Exhibit 10.2


 




 





SECOND LIEN TERM LOAN AGREEMENT


 


Dated as of November 1, 2005


 


by and among


 


PENHALL INTERNATIONAL CORP.,


as Borrower


 


and


 


DEUTSCHE BANK TRUST COMPANY AMERICAS,


as Agent


 


and


 


DEUTSCHE BANK SECURITIES INC.


as Sole Lead Arranger and Sole Bookrunner


 


and


 


THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO


as Lenders




 





 





















 


TABLE OF CONTENTS


 


	
  SECTION 1.

  	
   

  
	
   

  	
   

  	
   

  
	
  THE LOAN

  	
   

  
	
  1.1.

  	
  Loans

  	
   

  
	
  1.2.

  	
  Evidence of Debt; Register; Lenders’ Books and Records; Notes

  	
   

  
	
  1.3.

  	
  Interest
  on Loans

  	
   

  
	
  1.4.

  	
  Conversion/Continuation

  	
   

  
	
  1.5.

  	
  Default Interest

  	
   

  
	
  1.6.

  	
  Fees

  	
   

  
	
  1.7.

  	
  Repayments

  	
   

  
	
  1.8.

  	
  Prepayments and Repayment Premiums

  	
   

  
	
  1.9.

  	
  Mandatory Prepayments

  	
   

  
	
  1.10.

  	
  Application of Prepayments

  	
   

  
	
  1.11.

  	
  Application of Prepayments of Loans to ABR Loans and Eurodollar Rate
  Loans

  	
   

  
	
  1.12.

  	
  General Provisions Regarding Payments

  	
   

  
	
  1.13.

  	
  Ratable Sharing

  	
   

  
	
  1.14.

  	
  Making or Maintaining Eurodollar Rate Loans

  	
   

  
	
  1.15.

  	
  Reserve Requirements; Change in Circumstances

  	
   

  
	
  1.16.

  	
  Taxes

  	
   

  
	
  1.17.

  	
  Obligation to Mitigate

  	
   

  
	
  1.18.

  	
  Removal or Replacement of a Lender

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.

  	
   

  
	
   

  	
   

  	
   

  
	
  AFFIRMATIVE
  COVENANTS

  	
   

  
	
   

  	
   

  	
   

  
	
  2.1.

  	
  Compliance with Laws and Contractual Obligations

  	
   

  
	
  2.2.

  	
  Insurance; Damage to or Destruction of Collateral

  	
   

  
	
  2.3.

  	
  Inspection; Lender Meeting

  	
   

  
	
  2.4.

  	
  Organizational Existence

  	
   

  
	
  2.5.

  	
  Environmental Matters

  	
   

  
	
  2.6.

  	
  Landlords’ Agreements, Mortgagee Agreements, Bailee Letters and Real
  Estate Purchases

  	
   

  
	
  2.7.

  	
  Conduct of Business

  	
   

  
	
  2.8.

  	
  Further
  Assurances

  	
   

  
	
  2.9.

  	
  Cash Management Systems

  	
   

  
				



 


i





















 


	
  SECTION 3.

  	
   

  
	
   

  	
   

  	
   

  
	
  NEGATIVE
  COVENANTS

  	
   

  
	
   

  	
   

  
	
  3.1.

  	
  Indebtedness

  	
   

  
	
  3.2.

  	
  Liens and Related Matters

  	
   

  
	
  3.3.

  	
  Investments

  	
   

  
	
  3.4.

  	
  Contingent Obligations

  	
   

  
	
  3.5.

  	
  Restricted Payments

  	
   

  
	
  3.6.

  	
  Restriction on Fundamental Changes; Permitted Acquisitions

  	
   

  
	
  3.7.

  	
  Disposal of Assets or Subsidiary Stock

  	
   

  
	
  3.8.

  	
  Transactions with Affiliates

  	
   

  
	
  3.9.

  	
  Conduct of Business

  	
   

  
	
  3.10.

  	
  Changes Relating to Indebtedness; Prepayments of Certain Indebtedness

  	
   

  
	
  3.11.

  	
  Change of Name or Location

  	
   

  
	
  3.12.

  	
  Fiscal Year

  	
   

  
	
  3.13.

  	
  Bank Accounts

  	
   

  
	
  3.14.

  	
  Hazardous Materials

  	
   

  
	
  3.15.

  	
  ERISA

  	
   

  
	
  3.16.

  	
  Sale-Leasebacks

  	
   

  
	
  3.17.

  	
  Changes to BRS Management Services Agreement

  	
   

  
	
  3.18.

  	
  Interest Rate Protection

  	
   

  
	
  3.19.

  	
  Amendment to Existing Preferred Stock

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.

  	
   

  
	
   

  	
   

  	
   

  
	
  FINANCIAL COVENANTS/REPORTING

  	
   

  
	
   

  	
   

  	
   

  
	
  4.1.

  	
  Consolidated Capital Expenditures Limits

  	
   

  
	
  4.2.

  	
  Minimum Interest Coverage Ratio

  	
   

  
	
  4.3.

  	
  Maximum Leverage Ratio

  	
   

  
	
  4.4.

  	
  Financial Statements and Other Reports

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 5.

  	
   

  
	
   

  	
   

  	
   

  
	
  REPRESENTATIONS AND WARRANTIES

  	
   

  
	
   

  	
   

  
	
  5.1.

  	
  Disclosure

  	
   

  
	
  5.2.

  	
  No Material Adverse Effect

  	
   

  
	
  5.3.

  	
  No Conflict

  	
   

  
	
  5.4.

  	
  Organization, Powers, Capitalization and
  Good Standing

  	
   

  
	
  5.5.

  	
  Financial Statements and Projections

  	
   

  
	
  5.6.

  	
  Intellectual Property

  	
   

  
	
  5.7.

  	
  Investigations, Audits, Etc

  	
   

  
	
  5.8.

  	
  Employee Matters

  	
   

  
	
  5.9.

  	
  Solvency

  	
   

  
	
  5.10.

  	
  Litigation; Adverse Facts

  	
   

  



 


ii





















 


	
  5.11.

  	
  Use of Proceeds; Margin Regulations

  	
   

  
	
  5.12.

  	
  Ownership of Property; Liens

  	
   

  
	
  5.13.

  	
  Environmental Matters

  	
   

  
	
  5.14.

  	
  ERISA

  	
   

  
	
  5.15.

  	
  Brokers

  	
   

  
	
  5.16.

  	
  Deposit Accounts

  	
   

  
	
  5.17.

  	
  Agreements and Other Documents

  	
   

  
	
  5.18.

  	
  Insurance

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.

  	
   

  
	
   

  	
   

  	
   

  
	
  DEFAULT, RIGHTS AND REMEDIES

  	
   

  
	
   

  	
   

  	
   

  
	
  6.1.

  	
  Event of Default

  	
   

  
	
  6.2.

  	
  Acceleration and Other Remedies

  	
   

  
	
  6.3.

  	
  Performance by Agent

  	
   

  
	
  6.4.

  	
  Application of Proceeds

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 7.

  	
   

  
	
   

  	
   

  	
   

  
	
  CONDITIONS TO LOANS

  	
   

  
	
   

  	
   

  
	
  SECTION 8.

  	
   

  
	
   

  	
   

  	
   

  
	
  THE AGENT

  	
   

  
	
   

  	
   

  	
   

  
	
  8.1.

  	
  Appointment of Agent

  	
   

  
	
  8.2.

  	
  Powers and Duties

  	
   

  
	
  8.3.

  	
  General Immunity

  	
   

  
	
  8.4.

  	
  Notice of Default

  	
   

  
	
  8.5.

  	
  Agents Entitled to Act as Lender

  	
   

  
	
  8.6.

  	
  Lenders’ Representations, Warranties and
  Acknowledgement

  	
   

  
	
  8.7.

  	
  Right to Indemnity

  	
   

  
	
  8.8.

  	
  Successor Agents

  	
   

  
	
  8.9.

  	
  Loan Documents

  	
   

  
	
  8.10.

  	
  No Liability

  	
   

  
	
  8.11.

  	
  Withholdings

  	
   

  
	
   

  	
   

  
	
  SECTION 9.

  	
   

  
	
   

  	
   

  	
   

  
	
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  
	
  9.1.

  	
  Notices

  	
   

  
	
  9.2.

  	
  Survival of Agreement

  	
   

  
	
  9.3.

  	
  Binding Effect

  	
   

  
	
  9.4.

  	
  Successors and Assigns

  	
   

  
	
  9.5.

  	
  Expenses; Indemnity

  	
   

  



 


iii





















 


	
  9.6.

  	
  Adjustments; Setoff

  	
   

  
	
  9.7.

  	
  Governing Law

  	
   

  
	
  9.8.

  	
  Waivers; Amendment

  	
   

  
	
  9.9.

  	
  Interest Rate Limitation

  	
   

  
	
  9.10.

  	
  Entire Agreement

  	
   

  
	
  9.11.

  	
  WAIVER OF JURY TRIAL

  	
   

  
	
  9.12.

  	
  Severability

  	
   

  
	
  9.13.

  	
  Counterparts

  	
   

  
	
  9.14.

  	
  Headings

  	
   

  
	
  9.15.

  	
  Jurisdiction; Consent to Service of Process

  	
   

  
	
  9.16.

  	
  Confidentiality

  	
   

  
	
  9.17.

  	
  Acknowledgments

  	
   

  
	
  9.18.

  	
  Accounting Changes

  	
   

  
	
  9.19.

  	
  Construction

  	
   

  
	
  9.20.

  	
  Patriot Act

  	
   

  
	
  9.21.

  	
  Delivery of Termination Statements and
  Mortgage Releases

  	
   

  
	
  9.22.

  	
  Subordination of Intercompany Debt

  	
   

  



 


INDEX OF APPENDICES


 


	
  Annexes

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Annex
  A

  	
  -

  	
  Definitions

  
	
  Annex
  B

  	
  -

  	
  Pro
  Rata Shares and Commitment Amounts

  
	
  Annex
  C

  	
  -

  	
  Closing
  Checklist

  
	
  Annex
  D

  	
  -

  	
  Pro
  Forma

  
	
  Annex
  E

  	
  -

  	
  Principal
  Office

  
	
   

  	
   

  	
   

  
	
  Exhibits

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit 1.1(a)

  	
  -

  	
  Note

  
	
  Exhibit 1.1(b)

  	
  -

  	
  Notice of Borrowing

  
	
  Exhibit 1.3(b)

  	
  -

  	
  Notice of Continuation/Conversion

  
	
  Exhibit 1.16(d)

  	
  -

  	
  Non-Bank Certificate

  
	
  Exhibit 3.1(c)

  	
  -

  	
  Intercompany Note

  
	
  Exhibit 4.4(j)

  	
  -

  	
  Compliance Certificate

  
	
  Exhibit 9.4(c)

  	
  -

  	
  Assignment and Acceptance

  
	
  Exhibit A-1

  	
  -

  	
  Guaranty

  
	
  Exhibit A-2

  	
  -

  	
  Intercreditor Agreement

  
	
   

  	
   

  	
   

  
	
  Schedules

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 2.8(b)

  	
  -

  	
  Outstanding Lien Search Results

  
	
  Schedule 3.1

  	
  -

  	
  Existing Indebtedness

  
	
  Schedule 3.2

  	
  -

  	
  Liens

  
	
  Schedule 3.3(e)

  	
  -

  	
  Investments

  



 


iv





















 


	
  Schedule 3.4

  	
  -

  	
  Contingent Obligations

  
	
  Schedule 3.7

  	
  -

  	
  Permitted Dispositions

  
	
  Schedule 3.8

  	
  -

  	
  Affiliate Transactions

  
	
  Schedule 5.4(a)

  	
  -

  	
  Jurisdictions of Organization and Qualifications

  
	
  Schedule 5.4(b)

  	
  -

  	
  Capitalization

  
	
  Schedule 5.6

  	
  -

  	
  Intellectual Property

  
	
  Schedule 5.7

  	
  -

  	
  Investigations and Audits

  
	
  Schedule 5.8

  	
  -

  	
  Employee Matters

  
	
  Schedule 5.10

  	
  -

  	
  Litigation

  
	
  Schedule 5.11

  	
  -

  	
  Use of Proceeds

  
	
  Schedule 5.12

  	
  -

  	
  Real Estate

  
	
  Schedule 5.13

  	
  -

  	
  Environmental Matters

  
	
  Schedule 5.14

  	
  -

  	
  ERISA

  
	
  Schedule 5.16

  	
  -

  	
  Deposit and Disbursement Accounts

  
	
  Schedule 5.17

  	
  -

  	
  Agreements and Other Documents

  
	
  Schedule 5.18

  	
  -

  	
  Insurance

  



 


v





















 


SECOND LIEN TERM
LOAN AGREEMENT


 


This SECOND LIEN TERM LOAN AGREEMENT is dated
as of November 1, 2005 and entered into by and among PENHALL INTERNATIONAL
CORP., an Arizona corporation (“Borrower”),
the financial institutions who are or hereafter become parties to this
Agreement as Lenders, and DEUTSCHE BANK TRUST COMPANY AMERICAS (in its individual capacity “DBTCA”), as Agent.


 


R  E  C  I
T  A  L  S:


 


WHEREAS, Borrower desires that Lenders extend
a second lien term loan facility to Borrower to fund the repayment of certain
indebtedness and preferred stock of Borrower; and


 


WHEREAS, the Guarantors are willing to
guaranty all of the Obligations of Borrower; and


 


WHEREAS, each Credit Party has agreed to
secure all of the Obligations by granting to Agent, for the benefit of Agent
and Lenders, a security interest in and lien upon all of its existing and
after-acquired personal and real property that is collateral for the First Lien
Obligations; and


 


WHEREAS, all capitalized terms herein shall
have the meanings ascribed thereto in Annex A hereto, which is incorporated
herein by reference.


 


NOW, THEREFORE, in consideration of the
premises and the agreements, provisions and covenants herein contained,
Borrower, Lenders and Agent agree as follows:


 


SECTION 1.


 


THE LOAN


 


1.1.                            Loans.


 


(a)                                 Commitments.  Subject to the terms and conditions hereof,
each Lender severally agrees to make, on the Closing Date, a Loan to Borrower
in an amount equal to such Lender’s Commitment.  Borrower may make only one borrowing under the
Commitments, which shall be on the Closing Date.  Any amount borrowed under this Section 1.1
and subsequently repaid or prepaid may not be reborrowed.  Subject to Sections 1.7 through 1.10,
all amounts owed hereunder with respect to the Loans shall be paid in full no
later than the Maturity Date.  Each
Lender’s Commitment shall terminate immediately and without further action on
the Closing Date after giving effect to the funding of such Lender’s Commitment
on such date.  Notwithstanding the
foregoing, all the Commitments shall automatically terminate at 5:00 p.m.,
New York City time, on the date that is three Business Days after the date of
this Agreement, if the Closing Date shall not have occurred by such time.


 





















 


(b)                                 Borrowing
Mechanics for Loans.  Borrower shall
deliver to the Agent a fully executed Notice of Borrowing no later than 11:00
a.m. (New York City time) one (1) Business Day prior to the Closing Date.  Promptly upon receipt by the Agent of such Notice
of Borrowing, the Agent shall notify each Lender of the proposed
borrowing.  Each Lender shall make its
Loan available to the Agent not later than 12:00 p.m. (New York City time) on
the Closing Date, by wire transfer of same day funds in Dollars, at the Agent’s
Principal Office.  Upon satisfaction or
waiver of the conditions precedent specified herein, the Agent shall make the
proceeds of the Loans available to Borrower on the Closing Date by causing an
amount of same day funds in Dollars equal to the proceeds of all such Loans
received by the Agent from the Lenders to be credited to the account of Borrower
at the Agent’s Principal Office or to such other account as may be designated
in writing to the Agent by Borrower.


 


1.2.                            Evidence
of Debt; Register; Lenders’ Books and Records; Notes.


 


(a)                                 Lenders’
Evidence of Debt.  Each Lender shall
maintain on its internal records an account or accounts evidencing the
Obligations of Borrower to such Lender, including the amounts of the Loans made
by it and each repayment and prepayment in respect thereof.  Any such recordation shall be prima facie
evidence of the matters so recorded; provided that
the failure to make any such recordation, or any error in such recordation,
shall not affect any Lender’s Commitments or Borrower’s Obligations in respect
of any Loans.


 


(b)                                 Register.  The Agent shall, on behalf of Borrower,
maintain at its Principal Office a register for the recordation of the names
and addresses of Lenders and the Commitments and Loans of each Lender from time
to time (the “Register”).  The
Register shall be available for inspection by Borrower or any Lender at any
reasonable time and from time to time upon reasonable prior notice.  The Agent shall record in the Register the
Commitments and the Loans, the Type of Loan thereof and, if applicable, the
Interest Period applicable thereto, each repayment or prepayment in respect of
the principal amount of the Loans and each assignment thereof pursuant to Section
9.4(c), and any such recordation shall be prima facie evidence of the
matters so recorded; provided
failure to make any such recordation, or any error in such recordation, shall
not affect Borrower’s Obligations in respect of any Loan.  Borrower hereby designates DBTCA to serve as
Borrower’s representative solely for purposes of maintaining the Register as
provided in this Section 1.2(b), and Borrower hereby agrees that, to the
extent DBTCA serves in such capacity, DBTCA and its Related Parties shall
constitute “Indemnitees.”


 


(c)                                  Notes.  If so requested by any Lender by written
notice to Borrower (with a copy to the Agent) at least two Business Days prior
to the Closing Date, or at any time thereafter, Borrower shall execute and
deliver to such Lender (and/or, if applicable and if so specified in such notice,
to any Person who is an assignee of such Lender pursuant to Section 9.4(c))
on the Closing Date (or, if such notice is delivered after the Closing Date,
promptly after Borrower’s receipt of such notice) a Note or Notes to evidence
such Lender’s Loan.


 


2





















 


1.3.                            Interest
on Loans.


 


(a)                                 Except
as otherwise set forth herein, the Loans shall bear interest on the unpaid
principal amount thereof from the date made through repayment (whether by
acceleration or otherwise) thereof as follows:


 


(A)            if an ABR Loan, at the
Alternative Base Rate plus the Applicable Margin; and


 


(B)            if a Eurodollar Loan,
at the Adjusted Eurodollar Rate plus the Applicable Margin.


 


The basis for
determining the rate of interest with respect to any Loan and the Interest
Period with respect to any Eurodollar Loan shall be selected by Borrower and
notified to the Agent and Lenders pursuant to the applicable Notice of
Borrowing or Notice of Conversion/Continuation, as the case may be; provided (i) unless otherwise agreed by the Administrative
Agent, the Loans initially shall be made as ABR Loans until the date which is
five (5) Business Days following the Closing Date and (ii) until the date that
the Administrative Agent notifies Borrower that the primary syndication of the
Loans has been completed, as determined by the Administrative Agent, the Loans
shall be maintained as either (1) Eurodollar Loans having an Interest Period of
no longer than one month or (2) ABR Loans.


 


(b)                                 If
on any day a Loan is outstanding with respect to which a Notice of Borrowing or
Notice of Conversion/Continuation has not been delivered to the Agent in
accordance with the terms hereof specifying the applicable basis for determining
the rate of interest, then for that day such Loan shall be an ABR Loan.


 


(c)                                  In
connection with Eurodollar Loans there shall be no more than 4 (four) Interest
Periods outstanding at any time.  In the
event Borrower fails to specify between an ABR Loan or a Eurodollar Loan in the
applicable Notice of Borrowing or Notice of Conversion/Continuation (or, in the
case of the conversion or continuation of a Loan, fails to deliver a Notice of
Conversion/Continuation with respect thereto), such Loan (if outstanding as a
Eurodollar Loan) will be automatically converted into an ABR Loan on the last
day of the then current Interest Period for such Loan (or if outstanding as an
ABR Loan will remain as, or (if not then outstanding) will be made as, an ABR
Loan).  In the event Borrower fails to
specify an Interest Period for any Eurodollar Loan in the applicable Notice of
Borrowing or Notice of Conversion/Continuation, Borrower shall be deemed to
have selected an Interest Period of one month. 
As soon as practicable after 10:00 a.m. (New York City time) on each
Interest Rate Determination Date, the Agent shall determine (which determination
shall, absent manifest error, be final, conclusive and binding upon all
parties) the interest rate that shall apply to the Eurodollar Loans for which
an interest rate is then being determined for the applicable Interest Period
and shall promptly give notice thereof (in writing or by telephone confirmed in
writing) to Borrower and each Lender.


 


(d)                                 Interest
payable pursuant to Section 1.7(a) shall be computed (i) in the case of
ABR Loans, on the basis of a 365/366-day year for the actual number of days
elapsed


 


3





















 


in the period during which such interest accrues, and (ii) in the case
of Eurodollar Loans, on the basis of a 360-day year for the actual number of
days elapsed in the period during which it accrues.  In computing interest on any Loan, the date
of the making of such Loan or the first day of an Interest Period applicable to
such Loan or, with respect to an ABR Loan being converted from a Eurodollar
Loan, the date of conversion of such Eurodollar Loan to such ABR Loan, as the
case may be, shall be included, and the date of payment of such Loan or the
expiration date of an Interest Period applicable to such Loan or, with respect
to an ABR Loan being converted to a Eurodollar Loan, the date of conversion of
such ABR Loan to such Eurodollar Loan, as the case may be, shall be excluded; provided if a Loan is repaid on the same day on which it is
made, one day’s interest shall be paid on that Loan.


 


(e)                                  Except
as otherwise set forth herein, interest on each Loan shall be payable in
arrears on and to (i) each Interest Payment Date; (ii) upon any prepayment of
that Loan, whether voluntary or mandatory, to the extent accrued on the amount
being prepaid; and (iii) at maturity, including the Maturity Date.


 


1.4.                            Conversion/Continuation.


 


(a)                                 Subject
to Section 1.14 and so long as (x) no Event of Default shall have
occurred and then is continuing, Borrower shall have the option:


 


(i)                                     to
convert at any time all or any part of any Loan equal to $5,000,000 and
integral multiples of $1,000,000 in excess of that amount from one Type of Loan
to another Type of Loan; provided a
Eurodollar Loan may only be converted on the expiration of the Interest Period
applicable to such Eurodollar Loan unless Borrower shall pay all amounts due
under Section 1.14 in connection with any such conversion; or


 


(ii)                                  upon
the expiration of any Interest Period applicable to any Eurodollar Loan, to
continue all or any portion of such Loan equal to $1,000,000 and integral
multiples of $1,000,000 in excess of that amount as a Eurodollar Loan.


 


(b)                                 In
order to exercise any conversion option pursuant to Section 1.4(a)(i) or
continuation option pursuant to Section 1.4(a)(ii), Borrower shall
deliver a Notice of Conversion/Continuation to the Agent no later than 1:00 p.m.
(New York City time) at least one Business Day in advance of the proposed
conversion date (in the case of a conversion to an ABR Loan) and at least three
Business Days in advance of the proposed conversion/continuation date (in the
case of a conversion to, or a continuation of, a Eurodollar Loan).  Except as otherwise provided herein, a Notice
of Conversion/Continuation for conversion to, or continuation of, any
Eurodollar Loans shall be irrevocable on and after the related Interest Rate
Determination Date, and Borrower shall be bound to effect a conversion or continuation
in accordance therewith.  If Borrower
shall fail to give any required notice as described in Section 1.4(a) or
if such continuation is not permitted pursuant thereto, such Loans


 


4





















 


shall be automatically converted to ABR Loans on the last day of such
then expiring Interest Period.


 


1.5.                            Default
Interest.  Upon the occurrence and
during the continuance of an Event of Default under Section 6.1(a), the
principal amount of all Loans outstanding and any interest payments on the
Loans or any fees or other amounts owed hereunder shall thereafter bear interest
(including post-petition interest in any proceeding under the Bankruptcy Code
or other applicable bankruptcy laws) payable on demand at a rate that is equal
to the lesser of (a) 2.0% per annum in excess of the interest rate otherwise
payable hereunder with respect to the applicable Loans (or, in the case of any
such fees and other amounts, at a rate which is 2.0% per annum in excess of the
interest rate otherwise payable hereunder for ABR Loans) and (b) the maximum
rate of interest permitted under applicable law; provided
in the case of Eurodollar Loans, upon the expiration of the Interest Period in
effect at the time any such increase in interest rate is effective such
Eurodollar Loans shall thereupon become ABR Loans and shall thereafter bear
interest payable upon demand at a rate which is equal to the lesser of (i) 2.0%
per annum in excess of the interest rate otherwise payable hereunder for ABR
Loans and (ii) the maximum rate of interest permitted under applicable
law.  Payment or acceptance of the
increased rates of interest provided for in this Section 1.5 is not a
permitted alternative to timely payment and shall not constitute a waiver of
any Event of Default or otherwise prejudice or limit any rights or remedies of
the Agent or any Lender.


 


1.6.                            Fees
  Borrower agrees to pay to Agent and
Deutsche Bank Securities Inc. such fees in the amounts and at the times
separately agreed upon.  Once paid, none
of the fees referred to in this Section 1.6 shall be refundable under
any circumstances.


 


1.7.                            Repayments.  The Loans and all other amounts owed
hereunder with respect thereto, shall, in any event, be paid in full no later
than the Maturity Date.


 


1.8.                            Prepayments
and Repayment Premiums.


 


(a)                                 Voluntary
Prepayments.


 


(i)                                     At
any time and from time to time:


 


(A)            with respect to ABR
Loans, Borrower may prepay any such Loans on any Business Day in whole or in
part; provided that each partial prepayment
shall be in an aggregate minimum amount of $1,000,000 and integral multiples of
$1,000,000 in excess of that amount; and


 


(B)            with respect to
Eurodollar Loans, Borrower may prepay any such Loans on any Business Day in
whole or in part; provided that each partial
prepayment shall be in an aggregate minimum amount of $1,000,000 and integral
multiples of $1,000,000 in excess of that amount.


 


5





















 


(ii)                                  All
such prepayments shall be made:


 


(A)            upon not less than one
Business Day’s prior written or telephonic notice in the case of ABR Loans; and


 


(B)            upon not less than three
Business Days’ prior written or telephonic notice in the case of Eurodollar
Loans,


 


in each case
given to the Agent by 1:00 p.m. (New York City time) on the date required and,
if given by telephone, promptly confirmed in writing to the Agent (and the Agent
will promptly transmit such telephonic or original notice for Loans by
facsimile or telephone to each applicable Lender).  Upon the giving of any such notice, the
principal amount of the Loans specified in such notice shall become due and
payable on the prepayment date specified therein.  Any such voluntary prepayment shall be
applied as specified in Sections 1.10 and 1.11.


 


(b)                                 Repayment
Premium.  In the event that the Loans
are prepaid or repaid pursuant to Section 1.8(a) , Section 1.9(a), (b) or (d) or Section 1.18 in whole
or in part prior to the two-year anniversary of the Closing Date, Borrower
shall pay to the Lenders a repayment premium (expressed as a percentage of the
principal amount of Loans prepaid or repaid) on the amount so prepaid or repaid
in the amount set forth opposite the time period below in which such prepayment
or repayment occurs:


 




	
  Period

  	
   

  	
  Repayment

  Premium

  	
   

  
	
  Following the Closing Date but on or prior
  to the one year anniversary of the Closing Date

  	
   

  	
  2.0

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Following the one-year anniversary of the
  Closing Date but prior to the two-year anniversary of the Closing Date

  	
   

  	
  1.0

  	
  %

  






 


1.9.                            Mandatory
Prepayments.  The Loans shall be
repaid in the manner provided in Sections 1.9(a) through 1.9(e)
below (together with any repayment premium required in accordance with Section
1.8(b)):


 


(a)                                 Not
later than the third Business Day following the completion of any Specified
Asset Disposition or the occurrence of any Specified Recovery Event, Borrower
shall apply 100% of the Net Proceeds received with respect thereto to prepay
outstanding Loans in accordance with Section 1.10; provided
that (x) the Net Proceeds from any Specified Asset Disposition or
Specified Recovery Event shall not be required to be applied as provided herein
on such date if and to the extent that Borrower delivers an officers’
certificate to the Agent within three Business Days after the date


 


6





















 


of such Specified Asset Disposition or Specified Recovery Event stating
that the Net Proceeds therefrom shall be reinvested in capital assets of
Borrower or any of its Subsidiaries in each case within 180 days following the
date of such Specified Asset Disposition or such Specified Recovery Event
(which certificate shall set forth the estimates of the proceeds to be so expended),
and (y) if all or any portion of such Net Proceeds not so applied as
provided herein is not allocated to reinvestment in respect of a project that
shall have been commenced, and for which binding contractual commitments have
been entered into to be completed within 180 days after such 180-day period,
prior to the end of such 180-day period, such remaining portion shall be
applied on the last day of such period (or if any Net Proceeds allocated to
such an investment on such 180th day shall cease to be so allocated
or any such contractual commitment shall cease to be in effect and
contractually committed or shall not actually have been so expended on or prior
to the 180th day following such 180 day period, such remaining
portion shall be applied on the date it ceases to be so allocated and
contractually committed or on the 181st day following such 180-day
period) as specified in this Section 1.9(a); provided,
further, that to the extent any such Net
Proceeds are applied to a permanent repayment of Indebtedness (with a corresponding
reduction in the commitments) permitted by Section 3.1(d), such Net
Proceeds shall not be required to be applied pursuant to this Section 1.9(a).


 


(b)                                 In
the event that Borrower or any of its Subsidiaries shall receive Net Proceeds
from the issuance or other incurrence of Indebtedness by Borrower or any of its
Subsidiaries pursuant to Section 3.1(i) in excess of $25,000,000
for all such Indebtedness issued during the term of this Agreement, Borrower
shall, substantially simultaneously with (and in any event not later than the
third Business Day next following) the receipt of such Net Proceeds by Borrower
or such Subsidiary, apply an amount equal to 100% of such Net Proceeds to
prepay outstanding Loans in accordance with Section 1.10.


