any fee or other amount payable by any 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. 



        (c)   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; provided that (i) interest accrued pursuant to paragraph (b) 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 


30







 



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. 


        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 Second 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. Notwithstanding the foregoing, all the Commitments shall automatically terminate at 5:00 p.m., New York City time, on
October 3, 2003, if the initial Credit Extension shall not have occurred by such time. 


        (b)   Borrower
Agent 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
Agent 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 Agent pursuant to this Section shall be irrevocable; provided that a
notice of termination of the Commitments delivered by Borrower Agent may state that such notice is conditioned upon the effectiveness of other credit facilities, in which case such notice may be
revoked by Borrower Agent (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, the relevant 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. The relevant 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 comprising each such portion shall be considered a separate Borrowing. Notwithstanding
anything to the contrary, such 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, the relevant 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 such Borrower were requesting a Revolving Borrowing or Term B 


31







 



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 substantially in the form of Exhibit D. 


        (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"; provided that until the date on which the Syndication Agent shall have notified Borrower
Agent that the primary syndication of the Commitments has been completed, the Interest Period shall be seven days. 




        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 (subject to the proviso in clause (iv) above). 



        (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 Agent, 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) Borrowers
shall, jointly and severally, 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 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 


32







 



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.    Borrowers 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,
Borrowers shall, jointly and severally, 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 Agent 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 Borrowers shall, jointly and severally, on the date of such reduction, first, repay
or prepay Swingline Loans, 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, the Borrowers shall, without notice or demand,
immediately first, repay or prepay Revolving Borrowings, 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, the Borrowers 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, Holdings or any of its Subsidiaries or any Borrower 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:
 



        (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 $1.0 million in Net Cash Proceeds per Asset Sale (or series of related Asset Sales) and less than $5.0 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 $5.0 million in any
fiscal year of Holdings, such proceeds shall not be required to be so applied on such date to the extent that (A) the relevant 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 



33







 




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, Borrowers 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, Basic 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 Agent of such receipt) of any Net Cash Proceeds from a Casualty Event, Basic 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 $1.0 million, Basic 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 $1.0 million, the Administrative Agent has elected by notice to Basic 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 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 $5.0 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 $1.0 million,
Collateral Agent will promptly deliver such Net Cash Proceeds to Borrower Agent. 




        (g)   [Intentionally
omitted] 


34







 

        (h)    Application of Prepayments.    Any prepayments of Term B Loans pursuant to  Section 2.10(c), (d), (e) or  (f) shall be applied to reduce scheduled payments 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 Borrowers shall comply with Section 2.10(b). 


        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 the relevant 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 the relevant 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 Agent 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 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 mandatory prepayment, a reasonably detailed calculation of the amount 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; 



35







 





then
the Administrative Agent shall give notice thereof to Borrower Agent and the Lenders by telephone or telecopy as promptly as practicable thereafter and, until the Administrative Agent notifies
Borrower Agent 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 Borrowers 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. 


        (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 Borrowers 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 Agent and shall be conclusive absent manifest error. Borrowers shall, jointly and
severally, 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 Borrowers 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 Agent 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. 


36







 



        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 a Borrower pursuant to Section 2.16, then, in any such event, Borrowers shall, jointly and
severally, 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
Agent and shall be conclusive absent manifest error. Borrower Agent shall pay such Lender the amount shown as due on any such certificate within 10 days after receipt thereof. 


        SECTION 2.14.    Payments Generally; Pro Rata Treatment; Sharing of
Setoffs.    (a) Borrowers shall, jointly and severally, 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 


37







 



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 any 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 Borrowers or any Subsidiary or Affiliate thereof (as to
which the provisions of this paragraph shall apply). Each 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 Borrowers rights of setoff and counterclaim with respect to such participation as fully as if such Lender were a direct
creditor of any Borrower in the amount of such participation. 


        (d)   Unless
the Administrative Agent shall have received notice from Borrower Agent 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 Borrowers will not make such payment, the Administrative Agent may assume that Borrowers have 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 Borrowers have 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 Borrowers 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 Borrowers 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) such Borrower shall make such deductions or withholdings and (iii) such Borrower shall pay the full amount deducted or withheld to
the relevant Governmental Authority in accordance with applicable law. 


        (b)   In
addition, Borrowers shall, jointly and severally, pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law. 


38







 



        (c)   Borrowers
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
Borrowers 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 Agent 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 Borrowers to a Governmental Authority, Borrower Agent 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. 


        (e)   Any
Foreign Lender that is entitled to an exemption from or reduction of withholding tax under the law of the jurisdiction in which a Borrower is located, or any treaty
to which such jurisdiction is a party, with respect to payments under this Agreement shall deliver to Borrower Agent (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 Agent as will permit such payments to be made without withholding or
at a reduced rate. In the case of a U.S. Borrower, 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 Borrowers and the Administrative Agent), to the extent it may lawfully do so at such times, upon reasonable request by
Borrower Agent 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 Agent 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 Borrowers and the Administrative Agent) to the extent it may lawfully do so at such times, upon reasonable request by Borrower Agent 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 a Borrower or with respect to which a Borrower has paid additional amounts pursuant to this Section 2.15, it
shall pay over such refund to such Borrower (but only to the extent of indemnity payments made, or additional amounts paid, by such 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 the



39







 



relevant
Borrower, upon the request of the Administrative Agent or such Lender (or assignee), agrees to repay the amount paid over to such 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 Borrowers or any other person. Notwithstanding anything to the contrary, in no event will any Lender be required to pay any amount to any 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 any 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, 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. Each 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 any 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 Agent 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 Agent that shall assume
such obligations (which assignee may be another Lender, if a Lender accepts such assignment); provided that (i) Borrower Agent 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 Agent (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 Agent 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 Borrowers 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 


40







 



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,
Borrowers may borrow, repay and reborrow Swingline Loans. 