 


(c)                                  In
the event that Borrower’s Leverage Ratio as of the last day of any Excess Cash
Flow Period of Borrower exceeds 4.00:1.00, then no later than the earlier of
(i) 90 days after the end of such Excess Cash Flow Period, commencing
with the Excess Cash Flow Period ending on June 30, 2006, and (ii) the
date on which the financial statements with respect to the Fiscal Year ending
on the last day of such Excess Cash Flow Period are delivered pursuant to Section
4.4(c), Borrower shall prepay outstanding Loans in accordance with Section
1.10, in an aggregate principal amount equal to 50% of Excess Cash Flow for
such Excess Cash Flow Period.


 


(d)                                 In
the event that, without duplication, Borrower shall receive Net Proceeds from
any Specified Equity Issuance, Borrower shall, not later than the third
Business Day next following the date of receipt of such Net Proceeds, apply an
amount equal to 100% of such Net Proceeds to prepay outstanding Loans in
accordance with Section 1.10; provided that
to the extent any such Net Proceeds are applied to a permanent repayment of
Indebtedness (with a corresponding reduction in the


 


7





















 


commitments) permitted by Section 3.1(d), such Net Proceeds shall
not be required to be applied pursuant to this Section 1.9(d)..


 


(e)                                  Borrower
shall deliver to the Agent, at the time of each prepayment required under this Section
1.9, (i) a certificate signed by a Responsible Officer of Borrower setting
forth in reasonable detail the calculation of the amount of such prepayment and
(ii) to the extent practicable, at least three days’ prior written notice
of such prepayment.  Each notice of
prepayment shall specify the prepayment date and the principal amount of each
Loan (or portion thereof) to be prepaid. 
In the event that Borrower shall subsequently determine that the actual
amount received exceeded the amount set forth in such certificate, Borrower
shall promptly make an additional prepayment of the Loans in an amount equal to
such excess, and Borrower shall concurrently therewith deliver to the Agent a
certificate of a Responsible Officer of Borrower demonstrating the derivation
of such excess.


 


1.10.                     Application
of Prepayments.  Any prepayment of
any Loans pursuant to Section 1.8 or Section 1.9 shall, subject
to Section 1.11, be applied to prepay the Loans on a pro rata basis to
the full extent thereof.


 


1.11.                     Application
of Prepayments of Loans to ABR Loans and Eurodollar Rate Loans.  Any prepayment of Loans shall be applied
first to any outstanding ABR Loans to the full extent thereof before application
to Eurodollar Loans, in each case in a manner which minimizes the amount of any
payments required to be made by Borrower pursuant to Section 1.14(c).


 


1.12.                     General
Provisions Regarding Payments.


 


(a)                                 All
payments by Borrower of principal, interest, fees and other Obligations shall
be made in Dollars in same day funds, without defense, setoff or counterclaim,
free of any restriction or condition, and delivered to the Agent not later than
12:00 p.m. (New York City time) on the date due at the Agent’s Principal Office
for the account of the Lenders.


 


(b)                                 All
payments in respect of the principal amount of any Loan shall be accompanied by
payment of accrued interest and any required repayment premium pursuant to Section
1.8(b) on the principal amount being repaid or prepaid.


 


(c)                                  The
Agent shall promptly distribute to each Lender at such address as such Lender
shall indicate in writing, such Lender’s applicable Pro Rata Share of all
payments and prepayments of principal and interest due hereunder, together with
all other amounts due with respect thereto, including, without limitation, all
fees payable with respect thereto (or, to the extent any such amounts are paid
with respect to any such Lender’s interests individually, the Agent shall
promptly distribute to such Lender such amounts), to the extent received by the
Agent.


 


8





















 


(d)                                 Notwithstanding
the foregoing provisions hereof, if any Notice of Conversion/Continuation is
withdrawn as to any Affected Lender or if any Affected Lender makes ABR Loans
in lieu of its Pro Rata Share of any Eurodollar Rate Loans, the Agent shall
give effect thereto in apportioning payments received thereafter.


 


(e)                                  Subject
to the provisos set forth in the definition of “Interest Period”, whenever any
payment to be made hereunder shall be stated to be due on a day that is not a
Business Day, such payment shall be made on the next succeeding Business Day
and such extension of time shall be included in the computation of the payment
of interest hereunder.


 


(f)                                   Borrower
hereby authorizes the Agent to charge Borrower’s accounts with the Agent in
order to cause timely payment to be made to the Agent of all principal,
interest, fees and expenses due hereunder (subject to sufficient funds being
available in its accounts for that purpose).


 


(g)                                  The
Agent shall deem any payment by or on behalf of Borrower hereunder that is not
made in same day funds prior to 1:00 p.m. (New York City time) at the Agent’s
Principal Office to be a non-conforming payment.  Any such payment shall not be deemed to have
been received by the Agent until the later of (i) the time such funds become
available funds, and (ii) the applicable next Business Day.  The Agent shall give prompt telephonic notice
to Borrower and each applicable Lender (confirmed in writing) if any payment is
non-conforming.  Any non-conforming
payment may constitute or become a Default or Event of Default in accordance
with the terms of Section 6.  Interest
shall continue to accrue on any principal as to which a non-conforming payment
is made until such funds become available funds (but in no event less than the
period from the date of such payment to the next succeeding applicable Business
Day) at the rate determined pursuant to Section 1.5 from the date such
amount was due and payable until the date such amount is paid in full.


 


(h)                                 If
an Event of Default shall have occurred and not otherwise been waived, and the
maturity of the Obligations shall have been accelerated pursuant to Section
6, all payments or proceeds received by the Agent hereunder in respect of
any of the Obligations shall be applied in accordance with Section 6.4.


 


1.13.                     Ratable
Sharing.  Except to the extent that
this Agreement or any other Loan Document provides for payments to be allocated
to a particular Lender or Lenders (and except as provided in the Collateral
Documents with respect to amounts realized from the exercise of rights with
respect to Liens on the Collateral), the Lenders hereby agree among themselves
that if any of them shall, whether by voluntary payment (other than a voluntary
prepayment of Loans made and applied in accordance with the terms hereof),
through the exercise of any right of set off or banker’s lien, by counterclaim
or cross-action or by the enforcement of any right under the Loan Documents or
otherwise, or as adequate protection of a deposit treated as cash collateral
under the Bankruptcy Code, receive payment or reduction of a proportion of the
aggregate amount of principal, interest, fees and other amounts then due and
owing to such Lender hereunder or under the other Loan Documents (collectively,
the


 


9





















 


“Aggregate Amounts Due”
to such Lender) which is greater than the proportion received by any other
Lender in respect of the Aggregate Amounts Due to such other Lender, then the
Lender receiving such proportionately greater payment shall (a) notify the
Agent and each other Lender of the receipt of such payment and (b) apply a
portion of such payment to purchase participations (which it shall be deemed to
have purchased from each seller of a participation simultaneously upon the
receipt by such seller of its portion of such payment) in the Aggregate Amounts
Due to the other Lenders so that all such recoveries of Aggregate Amounts Due
shall be shared by all Lenders in proportion to the Aggregate Amounts Due to
them; provided if all or part of such
proportionately greater payment received by such purchasing Lender is
thereafter recovered from such Lender upon the bankruptcy or reorganization of
Borrower or otherwise, those purchases shall be rescinded and the purchase
prices paid for such participations shall be returned to such purchasing Lender
ratably to the extent of such recovery, but without interest.  Borrower expressly consents to the foregoing
arrangement and agrees that any holder of a participation so purchased may exercise
any and all rights of banker’s lien, set off or counterclaim with respect to
any and all monies owing by Borrower to that holder with respect thereto as
fully as if that holder were owed the amount of the participation held by that
holder.  The provisions of this Section
1.13 shall be subject to the terms of the Intercreditor Agreement.


 


1.14.                     Making or
Maintaining Eurodollar Rate Loans.


 


(a)                                 Inability
to Determine Applicable Interest Rate. 
In the event that (x) the Agent shall have determined (which
determination shall be final and conclusive and binding upon all parties
hereto), on any Interest Rate Determination Date with respect to any Eurodollar
Loans, that by reason of circumstances affecting the London interbank market adequate
and fair means do not exist for ascertaining the interest rate applicable to
such Loans on the basis provided for in the definition of “Adjusted Eurodollar
Rate”, or (y) prior to the commencement of any Interest Period with respect to
Eurodollar Loans the Agent is advised by the Requisite Lenders that the Adjusted
Eurodollar Rate for such Interest Period will not adequately and fairly reflect
the cost to such Lenders of making or maintaining such Eurodollar Loans for
such Interest Period, the Agent shall on such date give notice (by facsimile or
by telephone confirmed in writing) to Borrower and each Lender of such
determination, whereupon (i) no Loans may be made as, or converted to,
Eurodollar Loans until such time as the Agent notifies Borrower and Lenders
that the circumstances giving rise to such notice no longer exist, and (ii) any
Notice of Borrowing or Notice of Conversion/Continuation given by Borrower with
respect to the Loans in respect of which such determination was made shall be
deemed to be rescinded by Borrower.


 


(b)                                 Illegality
or Impracticability of Eurodollar Loans. 
In the event that on any date any Lender shall have determined (which
determination shall be final and conclusive and binding upon all parties hereto
but shall be made only after consultation with Borrower and the Agent) that the
making, maintaining or continuation of its Eurodollar Loans (i) has become
unlawful as a result of compliance by such Lender in good faith with any law,
treaty, governmental rule, regulation, guideline or order (or would conflict
with any such treaty, governmental


 


10





















 


rule, regulation, guideline or order not having the force of law even
though the failure to comply therewith would not be unlawful), or (ii) has
become impracticable, as a result of contingencies occurring after the date
hereof which materially and adversely affect the London interbank market or the
position of such Lender in that market, then, and in any such event, such
Lender shall be an “Affected Lender” and it shall on that day give
notice (by facsimile or by telephone confirmed in writing) to Borrower and the
Agent of such determination (which notice the Agent shall promptly transmit to
each other Lender).  Thereafter (1) the obligation
of the Affected Lender to make Loans as, or to convert Loans to, Eurodollar
Loans shall be suspended until such notice shall be withdrawn by the Affected
Lender, (2) to the extent such determination by the Affected Lender relates to
a Eurodollar Loan then being requested by Borrower pursuant to a Notice of
Borrowing or a Notice of Conversion/Continuation, the Affected Lender shall
make such Loan as (or continue such Loan as or convert such Loan to, as the
case may be) an ABR Loan, (3) the Affected Lender’s obligation to maintain its
outstanding Eurodollar Loans (the “Affected Loans”) shall be terminated
at the earlier to occur of the expiration of the Interest Period then in effect
with respect to the Affected Loans or when required by law, and (4) the
Affected Loans shall automatically convert into ABR Loans on the date of such
termination.  Notwithstanding the foregoing,
to the extent a determination by an Affected Lender as described above relates
to a Eurodollar Loan then being requested by Borrower pursuant to a Notice of
Borrowing or a Notice of Conversion/Continuation, Borrower shall have the
option, subject to the provisions of Section 1.14(c), to rescind such
Notice of Borrowing or Notice of Conversion/Continuation as to all Lenders by
giving notice (by facsimile or by telephone confirmed in writing) to the Agent
of such rescission on the date on which the Affected Lender gives notice of its
determination as described above (which notice of rescission the Agent shall
promptly transmit to each other Lender). 
Except as provided in the immediately preceding sentence, nothing in
this Section 1.14(b) shall affect the obligation of any Lender other
than an Affected Lender to make or maintain Loans as, or to convert Loans to,
Eurodollar Loans in accordance with the terms hereof.


 


(c)                                  Indemnity
for Breakage or Non-Commencement of Interest Periods.  Borrower shall indemnify each Lender against
any loss or expense that such Lender may sustain or incur as a consequence of
(i) any event, other than a default by such Lender in the performance of
its obligations hereunder, which results in (A) such Lender receiving or being
deemed to receive any amount on account of the principal of any Eurodollar Loan
prior to the end of the Interest Period in effect therefor, (B) the conversion
of any Eurodollar Loan to an ABR Loan, or the conversion of the Interest Period
with respect to any Eurodollar Loan, in each case other than on the last day of
the Interest Period in effect therefor, or (C) a borrowing of any Eurodollar
Loan does not occur on a date specified therefor in a Notice of Borrowing or a
conversion to or continuation of any Eurodollar Loan does not occur on a date
specified therefor in a Notice of Conversion/Continuation (any of the events
referred to in this clause (i) being called a “Breakage Event”) or
(ii) any default in the making of any payment or prepayment required to be
made hereunder.  In the case of any
Breakage Event, such loss shall include an amount equal to the excess, as
reasonably determined by such Lender, of (A) its cost of obtaining funds for
the Eurodollar Loan that is the subject of such Breakage Event for the


 


11





















 


period from the date of such Breakage Event to the last day of the
Interest Period in effect (or that would have been in effect) for such Loan
over (B) the amount of interest likely to be realized by such Lender in
redeploying the funds released or not utilized by reason of such Breakage Event
for such period.  A certificate of any
Lender setting forth in reasonable detail the calculation of any amount or amounts
which such Lender is entitled to receive pursuant to this Section 1.14(c)
shall be delivered to Borrower and shall be conclusive absent manifest error.


 


1.15.                     Reserve
Requirements; Change in Circumstances.


 


(a)                                 Notwithstanding
any other provision of this Agreement, 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 or the Agent (except any such reserve requirement which is reflected
in the Adjusted Eurodollar Rate);


 


(ii)                                  subject
any Lender to any tax of any kind whatsoever with respect to this Agreement or
any Eurodollar Loan made by it, or change the basis of taxation of payments to
such Lender in respect thereof (except for Indemnified Taxes or Other Taxes covered by Section 1.16 and the imposition of, or
any change in the rate of, any Excluded Taxes payable by such Lender); or


 


(iii)                               impose
on any Lender or the Agent or the London interbank market any other condition
affecting this Agreement or Eurodollar Loans made by such Lender;


 


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 any Lender or the Agent or to reduce
the amount of any sum received or receivable by such Lender hereunder (whether
of principal, interest or otherwise) by an amount deemed by such Lender or the
Agent to be material, then Borrower will pay to such Lender or the Agent, as
the case may be, upon demand such additional amount or amounts as will compensate
such Lender for such additional costs incurred or reduction suffered.


 


(b)                                 If
any Lender or the Agent shall have determined that any Change in Law regarding
capital adequacy has or would have the effect of reducing the rate of return on
such Lender’s or the Agent’s capital or on the capital of such Lender’s or the
Agent’s holding company, if any, as a consequence of this Agreement or the
Loans made by such Lender to a level below that which such Lender or the Agent
or such Lender’s or the Agent’s holding company could have achieved but for
such Change in Law (taking into consideration such Lender’s or the Agent’s policies
and the policies of such Lender’s or the Agent’s holding company with respect
to capital adequacy), then from time to time Borrower shall pay to such


 


12





















 


Lender or the Agent, as the case may be, such additional amount or
amounts as will compensate such Lender or the Agent or such Lender’s or the
Agent’s holding company for any such reduction suffered.


 


(c)                                  A
certificate of a Lender or the Agent setting forth a calculation in reasonable
detail of the amount or amounts necessary to compensate such Lender or the
Agent or its holding company, as applicable, as specified in Section 1.15(a)
or (b) shall be delivered to Borrower and shall be conclusive absent
manifest error.  Borrower shall pay such
Lender or the Agent, as the case may be, the amount or amounts shown as due on
any such certificate delivered by it within 10 days after its receipt of
the same.


 


(d)                                 Failure
or delay on the part of any Lender or the Agent to demand compensation pursuant
to this Section 1.15 shall not constitute a waiver of such Lender’s or
the Agent’s right to demand such compensation; provided
that Borrower shall not be under any obligation to compensate any Lender or the
Agent under clause (a) or (b) of this Section 1.15 for increased costs
or reductions with respect to any period prior to the date that is more than
180 days prior to such request if such Lender or the Agent knew or could reasonably
have been expected to know of the circumstances giving rise to such increased
costs or reductions and of the fact that such circumstances would result in a
claim for increased compensation by reason of such increased costs or
reductions; provided, further,
that the foregoing limitation shall not apply to any increased costs or
reductions arising out of the retroactive application of any Change in Law
within such 180-day period.  The
protection of this Section 1.15 shall be available to each Lender and
the Agent regardless of any possible contention of the invalidity or
inapplicability of the Change in Law that shall have occurred or been imposed.


 


1.16.                     Taxes.


 


(a)                                 Any
and all payments by or on account of any obligation of Borrower or any other
Credit Party hereunder or under any other Loan Document shall be made free and
clear of and without deduction for any Indemnified Taxes or Other Taxes; provided that if any Indemnified Taxes or Other Taxes are
required to be withheld or deducted from such payments, then (i) the sum
payable by Borrower shall be increased as necessary so that after making all
required deductions or withholdings (including deductions or withholdings
applicable to additional sums payable under this Section 1.16) the Agent
or Lender (as the case may be) receives an amount equal to the sum it would
have received had no such deductions been made, (ii) Borrower or such
other Credit Party shall make (or cause to be made) such deductions and
(iii) Borrower or such other Credit Party shall pay (or cause to be paid)
the full amount deducted to the relevant Governmental Authority in accordance
with applicable law.  In addition,
without limiting the foregoing provisions, Borrower or any other Credit Party
hereunder shall pay (or cause to be paid) any Other Taxes to the relevant Governmental
Authority in accordance with applicable law. 
The obligation of Borrower or any other Credit Party to a Foreign Lender
under this Section 1.16(a) is subject to the Foreign Lender’s compliance
with the obligation imposed on such Foreign Lender in Section 1.16(d)
below.


 


13





















 


(b)                                 Borrower
shall indemnify the Agent and each Lender, within 10 days after written demand
therefor, for the full amount of any Indemnified Taxes or Other Taxes paid by
the Agent or such Lender, as the case may be, or any of their respective Affiliates,
on or with respect to any payment by or on account of any obligation of
Borrower or any Credit Party 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 1.16) and any
penalties, interest and expenses arising therefrom or with respect thereto
(other than penalties or interest attributable to (i) a failure or delay by the
Agent or such Lender, as applicable, in making such written demand to Borrower
or (ii) the gross negligence or willful misconduct of the Agent or such Lender,
as applicable (in each case, as determined by a final and nonappealable
decision of a court of competent jurisdiction)), whether or not such
Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted
by the relevant Governmental Authority. 
A certificate as to the amount of such payment or liability delivered to
Borrower by a Lender, or by the Agent on its behalf or on behalf of a Lender,
shall be conclusive absent manifest error.


 


(c)                                  As
soon as practicable (and in any event within 30 days) after any payment of
Indemnified Taxes or Other Taxes by Borrower or any other Credit Party to a
Governmental Authority, Borrower shall deliver (or cause to be delivered) to
the 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
Agent.


 


(d)                                 Any
Foreign Lender that is entitled to an exemption from or reduction of
withholding tax under the law of the jurisdiction in which Borrower is located,
or any treaty to which such jurisdiction is a party, with respect to payments
under this Agreement shall deliver to Borrower (with a copy to the Agent), at
the reasonable written request of Borrower, such properly completed and
executed documentation prescribed by applicable law as will permit such
payments to be made without withholding or at a reduced rate of withholding; provided that such Lender is legally entitled to complete,
execute and deliver such documentation. 
In addition, any Lender, if requested by Borrower or the Agent, shall
deliver such other documentation prescribed by applicable law or reasonably
requested by Borrower or the Agent as will enable Borrower or the Agent to
determine whether or not such Lender is subject to backup withholding or information
reporting requirements.  Without limiting
the generality of the foregoing, any Foreign Lender shall deliver to Borrower
and the Agent (in such number of copies as shall be requested by the recipient)
on or prior to the date on which such Foreign Lender becomes a Lender under
this Agreement (and from time to time thereafter upon request of Borrower or
the Agent, but only if such Foreign Lender is legally entitled to do so),
whichever of the following is applicable: 
(i) two accurate and complete originally executed U.S. IRS Form
W-8BEN (or successor form) or (ii) an accurate and complete U.S. IRS Forms
W-8ECI (or successor form), certifying, in either case, to such Foreign Lender’s
legal entitlement to an exemption from or reduction in U.S. federal withholding
tax with respect to all interest payments hereunder; provided
that any Foreign Lender that is not a “bank” within the meaning of Section 881(c)(3)(A)
of the IRC and is relying on the so-called “portfolio


 


14





















 


interest exemption” shall also furnish a “Non-Bank Certificate” in the
form of Exhibit 1.16(d) together with two accurate and complete
originally executed U.S. IRS Forms W-8BEN (or successor form) and such other
documentation reasonably requested by Borrower to establish that such Lender is
not subject to deduction or withholding of United States federal income tax
with respect to any payments to such Lender of interest payable under this Agreement
or any other document related thereto.


 


(e)                                  Any
Lender that is a United States person, as defined in Section 7701(a)(30) of the
IRC, and is not an exempt recipient within the meaning of Treasury Regulations
Section 1.6049-4(c) shall deliver to Borrower (with a copy to the Agent), at
the time or times prescribed by applicable law or reasonably requested by
Borrower, two accurate and complete original signed copies of IRS Form W-9, or
any successor form that such person is entitled to provide at such time in
order to comply with United States backup withholding requirements.


 


(f)                                   If
the Agent or a Lender determines, in its sole discretion, that it has received
a refund of any Taxes or Other Taxes as to which it has been indemnified by
Borrower or with respect to which Borrower has paid additional amounts pursuant
to this Section 1.16, it shall pay to Borrower an amount equal to such
refund (but only to the extent of indemnity payments made, or additional
amounts paid, by Borrower under this Section 1.16 with respect to the
Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket
expenses of the Agent or such Lender, as the case may be, and without interest
(other than any interest paid by the relevant Governmental Authority with
respect to such refund); provided that
Borrower, upon the request of the Agent or such Lender, agrees to repay the
amount paid over to Borrower (plus any penalties, interest or other charges
imposed by the relevant Governmental Authority) to the Agent or such Lender in
the event the Agent or such Lender is required to repay such refund to such
Governmental Authority.  This Section
1.16(f) shall not be construed to require the Agent or any Lender to make
available its tax returns (or any other information relating to its taxes that
it deems confidential) to Borrower or any other Person.


 


(g)                                  Without
prejudice to the survival of any other agreement of Borrower hereunder, the
agreements and obligations of Borrower contained in this Section 1.16
shall survive the payment in full of all amounts due hereunder.


 


1.17.                     Obligation
to Mitigate.  Each Lender agrees
that, as promptly as practicable after the officer of such Lender responsible
for administering its Loans becomes aware of the occurrence of an event or the
existence of a condition that would cause such Lender to become an Affected
Lender or that would entitle such Lender to receive payments under Section
1.14, 1.15 or 1.16, it will, to the extent not inconsistent
with the internal policies of such Lender and any applicable legal or
regulatory restrictions, use reasonable efforts to (a) make, fund or maintain
its Loans, including any Affected Loans, through another office of such Lender,
or (b) take such other measures as such Lender may deem reasonable, if as
a result thereof the circumstances which would cause such Lender to be an
Affected Lender would cease to exist or the additional amounts which would otherwise
be required to be paid to such


 


15





















 


Lender pursuant to Section
1.14, 1.15 or 1.16 would be materially reduced and if, as
determined by such Lender in its sole discretion, the making, issuing, funding
or maintaining of such Loans through such other office or in accordance with
such other measures, as the case may be, would not otherwise adversely affect
such Loans or the interests of such Lender; provided such
Lender will not be obligated to utilize such other office pursuant to this Section
1.17 unless Borrower agrees to pay all incremental expenses incurred by
such Lender as a result of utilizing such other office as described in clause
(a) above.  A certificate as to the
amount of any such expenses payable by Borrower pursuant to this Section
1.17 (setting forth in reasonable detail the basis for requesting such
amount) submitted by such Lender to Borrower (with a copy to the Agent) shall
be conclusive absent manifest error.


 


1.18.                     Removal or
Replacement of a Lender.  Anything
contained herein to the contrary notwithstanding, in the event that: (a) (i)
any Lender (an “Increased-Cost Lender”) shall give notice to Borrower
that such Lender is an Affected Lender or that such Lender is entitled to
receive payments under Section 1.14, 1.15 or 1.16, (ii)
the circumstances which have caused such Lender to be an Affected Lender or
which entitle such Lender to receive such payments shall remain in effect, and
(iii) such Lender shall fail to withdraw such notice within five Business Days
after Borrower’s request for such withdrawal; or (b) in connection with any
proposed amendment, modification, termination, waiver or consent with respect
to any of the provisions of this Agreement as contemplated by Section 9.8,
the consent of the Requisite Lenders shall have been obtained but the consent
of one or more of such other Lenders (each a “Non-Consenting Lender”)
whose consent is required shall not have been obtained; then, with respect to
each such Increased-Cost Lender or Non-Consenting Lender (the “Terminated
Lender”), Borrower may, by giving written notice to the Agent and any
Terminated Lender of its election to do so, elect to cause such Terminated
Lender (and such Terminated Lender hereby irrevocably agrees) to assign its
outstanding Loans, in full, to one or more Eligible Assignees (each a “Replacement
Lender”) in accordance with the provisions of Section 9.4(c) and
Borrower shall pay any fees payable thereunder in connection with such assignment;
provided (1) on the date of such
assignment, the Replacement Lender shall pay to the Terminated Lender an amount
equal to the principal of, and all accrued interest on, all outstanding Loans
of the Terminated Lender, together with any repayment premium pursuant to Section
1.8(b) that would be payable were the Loans of such Terminated Lender being
optionally repaid on such date; (2) on the date of such assignment, Borrower
shall pay any amounts payable to such Terminated Lender pursuant to Section
1.14(c), 1.15 or 1.16 or otherwise as if it were a
prepayment; and (3) in the event such Terminated Lender is a Non-Consenting
Lender, each Replacement Lender shall consent, at the time of such assignment,
to each matter in respect of which such Terminated Lender was a Non-Consenting
Lender.  Upon the prepayment of all
amounts owing to any Terminated Lender, such Terminated Lender shall no longer
constitute a “Lender” for purposes hereof (and without any further action
required by such Terminated Lender); provided any
rights of such Terminated Lender to indemnification hereunder shall survive as
to such Terminated Lender.


 


16





















 


SECTION 2.


 


AFFIRMATIVE COVENANTS


 


Borrower agrees that from and after the date
hereof and until the Maturity Date:


 


2.1.                            Compliance
with Laws and Contractual Obligations. 
Borrower will (a) comply with and shall cause each of its
Subsidiaries to comply with (i) the requirements of all applicable laws,
rules, regulations and orders of any Governmental Authority (including, without
limitation, laws, rules, regulations and orders relating to taxes, employer and
employee contributions, securities, employee retirement and welfare benefits
and employee health and safety) as now in effect and which may be imposed in
the future in all jurisdictions in which Borrower or any of its Subsidiaries is
now doing business or may hereafter be doing business; provided
that this clause (i) shall not include environmental protection matters which
shall be governed by Section 2.5 and (ii) the obligations,
covenants and conditions contained in all Contractual Obligations of Borrower
or any of its Subsidiaries other than those arising under the First Lien Credit
Agreement and those laws, rules, regulations, orders and provisions of such Contractual
Obligations the noncompliance with which could not be reasonably expected to
have, either individually or in the aggregate, a Material Adverse Effect, and
(b) maintain or obtain and shall cause each of its Subsidiaries to
maintain or obtain all licenses, qualifications and permits now held or
hereafter required to be held by Borrower or any of its Subsidiaries, for which
the loss, suspension, revocation or failure to obtain or renew, could
reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect.  This Section 2.1
shall not preclude Borrower or its Subsidiaries from contesting any taxes or
other payments, if they are being diligently contested in good faith in a
manner which stays enforcement of any Lien in respect thereof and if
appropriate expense provisions have been recorded in conformity with GAAP,
subject to Section 3.2.  Borrower
represents and warrants that it (i) is in compliance and each of its
Subsidiaries is in compliance with the requirements of all applicable laws,
rules, regulations and orders of any Governmental Authority and the
obligations, covenants and conditions contained in all Contractual Obligations
other than those laws, rules, regulations, orders and provisions of such
Contractual Obligations the noncompliance with which could not be reasonably
expected to have, either individually or in the aggregate, a Material Adverse
Effect, and (ii) maintains and each of its Subsidiaries maintains all
licenses, qualifications and permits referred to above.


 


2.2.                            Insurance;
Damage to or Destruction of Collateral.


 


(a)                                 Borrower
shall, at its sole cost and expense, maintain the policies of insurance
described on Schedule 5.18 as in effect on the date hereof or otherwise
in form and amounts and with insurers reasonably acceptable to Agent.  Such policies of insurance (or the loss
payable and additional insured endorsements delivered to Agent) shall contain
provisions pursuant to which the insurer agrees to provide 30 days prior
written notice to Agent in the event of any non-renewal, cancellation or
amendment of any such insurance policy. 
If Borrower


 


17





















 


at any time or times hereafter shall fail to obtain or maintain any of
the policies of insurance required above or to pay all premiums relating
thereto, Agent may at any time or times thereafter obtain and maintain such
policies of insurance and pay such premiums and take any other action with
respect thereto that Agent deems advisable. 
Agent shall have no obligation to obtain insurance for Borrower or any
Subsidiary or pay any premiums therefor. 
By doing so, Agent shall not be deemed to have waived any Default arising
from Borrower’s failure to maintain such insurance or pay any premiums
therefor.  All sums so disbursed,
including reasonable attorneys’ fees, court costs and other charges related
thereto, shall be payable on demand by Borrower to Agent and shall be
additional Obligations hereunder secured by the Collateral.


 


(b)                                 Borrower
shall deliver to Agent from time to time a report of a reputable insurance
broker, reasonably satisfactory to Agent, with respect to its insurance policies.


 


(c)                                  Borrower
shall deliver to Agent, in form and substance reasonably satisfactory to Agent,
endorsements to (i) all “All Risk” and business interruption insurance naming
Agent, on behalf of itself and Lenders, as loss payee as its interest may
appear, and (ii) all general liability and other liability policies naming
Agent, on behalf of itself and Lenders, as additional insured.  Each Credit Party irrevocably makes, constitutes
and appoints Agent (and all officers, employees or agents designated by Agent),
so long as any Event of Default has occurred and is continuing, as each Credit
Party’s true and lawful agent and attorney-in-fact for the purpose of making,
settling and adjusting claims under such “All Risk” policies of insurance,
endorsing the name of each Credit Party on any check or other item of payment
for the proceeds of such “All Risk” policies of insurance and for making all
determinations and decisions with respect to such “All Risk” policies of
insurance.  Agent shall have no duty to
exercise any rights or powers granted to it pursuant to the foregoing
power-of-attorney.  For the avoidance of
doubt, subject to Section 1.9(a), Borrower shall be entitled to retain
any insurance proceeds received by it so long as no Event of Default is continuing.


 


2.3.                            Inspection;
Lender Meeting.  Borrower and each of
its Subsidiaries shall permit any authorized representatives of Agent to visit,
audit and inspect any of the properties of Borrower and its Subsidiaries,
including its and their financial and accounting records, and to make copies
and take extracts therefrom, and to discuss its and their affairs, finances and
business with its and their officers and certified public accountants, at such
reasonable times during normal business hours and as often as may be reasonably
requested.  Representatives of each
Lender will be permitted to accompany representatives of Agent during each
visit, inspection and discussion referred to in the immediately preceding
sentence.  Without in any way limiting
the foregoing, Borrower and its Subsidiaries will, upon request by Agent,
participate and will cause key management personnel of Borrower and its Subsidiaries
to participate in a meeting with Agent and Lenders once during each year, which
meeting shall be held at such time and such place as may be reasonably
requested by Agent.


 


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2.4.                            Organizational
Existence.  Except as otherwise
permitted by Section 3.6, Borrower will and will cause its Subsidiaries
to at all times preserve and keep in full force and effect its organizational
existence and all rights and franchises material to its business.


 


2.5.                            Environmental
Matters.  Borrower shall and shall
cause each of its Subsidiaries and each other Person within its control to
(a) conduct its operations and keep and maintain its Real Estate in
compliance with all Environmental Laws and Environmental Permits other than
noncompliance that could not reasonably be expected to have a Material Adverse
Effect; (b) implement any and all investigation, remediation, removal and
response actions that are appropriate or necessary to maintain the value and
marketability of the Real Estate or to otherwise comply in all material
respects with Environmental Laws and Environmental Permits pertaining to the
presence, generation, treatment, storage, use, disposal, transportation or Release
of any Hazardous Material on, at, in, under, above, to, from or about any of
its Real Estate; (c) notify Agent promptly after Borrower or any Person
within its control becomes aware of any violation of Environmental Laws or
Environmental Permits or any Release on, at, in, under, above, to, from or
about any Real Estate that is reasonably likely to result in Environmental
Liabilities to Borrower or its Subsidiaries in excess of $500,000; and
(d) promptly forward to Agent a copy of any order, notice, request for
information or any communication or report received by Borrower or any Person
within its control in connection with any such violation or Release or any
other matter relating to any Environmental Laws or Environmental Permits that
could reasonably be expected to result in Environmental Liabilities in excess
of $500,000, in each case whether or not the Environmental Protection Agency or
any Governmental Authority has taken or threatened any action in connection
with any such violation, Release or other matter.  If Agent at any time has a reasonable basis
to believe that there may be a violation of any Environmental Laws or Environmental
Permits by Borrower or any Person under its control or any Environmental
Liability arising thereunder, or a Release of Hazardous Materials on, at, in,
under, above, to, from or about any of its Real Estate, that, in each case,
could reasonably be expected to have a Material Adverse Effect, then Borrower
and its Subsidiaries shall, upon Agent’s written request (i) cause the
performance of such environmental audits including subsurface sampling of soil
and groundwater, and preparation of such environmental reports, at Borrower’s expense,
as Agent may from time to time reasonably request, which shall be conducted by
reputable environmental consulting firms reasonably acceptable to Agent and
shall be in form and substance reasonably acceptable to Agent, and
(ii) permit Agent or its representatives to have access to all Real Estate
for the purpose of conducting such environmental audits and testing as Agent
deems appropriate, including subsurface sampling of soil and groundwater.  Borrower shall reimburse Agent for the costs
of such audits and tests and the same will constitute a part of the Obligations
secured hereunder.


 


2.6.                            Landlords’
Agreements, Mortgagee Agreements, Bailee Letters and Real Estate Purchases.  Unless the Agent shall have waived such
requirement with respect to any property, Borrower shall use reasonable efforts
to obtain a landlord’s agreement, mortgagee agreement or bailee letter, as applicable,
from the lessor of each leased property, mortgagee of owned property or bailee
with respect to any warehouse, processor or converter facility


 


19





















 


or other location where Collateral
is stored or located, which agreement or letter shall contain a waiver or
subordination of all Liens or claims that the landlord, mortgagee or bailee may
assert against the Collateral at that location, and shall otherwise be
reasonably satisfactory in form and substance to Agent.  Borrower shall and shall cause its
Subsidiaries to timely and fully pay and perform their obligations under all
leases and other agreements with respect to each leased location or public
warehouse where any Collateral is or may be located except for such obligations
being diligently contested in good faith and in respect of which, if
appropriate, expense provisions have been recorded in accordance with GAAP.


 


2.7.                            Conduct
of Business.  Borrower shall, and
shall cause its Subsidiaries to, at all times maintain, preserve and protect
all of its assets and properties used or useful in the conduct of their
respective businesses, and keep the same in good repair, working order and
condition in all material respects (taking into consideration ordinary wear and
tear) and from time to time make, or cause to be made, all necessary or
appropriate repairs, replacements and improvements thereto consistent with
industry practices; continue to conduct its business substantially as now
conducted or as otherwise permitted hereunder.


 


2.8.                            Further
Assurances.


 


(a)                                 Each
Credit Party shall, from time to time, execute or authorize the execution of
such guaranties, financing statements, documents, control agreements, security
agreements and reports as Agent or Requisite Lenders at any time may reasonably
request to evidence, perfect or otherwise implement the guaranties and security
for repayment of the Obligations contemplated by the Loan Documents.


 


(b)                                 Promptly,
and in any event within ninety (90) days after the Closing Date (unless
otherwise extended by the Agent), (i) each Credit Party will take such actions
as is required to perfect the security interest of the Agent in all vehicles
subject to certificate of title laws in California, Arizona and Minnesota and
(ii) for all other motor vehicles owned by each Credit Party as of the Closing
Date, the Credit Parties shall, subject to requirements of law and the
Intercreditor Agreement, take such action as may be reasonably requested by the
Agent to perfect the Agent’s Lien on such vehicles.  Promptly, and in any event within ten (10)
Business Days following the Closing Date (unless otherwise extended by the
Agent), the Credit Parties shall amend each existing Control Agreement in favor
of the First Lien Agent or enter into a separate Control Agreement in favor of
Agent, in each case, subject to the terms of the Intercreditor Agreement, to
provide the Agent with “control” over such Deposit Accounts within the meaning
of the Code.  Promptly following the
Closing Date, each Credit Party shall use commercially reasonably efforts to
deliver such landlord waivers and bailee letters as further described in Section
2.6 that the First Lien Agent has received pursuant to the Revolving Credit
Agreement . Promptly, and in any event with 30 days after the Closing Date
(unless otherwise extended by Agent), each Credit Party shall deliver lien
search results in each of the jurisdictions set forth on Schedule 2.8(b).


 


20





















 


(c)                                  Each
Credit Party shall, from time to time, cause all chattel paper (excluding
written lease agreements governing Short-Term Rentals) owned by such Credit
Party with an individual value in excess of $100,000 (provided that the
aggregate value of all chattel paper (excluding written lease agreements
governing Short Term Rentals) not so legended does not exceed $1,000,000) to be
conspicuously legended to indicate that it is subject to a Lien in favor of
Agent.


 


(d)                                 In
the event any Credit Party acquires an ownership interest in real property
after the Closing Date with a fair market value in excess of $1,000,000, such
Credit Party shall deliver to Agent a fully executed mortgage or deed of trust
over such real property in form and substance similar to the Mortgages
delivered concurrently herewith, with such variations as may be reasonably required
by Agent in order to conform to and/or take advantage of laws of the state in
which such real property is located, together with such title insurance
policies, surveys, appraisals, evidence of insurance, legal opinions,
environmental assessments and other documents and certificates as shall be
reasonably required by Agent.


 


(e)                                  Promptly,
and in any event within 30 days (unless otherwise extended by the Agent) after
the acquisition by Borrower or its Subsidiaries of assets or personal property
of the type that would have constituted Collateral on the Closing Date and investments
of the type that would have constituted Collateral on the Closing Date, Borrower
will take, or will cause its Subsidiaries to take, all necessary action,
including (i) the filing of appropriate financing statements under the
applicable provisions of the UCC, applicable foreign, domestic or local laws,
rules or regulations in each of the offices where such filing is necessary or
appropriate, (ii) the execution and delivery of Control Agreements (subject to
Section 3.13), and (iii) the notation of the Lien of Agent on any certificate
of title, in each case, to create and perfect a perfected Lien in such
Collateral (or comparable interest under foreign law in the case of foreign
Collateral) pursuant to and to the full extent required by the Security
Agreements and this Agreement (or otherwise in form sufficient to perfect the
Agent’s security interest therein as reasonably determined by Agent).


 


(f)                                   Borrower
shall (i) cause each Person, upon its becoming a Subsidiary of Borrower,
promptly to guaranty the Obligations and to grant to Agent, for the benefit of
Agent and Lenders, a security interest (subject to the thresholds and
exclusions otherwise set forth in the Loan Documents) in the real, personal and
mixed property of such Person to secure the Obligations and (ii) pledge,
or cause to be pledged, to Agent, for the benefit of Agent and Lenders, all of
the Stock of such Subsidiary to secure the Obligations.  The documentation for such guaranty, security
and pledge shall be substantially similar to the Loan Documents executed
concurrently herewith with such modifications as are reasonably requested by
Agent and shall be accompanied by such legal opinions and other documents as
Agent may reasonably request. 
Notwithstanding the foregoing, in the event that a Person becomes a Subsidiary
of Borrower and such Person is a “controlled foreign corporation”, as defined
in Section 957(a) of the IRC (a “CFC”), of Borrower, then Borrower shall
(a) not be obligated to cause such CFC to comply with clause (i) of this
subsection (f) and nothing in this Agreement shall cause any CFC to have any
obligation under this Agreement, and (b) pledge or cause to


 


21





















 


be pledged no more than sixty-five percent (65%) of all of the Stock of
such CFC; provided that Borrower shall not be
obligated to pledge or cause to be pledged any assets owned by any CFC (including
the Stock of such CFC owned by another CFC).


 


(g)                                  In
the event that any Credit Party takes any action (other than delivery of
Collateral to the First Lien Agent) to grant a security interest to secure the
First Lien Obligations or to perfect any security interest for the benefit of
the First Lien Obligations, then notwithstanding that Borrower would not
otherwise be required by the Loan Documents to take such action to grant or
perfect a security interest for the Obligations, Borrower shall, or shall cause
its applicable Subsidiary to, grant or perfect such security interest to secure
the Obligations subject to the terms of the Intercreditor Agreement.


 


2.9.                            Cash
Management Systems.  Borrower shall,
and shall cause each of its Subsidiaries to, promptly enter into Control
Agreements with respect to each deposit account (other than Excluded Accounts) maintained
by Borrower or any Subsidiary after the Closing Date.  Each such Control Agreement shall be in form
and substance satisfactory to Agent.


 


SECTION 3.


 


NEGATIVE COVENANTS


 


Borrower agrees that from and after the date
hereof until the Maturity Date:


 


3.1.                            Indebtedness.  Borrower shall not and shall not cause or
permit its Subsidiaries directly or indirectly to create, incur, assume, or
otherwise become or remain directly or indirectly liable with respect to any
Indebtedness (other than pursuant to a Contingent Obligation permitted under Section 3.4)
except:


 


(a)                                 the
Obligations and any Permitted Refinancing Indebtedness in respect thereof;


 


(b)                                 existing
Indebtedness described in Schedule 3.1 and Permitted
Refinancing Indebtedness in respect thereof;


 


(c)                                  Indebtedness
consisting of intercompany loans and advances made by any Credit Party to
another Credit Party; provided that
(i) such obligor Credit Party shall have executed and delivered to each such
obligee Credit Party a demand note (as amended, modified, extended, substituted
or replaced from time to time, an “Intercompany Note” and, collectively
the “Intercompany Notes”) to evidence any such intercompany Indebtedness
owing at any time by such obligor Credit Party to such obligee Credit Party,
which Intercompany Notes shall be substantially in the form of Exhibit
3.1(c) and shall be pledged and, following the First Lien Loan Termination
Date, delivered to Agent pursuant to the applicable Pledge Agreement or
Security Agreement as additional collateral security for the Obligations; (ii) the
obligations of such


 


22





















 


obligor Credit Party under any such Intercompany Notes shall be
subordinated to the Obligations of such obligor Credit Party hereunder pursuant
to Section 9.22;  (iii) at the
time any such intercompany loan or advance is made to such obligor Borrower and
after giving effect thereto, such obligor Credit Party shall be Solvent; and (iv)
no Default or Event of Default would occur and be continuing after giving
effect to any such proposed intercompany loan.


 


(d)                                 Indebtedness
of Borrower under the Revolving Credit Facility and Indebtedness of the Guarantors
under any guarantees in respect of the Revolving Credit Facility and
Indebtedness of Credit Parties under any Permitted Refinancing Indebtedness in
respect of any such Indebtedness in an aggregate principal amount not to exceed
(x) $61,000,000 minus (y) the amount by which the commitments thereunder are
permanently reduced (other than in connection with the incurrence of a like
amount of Permitted Refinancing Indebtedness);


 


(e)                                  Indebtedness
at any time outstanding secured by purchase money Liens or incurred with
respect to Capital Leases which together with principal Indebtedness does not
exceed $7,500,000 in the aggregate in principal (or notional principal) at any
time outstanding;


 


(f)                                   any
other Indebtedness not to exceed $1,000,000 in aggregate principal amount at
any time outstanding;


 


(g)                                  Indebtedness
in an amount not to exceed $2,000,000 arising from a Permitted Acquisition that
is either (x) unsecured or secured by the assets so acquired and issued to the
seller in such Permitted Acquisition or (y) unsecured or secured only be
specific assets or properties of the Target and which was not created in
contemplation of such Permitted Acquisition;


 


(h)                                 Indebtedness
in respect of Interest Rate Obligations;


 


(i)                                     Qualified
Subordinated Debt; provided that
to the extent the Net Proceeds therefrom during the term of this Agreement exceed
$25,000,000, Borrower shall apply such excess amount of Net Proceeds to a
prepayment of the Loans pursuant to Section 1.9(b);


 


(j)                                    surety
bonds issued in the ordinary course of business which are permitted to be
secured pursuant to Section 3.2; and


 


(k)                                 prior
to December 16, 2005, Indebtedness in respect of the Senior Unsecured Notes; provided that the Senior Unsecured Notes are irrevocably
called for redemption on the Closing Date and funds sufficient to pay the
redemption price therefor are deposited with the trustee under the Senior
Unsecured Notes Indenture on the Closing Date.


 


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3.2.                            Liens
and Related Matters.


 


(a)                                 No
Liens.  Borrower shall not and shall
not cause or permit its Subsidiaries to directly or indirectly create, incur,
assume or permit to exist any Lien on or with respect to any property or asset
of Borrower or any such Subsidiary, whether now owned or hereafter acquired, or
any income or profits therefrom, except Permitted Encumbrances (including,
without limitation, those Liens constituting Permitted Encumbrances existing on
the date hereof and renewals and extensions thereof, as set forth on Schedule
3.2).


 


(b)                                 No
Negative Pledges.  Borrower shall not
and shall not cause or permit its Subsidiaries to directly or indirectly enter
into or assume any agreement (other than the Loan Documents, subject to the
terms of the Intercreditor Agreement, the First Lien Credit Agreement and other
secured Indebtedness permitted by this Agreement (with respect to the assets
securing such Indebtedness)) prohibiting the creation or assumption of any Lien
upon its properties or assets, whether now owned or hereafter acquired securing
the Obligations.


 


(c)                                  No
Restrictions on Subsidiary Distributions to Borrower.  Except as provided herein and in the First
Lien Credit Agreement (and other Indebtedness of Borrower that is no more
restrictive than the terms of this Agreement or the First Lien Credit Agreement),
Borrower shall not and shall not cause or permit its Subsidiaries to directly
or indirectly create or otherwise cause or suffer to exist or become effective
any consensual encumbrance or restriction of any kind on the ability of any
such Subsidiary to (1) pay dividends or make any other distribution on any
of such Subsidiary’s Stock owned by Borrower or any other Subsidiary;
(2) pay any Indebtedness owed to Borrower or any other Subsidiary;
(3) make loans or advances to Borrower or any other Subsidiary; or
(4) transfer any of its property or assets to Borrower or any other
Subsidiary.


 


3.3.                            Investments.  Borrower shall not and shall not cause or
permit its Subsidiaries to directly or indirectly make or own any Investment in
any Person except:


 


(a)                                 Borrower
and its Subsidiaries may make and own Investments in Cash Equivalents;


 


(b)                                 subject
to Section 9.22, any Credit Party may make intercompany loans to other
Credit Parties to the extent permitted under Section 3.1;


 


(c)                                  Borrower
and its Subsidiaries may make loans and advances to employees for moving,
entertainment, travel and other similar expenses in the ordinary course of
business not to exceed $500,000 in the aggregate at any time outstanding;


 


(d)                                 Investments
by Borrower or any Subsidiary in any Credit Party;


 


(e)                                  Borrower
and its Subsidiaries may own the Investments listed on Schedule 3.3(e)
and outstanding on the Closing Date and any continuation, renewal or amendment
thereof that does not increase the amount thereof;


 


24





















 


(f)                                   Borrower
may make Investments constituting Permitted Acquisitions;


 


(g)                                  Investments
in Credit Parties;


 


(h)                                 Investments
in Interest Rate Obligations; and


 


(i)                                     other
Investments in an aggregate amount outstanding at any time not to exceed $3,000,000.


 


3.4.                            Contingent
Obligations.  Borrower shall not and
shall not cause or permit its Subsidiaries to directly or indirectly create or
become or be liable with respect to any Contingent Obligation except:


 


(a)                                 letters
of credit under the First Lien Credit Agreement;


 


(b)                                 Interest
Rate Obligations;


 


(c)                                  those
resulting from endorsement of negotiable instruments for collection in the
ordinary course of business;


 


(d)                                 those
existing on the Closing Date and described in Schedule 3.4;


 


(e)                                  those
arising under indemnity agreements to title insurers to cause such title
insurers to issue to Agent mortgagee title insurance policies;


 


(f)                                   those
arising with respect to customary indemnification obligations incurred in
connection with Asset Dispositions permitted hereunder;


 


(g)                                  those
incurred in the ordinary course of business with respect to surety and appeal
bonds, performance and return-of-money bonds and other similar obligations;


 


(h)                                 those
incurred with respect to Indebtedness permitted by Section 3.1 and of
other obligations not prohibited hereunder; provided that
any such Contingent Obligation is subordinated to the Obligations to the same
extent as the Indebtedness to which it relates is subordinated to the
Obligations;


 


(i)                                     Contingent
Obligations arising from the guarantee by any Credit Party of any Indebtedness
otherwise permitted by Section 3.1; and


 


(j)                                    any
other Contingent Obligation not expressly permitted by clauses (a) through (h)
above, so long as any such other Contingent Obligations, in the aggregate at
any time outstanding, do not exceed $1,000,000.


 


25





















 


3.5.                            Restricted
Payments.  The Credit Parties shall
not and shall not cause or permit their Subsidiaries to directly or indirectly
declare, order, pay, make or set apart any sum for any Restricted Payment,
except that:


 


(a)                                 Omitted;


 


(b)                                 Omitted;


 


(c)                                  Subsidiaries
of Borrower may make Restricted Payments to any Credit Party;


 


(d)                                 the
redemption of the Preferred Stock to be Redeemed within 35 days of the Closing
Date in accordance with its terms as in effect on the Closing Date;


 


(e)                                  Borrower
may pay management fees and reasonable out-of-pocket expenses payable
semi-annually pursuant to the BRS Management Services Agreement as in effect on
the Closing Date; provided that no Default or Event
of Default exists at the time of any such Restricted Payment or would occur as
a result thereof; and


 


(f)                                   So
long as no Default or Event of Default is continuing, Borrower may repurchase
Stock owned by employees, officers or directors of Borrower or any of its
Subsidiaries or their authorized representatives upon the death, disability or
termination of employment of such employees, officers or directors, or as
otherwise required by employment agreements, in an aggregate amount not to
exceed (x) one million dollars ($1,000,000) in any calendar year or (y) three
million dollars ($3,000,000) during the term of this Agreement, plus, (i) the
aggregate cash proceeds actually received from any issuance of Stock during
such calendar year by Borrower or any of its Subsidiaries to employees,
officers or directors of Borrower or its Subsidiaries and (ii) the aggregate
cash proceeds actually received in such calendar year from any payments on life
insurance policies in which Borrower or any of its Subsidiaries is the
beneficiary with respect to any employees, officers or directors of Borrower or
any of its Subsidiaries which proceeds are used to purchase the Stock of
Borrower held by any such employees, officers or directors.


 


3.6.                            Restriction
on Fundamental Changes; Permitted Acquisitions.


 


(a)                                 Borrower
shall not and shall not cause or permit its Subsidiaries to directly or indirectly:


 


(i)                                     amend,
modify or waive any term or provision of its organizational documents,
including its articles of incorporation, certificates of designations pertaining
to preferred stock (other than the amendments to Borrower’s preferred stock contemplated
by Section 3.19), by-laws, partnership agreement or operating agreement in any
way materially adversely affecting the Lenders unless required by law;


 


26





















 


(ii)                                  enter
into any transaction of merger or consolidation except, upon not less than five
(5) Business Days’ prior written notice to Agent, any Subsidiary of Borrower may
be merged with or into Borrower or any Subsidiary of Borrower (and in
connection therewith Borrower will take such action as may be required to
preserve and protect the Liens of the Agent on the Collateral); provided that if the Subsidiary so merged is a Credit Party,
the surviving company shall be a Credit Party;


 


(iii)                               liquidate,
wind-up or dissolve itself (or suffer any liquidation or dissolution) except,
upon not less than five (5) Business Days’ prior written notice to Agent, any Subsidiary
of Borrower may be liquidated or dissolved and its assets distributed to any
Credit Party (and in connection therewith Borrower will take such action as may
be required to preserve and protect the Liens of the Agent on the Collateral);
or


 


(iv)                              acquire
by purchase or otherwise all or any substantial part of the business or assets
of any other Person other than in a Permitted Acquisition.


 


(b)                                 Borrower
may acquire all or substantially all of the assets or Stock of any Person (the “Target”)
(in each case, a “Permitted Acquisition”) subject to the satisfaction of
each of the following conditions:


 


(i)                                     Agent
shall receive at least thirty (30) days’ prior written notice (or such shorter
notice as to which Agent may consent in its sole discretion) of such proposed
Permitted Acquisition, which notice shall include a reasonably detailed
description of such proposed Permitted Acquisition;


 


(ii)                                  such
Permitted Acquisition shall be consensual and shall have been approved by the
Target’s board of directors and Borrower and Target (and the seller thereof)
shall have received all necessary regulatory and third-party approvals in connection
with such Permitted Acquisition;


 


(iii)                               the
sum of all amounts payable by Borrower and its Subsidiaries in connection with
all Permitted Acquisitions during the term hereof (including all transaction
costs and all Indebtedness, liabilities and Contingent Obligations incurred or
assumed in connection therewith or otherwise reflected on a consolidated
balance sheet of Borrower and Target) shall not exceed $12,000,000 in any
Fiscal Year of Borrower or $25,000,000 in the aggregate for all such Permitted
Acquisitions during the term of this Agreement;


 


(iv)                              on
a pro forma basis, no Event of Default has occurred and is continuing or would
result after giving effect to such Permitted Acquisition and Borrower would
have been in compliance with the financial covenants set forth in Section 4
for the four quarter period reflected in the Compliance Certificate most
recently delivered to Agent pursuant to Section 4.9(j) prior to the
consummation of such Permitted Acquisition


 


27





















 


(after giving effect to such Permitted
Acquisition and all Indebtedness issued, assumed, incurred or guaranteed, in
connection therewith as if made on the first day of such period);


 


(v)                                 concurrently
with delivery of the notice referred to in clause (i) above, Borrower shall
have delivered to Agent, in form and substance reasonably satisfactory to
Agent:


 


(A)                               in
the case of any Permitted Acquisition involving aggregate consideration in
excess of $1,000,000, a pro forma consolidated balance sheet, income statement and
cash flow statement of Borrower and its Subsidiaries (the “Acquisition Pro Forma”),
based on recent financial statements, which shall be complete and shall fairly
present in all material respects the assets, liabilities, financial condition
and results of operations of Borrower and its Subsidiaries in accordance with
GAAP consistently applied, but taking into account such Permitted Acquisition
and the financing thereof;


 


(B)                               a
certificate of the chief financial officer of Borrower to the effect that: (x)
Borrower will be Solvent upon the consummation of the Permitted Acquisition; (y)
if required pursuant to clause (A) above, the Acquisition Pro Forma fairly
presents the financial condition of Borrower and its Subsidiaries (on a
consolidated basis) as of the date thereof after giving effect to the Permitted
Acquisition; and (z) the other conditions set forth in this Section
3.7(b) have been satisfied; and


 


(vi)                              on
or prior to the date of such Permitted Acquisition, Agent shall, to the extent
requested, have received copies of the acquisition agreement and related
agreements and instruments, and all opinions, certificates, lien search results
and other documents reasonably requested by Agent.


 


3.7.                            Disposal
of Assets or Subsidiary Stock. 
Except as described on Schedule 3.7, Borrower shall not and shall
not cause or permit its Subsidiaries to directly or indirectly convey, sell,
lease, sublease, license, assign, transfer or otherwise dispose of, or grant
any Person an option to acquire, in one transaction or a series of related
transactions, any of its property, business or assets, whether now owned or
hereafter acquired, except for (a) sales of inventory in good faith to
customers for fair value in the ordinary course of business and dispositions of
equipment and parts and supplies not used or useful in the business,
(b) Asset Dispositions by Borrower and its Subsidiaries if all of the
following conditions are met: 
(i) the fair market value of assets sold or otherwise disposed of
does not exceed $2,000,000 in any Fiscal Year; (ii) the consideration
received is at least equal to the fair market value of such assets; (iii) the
consideration received by Borrower and its Subsidiaries in such transaction is at
least 75% in the form of cash and Cash Equivalents; (iv) the Net Proceeds
of any Specified Asset Disposition are applied as required by Section 1.9;
(v) after giving effect to the Asset Disposition and the repayment of Indebtedness
with the proceeds thereof, Borrower


 


28





















 


is in compliance on a pro forma
basis with the covenants set forth in Section 4 recomputed for the most
recently ended Fiscal Quarter for which information is available and is in
compliance with all other terms and conditions of this Agreement; and
(vi) no Default or Event of Default then exists or would result from such
Asset Disposition, (c) transactions permitted by Section 3.3 and Section
3.6(a) and (d) Permitted Sale-Leasebacks.


 


3.8.                            Transactions
with Affiliates.  Borrower shall not
and shall not cause or permit its Subsidiaries to directly or indirectly enter
into or permit to exist any transaction (including the purchase, sale, lease or
exchange of any property or the rendering of any management, consulting,
investment banking, advisory or other similar services) with any Affiliate or
with any director, officer or employee of Borrower or any of its Subsidiaries,
except (a) as set forth on Schedule 3.8, (b) transactions in
the ordinary course of and pursuant to the reasonable requirements of the business
of Borrower or any of its Subsidiaries and upon fair and reasonable terms that
are no less favorable to Borrower or any of its Subsidiaries than would be
obtained in a comparable arm’s length transaction with a Person that is not an
Affiliate, (c) payment of reasonable compensation to officers and
employees for services actually rendered to Borrower or any of its
Subsidiaries, (d) payment of customary director’s fees and (e) transactions
between Credit Parties.


 


3.9.                            Conduct
of Business.  Borrower shall not and
shall not cause or permit its Subsidiaries to directly or indirectly engage in
any business other than businesses of the type conducted by Borrower and its
Subsidiaries on the Closing Date and other businesses reasonably related
thereto.


 


3.10.                     Changes
Relating to Indebtedness; Prepayments of Certain Indebtedness.  Borrower shall not and shall not cause or
permit its Subsidiaries to directly or indirectly:


 


(i)                                     change
or amend the terms of the First Lien Credit Agreement in any manner that would
violate the provisions of the Intercreditor Agreement;


 


(ii)                                  change
or amend the terms of any Qualified Subordinated Debt in any manner that would
cause such Indebtedness to cease to meet the definition of Qualified Subordinated
Debt; or


 


(iii)                               prepay,
repay, redeem or otherwise acquire for value any Qualified Subordinated Debt
prior to the stated maturity thereof.