        (b)    Swingline Loans.    To request a Swingline Loan, Borrower Agent 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
Agent. The Swingline Lender shall make each Swingline Loan available to the relevant Borrower by means of a credit to the general deposit account of such 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 Agent 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. 


        (c)    Prepayment.    Borrowers 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 Agent 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 a Borrower or
Borrower Agent (or other party on behalf of any 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 


41







 



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 Borrowers of any default in the payment thereof. 


        SECTION 2.18.    Letters of Credit.    


        (a)    General.    Subject to the terms and conditions set forth herein, any 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 (provided that the other Borrowers shall be co applicants, and be jointly and severally
liable, with respect to each Letter of Credit issued for the account of or in favor of such Borrower). The Issuing Bank shall have no obligation to issue, and such 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 such Borrower to, or entered into by such Borrower
with, the Issuing Bank relating to any Letter of Credit, the terms and conditions of this Agreement shall control. 


        (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, a 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 one if its Subsidiaries (provided
that the other Borrowers shall be co applicants, and jointly and severally liable, with respect to each Letter of Credit issued for the account of such Borrower); 



        (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; 



42







 

        (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, the relevant 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, Borrowers 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. 


        (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
the 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, the 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 the 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 


43







 



reimbursed
by Borrowers on the date due as provided in paragraph (e) of this Section, or of any reimbursement payment required to be refunded to a 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,
Borrowers shall, jointly and severally, 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 Agent shall have received notice of such LC Disbursement prior to 11:00 a.m., New York City time, on such date, or, if such notice has not
been received by Borrower Agent 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 Agent
receives such notice; provided that Borrower Agent 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, Borrowers' obligation to make such payment shall be discharged and replaced by the resulting ABR Revolving Borrowing. 



        If
any 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 such 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 such 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
such 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 such 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. 


44









  





        (f)    Obligations Absolute.    The Reimbursement Obligation of Borrowers 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 Borrowers 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 Holdings 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 beyond the control of the Issuing Bank;  provided that the
foregoing shall not be construed to excuse the Issuing Bank from liability to Borrowers to the extent of any direct damages (as
opposed to consequential damages, claims in respect of which are hereby waived by such Borrower to the extent permitted by applicable law) suffered by such 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 Agent 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 any 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 Borrowers 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 such Borrower reimburses such LC Disbursement, at the rate per annum set forth in the second paragraph of  Section 2.06(b). 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 


45







 

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 Agent 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, Borrowers 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 the any 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
Borrowers 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 Borrowers, 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 be held for the satisfaction of the reimbursement obligations of Borrowers 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 Borrowers under this Agreement. If any 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 of such amounts (to the extent not applied as aforesaid) shall be returned to such Borrower within three
Business Days after all Events of Default have been cured or waived. If any 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 such Borrower as and to the extent that, after giving effect to such return, such 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 Agent. The Issuing Bank may be replaced at any time by written agreement among Borrower Agent,
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, Borrowers shall, jointly and severally, 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 addition or to any previous Issuing Bank, or to such successor or such addition 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 Agent may, in its discretion, select which Issuing Bank is to issue any particular Letter of Credit. 


46







 



        (k)    Additional Issuing Banks.    Borrower Agent 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 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.    Joinder of Additional Borrowers.    (a) On or after
the Closing Date, Borrower Agent may designate any Domestic Subsidiary as an additional borrower (an "Additional Borrower"), by delivery to the
Administrative Agent of an Additional Borrower Agreement executed by such Additional Borrower and Borrower Agent, and upon such delivery such Additional Borrower shall for all purposes of this
Agreement be a party to and a Borrower under this Agreement, jointly and severally liable with the other Borrowers and Guarantors for the Obligations under this Agreement. Such Subsidiary shall be
subject to compliance with the provisions of Section 5.11 hereof. 


        (b)   Upon
the execution by Basic and delivery to the Administrative Agent of an Additional Borrower Termination Agreement with respect to any Additional Borrower, such
Additional Borrower shall cease to be a Borrower; provided that no Additional Borrower Termination Agreement will become effective as to such Additional
Borrower (other than to terminate its right to make further Borrowings under this Agreement) at a time when any principal of or interest on any Loan to such Additional Borrower shall be outstanding
hereunder, unless the obligations of such Additional Borrower in respect of such Loan shall have been assumed by another Borrower. In the event any such Additional Borrower shall cease to be a
Subsidiary, Borrower Agent will promptly execute and deliver to the Administrative Agent an Additional Borrower Termination Agreement terminating such Subsidiary's status as a Borrower, subject to the
proviso of the immediately preceding sentence. 


        SECTION 2.20.    Joint and Several Liability.    (a) Borrowers shall
have joint and several liability in respect of all Obligations hereunder and under any other Loan Document to which any Borrower is a party, without regard to any defense (other than the defense that
payment in full has been made), setoff or counterclaim which may at any time be available to or be asserted by any other Loan Party 


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against
the Lenders, or by any other circumstance whatsoever (with or without notice to or knowledge of Borrowers) which constitutes, or might be construed to constitute, an equitable or legal
discharge of Borrowers' liability hereunder, in bankruptcy or in any other instance, and the Obligations of Borrowers hereunder shall not be conditioned or contingent upon the pursuit by the Lenders
or any other person at any time of any right or remedy against Borrowers or against any other person which may be or become liable in respect of all or any part of the Obligations or against any
Collateral or Guarantee therefor or right of offset with respect thereto. Borrowers hereby acknowledge that this Agreement is the independent and several obligation of each Borrower (regardless of
which Borrower shall have delivered a Notice of Borrowing) and may be enforced against each Borrower separately, whether or not enforcement of any right or remedy hereunder has been sought against any
other Borrower. Each Borrower hereby expressly waives, with respect to any of the Loans made to any other Borrower hereunder and any of the amounts owing hereunder by such other Loan Parties in
respect of such Loans, diligence, presentment, demand of payment, protest and all notices whatsoever, and any requirement that the Administrative Agent or any Lender exhaust any right, power or remedy
or proceed against such other Loan Parties under this Agreement or any other agreement or instrument referred to herein or against any other person under any other guarantee of, or security for, any
of such amounts owing hereunder. 