 


3.11.                     Change of
Name or Location.  Borrower shall not
and shall not cause or permit any of its Subsidiaries to (a) change its name as
it appears in official filings in the state of its incorporation or
organization, (b) change its offices or warehouses or locations at which
Collateral is held or stored, or the location of its records concerning the
Collateral, (c) change the type of entity that it is, (d) change its
organization identification number, if any, issued by its state of
incorporation or organization, or (e) change its state of incorporation or


 


29





















 


organization, in each case
without at least thirty (30) days’ prior written notice to Agent (or such
shorter period as to which Agent may agree) and after taking any reasonable
action requested by Agent in connection therewith, including to continue the
perfection of any Liens in favor of Agent, on behalf of Lenders, in any
Collateral, has been completed or taken; provided that
any such new location shall, except in the ordinary course of business, be in
the continental United States.  Without
limiting the foregoing, Borrower shall not and shall not cause or permit any of
its Subsidiaries to change its name, identity or limited liability company (or
corporate, as the case may be) structure in any manner that might make any
financing or continuation statement filed in connection herewith seriously
misleading within the meaning of Section 9-506 or 9-507 of the Code or any
other then applicable provision of the Code except upon prior written notice to
Agent and after taking any reasonable action requested by Agent in connection
therewith to continue the perfection of any Liens in favor of Agent, on behalf
of Lenders, in any Collateral.


 


3.12.                     Fiscal
Year.  Borrower shall not change its
Fiscal Year or permit any of its Subsidiaries to change their respective fiscal
years.


 


3.13.                     Bank
Accounts.  Borrower shall not and
shall not cause or permit their Subsidiaries to establish any new bank accounts
(other than Excluded Accounts) without prior written notice to Agent and,
except in the case of Excluded Accounts, unless Agent and the bank at which the
account is to be opened enter into a Control Agreement regarding such bank
account in form and substance reasonably satisfactory to Agent (it being
understood that a Control Agreement which provides that Agent shall only have
the right to exercise control over an account only after the First Lien Loan
Termination Date shall be sufficient so long as otherwise reasonably satisfactory
to the Agent).


 


3.14.                     Hazardous
Materials.  Borrower shall not and
shall not cause or permit its Subsidiaries to cause or permit a Release of any
Hazardous Material on, at, in, under, above, to, from or about any of the Real
Estate where such Release would (a) violate in any respect, or form the
basis for any Environmental Liabilities by Borrower or any of its Subsidiaries
under, any Environmental Laws or Environmental Permits or (b) otherwise
adversely impact the value or marketability of any of the Real Estate or any of
the Collateral, other than such violations or Environmental Liabilities that
could not reasonably be expected to have a Material Adverse Effect.


 


3.15.                     ERISA.  Borrower shall not and shall not cause or
permit any ERISA Affiliate to, cause or permit to occur an ERISA Event to the
extent such ERISA Event could reasonably be expected to have a Material Adverse
Effect.


 


3.16.                     Sale-Leasebacks.  Borrower shall not and shall not cause or
permit any of their Subsidiaries to engage in any sale-leaseback, synthetic
lease or similar transaction involving any of its assets except for Permitted
Sale-Leasebacks.


 


30





















 


3.17.                     Changes to
BRS Management Services Agreement. 
Borrower shall not and shall not cause or permit any of their
Subsidiaries to change or amend the terms of the BRS Management Services
Agreements in any manner that would be adverse in any material respect to the
Lenders.


 


3.18.                     Interest
Rate Protection.  Within 90 days of
the Closing Date, Borrower shall obtain, and thereafter shall caused to be
maintained, interest rate protection agreements with terms and counterparties
reasonably satisfactory to the Agent sufficient to ensure that at least 50% of
Borrower’s Consolidated Total Debt effectively bears interest at a fixed rate
for a period of not less than three years from the Closing Date.


 


3.19.                     Amendment
to Existing Preferred Stock.  Within
30 days of the Closing Date, Borrower shall amend the terms of its existing
preferred stock (other than the Preferred Stock to be Redeemed) in order to
eliminate the mandatory redemption provisions contained therein.


 


SECTION 4.


 


FINANCIAL
COVENANTS/REPORTING


 


Borrower covenants and agrees that from and
after the date hereof until the Maturity Date, Borrower shall perform and
comply with, and shall cause each of its Subsidiaries to perform and comply
with, all covenants in this Section 4 applicable to such Person.


 


4.1.                            Consolidated
Capital Expenditures Limits.  Borrower and its Subsidiaries on a
consolidated basis shall not make Consolidated Capital Expenditures (excluding
for purposes of this Section 4.1, (a) any reinvestment of the Net
Proceeds of any Specified Asset Sale or Specified Recovery Event or (b) any
reinvestment of the net proceeds of the dispositions of Equipment and Part and
Supplies not used or useful in the business) during any of the following
periods that exceed in the aggregate the amount set forth opposite such period
(the “Capex Limit”):


 


	
  Period

  	
   

  	
  Maximum Consolidated

  Capital Expenditures per Period

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Fiscal Year
  ending June 30, 2006

  	
   

  	
   

  	
  $

  	
  17,000,000

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Fiscal Year
  ending June 30, 2007

  	
   

  	
   

  	
  $

  	
  17,000,000

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Fiscal Year
  ending June 30, 2008

  	
   

  	
   

  	
  $

  	
  17,000,000

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Fiscal Year
  ending June 30, 2009

  	
   

  	
   

  	
  $

  	
  17,000,000

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Fiscal Year
  ending June 30, 2010

  	
   

  	
   

  	
  $

  	
  17,000,000

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Fiscal Year
  ending June 30, 2011

  	
   

  	
   

  	
  $

  	
  17,000,000

  	
   

  	
   

  



 


31





















 


; provided, however, that
commencing with the Fiscal Year ending June 30, 2007, the
Capex Limit referenced above will be increased in any period by the positive
amount equal to the lesser of (i) the Capex Limit for the immediately prior
period, and (ii) the amount (if any), equal to the difference obtained by
taking the Capex Limit minus the actual amount of any Consolidated
Capital Expenditures expended during such prior period (the “Carry Over
Amount”), and for purposes of measuring compliance herewith, the Carry Over
Amount shall be deemed to be the last amount spent on Consolidated Capital
Expenditures in that succeeding period.


 


4.2.                            Minimum
Interest Coverage Ratio.  Borrower
and its Subsidiaries on a consolidated basis shall have at the end of each
Fiscal Quarter set forth below, an Interest Coverage Ratio for the 12-month
period then ended of not less than the following:


 


	
  1.60 to 1.00

  	
   

  	
  for each Fiscal Quarter ending on or after December 31, 2005
  and on or prior to June 30, 2006;

  
	
   

  	
   

  	
   

  
	
  1.70 to 1.00

  	
   

  	
  for each Fiscal Quarter ending on or after September 30, 2006
  and on or prior to June 30, 2007; and

  
	
   

  	
   

  	
   

  
	
  1.80 to 1.00

  	
   

  	
  for each Fiscal Quarter ending on or after September 30, 2007
  and on or prior to June 30, 2008; and

  
	
   

  	
   

  	
   

  
	
  1.90 to 1.00

  	
   

  	
  for each Fiscal Quarter ending on or after September 30, 2008
  and on or prior to June 30, 2009; and

  
	
   

  	
   

  	
   

  
	
  2.00 to 1.00

  	
   

  	
  for each Fiscal Quarter ending on or after September 30, 2009.

  



 


4.3.                            Maximum
Leverage Ratio.  Borrower and its
Subsidiaries on a consolidated basis shall have at the end of each Fiscal
Quarter set forth below, a Leverage Ratio for the 12-month period then ended,
of not more than the following:


 


	
  5.50 to 1.00

  	
   

  	
  for each Fiscal Quarter ending on or after December 31, 2005 and on
  or prior to June 30, 2006;

  
	
   

  	
   

  	
   

  
	
  5.25 to 1.00

  	
   

  	
  for each Fiscal Quarter ending on or after September 30, 2006
  and on or prior to June 30, 2007;

  
	
   

  	
   

  	
   

  
	
  5.00 to 1.00

  	
   

  	
  for each Fiscal Quarter ending on or after September 30, 2007
  and on or prior to June 30, 2008; and

  



 


32





















 


	
  4.75 to 1.00

  	
   

  	
  for each Fiscal Quarter ending on or after September 30, 2008.

  



 


4.4.                            Financial
Statements and Other Reports. 
Borrower will maintain, and cause each of
its Subsidiaries to maintain, a system of accounting established and administered
in accordance with sound business practices to permit preparation of Financial
Statements in conformity with GAAP (it being understood that monthly Financial
Statements are not required to have footnote disclosures).  Borrower will deliver each of the Financial
Statements and other reports described below to Agent.


 


(a)                                 Monthly
Financials.  As soon as available and
in any event within thirty (30) days after the end of each month (including the
last month of Borrower’s Fiscal Year), Borrower will deliver (1) the
consolidated and consolidating balance sheets of Borrower and
its Subsidiaries, as at the end of such month, and the related consolidated and
consolidating statements of income, stockholders’ equity and cash flow for such
month and for the period from the beginning of the then current Fiscal Year of
Borrower to the end of such month, (2) a report setting forth in
comparative form the corresponding figures for the corresponding periods of the
previous Fiscal Year and the corresponding figures from the most recent
Projections for the current Fiscal Year delivered pursuant to Section 4.4(e)
and (3) a schedule of the outstanding Indebtedness for borrowed money of
Borrower and its Subsidiaries describing in reasonable detail each such debt
issue or loan outstanding and the principal amount and amount of accrued and
unpaid interest with respect to each such debt issue or loan.


 


(b)                                 Quarterly
Financials.  As soon as available and
in any event within forty-five (45) days after the end of each Fiscal Quarter of
Borrower, Borrower will deliver (1) the consolidated and consolidating balance
sheets of Borrower and its Subsidiaries, as at the end of such quarter, and the
related consolidated and consolidating statements of income, stockholders’
equity and cash flow for such Fiscal Quarter and for the period from the
beginning of the then current Fiscal Year of Borrower to the end of such Fiscal
Quarter, (2) a report setting forth in comparative form the corresponding
figures for the corresponding periods of the previous Fiscal Year and the corresponding
figures from the most recent Projections for the current Fiscal Year delivered
pursuant to Section 4.4(e) and (3) a schedule of the outstanding
Indebtedness for borrowed money of Borrower and its Subsidiaries describing in
reasonable detail each such debt issue or loan outstanding and the principal
amount and amount of accrued and unpaid interest with respect to each such debt
issue or loan.


 


(c)                                  Year-End
Financials.  As soon as available and
in any event within ninety (90) days after the end of each Fiscal Year of
Borrower, Borrower will deliver (1) the consolidated and consolidating
balance sheets of Borrower and its Subsidiaries, as at the end of such year,
and the related consolidated and consolidating statements of income, stockholders’
equity and cash flow for such Fiscal Year, (2) a schedule of the
outstanding Indebtedness for borrowed money of Borrower and its Subsidiaries
describing in reasonable detail each


 


33





















 


such debt issue or loan outstanding and the principal amount and amount
of accrued and unpaid interest with respect to each such debt issue or loan and
(3) a report with respect to the consolidated Financial Statements from a
firm of Certified Public Accountants selected by Borrower and reasonably
acceptable to Agent, which report shall be prepared in accordance with
Statement of Auditing Standards No. 58 (the “Statement”) “Reports
on Audited Financial Statements” and such report shall be “Unqualified” (as
such term is defined in such Statement).


 


(d)                                 Accountants’
Reports.  Promptly upon receipt
thereof, Borrower will deliver copies of all significant reports submitted by
Borrower’s firm of Certified Public Accountants in connection with each annual,
interim or special audit or review of any type of the Financial Statements or
related internal control systems of Borrower or its Subsidiaries made by such accountants, including any comment letter
submitted by such accountants to management in connection with their services.


 


(e)                                  Projections.  As soon as available and in any event no
later than the 60th day following the first day of each of Borrower’s Fiscal
Years, Borrower will deliver Projections of Borrower and its Subsidiaries for
the forthcoming Fiscal Year prepared on a quarterly basis.


 


(f)                                   SEC
Filings and Press Releases.  Promptly
upon their becoming available, Borrower will deliver copies of (1) all
Financial Statements, reports, notices and proxy statements sent or made
available by Borrower or any of its Subsidiaries to their Stockholders (which
are similar to the reports described in clause (2)), (2) all regular and
periodic reports and all registration statements and prospectuses, if any,
filed by Borrower or any of its Subsidiaries with any securities exchange or
with the Securities and Exchange Commission, any Governmental Authority or any
private regulatory authority, and (3) all press releases and other statements
made available by Borrower or any of its Subsidiaries to the public concerning
developments in the business of any such Person.


 


(g)                                  Events
of Default, Etc.  Promptly upon any
officer of Borrower or any of its Subsidiaries obtaining knowledge of (1) any Default
or Event of Default, Borrower shall deliver a certificate of a Responsible
Officer specifying the nature and period of existence of such event or
condition and what action Borrower or such Subsidiary thereof has taken, is
taking and proposes to take with respect thereto; or (2) any event or condition
that could reasonably be expected to result in any Material Adverse Effect,
Borrower shall deliver a certificate of a Responsible Officer specifying the
nature and period of existence of such event or condition.


 


(h)                                 Litigation.  Promptly upon any officer of Borrower or any
of its Subsidiaries obtaining knowledge of (1) the institution of any
action, charge, claim, demand, suit, proceeding, petition, governmental
investigation, tax audit or arbitration now pending or, to the best knowledge
of Borrower after due inquiry, threatened against or affecting Borrower or any
of its Subsidiaries or any property of any Credit Party or any of its
Subsidiaries (“Litigation”)


 


34





















 


which could reasonably be expected to have a Material Adverse Effect or
result in liability to Borrower and its Subsidiaries in excess of $1,000,000
and which has not previously disclosed by Borrower to Agent or (2) any
material development in any action, suit, proceeding, governmental
investigation or arbitration at any time pending against or affecting Borrower or
any of its Subsidiaries or any property of any of them which, in each case,
could reasonably be expected to have a Material Adverse Effect, Borrower will
promptly give notice thereof to Agent and provide such other information as may
be reasonably available to them to enable Agent and the Lenders to evaluate
such matter.


 


(i)                                     Notice
of Corporate and other Changes. 
Borrower shall provide prompt written notice of (1) any change after the
Closing Date in the authorized and issued Stock of Borrower or any Subsidiary
of Borrower or any amendment to their articles or certificate of incorporation,
by-laws, partnership agreement or other organizational documents, and (2) any
Subsidiary created or acquired by Borrower or any of its Subsidiaries after the
Closing Date, such notice, in each case, to identify the applicable jurisdictions,
capital structures or Subsidiaries, as applicable.  The foregoing notice requirement shall not be
construed to constitute consent by any of the Lenders to any transaction
referred to above which is not otherwise permitted by the terms of this Agreement.


 


(j)                                    Compliance
Certificate.  Together with each
delivery of Financial Statements of Borrower and its Subsidiaries pursuant to Section
4.4(b) and Section 4.4(c), Borrower will deliver a fully and
properly completed Compliance Certificate (in substantially the same form as Exhibit
4.4(j) (the “Compliance Certificate”) signed by Borrower’s chief
executive officer or chief financial officer.


 


(k)                                 Other
Information.  With reasonable promptness,
Borrower will deliver such other information and data with respect to Borrower
or any of its Subsidiaries as from time to time may be reasonably requested by
Agent or any Lender.


 


(l)                                     Taxes.  Borrower shall provide prompt written notice
of (i) the execution or filing with the IRS or any other Governmental Authority
of any agreement or other document extending, or having the effect of
extending, the period for assessment or collection of any Charges by the Credit
Parties which could reasonably be expected to have a Material Adverse Effect
and (ii) any agreement by the Credit Parties or request directed to the Credit
Parties to make any adjustment under IRC Section 481(a), by reason of a change
in accounting method or otherwise, which could reasonably be expected to have a
Material Adverse Effect.


 


SECTION 5.


 


REPRESENTATIONS
AND WARRANTIES


 


To induce Agent and Lenders to enter into the
Loan Documents and to make Loans, Borrower represents and warrants as follows:


 


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5.1.                            Disclosure.  No representation or warranty of any Credit
Party contained in this Agreement, the Financial Statements referred to in Section
5.5, the other Related Transactions Documents or any other document,
certificate or written statement furnished to Agent or any Lender by or on
behalf of any such Person for use in connection with the Loan Documents or the
Related Transactions Documents contains as of the date made or deemed remade or
given any untrue statement of a material fact or omitted, omits or will omit to
state a material fact necessary in order to make the statements contained
herein or therein not misleading in light of the circumstances in which the
same were made.


 


5.2.                            No
Material Adverse Effect.  Since June
30, 2005 there have been no events or changes in facts or circumstances
affecting Borrower or any of its Subsidiaries which individually or in the
aggregate have had or could reasonably be expected to have a Material Adverse
Effect and that have not been disclosed herein or in the attached Disclosure
Schedules.


 


5.3.                            No
Conflict.  The consummation of the
Related Transactions does not and will not violate or conflict with any laws,
rules, regulations or orders of any Governmental Authority or violate, conflict
with, result in a breach of, or constitute a default (with due notice or lapse
of time or both) under any Contractual Obligation or organizational documents
of Borrower or any of its Subsidiaries except if such violations, conflicts,
breaches or defaults could not reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect.  None of the Credit Parties is an “investment
company” within the meaning of the Investment Company Act of 1940, as amended,
or a “holding company” or a “subsidiary company” of a “holding company” within
the meaning of the Public Utility Holding Company Act of 1935, as amended.


 


5.4.                            Organization,
Powers, Capitalization and Good Standing.


 


(a)                                 Organization
and Powers.  Borrower and each of its
Subsidiaries is duly organized, validly existing and in good standing under the
laws of its jurisdiction of organization and qualified to do business in all
states where such qualification is required except where failure to be so
qualified could not reasonably be expected to have a Material Adverse
Effect.  The jurisdiction of organization
and all jurisdictions as of the Closing Date in which each Credit Party is
qualified to do business are set forth on Schedule 5.4(a).  Borrower and each of its Subsidiaries has all
requisite organizational power and authority to own and operate its properties,
to carry on its business as now conducted and proposed to be conducted, to
enter into each Related Transactions Document to which it is a party and to
incur the Obligations, grant Liens and security interests in the Collateral and
carry out the Related Transactions.


 


(b)                                 Capitalization.  As of the Closing Date:  (i) the authorized Stock of Borrower and
each of its Subsidiaries is as set forth on Schedule 5.4(b);
(ii) all issued and outstanding Stock of Borrower and each of its Subsidiaries
is duly authorized and validly issued, fully paid, nonassessable, free and
clear of all Liens other than those in favor of the First Lien


 


36





















 


Agent and those in favor of Agent for the benefit of Agent and Lenders,
and such Stock was issued in compliance with all applicable state, federal and
foreign laws concerning the issuance of securities; (iii) the identity of
the holders of the Stock of Borrower and each of its Subsidiaries and the
percentage of their fully-diluted ownership of the Stock of Borrower and each
of its Subsidiaries is set forth on Schedule 5.4(b); and (iv) no
Stock of Borrower or any of its Subsidiaries, other than those described above,
are issued and outstanding.  Except as
provided in Schedule 5.4(b), as of the
Closing Date, there are no preemptive or other outstanding rights, options,
warrants, conversion rights or similar agreements or understandings for the
purchase or acquisition from Borrower or any of its Subsidiaries of any Stock
of any such entity.


 


(c)                                  Binding
Obligation.  This Agreement is, and
the other Related Transactions Documents when executed and delivered will be,
the legally valid and binding obligations of the applicable parties thereto,
each enforceable against each of such parties, as applicable, in accordance
with their respective terms.


 


5.5.                            Financial
Statements and Projections.  All
Financial Statements concerning Borrower and its Subsidiaries which have been
or will hereafter be furnished to Agent pursuant to this Agreement, including
those listed below, have been or will be prepared in accordance with GAAP
consistently applied (except as disclosed therein) and do or will present
fairly the financial condition of the entities covered thereby as at the dates
thereof and the results of their operations for the periods then ended, subject
to, in the case of unaudited Financial Statements, the absence of footnotes and
normal year-end adjustments.


 


(a)                                 The
consolidated balance sheets at June 30, 2005 and the related statement of
income, cash flows and stockholders’ equity of Borrower and its Subsidiaries,
for the Fiscal Year then ended, audited by KPMG LLP.


 


The
Projections delivered on or prior to the Closing Date and the updated
Projections delivered pursuant to Section 4.4(e) represent and will
represent as of the date thereof the good faith estimate of Borrower and its
senior management concerning the most probable course of its business.


 


5.6.                            Intellectual
Property.  Borrower and its
Subsidiaries own, are licensed to use or otherwise has the right to use, all
Intellectual Property used in or necessary for the conduct of their businesses
as currently conducted that is material to the condition (financial or other),
business or operations of Borrower and its Subsidiaries.  All issued Patents, registered Trademarks,
registered Copyrights and pending applications for any of the foregoing owned
by a Credit Party on the Closing Date are identified on Schedule 5.6 and
fully protected and/or duly and properly registered, filed or issued in the
appropriate office and jurisdictions for such registrations, filings or issuances.  Except as disclosed in Schedule 5.6,
to Borrower’s knowledge the use of such Intellectual Property by Borrower and
its Subsidiaries and the conduct of their businesses does not and has not been
alleged by any Person to infringe on the rights of any Person.


 


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5.7.                            Investigations,
Audits, Etc.  As of the Closing Date,
except as set forth on Schedule 5.7, neither Borrower nor any of its
Subsidiaries is the subject of any review or audit by the IRS or any
governmental investigation concerning the violation or possible violation of
any law.


 


5.8.                            Employee
Matters.  Except as set forth on Schedule
5.8, (a) as of the Closing Date, neither Borrower nor any of its
Subsidiaries nor any of their respective employees is subject to any collective
bargaining agreement, (b) as of the Closing Date, no petition for
certification or union election is pending with respect to the employees of Borrower
or any of its Subsidiaries and no union or collective bargaining unit has
sought such certification or recognition with respect to the employees of
Borrower or any of its Subsidiaries, (c) there are no strikes, slowdowns,
work stoppages or controversies pending or, to the best knowledge of Borrower
after due inquiry, threatened between Borrower or any of its Subsidiaries and
its respective employees, other than employee grievances arising in the ordinary
course of business which could not reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect and (d) hours
worked by and payment made to employees of Borrower and its Subsidiaries comply
with the Fair Labor Standards Act and each other federal, state, local or
foreign law applicable to such matters except where failure to comply will not
have a Material Adverse Effect.  Except
as set forth on Schedule 5.8, as of the Closing Date, neither Borrower
nor any of its Subsidiaries is party to an employment contract.


 


5.9.                            Solvency.  Each of the Credit Parties is Solvent.


 


5.10.                     Litigation;
Adverse Facts.  Except as set forth
on Schedule 5.10, there are no judgments outstanding against
Borrower or any of its Subsidiaries or affecting any property of Borrower or
any of its Subsidiaries, nor is there any Litigation pending, or to the best
knowledge of Borrower threatened, against Borrower or any of its Subsidiaries
which could reasonably be expected to result in any Material Adverse Effect.


 


5.11.                     Use of
Proceeds; Margin Regulations.


 


(a)                                 No
part of the proceeds of any Loan will be used for “buying” or “carrying” “margin
stock” within the respective meanings of such terms under Regulation U of
the Board of Governors of the Federal Reserve System as now and from time to
time hereafter in effect or for any other purpose that violates the provisions
of the regulations of the Board of Governors of the Federal Reserve
System.  If requested by Agent, Borrower
will furnish to Agent and each Lender a statement to the foregoing effect in
conformity with the requirements of FR Form G-3 or FR Form 0-1, as applicable,
referred to in Regulation U.


 


(b)                                 Borrowers
shall utilize the proceeds of the Loans solely for the Refinancing (and to pay
any related transaction expenses).  Schedule
5.11 contains a description of Borrower’s sources and uses of funds as of
the Closing Date, including Loans to be made or incurred on that date.


 


38





















 


5.12.                     Ownership
of Property; Liens.  As of the
Closing Date, the real estate (together with any real estate acquired by any
Credit Party after the Closing Date, “Real Estate”) listed in Schedule 5.12,
as such Schedule may be updated from time to time upon thirty (30) days’ prior
written notice to Agent, constitutes all of the real property owned, leased,
subleased, or used by Borrower or any of its Subsidiaries.  Borrower and each of its Subsidiaries owns,
subject to Permitted Encumbrances, good and marketable fee simple title to all
of its owned Real Estate, and valid and marketable leasehold interests in all
of its leased Real Estate, all as described on Schedule 5.12, and copies
of all such leases or a summary of terms thereof reasonably satisfactory to Agent
have been delivered to Agent.  Schedule 5.12
further describes any Real Estate with respect to which Borrower or any of its
Subsidiaries is a lessor, sublessor or assignor as of the Closing Date.  As of the Closing Date, Borrower and each of
its Subsidiaries also has good and marketable title to, or valid leasehold
interests in, all of its personal property and assets, including, without
limitation, those titled vehicles described in Schedule 5.12 (the “Titled
Vehicles”).  As of the Closing Date,
none of the properties and assets of Borrower or any of its Subsidiaries are
subject to any Liens other than Permitted Encumbrances, and there are no facts,
circumstances or conditions known to Borrower that may result in any Liens
(including Liens arising under Environmental Laws) other than Permitted Encumbrances
against the properties or assets of Borrower or any of its Subsidiaries.  Borrower and each of its Subsidiaries has
received all deeds, certificates of title, assignments, waivers, consents,
nondisturbance and attornment or similar agreements, bills of sale and other
documents, and has duly effected all recordings, filings and other actions
necessary to establish, protect and perfect Borrower’s or Subsidiary’s right,
title and interest in and to all such Real Estate and other properties and
assets.  Schedule 5.12 also
describes any purchase options, rights of first refusal or other similar
contractual rights pertaining to any Real Estate as of the Closing Date.  As of the Closing Date, no portion of Borrower’s
or any of its Subsidiaries’ Real Estate has suffered any material damage by
fire or other casualty loss that has not heretofore been repaired and restored
in all material respects to its original condition or otherwise remedied.  As of the Closing Date, all material permits
required to have been issued or appropriate to enable the Real Estate to be
lawfully occupied and used for all of the purposes for which it is currently
occupied and used have been lawfully issued and are in full force and effect.


 


5.13.                     Environmental
Matters.


 


(a)                                 Except
as set forth in Schedule 5.13, as of the Closing Date: (i) the Real
Estate is free of contamination from any Hazardous Material except for such
contamination that could not reasonably be expected to adversely impact the
value or marketability of such Real Estate and that could not reasonably be expected
to result in Environmental Liabilities of Borrower or its Subsidiaries in
excess of $250,000 in the aggregate; (ii) neither Borrower nor any of its
Subsidiaries has caused or suffered to occur any Release of Hazardous Materials
on, at, in, under, above, to, from or about any of their Real Estate except for
such Releases that could not reasonably be expected to result in Environmental
Liabilities of Borrower and its Subsidiaries in excess of $250,000 in the
aggregate; (iii) Borrower and its Subsidiaries are and have been in
compliance with all Environmental Laws, except for such noncompliance that


 


39





















 


could not reasonably be expected to result in Environmental Liabilities
of Borrower or its Subsidiaries in excess of $250,000 in the aggregate;
(iv) Borrower and its Subsidiaries have obtained, and are in compliance
with, all Environmental Permits required by Environmental Laws for the
operations of their respective businesses as presently conducted or as proposed
to be conducted, except where the failure to so obtain or comply with such
Environmental Permits could not reasonably be expected to result in
Environmental Liabilities of Borrower or its Subsidiaries in excess of $250,000
in the aggregate, and all such Environmental Permits are valid, uncontested and
in good standing; (v) neither Borrower nor any of its Subsidiaries is
involved in operations or knows of any facts, circumstances or conditions,
including any Releases of Hazardous Materials, that are likely to result in any
Environmental Liabilities of Borrower or any of its Subsidiaries that could
reasonably be expected to be in excess of $250,000 in the aggregate, and
neither Borrower nor any of its Subsidiaries has permitted any current or
former tenant or occupant of the Real Estate to engage in any such operations;
(vi) there is no pending Litigation arising under or related to any
Environmental Laws, Environmental Permits or Hazardous Material that seeks
damages, penalties, fines, costs or expenses in excess of $250,000 in the
aggregate or injunctive relief against, or that alleges criminal misconduct by Borrower
or any of its Subsidiaries; (vii) no notice has been received by Borrower
or any of its Subsidiaries identifying any of them as a “potentially
responsible party” or requesting information under CERCLA or analogous state
statutes, and to the knowledge of Borrower, there are no facts, circumstances
or conditions that may result in any of Borrower or any of its Subsidiaries
being identified as a “potentially responsible party” under CERCLA or analogous
state statutes; and (viii) Borrower has provided to Agent copies of all
existing environmental reports prepared by or on behalf of Borrower or any of
its Subsidiaries or in the possession or control of any of them, reviews and
audits and all written information pertaining to actual or potential Environmental
Liabilities, in each case relating to Borrower or any of its Subsidiaries.


 


(b)                                 Borrower
hereby acknowledges and agrees that Agent (i) is not now in control of any
of the Real Estate or environmental affairs of Borrower or its Subsidiaries,
(ii) to the best of Borrower’s knowledge, before the possession or control by
Borrower or its Subsidiaries of such Real Estate or environmental affairs,
Agent was not in control of any such Real Estate of environmental affairs and
(iii) does not have the capacity through the provisions of the Loan
Documents or otherwise to control Borrower’s or its Subsidiaries’ conduct with
respect to the ownership, operation or management of any of their Real Estate
or compliance with Environmental Laws or Environmental Permits.


 


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5.14.                     ERISA.


 


(a)                                 Schedule
5.14 lists all Plans and separately identifies all Pension Plans, including
Title IV Plans, Multiemployer Plans, ESOPs and Welfare Plans, including all
Retiree Welfare Plans.  Except with
respect to Multiemployer Plans, each Qualified Plan has been determined by the
IRS to qualify under Section 401 of the IRC, the trusts created thereunder have
been determined to be exempt from tax under the provisions of Section 501 of
the IRC, and nothing has occurred that could reasonably be expected to cause
the loss of such qualification or tax-exempt status.  Each Plan other than a Multiemployer Plan,
is, and to the knowledge of Borrower each Multiemployer Plan is, in compliance
in all material respects, with the applicable provisions of ERISA and the IRC,
including the timely filing of all reports required under the IRC or ERISA,
including the statement required by 29 CFR Section 2520.104-23.  Neither Borrower nor any ERISA Affiliate has
failed in other than a de minimis respect, to make any contribution or pay any
amount due as required by either Section 412 of the IRC or Section 302 of ERISA
or the terms of any such Plan.  Neither
Borrower nor any ERISA Affiliate has engaged in a “prohibited transaction,” as
defined in Section 406 of ERISA and Section 4975 of the IRC, in connection with
any Plan, that would subject any Credit Party to a material tax on prohibited
transactions imposed by Section 502(i) of ERISA or Section 4975 of the IRC.


 


(b)                                 Except
as set forth in Schedule 5.14: (i) no Title IV Plan has any
Unfunded Pension Liability; (ii) no ERISA Event or event described in
Section 4062(e) of ERISA with respect to any Title IV Plan has occurred or is
reasonably expected to occur; (iii) there are no pending, or to the
knowledge of Borrower, threatened claims (other than claims for benefits in the
normal course), sanctions, actions or lawsuits, asserted or instituted against
any Plan (other than a Multiemployer Plan) or any Person as fiduciary or
sponsor of any Plan; (iv) no Credit Party or ERISA Affiliate has incurred
or reasonably expects to incur any liability as a result of a complete or partial
withdrawal from a Multiemployer Plan; (v) within the last five years no
Title IV Plan of any Credit Party or ERISA Affiliate has been terminated,
whether or not in a “standard termination” as that term is used in Section
404(b)(1) of ERISA, nor has any Title IV Plan of any Credit Party or ERISA
Affiliate (determined at any time within the past five years) with Unfunded
Pension Liabilities been transferred outside of the “controlled group” (within
the meaning of Section 4001(a)(14) of ERISA) of any Credit Party or ERISA Affiliate;
(vi) except in the case of any ESOP, Stock of all Credit Parties and their
ERISA Affiliates makes up, in the aggregate, no more than 10% of fair market
value of the assets of any Plan measured on the basis of fair market value as
of the latest valuation date of any Plan; and (vii) no liability under any
Title IV Plan has been satisfied with the purchase of a contract from an
insurance company that is not rated AAA by the S&P or an equivalent rating
by another nationally recognized rating agency.


 


5.15.                     Brokers.  No broker or finder acting on behalf of any
Credit Party or Affiliate thereof brought about the obtaining, making or
closing of the Loans or the Related Transactions, and no Credit Party or
Affiliate thereof has any obligation to any Person in respect


 


41





















 


of any finder’s or brokerage
fees in connection therewith, except as contemplated by Section 1.6.


 


5.16.                     Deposit Accounts.  Schedule 5.16 lists all banks and
other financial institutions at which any Credit Party maintains deposit,
securities or other accounts as of the Closing Date, and such Schedule
correctly identifies the name, address and telephone number of each depository,
the name in which the account is held, a description of the purpose of the
account, and the complete account number therefor.


 


5.17.                     Agreements
and Other Documents.  As of the
Closing Date, each of the following licenses and agreements to which any Credit
Party is a party is listed on Schedule 5.17:  supply agreements and purchase agreements not
terminable by such Credit Party within sixty (60) days following written notice
issued by such Credit Party and involving transactions in excess of $1,000,000
per annum; leases of Equipment having a remaining term of one year or longer
and requiring aggregate rental and other payments in excess of $500,000 per annum; licenses and permits held by the Credit Parties,
the absence of which could reasonably be expected to have a Material Adverse
Effect; instruments and documents evidencing any Indebtedness or Guaranteed
Indebtedness of such Credit Party and any Lien granted by such Credit Party
with respect thereto; and instruments and agreements evidencing the issuance of
any equity securities, warrants, rights or options to purchase equity
securities of such Credit Party.


 


5.18.                     Insurance.  Schedule 5.18 lists all insurance
policies of any nature maintained, as of the Closing Date, for current
occurrences by each Credit Party, as well as a summary of the key business
terms of each such policy such as deductibles, coverage limits and term of
policy.


 


SECTION 6.


 


DEFAULT, RIGHTS AND REMEDIES


 


6.1.                            Event
of Default.  “Event of Default”
shall mean the occurrence or existence of any one or more of the following:


 


(a)                                 Payment.  (1) Failure to pay any installment or
other payment of principal of any Loan when due or (2) failure to pay,
within three (3) days after the due date, any interest on any Loan or any other
amount due under this Agreement or any of the other Loan Documents; or


 


(b)                                 Default
in Other Agreements. 
(1) Borrower or any of its Subsidiaries fails to pay when due or
within any applicable grace period any amount of principal of or any amount of
interest on Indebtedness (other than the Loans) or any Contingent Obligations
if such Indebtedness or Contingent Obligation is in excess of $2,000,000 or
(2) breach or default of Borrower or any of its Subsidiaries, or the
occurrence of any condition or event, with respect


 


42





















 


to any Indebtedness (other than the Loans) or
any Contingent Obligations, if the effect of such breach, default or occurrence
is to cause or to permit the holder or holders then to cause, Indebtedness
and/or Contingent Obligations having an aggregate principal amount in excess of
$2,000,000 to become or be declared due prior to their stated maturity; provided that with respect to any failure to observe or
perform any term, covenant, condition or agreement under the First Lien Credit
Agreement, such event shall not constitute an Event of Default pursuant to this
clause (b) unless the obligations under the First Lien Credit Agreement have
been accelerated or are otherwise presently due and payable; or


 


(c)                                  Breach
of Certain Provisions.  Failure of
Borrower or any of its Subsidiaries to perform or comply with any term or
condition contained in Section 3 or Section 4; or


 


(d)                                 Breach
of Warranty.  Any representation or
warranty herein or in any Loan Document or in any written statement, report, financial
statement or certificate made or delivered to Agent or any Lender by any Credit
Party is untrue or incorrect in any material respect (without duplication of
materiality qualifiers contained therein) as of the date when made or deemed
made; or


 


(e)                                  Other
Defaults Under Loan Documents. Any Credit Party defaults in the performance
of or compliance with any term contained in this Agreement or the other Loan
Documents (other than occurrences described in other provisions of this Section
6.1 for which a different grace or cure period is specified, or for which
no cure period is specified and which constitute immediate Events of Default)
and such default is not remedied or waived within thirty (30) days after the
earlier of (1) receipt by Borrower of notice from Agent or Requisite
Lenders of such default or (2) actual knowledge of Borrower or any other
Credit Party of such default; or


 


(f)                                   Involuntary
Bankruptcy; Appointment of Receiver, Etc. 
(1) A court enters a decree or order for relief with respect to any
Credit Party in an involuntary case under the Bankruptcy Code, which decree or
order is not stayed or other similar relief is not granted under any applicable
federal or state law; or (2) the continuance of any of the following
events for forty-five (45) days unless dismissed, bonded or discharged:  (a) an involuntary case is commenced
against any Credit Party, under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect; or
(b) a decree or order of a court for the appointment of a receiver,
liquidator, sequestrator, trustee, custodian or other officer having similar
powers over any Credit Party, or over all or
a substantial part of its property, is entered; or (c) a receiver, trustee
or other custodian is appointed without the consent of a Credit Party, for all
or a substantial part of the property of the Credit
Party; or


 


(g)                                  Voluntary
Bankruptcy; Appointment of Receiver, Etc. 
(1) any Credit Party commences a voluntary case under the
Bankruptcy Code, or consents to the entry of an order for relief in an involuntary
case or to the conversion of an involuntary case to a voluntary case under any
such law or consents to the appointment of or taking possession by a receiver,


 


43





















 


trustee or other custodian for all or a substantial part of its
property; or (2) any Credit Party makes any assignment for the benefit of
creditors; or (3) the Board of Directors of any Credit Party adopts any
resolution or otherwise authorizes action to approve any of the actions referred
to in this Section 6.1(g); or


 


(h)                                 Judgment
and Attachments.  Any money judgment,
writ or warrant of attachment, or similar process (other than those described
elsewhere in this Section 6.1) involving an amount in the aggregate at
any time in excess of $2,000,000 for all such judgments, writs, warrants or
similar process (to the extent not adequately covered by insurance as to which
the insurance company has acknowledged coverage) is entered or filed against
one or more of the Credit Parties or any of their respective assets and remains
undischarged, unvacated, unbonded or unstayed for a period of thirty (30) days
or in any event later than five (5) Business Days prior to the date of any proposed
sale thereunder; or


 


(i)                                     Dissolution.  Any order, judgment or decree is entered
against any Credit Party decreeing the dissolution or split up of such Credit
Party and such order remains undischarged or unstayed for a period in excess of
fifteen (15) days; or


 


(j)                                    Solvency.  Any Credit Party ceases to be Solvent, fails
to pay its debts as they become due or admits in writing its present or
prospective inability to pay its debts as they become due; or


 


(k)                                 Invalidity
of Loan Documents.  Any of the Loan
Documents for any reason, other than a partial or full release in accordance
with the terms thereof, ceases to be in full force and effect or is declared to
be null and void, or any Credit Party denies that it has any further liability
under any Loan Documents to which it is party, or gives notice to such effect;
or


 


(l)                                     Change
of Control.  A Change of Control
occurs.


 


6.2.                            Acceleration
and Other Remedies.  Upon the
occurrence of any Event of Default described in Section 6.1(f) or 6.1(g),
in each case, with respect to Borrower, all of the Obligations, including the Loans,
shall automatically become immediately due and payable, without presentment,
demand, protest, notice of intent to accelerate, notice of acceleration or
other requirements of any kind, all of which are hereby expressly waived by
Borrower.  Upon the occurrence and during
the continuance of any other Event of Default, Agent may, and at the request of
the Requisite Lenders, Agent shall, by written notice to Borrower (a) declare
all or any portion of the Loans and all or any portion of the other Obligations
to be, and the same shall forthwith become, immediately due and payable
together with accrued interest thereon, and (b) exercise any other remedies
which may be available under the Loan Documents or applicable law.


 


6.3.                            Performance
by Agent.  If any Credit Party shall
fail to perform any covenant, duty or agreement contained in any of the Loan
Documents, Agent may perform or


 


44





















 


attempt to perform such
covenant, duty or agreement on behalf of such Credit Party after the expiration
of any cure or grace periods set forth herein. 
In such event, such Credit Party shall, at the request of Agent,
promptly pay any amount reasonably expended by Agent in such performance or
attempted performance to Agent, together with interest thereon at the highest
rate of interest in effect upon the occurrence of an Event of Default as
specified in Section 1.5 from the date of such expenditure until
paid.  Notwithstanding the foregoing, it
is expressly agreed that Agent shall not have any liability or responsibility
for the performance of any obligation of any Credit Party under this Agreement
or any other Loan Document.


 


6.4.                            Application
of Proceeds.  Notwithstanding
anything to the contrary contained in this Agreement, upon the occurrence and
during the continuance of an Event of Default, (a) Borrower irrevocably
waives the right to direct the application of any and all payments at any time
or times thereafter received by Agent from or on behalf of Borrower, and Agent
shall have the continuing and exclusive right to apply and to reapply any and
all payments received at any time or times after the occurrence and during the
continuance of an Event of Default against the Obligations in such manner as
Agent may deem advisable notwithstanding any previous application by Agent and
(b) in the absence of a specific determination by Agent with respect
thereto, the proceeds of any sale of, or other realization upon, all or any
part of the Collateral shall, subject to the terms of the Intercreditor
Agreement, be applied:  first, to
all fees, costs and expenses incurred by or owing to Agent and any Lender with
respect to this Agreement, the other Loan Documents or the Collateral; second,
to all fees, costs and expenses incurred by or owing to any Lender with respect
to this Agreement, the other Loan Documents or the Collateral; third, to
accrued and unpaid interest on the Obligations (including any interest which
but for the provisions of the Bankruptcy Code, would have accrued on such
amounts); fourth, to the principal amount of the Obligations outstanding
and fifth to any other obligations of Credit Parties owing to Agent or
any Lender under the Loan Documents.  Any
balance remaining shall be delivered to Borrower or to whomever may be lawfully
entitled to receive such balance or as a court of competent jurisdiction may
direct.


 


SECTION 7.


 


CONDITIONS TO LOANS


 


The obligations of Lenders to make Loans are
subject to satisfaction of all of the applicable conditions set forth below:


 


(a)                                 The
obligations of Lenders to make the Loans on the Closing Date are, in addition
to the conditions precedent specified in clauses (b) and (c) below, subject to
the delivery of all documents listed on, the taking of all actions set forth on
and the satisfaction of all other conditions precedent listed in the Closing
Checklist attached hereto as Annex C (except as contemplated to be delivered
post-closing pursuant to Section 2.8(b) hereto), all in form and substance, or
in a manner, satisfactory to Agent and Lenders;


 


45





















 


(b)                                 the
representations and warranties by the Credit Parties contained herein and in
the other Loan Documents shall be true and correct in all material respects
(without duplication of any materiality qualifier contained therein) as of the
Closing Date, except to the extent that such representation or warranty
expressly relates to an earlier date; and


 


(c)                                  no
Default shall have occurred and is continuing or would result after giving
effect to the Related Transactions.


 


The request
and acceptance by Borrower of the proceeds of any Loan shall be deemed to
constitute, as of the date thereof, a representation and warranty by
Borrower that the conditions in clauses (b) and (c) have been satisfied and the
continuation or the conversion or continuation of any Loan into, or as, a
Eurodollar Loan by Borrower shall be deemed to constitute, as of the date thereof,
a representation and warranty that the condition in clause (c) has been
satisfied.


 


SECTION 8.


 


THE AGENT


 


8.1.                            Appointment
of Agent.  Each of the Lenders hereby
irrevocably appoints DBTCA as the Agent. 
The Agent hereby agrees to act upon the express conditions contained
herein and the other Loan Documents, as applicable.  The provisions of this Section 8 are solely
for the benefit of the Agents and the Lenders and no Credit Party shall have
any rights as a third party beneficiary of any of the provisions thereof.  In performing its functions and duties
hereunder, the Agent shall act solely as a representative and on behalf of the
Lenders and does not assume and shall not be deemed to have assumed any
obligation towards or relationship of agency or trust with or for Borrower or
any of its Subsidiaries.  The Agent,
without consent of or notice to any party hereto, may assign any and all of its
rights hereunder to any of its Affiliates.


 


8.2.                            Powers
and Duties.  Each Lender irrevocably
authorizes the Agent to take such action on such Lender’s behalf and to
exercise such powers, rights and remedies hereunder and under the other Loan
Documents as are specifically delegated or granted to the Agent by the terms
hereof and thereof, together with such powers, rights and remedies as are reasonably
incidental thereto.  The Agent shall have
only those duties and responsibilities that are expressly specified herein and
the other Loan Documents.  The Agent may
exercise such powers, rights and remedies and perform such duties by or through
any one or more sub-agents appointed by it. 
The Agent and any such sub-agent may perform any and all its duties and
exercise its rights and powers by or through their Affiliates.  Section 8.3 shall apply to any such
sub-agent and to the Affiliates of the Agent and any such sub-agent.  The Agent shall have, by reason hereof or any
of the other Loan Documents, a fiduciary relationship with, or any other
implied duties in respect of, any Lender; and nothing herein or any of the
other Loan Documents, expressed or implied, is intended to or shall be so
construed as to impose


 


46





















 


upon any Agent any obligations
in respect hereof or any of the other Loan Documents except as expressly set
forth herein or therein.  The Agent is
further authorized by the Lenders to enter into agreements supplemental to this
Agreement or any other Loan Documents for the purpose of curing any formal
defect, inconsistency, omission or ambiguity in this Agreement or any other
Loan Document to which it is a party (without any consent or approval by the
Lenders).


 


8.3.                            General
Immunity.


 


(a)                                 No
Responsibility for Certain Matters. 
The Agent shall not be responsible to any Lender for, or be required to
ascertain or inquire as to, (i) any statement, recital, warranty or
representation (in each case whether written or oral) made in or in connection
with any Loan Document, (ii) the contents of any certificate, report or other
document (including financial statements) 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 execution, validity, enforceability, effectiveness, genuineness,
sufficiency or collectability of any Loan Document or any other agreement,
instrument or document, (v) the use of proceeds of the Loans, (vi) the
existence or possible existence of any Default, (vii) the financial condition
or business affairs of any Credit Party or any other Person liable for the
payment of any Obligations or (viii) the satisfaction of any condition set
forth in Section 7 or elsewhere in any Loan Document, other than to confirm receipt
of items expressly required to be delivered to the Agent, or, in each such
case, to make any disclosures with respect to the foregoing.  Except as expressly set forth in the Loan
Documents, the Agent shall have no duty to disclose, nor shall it be liable for
the failure to disclose, any information relating to Borrower or any of its
Subsidiaries that is communicated to or obtained by the entity serving as Agent
or any of its Affiliates in any capacity. 
Anything contained herein to the contrary notwithstanding, the Agent
shall not have any liability arising from confirmations of the amount of
outstanding Loans or the component amounts thereof.


 


(b)                                 Exculpatory
Provisions.  Neither Agent nor any of
its officers, partners, directors, employees or agents shall be liable to the
Lenders for any action taken or omitted by Agent under or in connection with
any of the Loan Documents except to the extent caused by Agent’s gross
negligence or willful misconduct (as determined by a court of competent
jurisdiction by final and nonappealable judgment).  Agent shall be entitled to refrain from any
act or the taking of any action (including the failure to take an action) in connection
herewith or any of the other Loan Documents or from the exercise of any power,
discretion or authority vested in it hereunder or thereunder unless and until
such Agent shall have received instructions in respect thereof from the Requisite
Lenders (or such other Lenders as may be required to give such instructions
under Section 9.8) and, upon receipt of such instructions from the Requisite
Lenders (or such other Lenders, as the case may be), the Agent shall be
entitled to act or (where so instructed) refrain from acting, or to exercise
such power, discretion or authority, in accordance with such instructions.  Without prejudice to the generality of the
foregoing, (i) the Agent shall be entitled to rely, and shall be fully
protected in relying, upon any notice, request, certificate, consent,
communication, instrument or document believed by it to


 


47





















 


be genuine and correct and to have been signed or sent by the proper
Person or Persons, and shall be entitled to rely and shall be protected in
relying on opinions and judgments of attorneys (who may be attorneys for
Borrower and its Subsidiaries), accountants, experts and other professional
advisors selected by it; and (ii) no Lender shall have any right of action
whatsoever against any Agent as a result of such Agent acting or (where so
instructed) refraining from acting hereunder or any of the other Loan Documents
in accordance with the instructions of the Requisite Lenders (or such other
Lenders as may be required to give such instructions under Section 9.8).


 


(c)                                  To
the extent that First Lien Agent acts as agent for perfection for the Agent and
the Lenders as contemplated by the Intercreditor Agreement, each Lender agrees
that the First Lien Agent shall be entitled to the limitation on liability and
indemnity under Section 8 of the Revolving Credit Agreement as in effect on the
Closing Date.


 


8.4.                            Notice
of Default.  The Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default hereunder
unless the Agent has received notice from a Lender or Borrower referring to
this Agreement, describing such Default and stating that such notice is a “notice
of default”.  In the event that the Agent
receives such a notice, the Agent shall promptly give notice thereof to the
Lenders.  The Agent shall take such
action with respect to such Default as shall be reasonably directed by the Requisite
Lenders (or such other Lenders as may be required to give such direction
pursuant to the terms of this Agreement); provided that
unless and until the Agent shall have received such directions, the Agent may
(but shall not be obligated to) take such action, or refrain from taking such
action, with respect to such Default as it shall deem advisable in the best
interests of the Lenders.


 


8.5.                            Agents
Entitled to Act as Lender.  Being an
Agent shall in no way impair or affect any of the rights and powers of, or
impose any duties or obligations upon, the Agent in its individual capacity as
a Lender hereunder.  With respect to its
participation in the Loans, the Agent shall have the same rights and powers
hereunder as any other Lender and may exercise the same as if it were not performing
the duties and functions delegated to it hereunder, and the term “Lender”
shall, unless the context clearly otherwise indicates, include the Agent, as
the case may be, in its individual capacity. 
The Agent and its Affiliates may accept deposits from, lend money to,
own securities of, and generally engage in any kind of banking, trust, financial
advisory or other business with Borrower or any of its Affiliates as if it were
not performing the duties specified herein, and may accept fees and other
consideration from Borrower for services in connection herewith and otherwise
without having to account for the same to the Lenders.


 


8.6.                            Lenders’
Representations, Warranties and Acknowledgement.


 


(a)                                 Each
Lender represents and warrants that it has made its own independent investigation
of the financial condition and affairs of Borrower and its Subsidiaries in
connection with the Loans hereunder and that it has made and shall continue to
make its own appraisal of the creditworthiness of Borrower and its Subsidiaries.  The Agent shall have no


 


48





















 


duty or responsibility, either initially or on a continuing basis, to
make any such investigation or any such appraisal on behalf of the Lenders or
to provide any Lender with any credit or other information with respect
thereto, whether coming into its possession before the making of the Loans or
at any time or times thereafter, and the Agent shall have no responsibility
with respect to the accuracy of or the completeness of any information provided
to the Lenders.


 


(b)                                 Each
Lender, by delivering its signature page hereto and funding its Loan (or taking
any Loan by assignment) shall be deemed to have acknowledged receipt of, and
consented to and approved, each Loan Document and each other document required
to be approved by any Agent or the Requisite Lenders (or such other Lenders as
may be required to give such approvals), as applicable, on the date of delivery
of such signature page.


 


(c)                                  Notwithstanding
anything herein to the contrary, each Lender also acknowledges that the lien
and security interest granted to the Agent pursuant to the Collateral Documents
and the exercise of any right or remedy by the Agent thereunder are subject to
the provisions of the Intercreditor Agreement. 
In the event of any conflict between the terms of the Intercreditor
Agreement and the terms of the Loan Documents, the terms of the Intercreditor
Agreement shall govern and control. 
Additionally, prior to the First Lien Loan Termination Date, any requirement
for any Credit Party to deliver any item of Collateral to the Agent may be
satisfied by the delivery of such item to the collateral agent under the First
Lien Credit Agreement to the extent provided in the Intercreditor Agreement.


 


8.7.                            Right
to Indemnity.  Each Lender, in
proportion to its Pro Rata Share, severally agrees to indemnify the Agent, to
the extent that the Agent shall not have been reimbursed by any Credit Party,
for and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses (including reasonable
counsel fees and disbursements) or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by or asserted against the Agent
in exercising its powers, rights and remedies or performing its duties
hereunder or under the other Loan Documents or otherwise in its capacity as
Agent in any way relating to or arising out of this Agreement or the other Loan
Documents; provided no Lender shall be liable for
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 the
extent resulting from the Agent’s gross negligence or willful misconduct.  If any indemnity furnished to the Agent for
any purpose shall, in the opinion of the Agent, be insufficient or become impaired,
the Agent may call for additional indemnity and cease, or not commence, to do
the acts indemnified against until such additional indemnity is furnished; provided in no event shall this sentence require any Lender
to indemnify the Agent against any liability, obligation, loss, damage,
penalty, action, judgment, suit, cost, expense or disbursement in excess of
such Lender’s Pro Rata Share thereof; and provided, further, this sentence shall not be deemed to require any
Lender to indemnify the Agent against any liability, obligation, loss, damage,
penalty, action, judgment, suit, cost, expense or disbursement that are found
by a final and nonappealable decision of a court of competent jurisdiction to
have resulted solely from the Agent’s gross negligence or willful misconduct.


 


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8.8.                            Successor
Agents.  The Agent may resign at any
time by giving thirty days’ prior written notice thereof to the Lenders and
Borrower, and the Agent may be removed at any time with or without cause by an
instrument or concurrent instruments in writing delivered to Borrower and the
Agent and signed by the Requisite Lenders. 
Upon any such notice of resignation or any such removal, the Requisite
Lenders shall have the right, upon five Business Days’ notice to Borrower, to
appoint a successor Agent.  Upon the acceptance
of any appointment as the Agent hereunder by an applicable successor, such
successor shall thereupon succeed to and become vested with all the rights,
powers, privileges and duties of the retiring or removed Agent and the retiring
or removed Agent shall promptly (i) transfer to such successor all sums, items
of Collateral held by it under the Collateral Documents, together with all
records and other documents necessary or appropriate in connection with the
performance of the duties of the successor Agent under the Loan Documents, and
(ii) execute and deliver to such successor such amendments to financing
statements, and take such other actions, as may be necessary or appropriate in
connection with the assignment to such successor of the security interests
created under the Collateral Documents, whereupon such retiring or removed
Agent shall be discharged from its duties and obligations hereunder.  After any retiring or removed Agent’s
resignation or removal hereunder as the Agent, the provisions of this Section 8
shall inure to its benefit, as well as to the benefit of its sub-agents and
their respective Affiliates, as to any actions taken or omitted to be taken by
it while it was the Agent, as the case may be, hereunder.


 


8.9.                            Loan
Documents.  Anything contained in any
of the Loan Documents (other than Section 9.6) to the contrary
notwithstanding, Borrower, the Agent and each Lender hereby agree that (i) no
Lender shall have any right individually to realize upon any of the Collateral
or to enforce the Security Agreement or any other Collateral Document, it being
understood and agreed that all powers, rights and remedies hereunder may be
exercised solely by the Agent, on behalf of the Lenders in accordance with the
terms hereof and thereof, and (ii) in the event of a foreclosure by the Agent
on any of the Collateral pursuant to a public or private sale, the Agent or any
Lender may be the purchaser of any or all of such Collateral at any such sale
and the Agent, as representative of itself and the Lenders (but not any Lender
or Lenders in its or their respective individual capacities unless the Requisite
Lenders shall otherwise agree in writing) shall be entitled, for the purpose of
bidding and making settlement or payment of the purchase price for all or any portion
of the Collateral sold at any such public sale, to use and apply any of the
Obligations as a credit on account of the purchase price for any Collateral payable
by the Agent at such sale.  By making a
Loan or taking a Loan by assignment pursuant to Section 9.4(c) each Lender
hereby (i) agrees that the Loan Documents are subject to the terms of the
Intercreditor Agreement and agrees to be bound by the terms thereof and (ii)
authorizes the Agent to take any action required to be taken by it pursuant to the
terms of the Intercreditor Agreement.


 


8.10.                     No
Liability.  Notwithstanding anything
to the contrary contained in this Agreement or any other Loan Document, none of
the entities listed as Lead Arranger, Book Runner, Syndication Agent or
Documentation Agent in their respective capacities as


 


50





















 


such, shall have any duties or
responsibilities or shall incur any liability, under this Agreement or any
other Loan Document.


 


8.11.                     Withholdings.  To the extent required by any applicable law,
the Agent may withhold from any interest payment to any Lender an amount
equivalent to any applicable withholding tax. 
If the forms or other documentation required by Section 1.16(d)
are not delivered to the Agent, then the Agent may withhold from any interest
payment to any Lender not providing such forms or other documentation, an
amount equivalent to the applicable withholding tax.  If the IRS or any other Governmental Authority
asserts a claim that the Agent did not properly withhold tax from amounts paid
to or for the account of any Lender because the appropriate form was not
delivered or was not properly executed or because such Lender failed to notify
the Agent of a change in circumstance which rendered the exemption from, or
reduction of, withholding tax ineffective or for any other reason, such Lender
shall indemnify the Agent fully for all amounts paid, directly or indirectly,
by the Agent as tax or otherwise, including any penalties or interest and
together with all expenses (including legal expenses, allocated internal costs
and out-of-pocket expenses) incurred.


 


SECTION 9.


 


MISCELLANEOUS


 


9.1.                            Notices.  All notices, requests and demands to or upon
the respective parties hereto to be effective shall be in writing (including by
facsimile), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered, or three Business Days after being
deposited in the mail, postage prepaid, or, in the case of facsimile notice,
when received, addressed (a) in the case of Borrower, the Guarantors the Agents
and the other parties below, as follows and (b) in the case of the Lenders, as
set forth on Annex B or, in the case of a Lender which becomes a party
to this Agreement pursuant to an Assignment and Acceptance, in such Assignment
and Acceptance or (c) in the case of any party, to such other address as such
party may hereafter notify to the other parties hereto:


 


	
  Borrower or any Guarantor:

  	
   

  	
  c/o Penhall Company

  1801 W. Penhall Way

  Anaheim, California 92801

  Attention:  Chief Financial Officer

  Facsimile:  (714) 778-5638

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  or, for service of process:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  c/o Penhall Company

  933 Ransom Road

  Lancaster, New York 14806

  



 


51





















 


	
  with a copy to:

  	
   

  	
  Dechert LLP

  2929 Arch Street

  Philadelphia, Pennsylvania 19104

  Attention:   Gary Green

  Facsimile:   (215) 994-2222

  Telephone:  (215) 994-2656

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  DBTCA as
  Agent:

  	
   

  	
  Deutsche Bank Trust Company Americas
Global Credit Products

  Leveraged Loan Portfolio

  60 Wall Street, NYC60-1104

  New York, NY 10005-2858

  Attention:   Omayra Laucella

  Facsimile:   (212) 797-5690

  Telephone:  (212) 250-6106

  
	
   

  	
   

  	
   

  
	
  with a copy to:

  	
   

  	
  Cahill Gordon & Reindel LLP

  80 Pine Street

  New York, NY 10005

  Attention:   William M. Hartnett, Esq.