        (b)   Notwithstanding
any other provisions of this Agreement or the other Loan Documents, the maximum aggregate amount for which a Borrower shall be liable hereunder with
respect to Loans to any other Borrower and other Obligations of any other Borrower shall equal the greater of (i) 95% of the excess of the fair saleable value of the property of such Borrower
over the total liabilities of such Borrower (including the maximum amount reasonably expected to become due in respect of contingent liabilities, other than any such contingent liabilities hereunder
and under the other Loan Documents), such excess to be determined on the date hereof or the date on which, from time to time, enforcement against such Borrower of its joint and several liability
hereunder is sought by the Administrative Agent or a Lender or realization against any of the property or assets of such Borrower is effected by the Administrative Agent or a Lender, whichever is
higher, or (ii) the maximum aggregate amount of Obligations which does not render this Section 2.20, as it relates to such Borrower, void
or voidable under applicable laws relating to fraudulent conveyance or fraudulent transfer. Subject to the preceding sentence, each Borrower understands, agrees and confirms that each Borrower shall
be liable for payment of Obligations when due and not for collection thereof and that each Lender may, from time to time, enforce this provision against any Borrower up to the full amount of the
Obligations owed to such Lender without proceeding against any other Borrower, against any security for the Obligations, against any Guarantor or under any Guarantee covering the Obligations. 


        SECTION 2.21.    [Intentionally omitted].    


        SECTION 2.22.    Increase in Revolving
Commitments.    (a) New Revolving Commitments. At any time following the completion of the syndication of the
Loans (as reasonably determined by the Administrative Agent), the Borrower Agent 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, the "New Revolving Commitments") in an aggregate amount not to exceed an amount equal
to $10.0 million and in minimum amounts of at least $5.0 million. Such notice shall specify the date (an "Increased Amount Date") on which
the Borrower Agent proposes that the New Revolving 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. The Administrative Agent shall notify the Borrower Agent in writing of the identity of each Revolving Lender or other financial institution reasonably acceptable to the
Administrative Agent (each, a "New Revolving Lender") to whom the New Revolving Commitments have been allocated and the amounts of such allocations;  provided that any Lender approached to provide all or portion of the New Revolving Commitments may elect or decline, in its sole discretion, to provide
a New Revolving Commitment. Such New 


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Revolving
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 New Revolving Commitments and Loans or the application of the proceeds therefrom and (2) such increase in the Revolving
Commitments shall be evidenced by one or more joinder agreements executed and delivered to Administrative Agent by each New Lender, as applicable, and each shall be recorded in the register, each of
which shall be subject to the requirements set forth in Section 2.15(e). All terms and conditions of any Revolving Loans or other Obligations
relating to New Revolving Commitments shall be on the same terms and conditions as those applicable to Revolving Commitments, Revolving Loans and other Obligations under this Agreement. 



        (b)   On
any Increased Amount Date on which New 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 New Revolving Lenders, and each of the New 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 New Revolving Lenders
ratably in accordance with their Revolving Commitments after giving effect to the addition of such New Revolving Commitments to the Revolving Commitments, (ii) each New 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 New Revolving Lender shall become a Lender with respect to the Revolving Commitments and all matters relating thereto. 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 the Borrower Agent's notice of an Increased Amount Date and, in respect thereof, the New Revolving Commitments and the New
Revolving Lenders. 


        SECTION 2.23.    Term B Loans.    (a) 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 Second 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. 


        (b)   The
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 Second
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 may be effected on the Second 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. 



        (c)   The
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 Second Amendment and Restatement Effective Date and any breakage loss or expense under Section 2.13 of this Agreement. On the Second Amendment and Restatement Effective Date, the
Original Term B Loans shall be deemed paid in full and discharged. 


        (d)   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 


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Second
Amendment and Restatement Effective Date as the benefits which the holders of the Original Term B Loans had been entitled immediately prior to the Second 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 (with references to the
Companies being references thereto after giving effect to the Transactions unless otherwise expressly stated) 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.    (a) Borrower Agent has
heretofore furnished to the Lenders (i) the consolidated balance sheets as of December 31, 2001 and 2002 and related statements of income, stockholders' equity and cash flows of Basic as
of and for the fiscal years ended December 31, 2000, 2001 and 2002, 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 Basic as of and for the latest twelve-month and six month periods ended June, 2003, and for the
latest twelve-month and seven-month periods ended July 31, 2003, and for the comparable periods of the preceding fiscal year, in each case, certified by the Chief Financial Officer of Basic.
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 Basic as 


50







 



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. 


        (b)   Borrower
has heretofore delivered to the Lenders Holdings' (i) unaudited pro forma consolidated statements of
income for the fiscal years ended December 31, 2001 and 2002 and (ii) an unaudited pro forma consolidated statement of income for the six
month period ended June 30, 2003, in each case after giving effect to the Transactions as if they had occurred on first day of such period. Such pro
forma statements of income have been prepared in good faith by the Loan Parties based on the assumptions stated therein (which assumptions are believed by the Loan Parties on
the date hereof and on the Closing Date to be reasonable), are based on the best information available to the Loan Parties as of the date of delivery thereof, accurately reflect all adjustments that
would be required to be made to give effect to the Transactions in accordance with Regulation S-X under the Securities Act, and present fairly on a pro
forma basis the estimated results of operations of Holdings as of and for such dates, assuming that the Transactions had actually occurred on the first day of such periods. In
addition, Borrower has heretofore delivered to the Lenders an unaudited model pro forma consolidated balance sheet of Holdings as of and for
July 31, 2003, which model balance sheet been prepared in good faith by the Loan Parties based on the assumptions stated therein (which assumptions are believed by the Loan Parties on the date
hereof and on the Closing Date to be reasonable), are based on the best information available to the Loan Parties as of the date of delivery thereof, accurately reflect all adjustments that would be
required to be made to give effect to the Transactions in accordance with Regulation S-X under the Securities Act, and present fairly on a pro
forma basis the estimated consolidated financial position of Holdings as of and for such date, assuming that the Transactions had actually occurred on such date. 