  Facsimile:   (212) 269-5420

  Telephone:  (212) 701-3847

  



 


9.2.                            Survival
of Agreement.  All covenants,
agreements, representations and warranties made by Borrower herein and in the
documents, certificates or other instruments prepared or delivered in connection
with or pursuant to this Agreement or any other Loan Document shall be
considered to have been relied upon by the Lenders and shall survive the making
by the Lenders of the Loans, regardless of any investigation made by the
Lenders or on their behalf, 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 or any other Loan Document is outstanding
and unpaid.  The agreements of the Credit
Parties set forth in Sections 1.14(c), 1.15, 1.16, 9.5
and 9.6 and the agreements of the Lenders set forth in Sections 1.12,
8.3(b) and 8.7 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, 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 Agent
or any Lender.


 


9.3.                            Binding
Effect.  This Agreement shall become
effective when it shall have been executed by each of the parties hereto and
when the Agent shall have received


 


52





















 


counterparts hereof which, when
taken together, bear the signatures of each of the other parties hereto.


 


9.4.                            Successors
and Assigns.


 


(a)                                 Whenever
in this Agreement any of the parties hereto is referred to, such reference
shall, unless the context other requires, be deemed to include the permitted
successors and assigns of such party; and all covenants, promises and
agreements by or on behalf of Borrower, the other Credit Parties, the Agent or
the Lenders that are contained in this Agreement or the other Loan Documents
shall bind and inure to the benefit of their respective successors and assigns.


 


(b)                                 Any
Lender may, without the consent of Borrower or any other Person, in accordance
with applicable law, at any time sell to one or more banks, financial institutions
or other entities (each, a “Participant”) participating interests in any
Loan owing to such Lender, any Commitment of such Lender or any other interest
of such Lender hereunder and under the other Loan Documents.  In the event of any such sale by a Lender of
a participating interest to a Participant, such Lender’s obligations under this
Agreement to the other parties to this Agreement shall remain unchanged, such
Lender shall remain solely responsible for the performance thereof, such Lender
shall remain the holder of any such Loan for all purposes under this Agreement
and the other Loan Documents, and Borrower and the Agent shall continue to deal
solely and directly with such Lender in connection with such Lender’s rights
and obligations under this Agreement and the other Loan Documents.  In no event shall any Participant under any
such participation have any right to approve any amendment or waiver of any
provision of any Loan Document, or any consent to any departure by any Credit
Party therefrom, except to the extent that such amendment, waiver or consent
would reduce the principal of, or interest on, the Loans or any fees payable
hereunder, or postpone the date of the final maturity of the Loans, in each
case to the extent subject to such participation.  Borrower agrees that if amounts outstanding
under this Agreement and the Loans are due or unpaid, or shall have been
declared or shall have become due and payable upon the occurrence of an Event
of Default, each Participant shall, to the maximum extent permitted by
applicable law, be deemed to have the right of setoff in respect of its participating
interest in amounts owing under this Agreement to the same extent as if the
amount of its participating interest were owing directly to it as a Lender
under this Agreement (including pursuant to Section 9.6); provided that, in purchasing such participating interest,
such Participant shall be deemed to have agreed to share with the Lenders the
proceeds thereof as provided in Section 1.13 as fully as if it were a
Lender hereunder.  Borrower also agrees
that each Participant shall be entitled to the benefits of Sections 1.14(c),
1.15 and 1.16 with respect to its participation in the Loans
outstanding from time to time as if it was a Lender; provided
that, in the case of Section 1.16, such Participant shall have complied
with the requirements of such Section; and provided,  further, that no Participant shall be entitled to receive
any greater amount pursuant to any such Section than the transferor Lender
would have been entitled to receive in respect of the amount of the
participation transferred by such transferor Lender to such Participant had no
such transfer occurred.


 


53





















 


(c)                                  Any
Lender (an “Assignor”) may, in
accordance with applicable law and upon written notice to the Agent, at any
time and from time to time assign to any Eligible Assignee (an “Assignee”)
all or any part of its rights and obligations under this Agreement pursuant to
an Assignment and Acceptance, executed by such Assignee and such Assignor and
delivered to the Agent for its acceptance and recording in the Register
together with a registration and processing fee of $3,500 payable to the Agent;
provided that no such assignment to an
Assignee (other than any Lender or any Affiliate of the assigning Lender or of
another Lender or any Approved Fund) shall be in an aggregate principal amount
of less $1,000,000, unless otherwise agreed by Borrower and the Agent (provided that for purposes of the processing fee and minimum
assignment amount only, any two or more Funds that concurrently invest in Loans
and are managed by the same investment advisor, or investment advisors that are
Affiliates of one another, shall be treated as a single Assignee).  Any such assignment shall be made as an assignment
of a proportionate part of all of the Assignor’s rights and obligations under
this Agreement with respect to the Loan so assigned.  Upon such execution, delivery, acceptance and
recording (and if requested by the Agent, upon delivery to the Agent of an
administrative questionnaire in the form provided by the Agent), from and after
the effective date determined pursuant to such Assignment and Acceptance, (x)
the Assignee thereunder shall be a party hereto and, to the extent provided in
such Assignment and Acceptance, have the rights and obligations of a Lender hereunder
with Loans as set forth therein, and (y) the Assignor thereunder shall, to the
extent provided in such Assignment and Acceptance, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of an Assignor’s rights and obligations under this
Agreement, such Assignor shall cease to be a party hereto).


 


(d)                                 Any
assignment of any Loan, whether or not evidenced by a Note, shall be effective
only upon appropriate entries with respect thereto being made in the Register
(and each Note shall expressly so provide). 
Any assignment or transfer of all or part of a Loan evidenced by a Note
shall be registered on the Register only upon surrender for registration of
assignment or transfer of the Note evidencing such Loan, accompanied by a duly
executed Assignment and Acceptance; thereupon one or more new Notes in the same
aggregate principal amount shall, to the extent requested by the designated Assignee,
be issued to the designated Assignee, and the old Notes shall be returned by
the Agent to Borrower marked “canceled.”


 


(e)                                  Upon
its receipt of an Assignment and Acceptance executed by an Assignor and an
Assignee the Agent shall (i) promptly accept such Assignment and Acceptance and
(ii) on the effective date determined pursuant thereto record the information
contained therein in the Register and give notice of such acceptance and
recordation to Borrower.  On or prior to
such effective date, Borrower, at its own expense, upon request, shall execute
and deliver to the Agent (in exchange for any Note of the assigning Lender) a
new Note or Notes to such Assignee or its registered assigns in an amount equal
to the share of outstanding Loans assumed or acquired by it pursuant to such
Assignment and Acceptance and, if the Assignor has retained any portion of the
outstanding Loans upon request, a new Note or Notes to the Assignor or its
registered assigns in an amount equal to such portion of outstanding Loans,


 


54





















 


retained by it hereunder.  Such
new Note or Notes shall be dated the Closing Date (or, in the case of New
Loans, the date of the original making of such New Loans) and shall otherwise
be in the form of the Note or Notes replaced thereby.


 


(f)                                   For
the avoidance of doubt, the parties to this Agreement acknowledge that the
provisions of this Section 9.4 concerning assignments of Loans and Notes
relate only to absolute assignments and that such provisions do not prohibit
assignments creating security interests, including, without limitation, any
pledge or assignment by a Lender of any Loan or Note to any Federal Reserve
Bank in accordance with applicable law.


 


(g)                                  Notwithstanding
anything to the contrary contained herein, any Lender (a “Granting Lender”)
may grant to a special purpose funding vehicle (an “SPC”), identified as
such in writing from time to time by the Granting Lender to the Agent and Borrower,
the option to provide to Borrower all or any part of any Loan that such
Granting Lender would otherwise be obligated to make to Borrower pursuant to
this Agreement; provided that  (i) nothing herein shall constitute a
commitment by any SPC to make any Loan and (ii) if an SPC elects not to
exercise such option or otherwise fails to provide all or any part of such
Loan, the Granting Lender shall be obligated to make such Loan pursuant to the
terms hereof.  The making of a Loan by an
SPC hereunder shall utilize the Commitment of the Granting Lender to the same extent,
and as if, such Loan were made by such Granting Lender.  Each party hereto hereby agrees that no SPC
shall be liable for any indemnity or similar payment obligation under this
Agreement (all liability for which shall remain with the Granting Lender).  In furtherance of the foregoing, each party
hereto hereby agrees (which agreement shall survive the termination of this
Agreement) that, prior to the date that is one year and one day after the
payment in full of all outstanding commercial paper or other senior
indebtedness of any SPC, it will not institute against, or join any other
Person in instituting against, such SPC any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings under the laws of the United
States or any State thereof.  In
addition, notwithstanding anything to the contrary contained in this Section
9.4, any SPC may (i) with notice to, but without the prior written
consent of, Borrower and the Agent and without paying any processing fee
therefor, assign all or a portion of its interests in any Loans to the Granting
Lender or to any financial institutions providing liquidity and/or credit
support to or for the account of such SPC to support the funding or maintenance
of Loans and (ii) disclose on a confidential basis any non-public
information relating to its Loans to any rating agency, commercial paper dealer
or provider of any surety, guarantee or credit or liquidity enhancement to such
SPC.


 


(h)                                 Neither
Borrower nor any other Credit Party shall assign or delegate any of its rights
or duties hereunder or under any other Loan Document without the prior written
consent of the Agent and each Lender, and any attempted assignment without such
consent shall be null and void.


 


55





















 


9.5.                            Expenses;
Indemnity.


 


(a)                                 Whether
or not the Transactions shall be consummated, Borrower agrees to pay promptly
(i) all the actual and reasonable out-of pocket costs and expenses of the Agent
and the Lead Arranger in connection with the syndication of the Loans and the
negotiation, preparation and execution of the Loan Documents and any consents,
amendments, waivers or other modifications thereto and the transactions
contemplated thereby; (ii) all the reasonable out-of pocket costs of furnishing
all opinions by counsel for Borrower and the other Credit Parties; (iii) the
reasonable fees, expenses and disbursements of counsel to the Agent and the
Lead Arranger in connection with the syndication of the Loans and negotiation,
preparation, execution and administration of the Loan Documents and any
consents, amendments, waivers or other modifications thereto and any other
documents or matters requested by Borrower; (iv) all the actual out-of pocket costs
and reasonable expenses of creating and perfecting Liens on the Collateral in favor
of the Agent, for the benefit of the itself and the Lenders, including filing
and recording fees, expenses and taxes, stamp or documentary taxes, search
fees, title insurance premiums and reasonable fees, expenses and disbursements
of counsel to the Agent and of counsel providing any opinions that the Agent or
Requisite Lenders may request in respect of the Collateral or the Liens created
pursuant to the Collateral Documents; (v) all the actual out-of pocket costs
and reasonable fees, expenses and disbursements of any auditors, accountants,
consultants or appraisers; (vi) all the actual costs and reasonable expenses
(including the reasonable fees, expenses and disbursements of any appraisers,
consultants, advisors and agents employed or retained by the Agents and their
counsel) in connection with the custody or preservation of any of the
Collateral; and (vii) after the occurrence of an Event of Default, all costs
and expenses, including reasonable attorneys’ fees (including allocated costs
of internal counsel) and costs of settlement, incurred by the Agent or any
Lender in enforcing any Obligations of or in collecting any payments due from
any Credit Party hereunder or under the other Loan Documents by reason of such
Event of Default (including in connection with the sale of, collection from, or
other realization upon any of the Collateral or the enforcement of the Security
Agreement) or in connection with any refinancing or restructuring of the credit
arrangements provided hereunder in the nature of a “work-out” or pursuant to
any insolvency or bankruptcy cases or proceedings.


 


(b)                                 Borrower
agrees, whether or not the Transactions shall have been consummated, to
indemnify the Agent, the Lead Arranger, each Lender and each Related Party of
any of the foregoing Persons (each such Person being called an “Indemnitee”)
against, and to hold each Indemnitee harmless from, any and all losses, claims,
damages, liabilities and related costs and expenses, including reasonable
counsel fees, disbursements and other charges, incurred by or asserted against
any Indemnitee arising out of, in any way connected with, or as a result of
(i) the marketing and syndication of the Loans and execution or delivery
of this Agreement or any other Loan Document or any agreement or instrument
contemplated thereby, the performance by the parties thereto of their
respective obligations thereunder or the consummation of the Transactions and
the other transactions contemplated thereby, (ii) the use of the proceeds
of the Loans, (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 of Hazardous
Materials on any property owned or operated by Borrower or any of its
Subsidiaries, or any Environmental Liabilities related in any


 


56





















 


way to Borrower or any of its Subsidiaries; provided
that such indemnity shall not, as to any Indemnitee, be available to the extent
that such losses, claims, damages, liabilities or related costs and expenses
are determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted solely from the gross negligence or willful misconduct
of such Indemnitee (and, upon any such determination, any indemnification
payments with respect to such losses, claims, damages, liabilities or related
costs and expenses previously received by such Indemnitee shall be subject to
reimbursement by such Indemnitee).  To
the extent that the undertakings to defend, indemnify, pay and hold harmless
set forth in this Section 9.5(b) may be unenforceable in whole or in
part because they are violative of any law or public policy, Borrower shall
contribute the maximum portion that it is permitted to pay and satisfy under
applicable law to the payment and satisfaction of all indemnified liabilities
incurred by Indemnitees or any of them.


 


(c)                                  To
the extent that Borrower fails for any reason to pay any amount required to be
paid by them or any other Credit Party to the Agent or the Lead Arranger under
paragraph (a) or (b) of this Section 9.5, each Lender severally agrees
to pay to the Agent or the Lead Arranger, 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 the
Agent or the Lead Arranger in its capacity as such.


 


(d)                                 To
the extent permitted by applicable law, Borrower shall not assert, and hereby
waives, any claim against any Indemnitee, on any theory of liability, for
special, indirect, consequential or punitive damages (as opposed to direct or
actual damages) arising out of, in connection with, or as a result of, this
Agreement or any agreement or instrument contemplated hereby, the Transactions,
any Loan or the use of the proceeds thereof.


 


9.6.                            Adjustments;
Setoff.  Notwithstanding Section
8.9(b), if an Event of Default shall have occurred and be continuing, each
Lender is hereby authorized at any time and from time to time, except to the
extent prohibited 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
indebtedness at any time owing by such Lender to or for the credit or the
account of Borrower against any of and all the obligations of Borrower now or
hereafter existing under this Agreement and other Loan Documents held by such
Lender, irrespective of whether or not such Lender shall have made any demand
under this Agreement or such other Loan Document and although such obligations
may be unmatured.  The rights of each
Lender under this Section 9.6 are in addition to other rights and
remedies (including other rights of setoff) which such Lender may have.


 


9.7.                            Governing
Law.  THIS AGREEMENT AND THE OTHER
LOAN DOCUMENTS (OTHER THAN AS EXPRESSLY SET FORTH IN OTHER LOAN DOCUMENTS)
SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF
NEW YORK WITHOUT REGARD TO THE CONFLICT


 


57





















 


OF LAW RULES THEREOF (OTHER
THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW).


 


9.8.                            Waivers;
Amendment.


 


(a)                                 No
failure or delay on the part of the Agent or any Lender in exercising any power
or right 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 the Agent 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 this Agreement or any other Loan Document or consent to any departure by
Borrower or any other Credit Party therefrom shall in any event be effective
unless the same shall be permitted by Section 9.8(b), and then such
waiver or consent shall be effective only in the specific instance and for the
purpose for which given.  No notice or
demand on Borrower in any case shall entitle Borrower to any other or further
notice or demand in similar or other circumstances.


 


(b)                                 Neither
this Agreement nor any provision hereof may be waived, amended or modified
except pursuant to an agreement or agreements in writing entered into by
Borrower and the Requisite Lenders. 
Notwithstanding the foregoing, no such agreement
shall (i) forgive or reduce the principal amount or extend the final
scheduled date of maturity of any Loan, extend the scheduled date of any
payment of in principal in respect of any Loan, reduce the stated rate of any
repayment premium, interest or fee payable hereunder or forgive the payment of
any repayment premium, interest or fee payable hereunder or extend the
scheduled date of any payment thereof or amend or modify Section 1.12 or
amend or modify Section 6.4, in each case without the consent of each
Lender directly affected thereby (such consent being in lieu of the consent of
the Requisite Lenders required pursuant to the first sentence of this Section
9.8(b)), (ii) increase or extend the Commitment of any Lender or
require any Lender to make available Interest Periods with a duration longer
than six months without the prior written consent of each Lender affected
thereby (such consent being in lieu of the consent of the Requisite Lenders
required pursuant to the first sentence of this Section 9.8(b)), (iii)
amend the provisions of Section 9.4(h), the provisions of this Section
9.8 or the definition of the term “Pro Rata Share” or “Requisite Lenders,”
or release all or substantially all of the Guarantors from their obligations
under the Subsidiary Guaranty, in each case without the prior written consent
of each Lender (provided that, with respect to any
additional extensions of credit pursuant hereto as are approved by the Requisite
Lenders, the consent of the Requisite Lenders only shall be required to include
the Lenders advancing such additional funds in the determination of “Requisite
Lenders” or “Pro Rata Share” on substantially the same basis as the Loans are
included on the Closing Date), (iv) release all or substantially all of the
Collateral (except to the extent such release is contemplated under this
Agreement) without the prior written consent of each Lender; or (v) modify the
protections afforded to an SPC pursuant to the provisions of Section 9.4(g)
without the written consent of such SPC (such consent


 


58





















 


being in addition to the consent of the Requisite Lenders required
pursuant to first sentence of this Section 9.8(b)); provided,
further, that no such agreement shall
amend, modify or otherwise affect the rights or duties of the Agent hereunder
or under any other Loan Document without the prior written consent of the
Agent.  To the extent the Agent is
entitled or required to make any determinations (whether a consent, waiver or
otherwise) under the Intercreditor Agreement, the Agent shall make such
determinations upon the advice of the Requisite Lenders.


 


(c)                                  The
Agent may, but shall have no obligation to, with the concurrence of any Lender,
execute amendments, modifications, waivers or consents on behalf of such
Lender.  Any waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
it was given.  No notice to or demand on
any Credit Party in any case shall entitle any Credit Party to any other or
further notice or demand in similar or other circumstances.  Any amendment, modification, termination,
waiver or consent effected in accordance with this Section 9.8 shall be
binding upon each Lender at the time outstanding, each future Lender and, if
signed by a Credit Party, on such Credit Party.


 


9.9.                            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 “Loan 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 or
participation in accordance with applicable law, the rate of interest payable
in respect of such Loan or participation 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 or participation but were not payable as a result of the operation
of this Section 9.9 shall be cumulated and the interest and Charges
payable to such Lender in respect of other Loans or participations 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.


 


9.10.                     Entire
Agreement.  This Agreement and the
other Loan Documents constitute the entire contract between the parties relative
to the subject matter hereof.  Any other
previous agreement among the parties with respect to the subject matter hereof
is superseded by this Agreement and the other Loan Documents.  Nothing in this Agreement or in the other
Loan Documents, expressed or implied, is intended to confer upon any Person
(other than the parties hereto and thereto, their respective successors and
assigns permitted hereunder and, to the extent expressly contemplated hereby,
the Related Parties of the Agent, the Lead Arranger and the Lenders) any
rights, remedies, obligations or liabilities under or by reason of this
Agreement or the other Loan Documents.


 


9.11.                     WAIVER OF
JURY TRIAL.  EACH PARTY HERETO HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY


 


59





















 


RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER
OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS.  EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER
LOAN DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 9.11.


 


9.12.                     Severability.  In the event any one or more of the
provisions contained in this Agreement or in any other Loan Document should be
held invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein and therein
shall not in any way be affected or impaired thereby (it being understood that
the invalidity of a particular provision in a particular jurisdiction shall not
in and of itself affect the validity of such provision in any other jurisdiction).  The parties shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions the economic effect of which comes as close as possible to
that of the invalid, illegal or unenforceable provisions.


 


9.13.                     Counterparts.  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, and shall become effective as provided in Section 9.3.  Delivery of an executed signature page to
this Agreement shall be as effective as delivery of a manually signed
counterpart of this Agreement.  A set of
the copies of this Agreement signed by all the parties shall be lodged with Borrower
and the Agent.


 


9.14.                     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 are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.


 


9.15.                     Jurisdiction;
Consent to Service of Process.


 


(a)                                 Borrower
hereby irrevocably and unconditionally submits, for itself and its property, to
the nonexclusive jurisdiction of any New York State court or Federal court
of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or the other Loan Documents, 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


 


60





















 


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 shall affect any right that the Agent, the Lead Arranger or any
Lender may otherwise have to bring any action or proceeding relating to this
Agreement or the other Loan Documents against Borrower or its properties in the
courts of any jurisdiction.


 


(b)                                 Borrower
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 the other Loan Documents in any New York State or
Federal court.  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.


 


(c)                                  Each
party to this Agreement irrevocably consents to service of process in the
manner provided for notices in Section 9.1.  Nothing in this Agreement will affect the
right of any party to this Agreement to serve process in any other manner
permitted by law.


 


9.16.                     Confidentiality.  Each of the Agent and the Lenders agrees to
maintain the confidentiality of the Information, except that Information may be
disclosed (a) to its and its Affiliates’ officers, directors, employees,
trustees 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), (b) to the extent requested by any
regulatory authority or quasi-regulatory authority (such as the National
Association of Insurance Commissioners), (c) to the extent required by
applicable laws or regulations or by any subpoena or similar legal process, (d)
in connection with the exercise of any remedies hereunder or under the other
Loan Documents or any suit, action or proceeding relating to the enforcement of
its rights hereunder or thereunder, (e) subject to an agreement containing
provisions substantially the same as those of this Section 9.16, to
(i) any actual or prospective assignee of or participant in any of its
rights or obligations under this Agreement and the other Loan Documents,
(ii) any pledge referred to in Section 9.4(f) or (iii) any actual
or prospective counterparty (or its advisors) to any swap or derivative
transaction relating to Borrower or any of its Subsidiaries or any of their
respective obligations, (f) with the consent of Borrower, (g) to any
rating agency when required by it, provided that, prior to any disclosure, such
rating agency shall undertake in writing to preserve the confidentiality of any
confidential information relating to the Credit Parties received by it from any
of the Lead Arranger, Agent or Lenders or (h) to the extent such
Information becomes publicly available other than as a result of a breach of
this Section 9.16.  For the
purposes of this Section, “Information” shall mean all information
received from Borrower and related to Borrower or its business, other than any
such information that was available to the Agent, the Lead Arranger or any
Lender on a nonconfidential basis prior to its disclosure by Borrower.  Any Person required to maintain the
confidentiality of Information as provided in this Section 9.16
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 its own confidential information.


 


61





















 


9.17.                     Acknowledgments.  Borrower hereby acknowledges that:


 


(a)                                 it
has been advised by counsel in the negotiation, execution and delivery of this
Agreement and the other Loan Documents;


 


(b)                                 neither
the Lead Arranger, the Agent or any Lender has any fiduciary relationship with
or duty to Borrower or any other Credit Party arising out of or in connection
with this Agreement or any of the other Loan Documents, and the relationship
between the Lead Arranger, the Agent and the Lenders, on one hand, and Borrower
and the other Credit Parties, on the other hand, in connection herewith or
therewith is solely that of debtor and creditor; and


 


(c)                                  no
joint venture is created hereby or by the other Loan Documents or otherwise
exists by virtue of the transactions contemplated hereby among the Lead Arranger,
the Agent and the Lenders or among Borrower, the other Credit Parties and the
Lenders.  The amounts payable at any time
hereunder to each Lender shall be a separate and independent debt, and each
Lender shall be entitled to protect and enforce its rights arising out hereof
and it shall not be necessary for any other Lender to be joined as an
additional party in any proceeding for such purpose.


 


9.18.                     Accounting
Changes.  In the event that any Accounting
Change shall occur and such change results in a change in the method of
calculation of the Leverage Ratio or the Interest Coverage Ratio and all
standards or terms in this Agreement, then the parties hereto agree, upon
request by Borrower or the Requisite Lenders, to enter into negotiations in
order to amend such provisions of this Agreement so as to equitably reflect
such Accounting Changes with the desired result that the criteria for
evaluating Borrower’s and the other Credit Parties’ financial condition
(including the requirements and restrictions associated with the provisions of
this Agreement applicable thereto) shall be the same after such Accounting
Changes as if such Accounting Changes had not been made.  Following any such request by Borrower or the
Requisite Lenders and until such time as such an amendment shall have been
executed and delivered by Borrower, the Agent and the Requisite Lenders, the
Leverage Ratio, the Interest Coverage Ratio and all standards and terms in this
Agreement shall continue to be calculated or construed as if such Accounting
Changes had not occurred.


 


9.19.                     Construction.  Each covenant contained herein shall be
construed (absent express provision to the contrary) as being independent of
each other covenant contained herein, so that compliance with any one covenant
shall not (absent such an express contrary provision) be deemed to excuse
compliance with any other covenant. 
Where any provision herein refers to action to be taken by any Person,
or which such Person is prohibited from taking, such provision shall be
applicable whether such action is taken directly or indirectly by such Person.


 


9.20.                     Patriot
Act.  Each Lender and the Agent (for
itself and not on behalf of any Lender) hereby notifies Borrower that pursuant
to the requirements of the Patriot Act, it is


 


62





















 


required to obtain, verify and
record information that identifies Borrower and the other Credit Parties, which
information includes the name and address of Borrower and other information
that will allow such Lender or the Agent, as applicable, to identify Borrower
in accordance with the Patriot Act.


 


9.21.                     Delivery
of Termination Statements and Mortgage Releases.


 


(a)                                 Upon
payment in full in cash and performance of all of the Obligations (other than
indemnification Obligations), termination of the Commitments and a release of
all claims against Agent and Lenders, and so long as no suits, actions proceedings,
or claims are pending or threatened against any Indemnitee asserting any
damages, losses or liabilities that are indemnified liabilities hereunder,
Agent shall deliver to Borrower termination statements, mortgage releases and
other documents necessary or appropriate to evidence the termination of the
Liens securing payment of the Obligations.


 


(b)                                 Upon
the disposition of any Collateral in accordance with the terms and conditions
provided herein, Agent shall deliver to Borrower termination statements,
mortgage releases and other evidence necessary or appropriate to evidence the
termination of Liens on such Collateral.


 


(c)                                  In
the event that any Credit Party acquires any Equipment and in connection
therewith grants a security interest in such Equipment to any Person providing
purchase money financing to such Credit Party for such Equipment and such security
interest and financing does not contravene any provision of this Agreement and
prohibits the Lien of Agent therein, Agent, at the request of such Credit Party
shall release its security interest in such Equipment or shall subordinate such
Lien (as required by such Person) and shall at the cost and expense of such
Credit Party execute such documents as may be necessary to release such Lien of
record; provided,  however,
that upon any such prohibition ceasing to be binding on such Credit Party, the
Lien of Agent in such Equipment shall automatically be reinstated and such
Credit Party shall immediately notify Agent and shall take all steps as may be
necessary to perfect such Lien of Agent within 20 Business Days following such
prohibition ceasing to be effective.


 


9.22.                     Subordination
of Intercompany Debt.


 


(a)                                 Each
Credit Party hereby agrees that any intercompany Indebtedness or other
intercompany payables or receivables, or intercompany advances directly or indirectly
made by or owed to such Credit Party by any other Credit Party (collectively, “Intercompany
Debt”), of whatever nature at any time outstanding shall be subordinate and
subject in right of payment to the prior payment in full in cash of the
Obligations.  Each Credit Party hereby
agrees that it will not, while any Event of Default is continuing, accept any
payment, including by offset, on any Intercompany Debt until the Maturity Date,
in each case, except with the prior written consent of Agent.


 


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(b)                                 In
the event that any payment on any Intercompany Debt shall be received by a
Credit Party other than as permitted by this Section 9.22 before the
Maturity Date, such Credit Party shall receive such payments and hold the same
in trust for, segregate the same from its own assets and shall immediately pay
over to, the Agent for the benefit of the Agent and Lenders all such sums to
the extent necessary so that Agent and the Lenders shall have been paid in full,
in cash, all Obligations owed or which may become owing.


 


(c)                                  Upon
any payment or distribution of any assets of any Credit Party of any kind or
character, whether in cash, property or securities by set-off, recoupment or
otherwise, to creditors in any liquidation or other winding-up of such Credit
Party or in the event of any Proceeding, Agent and Lenders shall first be
entitled to receive payment in full in cash, in accordance with the terms of
the Obligations and of this Agreement, of all amounts payable under or in
respect of such Obligations, before any payment or distribution is made on, or
in respect of, any Intercompany Debt, in any such Proceeding, any distribution
or payment, to which Agent or any Lender would be entitled except for the
provisions hereof shall be paid by such Credit Party, or by any receiver,
trustee in bankruptcy, liquidating trustee, agent or other person making such
payment or distribution directly to Agent (for the benefit of Agent and the
Lenders) to the extent necessary to pay all such Obligations in full in cash,
after giving effect to any concurrent payment or distribution to Agent and
Lenders (or to Agent for the benefit of Agent and Lenders).


 


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64





















 


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.


 


	
   

  	
  PENHALL
  INTERNATIONAL CORP., an

  Arizona corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeffrey
  E. Platt

  
	
   

  	
   

  	
  Name:
  Jeffrey E. Platt

  
	
   

  	
   

  	
  Title: Vice
  President

  



 


S-1





















 


	
   

  	
  DEUTSCHE
  BANK TRUST COMPANY

  AMERICAS,

  
	
   

  	
  as Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Omayra
  Laucella

  
	
   

  	
   

  	
  Name: Omayra
  Laucella

  
	
   

  	
   

  	
  Title: Vice
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Evelyn
  Lazala

  
	
   

  	
   

  	
  Name: Evelyn
  Lazala

  
	
   

  	
   

  	
  Title: Vice
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  DEUTSCHE BANK SECURITIES INC.,

  
	
   

  	
  as Lead
  Arranger and Book Runner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  (illegible)

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Stephanie L. Perry

  
	
   

  	
   

  	
  Name:
  Stephanie L. Perry

  
	
   

  	
   

  	
  Title:
  Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  DEUTSCHE
  BANK TRUST COMPANY

  AMERICAS,

  
	
   

  	
  as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Omayra
  Laucella

  
	
   

  	
   

  	
  Name: Omayra
  Laucella

  
	
   

  	
   

  	
  Title: Vice
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Evelyn
  Lazala

  
	
   

  	
   

  	
  Name: Evelyn
  Lazala

  
	
   

  	
   

  	
  Title: Vice
  President

  



 


S-2





















 


ANNEX A


 


to


 


SECOND LIEN TERM LOAN AGREEMENT


 


DEFINITIONS


 


Capitalized terms used in
the Loan Documents shall have (unless otherwise provided elsewhere in the Loan
Documents) the following respective meanings and all references to Sections,
Exhibits, Schedules or Annexes in the following definitions shall refer to
Sections, Exhibits, Schedules or Annexes of or to the Agreement:


 


“ABR”, when used in
reference to any Loan, refers to whether such Loan is bearing interest at a
rate determined by reference to the Alternate Base Rate.


 


“Account Debtor”
means any Person who may become obligated to any Credit Party under, with
respect to, or on account of, an Account, Chattel Paper or General Intangibles
(including a payment intangible).


 


“Accounting Changes”
means (a) changes in accounting principles required by GAAP and
implemented by Borrower or any of its Subsidiaries; (b) changes in
accounting principles recommended by Borrower’s certified public accountants
and implemented by Borrower; and (c) changes in carrying value of Borrower’s
or any of its Subsidiaries’ assets, liabilities or equity accounts resulting
from (i) the application of purchase accounting principles (SFAS 141,
A.P.B. 16 and/or 17 and EITF 88-16 and FASB 109) to the Related
Transactions or (ii) as the result of any other adjustments that, in each
case, were applicable to, but not included in, the Pro Forma.


 


“Accounts” means all “accounts,”
as such term is defined in the Code, now owned or hereafter acquired by any
Credit Party, including (a) all accounts receivable, other receivables,
book debts and other forms of obligations (other than forms of obligations
evidenced by Chattel Paper or Instruments), (including any such obligations
that may be characterized as an account or contract right under the Code),
(b) all of each Credit Party’s rights in, to and under all purchase orders
or receipts for goods or services, (c) all of each Credit Party’s rights
to any goods represented by any of the foregoing (including unpaid sellers’
rights of rescission, replevin, reclamation and stoppage in transit and rights
to returned, reclaimed or repossessed goods), (d) all rights to payment
due to any Credit Party for property sold, leased, licensed, assigned or
otherwise disposed of, for a policy of insurance issued or to be issued, for a
secondary obligation incurred or to be incurred, for energy provided or to be
provided, for the use or hire of a vessel under a charter or other contract,
arising out of the use of a credit card or charge card, or for services
rendered or to be rendered by such Credit Party or in connection with any other
transaction (whether or not yet earned by performance on the part of such
Credit Party), (e) all healthcare insurance receivables, and (f) all
collateral security of any kind, now or hereafter in existence, given by any
Account Debtor or other Person with respect to any of the foregoing.


 


“Acquisition Pro Forma”
has the meaning ascribed to it in Section 3.6(b)(v).


 


S-1





















 


“Adjusted Eurodollar Rate”
shall mean, with respect to any Eurodollar Loan for any Interest Period, an
interest rate per annum (rounded upwards, if necessary, to the next 1/100 of
1%) equal to the product of (a) the Eurodollar Rate in effect for such
Interest Period and (b) Statutory Reserves.


 


“Affected Lender” has
the meaning ascribed to it in Section 1.14(b).


 


“Affected Loans” has
the meaning ascribed to it in Section 1.14(b).


 


“Affiliate” means,
with respect to any Person, (a) each Person that, directly or indirectly,
owns or controls, whether beneficially, or as a trustee, guardian or other
fiduciary, 5% or more of the Stock having ordinary voting power in the election
of directors of such Person, (b) each Person that controls, is controlled
by or is under common control with such Person, (c) each of such Person’s
officers, directors, joint venturers and partners and (d) in the case of
Borrower, the immediate family members, spouses and lineal descendants of
individuals who are Affiliates of Borrower. 
For the purposes of this definition, “control” of a Person shall
mean the possession, directly or indirectly, of the power to direct or cause
the direction of its management or policies, whether through the ownership of
voting securities, by contract or otherwise; provided,
however, that the term “Affiliate”
shall specifically exclude Agent and each Lender.


 


“Agent” means DBTCA
in its capacity as Agent for Lenders or its successor appointed pursuant to Section
8.2; provided that any reference herein to
the Agent with respect to any Lien on Collateral held by the First Lien Agent
for the benefit of such Agent and the Lenders shall also be deemed to be a
reference to the First Lien Agent.


 


“Aggregate Amounts Due”
has the meaning ascribed to it in Section 1.13.


 


“Agreement” means
this Second Lien Term Loan Agreement (including all schedules, subschedules,
annexes and exhibits hereto), as the same may be amended, supplemented,
restated or otherwise modified from time to time.


 


“Alternate Base Rate”
shall mean, for any day, a rate per annum (rounded upwards, if necessary, to
the next 1/100 of 1%) equal to the greatest of (a) the Prime Rate in
effect on such day and (b) the Federal Funds Effective Rate in effect on
such day plus 0.50%.  Any change in the
Alternate Base Rate due to a change in the Prime Rate, the above-described
secondary market rate for three-month certificates of deposit or the Federal
Funds Effective Rate shall be effective as of the opening of business on the
effective date of such change.


 


“Applicable Margin”
shall mean (a) for Eurodollar Loans, 6.75% per annum and (ii) for ABR Loans, 5.75%
per annum.


 


“Approved Fund” shall
mean any Fund that is administered, advised or managed by (a) a Lender,
(b) an Affiliate of a Lender or (c) an entity (including an
investment advisor) or an Affiliate of any entity that administers, advises or
manages a Lender.


 


“Asset Disposition”
means the disposition whether by sale, lease, transfer, loss, damage,
destruction, casualty, condemnation or otherwise of any of the following:  (a) any of the Stock or other equity or
ownership interest of any of Borrower’s Subsidiaries or (b) any or all of


 


S-2





















 


the assets of Borrower or any of its Subsidiaries
other than sales of Equipment and Parts and Supplies in the ordinary course of
business.  Without limitation of the
foregoing, the term “Asset Disposition” shall include the sale or transfer of
property by Borrower or a Subsidiary thereof in a Permitted Sale-Leaseback.


 


“Assignee” shall have
the meaning given in Section 9.4(c).


 


“Assignment and
Acceptance” shall mean an assignment and acceptance entered into by a
Lender and an assignee (with the consent of any Person whose consent is
required by Section 9.4(c)), and accepted by the Agent,
substantially in the form of Exhibit 9.4(c) or such other form as shall
be approved by the Agent (such approval not to be unreasonably withheld).  To the extent approved by the Agent, an
Assignment and Acceptance may be electronically executed and delivered to the
Agent via an electronic settlement system then acceptable to the Agent, which
shall initially be the settlement system of ClearPar, LLC.


 


“Assignor” shall have
the meaning given in Section 9.4(c).


 


“Authorized Officer”
shall mean, as applied to any Person, any individual holding the position of
chairman of the board (if an officer), chief executive officer, president or
one of its vice presidents (or the equivalent thereof), and such Person’s chief
financial officer or treasurer.


 


“Bankruptcy Code”
means the provisions of Title 11 of the United States Code, 11 U.S.C.
§§ 101 et  seq. or other
applicable bankruptcy, insolvency or similar laws.


 


“Borrower” shall have
the meaning ascribed to it in the preamble to the Agreement.


 


“Borrowing” shall mean Loans of the same 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.


 


“Breakage Event”
shall have the meaning given in Section 1.14(c).


 


“BRS” means
collectively Bruckmann, Rosser, Sherrill & Co., L.P., a Delaware limited
partnership, BRS Partners, LP and BRSE LLP.


 


“BRS Management Services
Agreement” means that Management Agreement dated as of August 4, 1998 by
and between BRS and Borrower as amended, modified or supplemented from time to
time in accordance with its terms.


 


“BRS Related Party”
means (1) any stockholder having more than 5% of any class of stock of any
entity that comprises BRS, any individual controlling any such stockholder, an
immediate family member of any such stockholder (if an individual) or of any
such individual and any majority owned Subsidiary, of BRS; or (2) any
trust, corporation, partnership or other entity, the beneficiaries,
stockholders, partners, owners or Persons beneficially holding a majority
interest of any of the entities that comprise BRS and/or such other Persons
referred to in the immediately preceding clause (1).


 


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“Business Day” means
any day that is not a Saturday, a Sunday or a day on which banks are required
or permitted to be closed in the State of New York or the State of California
and in reference to Eurodollar Loans shall mean any such day that is also a Eurodollar
Business Day.


 


“Capital Lease”
means, with respect to any Person, any lease of any property (whether real,
personal or mixed) by such Person as lessee that, in accordance with GAAP,
would be required to be classified and accounted for as a capital lease on a balance
sheet of such Person.


 


“Capital Lease Obligation”
means, with respect to any Capital Lease of any Person, the amount of the
obligation of the lessee thereunder that, in accordance with GAAP, would appear
on a balance sheet of such lessee in respect of such Capital Lease.


 


“Carry Over Amount”
has the meaning ascribed to it Section 4.1.


 


“Cash Equivalents”
means (i) marketable securities (A) issued or directly and
unconditionally guaranteed as to interest and principal by the United States
government or (B) issued by any agency of the United States government the
obligations of which are backed by the full faith and credit of the United
States, in each case maturing within one (1) year after acquisition thereof;
(ii) marketable direct obligations issued by any state of the United
States of America or any political subdivision of any such state or any public
instrumentality thereof, in each case maturing within one year after
acquisition thereof and having, at the time of acquisition, a rating of at
least A-1 from S&P or at least P-1 from Moody’s; (iii) commercial
paper maturing no more than one year from the date of acquisition and, at the
time of acquisition, having a rating of at least A-1 from S&P or at least P-1
from Moody’s; (iv) certificates of deposit or bankers’ acceptances issued
or accepted by any Lender or by any commercial bank organized under the laws of
the United States of America or any state thereof or the District of Columbia
that (A) is at least “adequately capitalized” (as defined in the
regulations of its primary Federal banking regulator) and (B) has Tier 1
capital (as defined in such regulations) of not less than $250,000,000, in each
case maturing within one year after issuance or acceptance thereof; and
(v) shares of any money market mutual or similar funds that (A) has
substantially all of its assets invested continuously in the types of
investments referred to in clauses (i) through (iv) above, (B) has net assets
of not less than $500,000,000 and (C) has the highest rating obtainable
from either S&P or Moody’s.


 


“CFC” has the meaning
ascribed to it in Section 2.8(f).


 


“Change of Control”
means any event, transaction or occurrence as a result of which (a) BRS
together with any BRS Related Party shall cease to own and control directly or
indirectly all of the economic and voting rights associated with ownership of
at least fifty-one percent (51%) of all classes of the outstanding Stock of Borrower
on a fully diluted basis, (b) Borrower ceases to directly or indirectly
own and control all of the economic and voting rights associated with all of
the outstanding Stock of Penhall Company or (c) except as permitted by Section
3.3 or Section 3.6, Borrower ceases to directly or indirectly own
and control all of the economic and voting rights associated with all of the
outstanding Stock of any of its Subsidiaries.


 


S-4





















 


“Change in Law” shall
mean (a) the adoption of any law, rule or regulation after the date of this
Agreement, (b) any change in any law, rule or regulation or in the
interpretation or application thereof by any Governmental Authority after the
date of this Agreement or (c) compliance by any Lender (or, for purposes
of Section 1.15, by any lending office of such Lender or by such Lender’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 date of this Agreement.


 


“Charges” means all
federal, state, county, city, municipal, local, foreign or other governmental
taxes (including premiums and other amounts owed to the PBGC at the time due
and payable), levies, assessments, charges, liens, claims or encumbrances upon
or relating to (a) the Collateral, (b) the Obligations, (c) the employees,
payroll, income or gross receipts of any Credit Party, (d) any Credit
Party’s ownership or use of any properties or other assets, or (e) any other
aspect of any Credit Party’s business.


 


“Chattel Paper” means
any “chattel paper,” as such term is defined in the Code, including electronic
chattel paper, now owned or hereafter acquired by any Credit Party, wherever
located.


 


“Closing Checklist”
means the schedule, including all appendices, exhibits or schedules thereto,
listing certain documents and information to be delivered in connection with
the Agreement, the other Loan Documents and the transactions contemplated thereunder,
substantially in the form attached hereto as Annex C.


 


“Closing Date” means
the date on which the Loans are made hereunder.


 


“Code” means the
Uniform Commercial Code as the same may, from time to time, be enacted and in
effect in the State of New York; provided that
to the extent that the Code is used to define any term herein or in any Loan
Document and such term is defined differently in different Articles or
Divisions of the Code, the definition of such term contained in Article or
Division 9 shall govern; provided, further, that in the event that, by reason of mandatory provisions
of law, any or all of the attachment, perfection or priority of, or remedies
with respect to, Agent’s or any Lender’s Lien on any Collateral is governed by
the Uniform Commercial Code as enacted and in effect in a jurisdiction other
than the State of New York, the term “Code” shall mean the Uniform
Commercial Code as enacted and in effect in such other jurisdiction solely for
purposes of the provisions thereof relating to such attachment, perfection,
priority or remedies and for purposes of definitions related to such provisions.


 


“Collateral” means
the property covered by the Collateral Documents and any other property, real
or personal, tangible or intangible, now existing or hereafter acquired, that
may at any time be or become subject to a security interest or Lien in favor of
Agent, on behalf of itself and Lenders, to secure the Obligations or any
portion thereof (excluding (i) the assets of any CFC and (ii) (x) any Stock in
excess of 65% of the Stock of any CFC) directly owned by Borrower or a Domestic
Subsidiary of Borrower and (y) all stock of any other CFC.


 


“Collateral Documents”
means the Security Agreement, the Pledge Agreement, the Guaranties, the
Mortgages, the Trademark Security Agreements and all similar agreements


 


S-5





















 


entered into guaranteeing payment of, or
granting a Lien upon property as security for payment of, the Obligations or
any portion thereof (including the Intercreditor Agreement to the extent
relating to the grant of a Lien over titled vehicles to the First Lien Agent to
secure the Obligations).


 


“Commitments” means
(a) as to any Lender, the aggregate of such Lender’s Commitment as set
forth on Annex B to the Agreement or in the most recent Assignment and
Acceptance executed by such Lender and (b) as to all Lenders, the
aggregate of all Lenders’ Commitments, which aggregate commitment shall be one
hundred and five million dollars ($105,000,000) on the Closing Date.


 


“Compliance Certificate”
has the meaning ascribed to it in Section 4.4(j).


 


“Consolidated Adjusted EBITDA” shall
mean, for Borrower for any period, Consolidated Net Income of Borrower and its
consolidated Subsidiaries for such period minus (in each case to the
extent included in the calculation of Consolidated Net Income, but without
duplication): (i) income tax credits, (ii) interest income, (iii) gain from
extraordinary items (net of loss from extraordinary items), (iv) any aggregate
net gain, net of any loss (other than gains, net of losses, arising from the
disposition of equipment in the ordinary course of business) arising from the
sale, exchange or other disposition of capital assets (including any fixed assets,
whether tangible or intangible, all inventory sold in conjunction with the
disposition of fixed assets and all securities), (v) any other non-cash gains,
(vi) expenditures pursuant to the last sentence of Section 4.10 of the
Revolving Credit Agreement applicable to, but not included on, the Projections,
including expenditures made in connection with Related Transactions and payment
of liabilities on the Closing Date, plus (in each case to the extent
deducted in the calculation of Consolidated Net Income, but without
duplication) (i) any provision for income taxes, (ii) Consolidated Interest
Expense, (iii) depreciation and amortization, (iv) amortized debt discount (but
in the case of amortization and expenses of Related Transactions, only to the
extent included in the Projections), (v) any deduction as the result of any
grant to any members of the management of Borrower or
any of its Subsidiaries of any Stock, (vi) any write-off of deferred financing
fees in connection with the Related Transactions and (vii) expenses of the
Related Transactions, provided that
such expenses were included in the Projections, or disclosed in any notes
thereto; provided that (x) Consolidated Adjusted
EBITDA of Borrower for the fiscal quarters ended March 31, 2005, June 30, 2005
and September 30, 2005 shall be deemed to be $2.1 million, $9.4 million and
$12.4 million, respectively (in each case, subject to adjustment as otherwise
provided in this Agreement).


 


“Consolidated Capital Expenditures”
shall mean, for any period, the aggregate of all expenditures of Borrower and
its Subsidiaries during such period determined on a consolidated basis that, in
accordance with GAAP, are or should be included in “purchase of property and
equipment” or similar items reflected in the consolidated statement of cash
flows of Borrower and its Subsidiaries.


 


“Consolidated Cash Interest Expense”
shall mean, for any period, Consolidated Interest Expense for such period, excluding
any amount not payable in cash.


 


S-6





















 


“Consolidated Current Assets” shall
mean, as at any date of determination, the total assets of Borrower and its Subsidiaries
on a consolidated basis that may properly be classified as current assets in
conformity with GAAP, excluding cash and cash equivalents.


 


“Consolidated Current Liabilities”
shall mean, as at any date of determination, the total liabilities of Borrower
and its Subsidiaries on a consolidated basis that may properly be classified as
current liabilities in conformity with GAAP, excluding the current portion of
long term debt and, without duplication, outstanding revolving Indebtedness
under the First Lien Credit Agreement.


 


“Consolidated Interest Expense” shall
mean, for any period, total interest expense (including that portion
attributable to Capital Lease Obligations in accordance with GAAP and
capitalized interest) of Borrower and its Subsidiaries on a consolidated basis
with respect to all outstanding Funded Debt of Borrower and its Subsidiaries,
including all unused commitment fees, commissions, discounts and other fees and
charges owed with respect to letters of credit and net costs under interest
rate hedging agreements; provided that
Consolidated Interest Expense shall exclude any amounts attributable to
amortization of deferred financing fees in connection with the Related
Transactions.


 


“Consolidated Net Income” shall mean,
for any period, (a) the net income (or loss) of Borrower and its Subsidiaries
on a consolidated basis for such period taken as a single accounting period
determined in conformity with GAAP, excluding (b) (i) the income (or deficit)
of any Person accrued prior to the date it became a Subsidiary of, or was
merged or consolidated into, Borrower or any of its Subsidiaries, (ii) the
income (or deficit) of any Person (other than a Subsidiary) in which Borrower
has an ownership interest, except to the extent any such income has actually
been received by Borrower or any of its Subsidiaries in the form of cash dividends
or distributions, (iii) the undistributed earnings of any Subsidiary of
Borrower to the extent that the declaration or payment of dividends or similar
distributions by such Subsidiary is not at the time permitted by the terms of
any contractual obligation or requirement of law applicable to such Subsidiary,
(iv) any restoration to income of any contingency reserve, except to the extent
that provision for such reserve was made out of income accrued during such period,
(v) any net gain attributable to the write-up of any asset, (vi) any net gain
from the collection of the proceeds of life insurance policies, (vii) any net
gain arising from the acquisition of any securities, or the extinguishment of
any Indebtedness, of Borrower or any of its Subsidiaries, (viii) in the case of
a successor to Borrower or any of its Subsidiaries by consolidation or merger
or as a transferee of its assets, any earnings of such successor prior to such
consolidation, merger or transfer of assets and (ix) any deferred credit
representing the excess of equity in any Subsidiary of Borrower at the date of
acquisition of such Subsidiary over the cost to Borrower of
the investment in such Subsidiary.


 


“Consolidated Total Debt” shall mean,
as at any date of determination, the aggregate stated balance sheet amount of
all Funded Debt of Borrower and its Subsidiaries determined on a consolidated
basis in accordance with GAAP.


 


“Consolidated Working Capital” shall
mean, as at any date of determination, the excess of Consolidated Current Assets
over Consolidated Current Liabilities.


 


S-7





















 


“Consolidated Working Capital Adjustment”
shall mean, for any period on a consolidated basis, the amount (which may be a
negative number) by which Consolidated Working Capital as of the beginning of
such period exceeds (or is less than) Consolidated Working Capital as of the
end of such period.


 


“Contingent Obligation”
means, as applied to any Person, any direct or indirect liability of that
Person:  (i) with respect to
Guaranteed Indebtedness and with respect to any Indebtedness, lease, dividend
or other obligation of another Person if the purpose or intent of the Person
incurring such liability, or the effect thereof, is to provide assurance to the
obligee of such liability that such liability will be paid or discharged, or
that any agreements relating thereto will be complied with, or that the holders
of such liability will be protected (in whole or in part) against loss with
respect thereto; (ii) with respect to any letter of credit issued for the
account of that Person or as to which that Person is otherwise liable for reimbursement
of drawings; (iii) under any foreign exchange contract, currency swap
agreement, interest rate swap agreement or other similar agreement or arrangement
designed to alter the risks of that Person arising from fluctuations in currency
values or interest rates, (iv) any agreement, contract or transaction
involving commodity options or future contracts, (v) to make take-or-pay
or similar payments if required regardless of nonperformance by any other party
or parties to an agreement, or (vi) pursuant to any agreement to purchase,
repurchase or otherwise acquire any obligation or any property constituting
security therefor, to provide funds for the payment or discharge of such
obligation or to maintain the solvency, financial condition or any balance
sheet item or level of income of another. 
The amount of any Contingent Obligation shall be equal to the amount of
the obligation so guaranteed or otherwise supported or, if not a fixed and
determined amount, the maximum amount so guaranteed.


 


“Contractual Obligations”
means, as applied to any Person, any indenture, mortgage, deed of trust,
contract, undertaking, agreement or other instrument to which that Person is a
party or by which it or any of its properties is bound or to which it or any of
its properties is subject including the Related Transactions Documents.


 


“Control Agreements”
means tri-party deposit account, securities account or commodities account
control agreements by and among the applicable Credit Party, Agent (and, if
applicable, First Lien Agent”) and the depository, securities intermediary or
commodities intermediary, and each in form and substance satisfactory in all
respects to Agent and in any event providing to Agent “control” of such deposit
account, securities account or commodities account within the meaning of Articles 8
and 9 of the Code.


 


“Conversion/Continuation
Date” shall mean the effective date of a conversion or continuation, as the
case may be, as set forth in the applicable Notice of Conversion/Continuation.


 


“Copyright License”
means any and all rights nor owned or hereafter acquired by any Credit Party
under any written agreement granting any right to use any Copyright or
Copyright registration.


 


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“Copyright Security
Agreements” means the Copyright Security Agreements made in favor of Agent,
on behalf of itself and Lenders, by each applicable Credit Party, in each case
as amended, modified or supplemented from time to time.


 


“Copyrights” means
all of the following now owned or hereafter adopted or acquired by any Credit
Party: (a) all copyrights and General Intangibles of like nature (whether
registered or unregistered), all registrations and recordings thereof, and all
applications in connection therewith, including all registrations, recordings
and applications in the United States Copyright Office or in any similar office
or agency of the United States, any state or territory thereof, or any other
country or any political subdivision thereof; and (b) all reissues,
extensions or renewals thereof.


 


“Credit Parties”
means Borrower and each of its Subsidiaries and each other Person who executes
a Guaranty or who grants a Lien on all or part of its assets to secure all of
part of the Obligations.


 


“DBTCA” shall have
the meaning given in the recitals.


 


“Default” means any
event that, with the passage of time or notice or both, would, unless cured or
waived, become an Event of Default.


 


“Disclosure Schedules”
means the Schedules prepared by Credit Parties and denominated as Schedules
2.8(b) through 5.18 in the index to the Agreement.


 


“Documents” means any
“document,” as such term is defined in the Code, including electronic
documents, now owned or hereafter acquired by any Credit Party, wherever located.


 


“Dollars” or “$”
means lawful currency of the United States of America.


 


“Eligible Assignee”
shall mean (i) any Lender, (ii) an Affiliate of any Lender, (iii) an
Approved Fund and (iv) any other Person approved by the Agent (such
approval not to be unreasonably withheld or delayed); provided
that “Eligible Assignee” shall not include Borrower or any of its Affiliates or
Subsidiaries or any natural person.


 


“Environmental Laws”
means all applicable federal, state, local and foreign laws, statutes, ordinances,
codes, rules, enforceable standards and regulations, now or hereafter in
effect, and any applicable judicial or administrative interpretation thereof,
including any applicable judicial or administrative order, consent decree,
order or judgment, imposing liability or standards of conduct for or relating
to the regulation and protection of human health, safety, the environment and
natural resources (including ambient air, surface water, groundwater, wetlands,
land surface or subsurface strata, wildlife, aquatic species and
vegetation).  Environmental Laws include
the Comprehensive Environmental Response, Compensation, and Liability Act of
1980 (42 U.S.C. §§ 9601 et seq.) (“CERCLA”);
the Hazardous Materials Transportation Authorization Act of 1994 (49 U.S.C. §§
5101 et seq.); the Federal Insecticide,
Fungicide, and Rodenticide Act (7 U.S.C. §§ 136 et seq.);
the Solid Waste Disposal Act (42 U.S.C. §§ 6901 et seq.);
the Toxic Substance Control Act (15 U.S.C. §§ 2601 et seq.);
the Clean Air Act (42 U.S.C. §§ 7401 et seq.); the
Federal Water Pollution Control Act (33 U.S.C. §§ 1251 et seq.);
the Occupational


 


S-9





















 


Safety and Health Act (29 U.S.C. §§ 651 et seq.); and the Safe Drinking Water Act (42 U.S.C. §§ 300(f)
et seq.), and any and all regulations
promulgated thereunder, and all analogous state, local and foreign counterparts
or equivalents and any transfer of ownership notification or approval statutes
relating to environmental matters.


 


“Environmental
Liabilities” means, with respect to any Person, all liabilities,
obligations, responsibilities, response, remedial and removal costs,
investigation and feasibility study costs, capital costs, operation and
maintenance costs, losses, damages, punitive damages, property damages, natural
resource damages, consequential damages, treble damages, costs and expenses
(including all reasonable fees, disbursements and expenses of counsel, experts
and consultants), fines, penalties, sanctions and interest incurred as a result
of or related to any claim, suit, action, investigation, proceeding or demand
by any Person, whether based in contract, tort, implied or express warranty,
strict liability, criminal or civil statute or common law, including any
arising under or related to any Environmental Laws, Environmental Permits, or
in connection with any Release or threatened Release or presence of a Hazardous
Material whether on, at, in, under, from or about or in the vicinity of any
real or personal property.


 


“Environmental Permits”
means all permits, licenses, authorizations, certificates, approvals or
registrations required by any Governmental Authority under any Environmental Laws.


 


“Equipment” means all
“equipment,” as such term is defined in the Code, now owned or hereafter
acquired by any Credit Party, wherever located and, in any event, including all
such Credit Party’s machinery and equipment, including processing equipment, conveyors,
machine tools, data processing and computer equipment, including embedded
software and peripheral equipment and all engineering, processing and
manufacturing equipment, office machinery, furniture, materials handling
equipment, tools, attachments, accessories, automotive equipment, trailers,
trucks, forklifts, molds, dies, stamps, motor vehicles, rolling stock and other
equipment of every kind and nature, trade fixtures and fixtures not forming a
part of real property, together with all additions and accessions thereto,
replacements therefor, all parts therefor, all substitutes for any of the
foregoing, fuel therefor, and all manuals, drawings, instructions, warranties
and rights with respect thereto, and all products and proceeds thereof and condemnation
awards and insurance proceeds with respect thereto.


 


“ERISA” means the
Employee Retirement Income Security Act of 1974, as amended from time to time,
and any regulations promulgated thereunder.


 


“ERISA Affiliate”
means, with respect to any Credit Party, any trade or business (whether or not
incorporated) that, together with such Credit Party, are treated as a single employer
within the meaning of Sections 414(b), (c), (m) or (o) of the IRC.


 


“ERISA Event” means,
with respect to any Credit Party or any ERISA Affiliate, (a) any event
described in Section 4043(c) of ERISA with respect to a Title IV Plan;
(b) the withdrawal of any Credit Party or ERISA Affiliate from a Title IV
Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial
employer, as defined in Section 4001(a)(2) of ERISA; (c) the complete or
partial withdrawal of any Credit Party or any ERISA Affiliate from any Multiemployer
Plan; (d) the filing of a notice of intent to terminate a Title IV


 


S-10





















 


Plan or the treatment of a plan amendment as
a termination under Section 4041 of ERISA; (e) the institution of
proceedings to terminate a Title IV Plan or Multiemployer Plan by the PBGC;
(f) the failure by any Credit Party or ERISA Affiliate to make when due
required contributions to a Multiemployer Plan or Title IV Plan unless such
failure is cured within 30 days; (g) any other event or condition that
might reasonably be expected to constitute grounds under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any
Title IV Plan or Multiemployer Plan or for the imposition of liability under
Section 4069 or 4212(c) of ERISA; (h) the termination of a Multiemployer
Plan under Section 4041A of ERISA or the reorganization or insolvency of a
Multiemployer Plan under Section 4241 or 4245 of ERISA; or (i) the loss of
a Qualified Plan’s qualification or tax exempt status; or (j) the termination
of a Plan described in Section 4064 of ERISA.


 


“ESOP” means a Plan
that is intended to satisfy the requirements of Section 4975(e)(7) of the IRC.


 


“Eurodollar”, when
used in reference to any Loan or Borrowing, refers to whether such Loan or the
Loans comprising such Borrowing are bearing interest at a rate determined by
reference to the Adjusted Eurodollar Rate.


 


“Eurodollar Business Day”
means a Business Day on which banks in the City of London are generally open
for interbank or foreign exchange transactions.