        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 


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Transactions.
Schedule 1.01(a) contains a true and complete list of all property listed in  Schedule 3.06(b) that has a fair market value equal to or exceeding
$2.0 million. 


        (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 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 or Mortgaged Property 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. 


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        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 Closing Date and
(ii) the number of shares of each class of its Equity Interests authorized, and the number outstanding, on the Closing Date and the number of shares covered by all outstanding options,
warrants, rights of conversion or purchase and similar rights at the Closing Date. All Equity Interests of each Company (other than Holdings) are duly and validly issued and are fully paid and non
assessable and are owned by Holdings or any Borrower, directly or indirectly through Wholly Owned Subsidiaries, and all Equity Interests of any Borrower are owned directly by Holdings. 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 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 Holdings, Borrowers and each Subsidiary on the Closing 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 Borrowers have 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.    Borrowers used the proceeds of
the Original Term B Loans to effect the Acquisitions and the Refinancing and pay related fees and expenses on the Closing Date. Borrowers 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 has (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.    Except for the
financial information furnished to the Administrative Agent and the Lenders pursuant to Section 5.01(a) and 5.01(b) which has been restated as described in Note 20 to the audited
consolidated financial statements of Holdings and its Subsidiaries for the year ended December 31, 2003, 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
Closing 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 


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violation
of the Fair Labor Standards Act or any other applicable federal, 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 Closing 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 Closing 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 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 



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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 Closing Date. As of each such date, such insurance is in full force and effect and all premiums have been
duly 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 


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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 as of the Closing Date, if any, is, or, to the extent any Mortgage is duly executed and delivered thereafter by the relevant Loan
Party, will be, 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 when the Mortgages are filed in the offices specified on  Schedule 1.01(a)
 (or, in the case of any Mortgage executed and delivered after the date thereof in accordance with the provisions of  Sections 5.11 and 5.12, when such Mortgage is filed in the offices specified in the local counsel
opinion delivered with respect thereto in accordance with the provisions of Sections 5.11 and 5.12), 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.    Acquisition Documents; Representations and Warranties in
Agreement.    (a) Schedule 3.23 lists (i) each exhibit, schedule, annex or other attachment to
the Acquisition Agreements and (ii) each agreement, certificate, instrument, letter or other document contemplated by the Acquisition Agreements or any item referred to in clause (i)
entered into, executed or delivered or to become effective in connection with the Acquisitions. The Original Lenders have been furnished true and complete copies of each Acquisition Document to the
extent executed and delivered on or prior to the Closing Date. 


        (b)   All
representations and warranties of each Company controlled by Holdings prior to the Acquisitions set forth in the Acquisition Agreements were true and correct in all
material respects as of the time such representations and warranties were made and shall be true and correct in all material respects as of the Closing Date as if such representations and warranties
were 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. 


        SECTION 3.24.    No Material Adverse Effect.    Since
December 31, 2002, 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. 


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ARTICLE IV
  
    CONDITIONS TO CREDIT EXTENSIONS    
    


        SECTION 4.01.    Conditions to Initial Credit Extension.    The
obligation of each Original Lender and, if applicable, each Issuing Bank to fund the initial Credit Extension requested to be made by it shall be subject to the prior or concurrent satisfaction of
each of the conditions precedent set forth in this Section 4.01. 



        (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 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 Borrowers, 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 Holdings, confirming compliance with the conditions precedent set forth in paragraphs (b), (c), (d) and (e) of  Section 4.02.



        (d)   Financings and Other Transactions, Etc. (i) The Original Lenders shall be satisfied with the form and substance
of the Transaction Documents, the total financing requirements for the Transactions shall not exceed $122.0 million and the Transactions shall have been consummated or shall be consummated
simultaneously on the Closing Date, in each case in all material respects in accordance with the terms hereof and the terms of the Transaction Documents (and without the waiver or amendment of any
such terms not approved by the Administrative Agent and the Arranger); provided, that, if the PWI Acquisition and/or the Pennant Acquisition shall not
be consummated simultaneously on the Closing Date, proceeds of the Term B Loans equal to $25.1 million in respect of the PWI Acquisition and/or $7.3 million in respect of the Pennant
Acquisition shall have been deposited in the Restricted Acquisition Account. 



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        (ii)   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 Basic and its subsidiaries have adequate working capital and capital expenditure funds and availability. 


        (iii)  The
Administrative Agent shall be reasonably satisfied that all steps necessary to effect the Refinancing shall have been completed in full (but for the funding of the
Loans hereunder and application of the proceeds thereof), with all preparations completed that will be sufficient to cause all liens in favor of the existing lenders to be unconditionally released;
the Administrative Agent shall have received "pay off" letters with respect to all debt being refinanced in the Refinancing; the Administrative Agent shall have received from any person holding any
Lien securing any such debt, such UCC termination statements, releases of assignments of leases and rents and other instruments, in each case in proper form for recording, as the Administrative Agent
shall have reasonably requested to release and terminate of record the Liens securing such debt. 


        (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 Holdings, Basic, 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 Borrowers 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 of each legal opinion delivered under the other Transaction Documents, and Holdings and Borrowers shall use
their 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 Holdings 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 Holdings 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 Holdings 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. 



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        (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 Holdings, Borrowers 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 Borrowers hereunder or under any other Loan
Document. 


        (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 the
Borrowers have 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 




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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 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 




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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 the relevant 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; 


        (vi)  with
respect to each Real Property or Mortgaged Property, copies of all Leases in which such 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 Holdings 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 (or, Original Lender, as the case may be) and each Issuing Bank to make any Credit Extension (including the initial 


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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). 


        (b)   No Default. Each 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 the Borrowers of the proceeds
of such Credit Extension shall constitute a representation and warranty by Borrowers 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.
Each 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.    Initial Borrowing by Each Additional Borrower.    The
obligation of each Lender to make Loans to any Additional Borrower is subject to the satisfaction of the following conditions: 



        (a)   The
Administrative Agent (or its counsel) shall have received such Additional Borrower's Additional Borrower Agreement, duly executed by all parties thereto. 


        (b)   The
Administrative Agent shall have received such documents and certificates, including such opinions of counsel, as the Administrative Agent or its counsel may
reasonably request relating to the organization, existence and good standing (to the extent such concept is relevant to such Additional Borrower in its jurisdiction of organization) of such Additional
Borrower, the authorization of the Transactions insofar as they related to the Additional Borrower and any other legal matters reasonably relating to such Additional Borrower, its Additional Borrower
Agreement or such Transactions, all in form and substance reasonably satisfactory to the Administrative Agent and its counsel. 



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        SECTION 4.04.    Conditions to Effectiveness of the Amendment and
Restatement.    This Second Amended and Restated Credit Agreement shall become effective on and as of the first date (the "Second 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 Second
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 Second 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). 


        (d)   Authorization. The execution, delivery and performance of this Agreement shall have been duly authorized by all necessary
action on the part of the Borrowers and the 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 Second
Amendment and Restatement Effective Date, in form and substance substantially similar to those delivered pursuant to Sections 4.01 (b), (c) and (g)(i) and including a representation by
the Chief Financial Officer of Holdings that, as of the Second 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. 



 
 

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.    Holdings 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
Holdings 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 



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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 Holdings and its Subsidiaries as of the end of such fiscal quarter and related consolidated statements of income and cash flows for 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), (b) or (c) 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 Holdings 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. Until the date on which the Syndication Agent shall have notified Borrower Agent that the primary syndication of
the Commitments has been completed, no later than the 



65







 




second
day of each fiscal year of Holdings 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 Holdings to the effect that the budget of the Consolidated Companies is a reasonable
estimate for the period covered thereby; 


        (i)    Annual Meetings with Lenders. Within 120 days after the close of each fiscal year of Holdings, Holdings and each
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 


66







 



expected
to result in a Material Adverse Effect; pay and perform its obligations under all Leases and Transaction Documents; and at 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 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 


67







 



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.    (a) 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 Holdings 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. 



        (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 Borrowers, 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 


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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.    No later than the 270th
day after the Closing Date, Borrowers shall enter into, and for a minimum of two years thereafter maintain, Interest Rate Agreements acceptable to the Administrative Agent that result in at least
$65,000,000 of the aggregate principal amount of Holdings' Consolidated Indebtedness being effectively subject to a fixed or maximum interest rate acceptable to the Administrative Agent through
May 28, 2006. 


        SECTION 5.11.    Additional Collateral; Additional Guarantors.    (a)
Subject to this Section 5.11, with respect to any property acquired on or after the Closing Date by any 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 and within 60 days in the case of any Real Property described in  Section 5.11(d)): (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. Borrowers 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. 


        (c)   If
at any time any two or more Wholly Owned Subsidiaries in the aggregate (other than any Foreign Subsidiary of any 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 the relevant 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. 


        (d)   Real Property. Each Loan Party will promptly grant to the Collateral Agent, within 60 days of the acquisition
thereof, a security interest in and Mortgage Lien on each owned or leased Real 


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Property
of such Loan Party as is acquired by such Loan Party after the Closing Date and that, together with any improvements thereon, individually has a fair market value of at least
$2.0 million, as additional security for the Obligations (unless the subject property is already mortgaged to a third party to the extent permitted by  Section 6.02), in accordance with the
provisions of Sections 4.01(o)(i)-(x) and  4.01(p). 


        SECTION 5.12.    Security Interests; Further Assurances.    Promptly,
upon the reasonable request of the Administrative Agent, the Collateral Agent or any Lender, at Borrowers' 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, Borrowers 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. Each 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. Each 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 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 


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(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). 


        SECTION 5.14.    Post Closing Matters.    Execute and deliver the
documents and complete the tasks set forth on Schedule 5.14, in each case within the time limits specified on such schedule. 



        SECTION 5.15.    Post Closing Equity Matter.    On or prior to
October 7, 2003, cause the existing preferred securities held by CSFB Global Energy Partners to be either (i) converted or exchanged into common Equity Interests or (ii) extended
in term to a date at least 90 days after the Term B Maturity Date. 


 
 

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 Closing Date 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(d); 



        (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
$30.0 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 $10.0 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 Closing Date 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 Closing
Date; 


        (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, 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; 



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        (e)   Liens
arising out of judgments or awards not resulting in a Default and in respect of which such Company shall in good faith be prosecuting an appeal or proceedings for
review in respect of which there shall be secured a subsisting stay of execution pending such appeal or proceedings; provided that the aggregate amount
of all such judgments or awards (and any cash and the fair market value of any property subject to such Liens) does not exceed $1.0 million at any time outstanding; 


        (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 $500,000 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; 


        (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 



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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
$1.0 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)   the
Companies may consummate the Transactions in accordance with the provisions of the Transaction Documents; 


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


        (c)   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
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; 


        (d)   Borrowers
may enter into Interest Rate Agreements to the extent permitted by Section 6.01(c) and may enter into
and perform their 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; 


        (e)   any
Company may make intercompany loans to any Loan Party (other than Holdings except to the extent necessary to fund its franchise taxes and ordinary and reasonable
operating expenses incurred in the ordinary course of business and other corporate overhead costs and 



74







 




expenses
(including legal and accounting expenses and similar expenses and customary fees to non-officer directors of Holdings) and any Loan Party may make intercompany loans and advances
to any other Loan Party (other than Holdings); provided that such loan shall be evidenced by a promissory notes 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; 


        (f)    Borrowers
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; 


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


        (h)   Borrowers
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); 



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


        (j)    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; 



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


        (l)    each
Borrower may make loans to senior management of such Borrower and its Subsidiary Guarantors for purposes of purchasing the capital stock of such Borrower in an
aggregate principal amount for all Borrowers not to exceed $1.0 million at any one time outstanding; and 


        (m)  scheduled
payments of Earn Out Obligations of 1.0 million individually and $5.0 million in any fiscal year of Holdings. 




        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 


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of
the property or assets of any person (or agree to do any of the foregoing at any future time), except that: 



        (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 the relevant 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 $1,000,000 individually or $5,000,000 in any four consecutive fiscal quarters of Holdings; 


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



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


        (d)   Borrowers
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)   the
Transactions shall be permitted as contemplated by the Transaction Documents; 


        (f)    Borrowers
and the Subsidiaries may consummate Permitted Acquisitions; 


        (g)   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 Holdings) 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; 



        (h)   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 


        (i)    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. 




To
the extent the Required Lenders 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 any Borrower (i) may pay cash Dividends to any Borrower or any Wholly Owned Subsidiary of any Borrower and (ii) if such Subsidiary is not
a Wholly Owned Subsidiary of any Borrower, may pay cash Dividends to its shareholders generally so long as such Borrower or its Subsidiary which owns the equity interest or interests in the Subsidiary
paying such Dividends receives at least its proportionate share thereof (based upon its relative holdings of 



76







 

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); 


        (b)   so
long as no Default exists or would result therefrom, a Borrower may pay Dividends to Holdings for the purpose of enabling Holdings to, and Holdings may, repurchase
outstanding shares of its common stock (or options to purchase such common stock) following the death, disability, retirement or termination of employment of employees, officers or directors of any
Company upon the exercise by any such person of any "put" right in respect of any such capital stock or options; provided that the aggregate amount of
Dividends paid by Holdings pursuant to this paragraph (b) shall not exceed $2.0 million in any fiscal year of Holdings; 


        (c)   Borrowers
may pay cash Dividends to Holdings for the purpose of paying, so long as all proceeds thereof are promptly used by Holdings to pay, its franchise taxes and
ordinary and reasonable operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including legal and accounting expenses and similar expenses and
customary fees to non officer directors of Holdings); and 


        (d)   Borrowers
may pay cash Dividends to Holdings for the purpose of paying, so long as all proceeds thereof are promptly used by Holdings to pay, its income tax when and as
due. 




        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 Borrowers 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; 


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


        (d)   Borrowers
may pay management fees to Holdings from time to time in an amount not in excess of Holdings' compensation expenses for its employees; 


        (e)   Borrowers
or any Subsidiary may make payments to Holdings pursuant to a Tax Sharing Agreement in an amount not in excess of the federal and state (in such states that
permit consolidated or combined tax returns) income tax liability that Borrowers and the Subsidiaries would have been liable for if any of the Companies had filed their taxes on a stand alone basis;  provided that such payments shall be made by Holdings no earlier than five days prior to the date on which Holdings is required to make its payments to
the Internal Revenue Service, as applicable; and 


        (f)    the
Transactions may be effected. 



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        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

	Closing Date - December 31, 2003	 	3.60 to 1.00
	January 1, 2004 - March 31, 2004	 	3.60 to 1.00
	April 1, 2004 - June 30, 2004	 	3.60 to 1.00
	July 1, 2004 - September 30, 2004	 	3.60 to 1.00
	October 1, 2004 - December 31, 2004	 	3.25 to 1.00
	January 1, 2005 - March 31, 2005	 	3.25 to 1.00
	April 1, 2005 - June 30, 2005	 	3.25 to 1.00
	July 1, 2005 - September 30, 2005	 	3.25 to 1.00
	October 1, 2005 - December 31, 2005	 	3.00 to 1.00
	January 1, 2006 and thereafter	 	3.00 to 1.00






        (b)    Minimum Interest Coverage Ratio.    Permit the Consolidated Interest Coverage Ratio for any Test Period to be
less than 3.00 to 1.0. 


        (c)    Minimum Fixed Charge Coverage Ratio.    Permit the Consolidated Fixed Charge Coverage Ratio for any Test Period
to be less than 1.15 to 1.0. 


        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; (v) amend or modify, or permit the amendment or
modification of, any other Transaction Document, in each case except for amendments or modifications which are not in any way adverse in any material respect to the interests of the Lenders; or
(vi) 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 (vi) or any
such new agreements pursuant to this clause (vi) which do not
in any way materially adversely affect in any material respect the interests of the Lenders; and provided that Holdings 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. 


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        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 any Borrower or any Subsidiary of such Borrower, or pay any Indebtedness owed to any Borrower or
a Subsidiary of such Borrower, (b) make loans or advances to any Borrower or any of such Borrower's Subsidiaries or (c) transfer any of its properties to any Borrower or any of such
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 any Borrower or a Subsidiary of such Borrower; (v) customary provisions restricting assignment of any agreement entered into by any Borrower or a Subsidiary of such 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 a
Borrower, so long as such agreement was not entered into in contemplation of such person becoming a Subsidiary of such 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. 



        SECTION 6.11.    Limitation on Issuance of Capital Stock.    (a) With
respect to Holdings, issue any Equity Interest that is not Qualified Capital Stock. 


        (b)   Borrowers
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 a 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 a Borrower or the Subsidiary of such Borrower which is to own such stock; and (iii) Borrowers
may issue common stock that is Qualified Capital Stock to Holdings. 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 any Borrower may establish,
create or acquire one or more Wholly Owned Subsidiaries of such 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. 


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        SECTION 6.13.    Business.    (a) With respect to Holdings, engage in
any business activities or have any assets or liabilities, other than (i) its ownership of the Equity Interests of Borrowers, (ii) obligations under the Loan Documents and
(iii) activities and assets incidental to the foregoing clauses (i) and (ii). 


        (b)   With
respect to Borrowers and their Subsidiaries, engage (directly or indirectly) in any business other than those businesses in which Borrowers and their Subsidiaries
are engaged on the Closing 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 the Borrowers and their Subsidiaries, on a consolidated basis, in respect of all such obligations to exceed $2.0 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 Holdings 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) Liens created pursuant to the Loan Documents on property
or assets of Holdings 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 Holdings of any of its Subsidiaries to secure the Loans or any Interest Rate Agreement
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.    Limitation on Activities of
Holdings.    Notwithstanding anything to the contrary set forth herein, Holdings shall not conduct any business or hold or acquire any assets (other than the Equity
Interests of Borrowers and cash sufficient to pay amounts owing under its Indebtedness permitted to be incurred hereunder and to pay its ordinary course operating expenses) and shall have no
operations other than holding such Equity Interests. 


 
 

ARTICLE VII
  
    GUARANTEE    
    


        SECTION 7.01.    The Guarantee.    The 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 


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Lender
of, Borrowers, 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 Guarantors hereby
jointly and severally agree that if Borrowers or other Guarantor(s) shall fail to pay in full when due (whether at stated maturity, by acceleration or otherwise) any of the Guaranteed Obligations, the
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
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 Guaranteed Obligations of Borrowers 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 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 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
Guarantors hereby expressly waive diligence, presentment, demand of payment, protest and all notices whatsoever, and any requirement that any Loan Party thereof exhaust any right,
power or remedy or proceed against Borrowers 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 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 Borrowers 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 


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the
obligations and liabilities of the 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 Borrowers 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 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. 


        SECTION 7.03.    Reinstatement.    The obligations of the 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 Borrowers 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 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 Borrowers 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 Borrowers or any other Guarantor now or hereafter owing to any Guarantor or Borrowers 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 the Guarantors 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 Borrowers 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 Guarantors jointly and severally
agree that, as between the Guarantors and the Lenders, the obligations of Borrowers 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 Borrowers 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 Borrowers) shall forthwith become due and payable by the Guarantors for purposes of  Section 7.01. 


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        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. 


        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 Agent; 


        (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 



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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
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 $1.0 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 liability of any Company and its ERISA Affiliates 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 Borrowers 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 the Borrowers or any Guarantor hereunder or under any Security
Document; 


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



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        (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 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; 


        (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; or 



        (p)   the
Acquisitions shall not have occurred on the Closing Date in accordance with the terms and conditions of the Acquisition Agreements; 




then,
and in every such event (other than an event with respect to Holdings or Borrowers 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 Agent, 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 Borrowers
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 Borrowers and the Guarantors, anything contained herein or in any other Loan Document to the contrary notwithstanding; and in any event with respect to Holdings or Borrowers described in
paragraph (g) or (h) above, the Commitments shall automatically terminate and the principal of the Loans then outstanding, together with accrued interest thereon and any unpaid accrued
Fees and all other liabilities of Borrowers 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 Borrowers and the 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 


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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 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 


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other
sums then held by the Collateral Agent pursuant to this Agreement, promptly by the Collateral Agent as follows: 



        (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 Borrowers 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, (a) no Agent shall be subject to any fiduciary or other implied
duties, regardless of whether a Default 


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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 Borrowers 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 Agent 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 Borrowers), 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 Agent. Upon any such resignation, the Required Lenders shall have the right, in consultation with
Borrower Agent, 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. 



        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 


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Agent,
and the retiring Agent shall be discharged from its duties and obligations hereunder. The fees payable by Borrowers to a successor Agent shall be the same as those payable to its predecessor
unless otherwise agreed between Borrower Agent 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 the 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 the Borrowers or the Guarantors and without limiting the obligation of the Borrowers or the 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 Agent at:
	

 	
 	

Basic Energy Services, L.P.

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
	

(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





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        (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 Agent 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; 


        (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 



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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
Holdings 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 substantially all 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 Agent 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 Agent, 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 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 Agent 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 Agent 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) Borrowers agree, jointly
and severally, 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) incurred by the Administrative Agent and Collateral Agent, the Swingline Lender and the Issuing Bank 


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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 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. 


        (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 any 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 


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that
no Borrower may 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 any 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 any
Borrower, Holdings 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
Agent 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 Agent 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 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 Agent 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 Agent that the primary syndication of the Commitments has been completed (in which case the Administrative Agent shall consult with
Borrower Agent). 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 Borrowers 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 Borrowers, 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 


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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 s, 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 Agent, 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 Agent, 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 Agent, 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, 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, Borrowers agree 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 the
Borrowers, 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 the Borrowers 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,  2.13or 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 Agent (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 Agent is notified of the participation sold to such Participant and such Participant agrees, for the benefit of Borrowers, to comply with Sections
2.15(e) and (f) as though it were a Lender. 


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        (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 Agent 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, 2.14, 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. 


        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 Sections 4.01,  4.02 and 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. The Borrowers, the Guarantors, the Agents and the Lenders agree that (a) all
obligations under the Original Credit Agreement 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 into Term B Loans 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 


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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
Borrowers against any of and all the obligations of Borrowers 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 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 


97







 



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,
(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 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 Borrowers and their obligations, (g) with the consent of Borrower Agent 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 Borrowers or any Subsidiary. For the purposes of this Section,
"Information" means all information received from Borrowers or any Subsidiary relating to any 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 Borrowers 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, the Borrower Agent 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 


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previous
agreements and understandings, oral or written, relating to the subject matter hereof. The Borrowers, the 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 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. 


[Signature
Pages Follow] 


99







 

        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, L.P., as a Borrower
	

 	
 	

By:	

BASIC ENERGY SERVICES GP, LLC,

its General Partner
	

 	
 	

By:	

/s/  KENNETH V. HUSEMAN      
 Name:  Kenneth V. Huseman

Title:    President
	

 	
 	

FIRST ENERGY SERVICES COMPANY,

as a Borrower
	

 	
 	

By:	

/s/  KENNETH V. HUSEMAN      
 Name:  Kenneth V. Huseman

Title:    President
	

 	
 	

H. B. & R., INC., as a Borrower
	

 	
 	

By:	

/s/  KENNETH V. HUSEMAN      
 Name:  Kenneth V. Huseman

Title:    President
	

 	
 	

FESCO ALASKA, INC., as a Borrower
	

 	
 	

By:	

/s/  KENNETH V. HUSEMAN      
 Name:  Kenneth V. Huseman

Title:    President
	

 	
 	

BASIC ENERGY SERVICES, INC., as Parent

Guarantor
	

 	
 	

By:	

/s/  KENNETH V. HUSEMAN      
 Name:  Kenneth V. Huseman

Title:    President
	 	 	 	 



100







 

	

 	
 	

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
	

 	
 	

ENERGY AIR DRILLING COMPANY,

as a Subsidiary Guarantor
	

 	
 	

By:	

/s/  KENNETH V. HUSEMAN      
 Name:  Kenneth V. Huseman

Title:    President
	 	 	 	 





101







 

	

 	
 	

UBS SECURITIES LLC,

as Arranger and Syndication Agent
	

 	
 	

By:	

/s/  JAMES P. BOLAND      
 Name:  James P. Boland

Title:    Executive Director
	

 	
 	

By:	

/s/  OLIVER O. TRUMBO      
 Name:  Oliver O. Trumbo

Title:    Director
	

 	
 	

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

 	
 	

By:	

/s/  WILFRED V. SAINT      
 Name:  Wilfred V. Saint

Title:    Director
	

 	
 	

By:	

/s/  JOSELIN FERNANDES      
 Name:  Joselin Fernandes

Title:    Associate Director
	

 	
 	

UBS AG, CAYMAN ISLANDS BRANCH, as a Lender and Swingline Lender
	

 	
 	

By:	

/s/  WILFRED V. SAINT      
 Name:  Wilfred V. Saint

Title:    Director
	

 	
 	

By:	

/s/  JOSELIN FERNANDES      
 Name:  Joselin Fernandes

Title:    Associate Director




102








  



Annex I  


 
 

Applicable Margin    
    



	 
	 	Revolving Loans
	 	Term B Loans
	 	 
	 
	Applicable Leverage Ratio
 
	 	Applicable Fee
	 
	 	Eurodollar
	 	ABR
	 	Eurodollar
	 	ABR
	 
	Level I 3 2.75:1.0	 	3.00	%	2.00	%	3.00	%	2.00	%	0.50	%
	

Level II < 2.75:1.0 but > 2.0:1.0	
 	

2.75	
%	

1.75	
%	

3.00	
%	

2.00	
%	

0.375	
%
	

Level III £ 2.0:1.0	
 	

2.50	
%	

1.50	
%	

3.00	
%	

2.00	
%	

0.375	
%






        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, the Leverage Ratio shall be deemed to be in Level I for
purposes of determining the Applicable Fee (i) from the Closing Date to 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)
for the fiscal period ended at least six months after the Closing Date, (ii) at any time during which Borrowers have failed to deliver the financial statements and certificates required by  Section 5.01(a)
 or (b) and  Section 5.01(d), respectively, and (iii) at any time during the existence of an Event of Default. 


Annex I-1








  



Annex II  


 
 

Amortization Table    
    



	Payment Date
 
	 	Installment Amount

	December 31, 2004	 	$	3,500,000.00
	March 31, 2005	 	$	1,750,000.00
	June 30, 2005	 	$	1,750,000.00
	September 30, 2005	 	$	1,750,000.00
	December 31, 2005	 	$	1,750,000.00
	March 31, 2006	 	$	2,625,000.00
	June 30, 2006	 	$	2,625,000.00
	September 30, 2006	 	$	2,625,000.00
	December 31, 2006	 	$	2,625,000.00
	March 31, 2007	 	$	2,625,000.00
	June 30, 2007	 	$	2,625,000.00
	September 30, 2007	 	$	2,625,000.00
	December 31, 2007	 	$	2,625,000.00
	March 31, 2008	 	$	3,500,000.00
	June 30, 2008	 	$	3,500,000.00
	September 30, 2008	 	$	3,500,000.00
	December 31, 2008	 	$	3,500,000.00
	March 31, 2009	 	$	31,500,000.00
	June 30, 2009	 	$	31,500,000.00
	Term B Maturity Date	 	$	61,500,000.00





Annex II-1











QuickLinks


TABLE OF CONTENTS


SECOND AMENDED AND RESTATED CREDIT AGREEMENT

WITNESSETH

ARTICLE I DEFINITIONS


ARTICLE II THE CREDITS


ARTICLE III REPRESENTATIONS AND WARRANTIES

ARTICLE IV CONDITIONS TO CREDIT EXTENSIONS


ARTICLE V AFFIRMATIVE COVENANTS

ARTICLE VI NEGATIVE COVENANTS


ARTICLE VII GUARANTEE

ARTICLE VIII EVENTS OF DEFAULT

ARTICLE IX COLLATERAL ACCOUNT; APPLICATION OF COLLATERAL PROCEEDS

ARTICLE X THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT

ARTICLE XI MISCELLANEOUS


Applicable Margin



Amortization Table