 


“Eurodollar Rate”
shall mean, with respect to any Eurodollar Borrowing for any Interest Period,
the rate per annum determined by the Agent at approximately 11:00 a.m., London
time, on the date that is two Business Days prior to the commencement of such Interest
Period by reference to the rate for eurodollar deposits which appears on the
page of the Telerate screen that displays an average British Bankers
Association Interest Settlement Rate (such page currently being page number
3740 or page 3750 of the Telerate screen) for a period equal to such Interest
Period; provided that, to the extent that an interest
rate is not ascertainable pursuant to the foregoing provisions of this
definition, the “Eurodollar Rate” shall be the interest rate per annum determined
by the Agent to be the average of the rates per annum at which Eurodollar
deposits in Eurodollars are offered for such relevant Interest Period to major
banks in the London interbank market in London, England by the Agent at
approximately 11:00 a.m. (London time) on the date that is two Business Days
prior to the beginning of such Interest Period.


 


“Event of Default”
has the meaning ascribed to it in Section 6.1.


 


“Excess Cash Flow” shall mean, for any
period, an amount (if positive) equal to: 
(a) the sum, without duplication, of the amounts for such period of (i)
Consolidated Adjusted EBITDA, plus (ii) the Consolidated Working Capital
Adjustment, minus (b) the sum, without duplication, of the amounts for such
period of (i) voluntary and scheduled repayments of Funded Debt (excluding any
repayment of revolving Indebtedness except to the extent the related commitments
are permanently reduced in connection with such repayments),
(ii) Consolidated Capital Expenditures, the amount of Permitted
Acquisitions and the amount of Investments made in reliance on Section 3.3(i)
(in each case, net of any proceeds of (A) any related financings with respect
to such expenditures, (B) any sales of assets used to finance such expenditures
and (C) any casualty or condemnation to the extent such net proceeds are not included
in the calculation


 


S-11





















 


of Consolidated Adjusted EBITDA), (iii)
Consolidated Cash Interest Expense, and (iv) provisions for current taxes based
on income of Borrower and its Subsidiaries and payable in cash with respect to
such period.


 


“Excess Cash Flow Period” shall mean
(i) initially, the period commencing on and including October 1, 2005 and
ending on and including June 30, 2006 and (ii) thereafter, each Fiscal Year of
Borrower.


 


“Excluded Accounts” shall mean (i)
accounts used solely to fund current payroll requirements of Borrower and its
Subsidiaries, and (ii) medical savings accounts and similar employee benefit
accounts.


 


“Excluded Taxes”
shall mean, with respect to the Agent, any Lender or any other recipient of any
payment to be made by or on account of any obligation of Borrower hereunder,
(a) income or franchise taxes imposed on (or measured by) its net income, net
capital or net profits (including any minimum tax or alternative minimum tax)
by the United States of America, or by the jurisdiction under the laws of which
such recipient is organized (or any political subdivision thereof), or in which
its principal office is located or, in the case of any Lender, in which its
applicable lending office is located or in which such Lender carries on business,
(b) any branch profits taxes imposed by the United States of America or any
similar tax imposed by any other jurisdiction (or any political subdivision
thereof) described in clause (a) above, and (c) in the case of a Foreign Lender
(other than an assignee pursuant to a request by Borrower under Section
1.17(a)), 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 1.16(d), 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 such assignment), to receive additional
amounts from Borrower with respect to such withholding tax pursuant to Section
1.16(a).


 


“Fair Labor Standards Act”
means the Fair Labor Standards Act, 29 U.S.C. § 201 et seq.


 


“Federal Funds Effective
Rate” shall mean,
for any day, the weighted average (rounded upwards, if
necessary, to the next 1/100 of 1%) 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 (rounded upwards, if necessary, to the next
1/100 of 1%) of the quotations for the day for such transactions received by
the Agent from three Federal funds brokers of recognized standing selected by
it.


 


“Federal Reserve Board”
means the Board of Governors of the Federal Reserve System.


 


“Financial Statements”
means the consolidated and consolidating income statements, statements of cash
flows and balance sheets of Borrower and its Subsidiaries delivered in accordance
with Section 4.4.


 


S-12





















 


“First Lien Agent”
shall mean General Electric Capital Corporation, in its capacity as administrative
agent under the First Lien Credit Agreement together with its successors and
assigns in such capacity.


 


“First Lien Credit
Agreement” shall mean the Revolving Credit Agreement and any other replacement,
refinancing, substitute or supplemental agreement governing any Indebtedness permitted
by Section 3.1(d).


 


“First Lien Lenders”
shall mean the financial institutions from time to time party to the First Lien
Credit Agreement as “Lenders.”


 


“First Lien Obligations”
shall have the meaning given in the Intercreditor Agreement.


 


“First Lien Loan
Termination Date” shall have the meaning given in the Intercreditor Agreement.


 


“Fiscal Quarter”
means any of the quarterly accounting periods of Borrower, ending on March 31, June
30, September 30 and December 31 of each year.


 


“Fiscal Year” means
any of the annual accounting periods of Borrower ending on June 30 of each
year.


 


“Fixtures” means all “fixtures”
as such term is defined in the Code, now owned or hereafter acquired by any
Credit Party.


 


“Foreign Lender”
shall mean any Lender that is organized under the laws of a jurisdiction other
than that in which Borrower is located. For purposes of this definition, the
United States of America, each State thereof and the District of Columbia shall
be deemed to constitute a single jurisdiction.


 


“Fund” shall mean any
Person (other than a natural person) that is (or will be) engaged in making,
purchasing, holding or otherwise investing in commercial loans and/or similar
extensions of credit in the ordinary course.


 


“Funded Debt” means,
with respect to any Person, without duplication, all Indebtedness for borrowed
money (other than the Senior Unsecured Notes) evidenced by notes, bonds,
debentures, or similar evidences of Indebtedness and that by its terms matures
more than one year from, or is directly or indirectly renewable or extendible
at such Person’s option under a revolving credit or similar agreement
obligating the lender or lenders to extend credit over a period of more than one
year from the date of creation thereof, and specifically including Capital
Lease Obligations, current maturities of long-term debt, revolving credit and
short-term debt extendible beyond one year at the option of the debtor, and
also including, in the case of Borrower, the Obligations and, without
duplication, Guaranteed Indebtedness consisting of guaranties of Funded Debt of
other Persons.


 


“GAAP” means
generally accepted accounting principles in the United States of America, consistently
applied.


 


S-13





















 


“General Intangibles”
means “general intangibles,” as such term is defined in the Code, now owned or
hereafter acquired by any Credit Party, including all right, title and interest
that such Credit Party may now or hereafter have in or under any Contractual
Obligation, all payment intangibles, customer lists, Licenses, Copyrights,
Trademarks, Patents, and all applications therefor and reissues, extensions or
renewals thereof, rights in Intellectual Property, interests in partnerships,
joint ventures and other business associations, licenses, permits, copyrights,
trade secrets, proprietary or confidential information, inventions (whether or
not patented or patentable), technical information, procedures, designs,
knowledge, know-how, software, data bases, data, skill, expertise, experience,
processes, models, drawings, materials and records, goodwill (including the
goodwill associated with any Trademark or Trademark License), all rights and
claims in or under insurance policies (including insurance for fire, damage,
loss and casualty, whether covering personal property, real property, tangible
rights or intangible rights, all liability, life, key man and business
interruption insurance, and all unearned premiums), uncertificated securities,
chooses in action, deposit, checking and other bank accounts, rights to receive
tax refunds and other payments, rights to receive dividends, distributions,
cash, Instruments and other property in respect of or in exchange for pledged
Stock and Investment Property, rights of indemnification, all books and
records, correspondence, credit files, invoices and other papers, including all
tapes, cards, computer runs and other papers and documents in the possession or
under the control of such Credit Party or any computer bureau or service
company from time to time acting for such Credit Party.


 


“Goods” means any “goods,”
as such term is defined in the Code, now owned or hereafter acquired by any
Credit Party, wherever located, including embedded software to the extent included
in “goods” as defined in the Code, manufactured homes, standing timber that is
cut and removed for sale and unborn young of animals.


 


“Governmental Authority”
means any nation or government, any state or other political subdivision
thereof, and any agency, department or other entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.


 


“Granting
Lender” shall have the meaning given in Section 9.4(g).


 


“Guaranteed Indebtedness”
means, as to any Person, any obligation of such Person guaranteeing, providing
comfort or otherwise supporting any Indebtedness, lease, dividend, or other
obligation (“primary obligation”) of any other Person (the “primary
obligor”) in any manner, including any obligation or arrangement of such
Person to (a) purchase or repurchase any such primary obligation,
(b) 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 or
any balance sheet condition of the primary obligor, (c) 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) protect the beneficiary of such arrangement
from loss (other than product warranties given in the ordinary course of
business) or (e) indemnify the owner of such primary obligation against
loss in respect thereof.  The amount of
any Guaranteed Indebtedness at any time shall be deemed to be an amount equal
to the lesser at such time of (x) the stated or determinable amount of the
primary obligation in respect of which such Guaranteed Indebtedness is incurred
and (y) the maximum amount for which such Person may be liable pursuant to


 


S-14





















 


the terms of the instrument embodying such
Guaranteed Indebtedness, or, if not stated or determinable, the maximum
reasonably anticipated liability (assuming full performance) in respect
thereof.


 


“Guarantors” means
each Subsidiary of Borrower that executes a guaranty or other similar agreement
in favor of Agent, for itself and the ratable benefit of Lenders, in connection
with the transactions contemplated by the Agreement and the other Loan
Documents.


 


“Guaranty” means the
Guaranty Agreement entered into by each of the Guarantors on the Closing Date
substantially in the form of Exhibit A-1 hereto, as the same may be
amended or supplemented in accordance with its terms.


 


“Hazardous Material”
means any substance, material or waste that is regulated by, or forms the basis
of liability now or hereafter under, any Environmental Laws, including any
material or substance that is (a) defined as a “solid waste,” “hazardous
waste,” “hazardous material,” “hazardous substance,” “extremely hazardous
waste,”  “restricted hazardous waste,” “pollutant,”
“contaminant,” “hazardous constituent,” “special waste,” “toxic substance” or
other similar term or phrase under any Environmental Laws, or
(b) petroleum or any fraction or by-product thereof, asbestos,
polychlorinated biphenyls (PCB’s), or any radioactive substance.


 


“Increased-Cost
Lenders” shall have the meaning given in Section 1.18.


 


“Indebtedness” means,
with respect to any Person, without duplication (a) all indebtedness of
such Person for borrowed money or for the deferred purchase price of property
payment for which is deferred six (6) months or more, but excluding obligations
to trade creditors incurred in the ordinary course of business that are
unsecured and not overdue by more than six (6) months unless being contested in
good faith, (b) all reimbursement and other obligations with respect to
letters of credit, bankers’ acceptances and surety bonds, whether or not
matured, (c) all obligations evidenced by notes, bonds, debentures or
similar instruments, (d) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to property acquired
by such Person (even though the rights and remedies of the seller or lender
under such agreement in the event of default are limited to repossession or
sale of such property), (e) all Capital Lease Obligations and the present
value (discounted at the Prime Rate as in effect on the Closing Date) of future
rental payments under all synthetic leases, (f) all obligations of such
Person under commodity purchase or option agreements or other commodity price
hedging arrangements, in each case whether contingent or matured, (g) all
obligations of such Person under any foreign exchange contract, currency swap
agreement, interest rate swap, cap or collar agreement or other similar
agreement or arrangement designed to alter the risks of that Person arising
from fluctuations in currency values or interest rates, in each case whether
contingent or matured, (h) all Indebtedness referred to above secured by
(or for which the holder of such Indebtedness has an existing right, contingent
or otherwise, to be secured by) any Lien upon or in property or other assets
(including accounts and contract rights) owned by such Person, even though such
Person has not assumed or become liable for the payment of such Indebtedness,
(i) ”earnouts” and similar payment obligations, and (j) the
Obligations. For the avoidance of
doubt, “Indebtedness” of Borrower or any of its Subsidiaries shall not include
any Stock, or any liabilities or obligations in respect of any Stock (or any
security into which such Stock is convertible or for which it is exchangeable
at the option of the holder thereof) of Borrower or any of


 


S-15





















 


its Subsidiaries,
so long as neither Borrower nor any such Subsidiary is or, upon the passage of
time or the occurrence of any event, may become obligated to (notwithstanding
any prohibition in this Agreement to the contrary) redeem, purchase, retire,
defease or otherwise make any cash payment in respect of such Stock or security
at any time prior to February 2, 2011, except as permitted by Section 3.5(f).


 


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


 


“Indemnitee” shall
have the meaning given in Section 9.5(b).


 


“Information” shall
have the meaning given in Section 9.16.


 


“Instruments” means
all “instruments,” as such term is defined in the Code, now owned or hereafter
acquired by any Credit Party, wherever located, and, in any event, including
all certificated securities, all certificates of deposit, and all promissory
notes and other evidences of indebtedness, other than instruments that
constitute, or are a part of a group of writings that constitute, Chattel
Paper.


 


“Intellectual Property”
means any and all Licenses, Patents, Copyrights, Trademarks, and the goodwill
associated with such Trademarks.


 


“Intercompany Debt”
has the meaning ascribed to it in Section 9.22.


 


“Intercompany Notes”
has the meaning ascribed to it in Section 3.1.


 


“Intercreditor Agreement”
shall mean the Intercreditor Agreement, substantially in the form of Exhibit
A-2 dated as of the date hereof, among the Agent and the First Lien Agent.


 


“Interest Coverage Ratio”
shall mean, for any period, the ratio of (a) Consolidated Adjusted EBITDA
of Borrower for such period, taken as one accounting period, to
(b) Consolidated Interest Expense of Borrower for such period, taken as
one accounting period; provided that (x)
for purposes of determining the Interest Coverage Ratio for any period ending
prior to December 31, 2006, Consolidated Interest Expense of Borrower shall be
determined on a pro forma basis as though the Related Transactions had occurred
on the day prior to the first day of such period (and for avoidance of doubt,
shall exclude any items on the balance sheet related to debt issuance costs to
be written off due to the Related Transactions) and (y) for purposes of
calculating the Interest Coverage Ratio for Borrower for any period
(A) the Consolidated Adjusted EBITDA and interest expense of any Person
acquired by Borrower or any of its Subsidiaries pursuant to a Permitted
Acquisition during such period shall be included on a pro forma basis for such
period (assuming the consummation of such acquisition and the incurrence, assumption
or repayment of any Indebtedness in connection therewith occurred as of the
first day of such period) and (B) the Consolidated Adjusted EBITDA and
interest expense of any Person or line of business sold or otherwise disposed
of by Borrower or any of its Subsidiaries during such period shall be excluded
for such period (assuming the consummation of such sale or other disposition
and the incurrence, assumption or repayment of any Indebtedness in connection
therewith occurred as of the first day of such period).


 


S-16





















 


“Interest Payment Date”
shall mean (a) with respect to any ABR Loan, the last Business Day of each
March, June, September and December and (b) with respect to any Eurodollar
Loan, the last day of the Interest Period applicable to such Loan and, in the
case of a Eurodollar Loan with an Interest Period of more than three months’
duration, each day that would have been an Interest Payment Date had successive
Interest Periods of three months’ duration been applicable to such Loan.


 


“Interest Period” shall mean, in
connection with a Eurodollar Loan, an interest period of one, two, three or six
months (or, to the extent requested by Borrower and with the prior written
consent of each Lender, nine or twelve months), as selected by Borrower in the
applicable Notice of Borrowing or Notice of Conversion/Continuation, (x)
initially, commencing on the borrowing date or Conversion/Continuation Date
thereof, as the case may be; and (y) thereafter, commencing on the day on which
the immediately preceding Interest Period expires; provided
(a) if an Interest Period would otherwise expire on a day that is not a
Business Day, such Interest Period shall expire on the next succeeding Business
Day unless no further Business Day occurs in such month, in which case such
Interest Period shall expire on the immediately preceding Business Day; (b) any
Interest Period that begins on the last Business Day of a calendar month (or on
a day for which there is no numerically corresponding day in the calendar month
at the end of such Interest Period) shall, subject to clause (c) of this
definition, end on the last Business Day of a calendar month; and (c) no
Interest Period with respect to any portion of the Loans shall extend beyond
the Maturity Date.


 


“Interest Rate
Determination Date” shall mean, with respect to any Interest Period, the
date that is two Business Days prior to the first day of such Interest Period.


 


“Interest Rate
Obligations” means the obligations of any Person pursuant to any
arrangement with any other Person, whereby, directly or indirectly, such Person
is entitled to receive from time to time periodic payments calculated by applying
either a floating or a fixed rate of interest on a stated notional amount in
exchange for periodic payments made by such other Person calculated by applying
a fixed or a floating rate of interest on the same notional amount and shall
include, without limitation, interest rate swaps, caps, floors, collars and
similar agreements.


 


“Inventory” means any
“inventory,” as such term is defined in the Code, now owned or hereafter
acquired by any Credit Party, wherever located, including inventory, merchandise,
goods and other personal property that are held by or on behalf of any Credit
Party for sale or lease or are furnished or are to be furnished under a
contract of service, or that constitute raw materials, work in process,
finished goods, returned goods, supplies or materials of any kind, nature or
description used or consumed or to be used or consumed in such Credit Party’s
business or in the processing, production, packaging, promotion, delivery or
shipping of the same, including all supplies and embedded software.


 


“Investment” means
(i) any direct or indirect purchase or other acquisition by Borrower or
any of its Subsidiaries of any Stock, or other ownership interest in, any other
Person, and (ii) any direct or indirect loan, advance or capital
contribution by Borrower or any of their Subsidiaries to any other Person,
including all indebtedness and accounts receivable from


 


S-17





















 


that other Person that are not current assets
or did not arise from sales to that other Person in the ordinary course of
business.


 


“Investment Property”
means all “investment property,” as such term is defined in the Code, now owned
or hereafter acquired by any Credit Party, wherever located, including:
(i) all securities, whether certificated or uncertificated, including
stocks, bonds, interests in limited liability companies, partnership interests,
treasuries, certificates of deposit, and mutual fund shares; (ii) all
securities entitlements of any Credit Party, including the rights of such
Credit Party to any securities account and the financial assets held by a
securities intermediary in such securities account and any free credit balance
or other money owing by any securities intermediary with respect to that
account; (iii) all securities accounts of any Credit Party; (iv) all
commodity contracts of any Credit Party; and (v) all commodity accounts
held by any Credit Party.


 


“IRC” means the
Internal Revenue Code of 1986, as amended, and all regulations promulgated
thereunder.


 


“IRS” means the
Internal Revenue Service.


 


“Lead Arranger” shall
mean Deutsche Bank Securities Inc, in its capacity as sole lead arranger and
sole bookrunner for the Loans.


 


“Loan Charges” shall
have the meaning given in Section 9.9.


 


“Lenders” means the Lenders
named on the signature pages of this Agreement, and any Assignee pursuant to Section
9.4(c).


 


“Leverage Ratio”
shall mean, on any date, the ratio of (a) Consolidated Total Debt on such date
to (b) Consolidated Adjusted EBITDA for the period of four consecutive Fiscal
Quarters most recently ended on or prior to such date taken as one accounting period;
provided that for purposes of calculating the Leverage Ratio for Borrower for
any period (A) the Consolidated Adjusted EBITDA of any Person acquired by
Borrower or any of its Subsidiaries pursuant to a Permitted Acquisition during
such period shall be included on a pro forma basis for such period (assuming
the consummation of such acquisition and the incurrence, assumption or
repayment of any Indebtedness in connection therewith occurred as of the first
day of such period) and (B) the Consolidated Adjusted EBITDA of any Person
or line of business sold or otherwise disposed of by Borrower or any of its Subsidiaries
during such period shall be excluded for such period (assuming the consummation
of such sale or other disposition and the incurrence, assumption or repayment
of any Indebtedness in connection therewith occurred as of the first day of
such period).


 


“License” means any
Copyright License, Patent License, Trademark License or other license of rights
or interests now held or hereafter acquired by any Credit Party.


 


“Lien” means any mortgage
or deed of trust, pledge, hypothecation, assignment, deposit arrangement, lien,
charge, claim, security interest, easement or encumbrance, or preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including any lease or title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing, and the filing of, or agreement to give, any


 


S-18





















 


financing statement perfecting a security
interest under the Code or comparable law of any jurisdiction).


 


“Litigation” has the
meaning ascribed to it in Section 4.4(h).


 


“Loan Documents”
means the Agreement, the Notes, the Collateral Documents, the Intercreditor
Agreement and all other agreements, instruments, documents and certificates
identified in the Closing Checklist executed and delivered to, or in favor of,
Agent or any Lenders and including all other pledges, powers of attorney,
consents, assignments, contracts, notices, and all other written matter whether
heretofore, now or hereafter executed by or on behalf of any Credit Party, or
any employee of any Credit Party, and delivered to Agent or any Lender in connection
with the Agreement or the transactions contemplated thereby.  Any reference in the Agreement or any other
Loan Document to a Loan Document shall include all appendices, exhibits or
schedules thereto, and all amendments, restatements, supplements or other
modifications thereto, and shall refer to the Agreement or such Loan Document
as the same may be in effect at any and all times such reference becomes
operative.


 


“Loans” means a loan
made by a Lender pursuant to Section 1.1(a).


 


“Material Adverse Effect”
means a material adverse effect on (a) the business, assets, operations,
prospects or financial or other condition of the Credit Parties considered as a
whole, (b) Borrower’s ability to pay any of the Loans or any of the other
Obligations in accordance with the terms of the Agreement, (c) the Collateral
or Agent’s Liens, on behalf of itself and Lenders, on the Collateral or the
priority of such Liens, or (d) Agent’s or any Lender’s rights and remedies
under the Agreement and the other Loan Documents.


 


“Maturity Date”  means November 1, 2010.


 


“Maximum Rate” shall
have the meaning given in Section 9.9.


 


“Moody’s” means Moody’s
Investors Service, Inc.


 


“Mortgages” means
each of the mortgages, deeds of trust, leasehold mortgages, leasehold deeds of
trust, collateral assignments of leases or other real estate security documents
delivered by any Credit Party to Agent on behalf of itself and Lenders with respect
to the Real Estate, in each case as amended, modified or supplemented from time
to time.


 


“Multiemployer Plan”
means a “multiemployer plan” as defined in Section 4001(a)(3) of ERISA, and to
which any Credit Party or ERISA Affiliate is making, is obligated to make or
has made or been obligated to make, contributions on behalf of participants who
are or were employed by any of them.


 


“Net Proceeds” shall
mean (a) with respect to any Specified Asset Disposition or Specified Recovery
Event, the proceeds thereof in the form of cash or cash equivalents (including
any such proceeds subsequently received (as and when received) in respect of
non-cash consideration initially received), net of (i) selling expenses
(including reasonable and customary broker’s fees or commissions, legal fees,
transfer and similar taxes incurred by Borrower or any of its Subsidiaries in
connection therewith and Borrower’s good faith estimate of income taxes paid


 


S-19





















 


or payable in connection with such sale,
after taking into account any available tax credits or deductions and any tax
sharing arrangements, in each case to the extent attributable to such sale);
(ii) amounts provided as a reserve, in accordance with GAAP, against any
liabilities under any indemnification obligations or purchase price adjustment
associated with such Specified Asset Disposition (provided
that, to the extent and at the time any such amounts are released from such reserve,
such amounts shall constitute Net Proceeds); (iii) the principal amount,
premium or penalty, if any, interest and other amounts on any Indebtedness for
borrowed money which is secured by the asset sold in such Specified Asset
Disposition and which is required to be repaid with such proceeds (other than
any such Indebtedness assumed by the purchaser of such asset); (iv) reserves
for withdrawal liability or severance estimated by Borrower to be payable
arising from such Specified Asset Disposition; and (v) amounts required to be
paid to any person (other than Borrower and its Subsidiaries) owning a
beneficial interest in the subject asset; and (b) with respect to any
issuance or disposition of Indebtedness or any Specified Equity Issuance, the
cash proceeds thereof, net of all taxes and reasonable and customary fees,
commissions, costs and other expenses incurred by Borrower or any of its
Subsidiaries in connection therewith.


 


“Non-Consenting Lender”
has the meaning ascribed to it in Section 1.18.


 


“Note” means a Note
substantially in the form of Exhibit 1.1(a), executed by Borrower and
evidencing the Loans of a Lender.


 


“Notice of Borrowing”
shall mean a notice substantially in the form of Exhibit 1.1(b).


 


“Notice of
Conversion/Continuation” shall mean a Conversion/Continuation Notice
substantially in the form of Exhibit 1.3(b).


 


“Obligations” means
all loans, advances, debts, liabilities and obligations, for the performance of
covenants, tasks or duties or for payment of monetary amounts (whether or not
such performance is then required or contingent, or such amounts are liquidated
or determinable) owing by any Credit Party to Agent or any Lender, and all
covenants and duties regarding such amounts, of any kind or nature, present or
future, whether or not evidenced by any note, agreement or other instrument,
arising under the Agreement or any of the other Loan Documents.  This term includes all principal, interest
(including all interest that accrues after the commencement of any case or
proceeding by or against any Credit Party in bankruptcy, whether or not allowed
in such case or proceeding), Charges, expenses, attorneys’ fees and any other
sum chargeable to any Credit Party under the Agreement or any of the other Loan
Documents.


 


“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 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 given in Section 9.4(b).


 


S-20





















 


“Parts and Supplies”
means as to any of the Credit Parties, its fuel, diamond blades and diamond
grinders used by such Credit Party in conjunction with such Credit Party’s
Equipment in the ordinary course of business.


 


“Patent License”
means rights under any written agreement now owned or hereafter acquired by any
Credit Party granting any right with respect to any invention on which a Patent
is in existence.


 


“Patent Security
Agreements” means the Patent Security Agreements made in favor of Agent, on
behalf of itself and Lenders, by each applicable Credit Party, in each case as
amended, modified or supplemented from time to time.


 


“Patents” means all
of the following in which any Credit Party now holds or hereafter acquires any
interest: (a) all letters patent of the United States or any other
country, all registrations and recordings thereof, and all applications for
letters patent of the United States or of any other country, including
registrations, recordings and applications in the United States Patent and Trademark
Office or in any similar office or agency of the United States, any State or
any other country, and (b) all reissues, continuations, continuations-in-part
or extensions thereof.


 


“PBGC” means the
Pension Benefit Guaranty Corporation.


 


“Pension Plan” means
a Plan described in Section 3(2) of ERISA.


 


“Permitted Acquisition”
has the meaning ascribed to it in Section 3.6(b).


 


“Permitted Encumbrances”
means the following encumbrances: (a) Liens for taxes or assessments or
other governmental Charges (i) not yet due and payable or (ii) due and payable
but being contested in a manner consistent with Section 2.1 so long as
such Lien is not being enforced and does not (except in the case of Liens on
Real Estate) have priority over any Lien of Agent; (b) pledges or deposits
of money securing statutory obligations under workmen’s compensation,
unemployment insurance, social security or public liability laws or similar
legislation (excluding Liens under ERISA); (c) pledges or deposits of
money securing bids, tenders, contracts (other than contracts for the payment
of money) or leases to which any Credit Party is a party as lessee made in the
ordinary course of business; (d) inchoate and unperfected workers’,
mechanics’ or similar liens arising in the ordinary course of business, so long
as such Liens attach only to Equipment, Fixtures and/or Real Estate;
(e) carriers’, warehousemen’s, suppliers’ or other similar possessory
liens arising in the ordinary course of business; (f) deposits securing,
or in lieu of, surety, appeal or customs bonds in proceedings to which any
Credit Party is a party; (g) any attachment or judgment lien not
constituting an Event of Default under Section 6.1; (h) zoning
restrictions, easements, licenses, or other restrictions on the use of any Real
Estate or other minor irregularities in title (including leasehold title)
thereto, so long as the same do not materially impair the use, value, or
marketability of such Real Estate or are declared on the title reports
delivered on behalf of the Credit Parties pursuant to the Loan Documents;
(i) presently existing or hereafter created Liens in favor of Agent, on
behalf of Lenders; (j) Liens existing on the date hereof and renewal, and extensions
thereof which Liens are set forth on Schedule 3.2; (k) Liens securing
Indebtedness permitted by Section 3.1(f) and Section 3.1(g); provided that the Liens attach only to the assets financed
by such Indebtedness (in the case of Section 3.1(f)) or the


 


S-21





















 


assets specified therein (in the case of Section
3.1(g)), (l) other Liens securing obligations in an amount not to exceed
$2,500,000 at any time outstanding; and (m) Liens on the Collateral securing
the First Lien Obligations.


 


“Permitted Refinancing
Indebtedness” shall mean Indebtedness issued or incurred (including by
means of the extension or renewal of existing Indebtedness) to refinance,
refund, extend, renew or replace existing Indebtedness (“Refinanced Indebtedness”);
provided that (a) the principal amount
of such refinancing, refunding, extending, renewing or replacing Indebtedness
is not greater than the principal amount of such Refinanced Indebtedness plus
the amount of any premiums or penalties and accrued and unpaid interest paid
thereon and reasonable fees and expenses, in each case associated with such
refinancing, refunding, extension, renewal or replacement, (b) such
refinancing, refunding, extending, renewing or replacing Indebtedness has a
final maturity that is no sooner than, and a weighted average life to maturity
that is no shorter than, such Refinanced Indebtedness, (c) if such Refinanced Indebtedness
or any guarantees thereof are subordinated to the Obligations, such
refinancing, refunding, extending, renewing or replacing Indebtedness and any
guarantees thereof remain so subordinated on terms no less favorable to the
Lenders, (d) the obligors in respect of such Refinanced Indebtedness
immediately prior to such refinancing, refunding, extending, renewing or
replacing are, and/or Borrower is, the only obligors on such refinancing, refunding
extending, renewing or replacing Indebtedness and (e) such refinancing,
refunding, extending, renewing or replacing Indebtedness contains covenants and
events of default and is benefited by guarantees, if any, which, taken as a
whole, are no less favorable to Borrower or the applicable Subsidiary and the
Lenders in any material respect than the covenants and events of default or
guarantees, if any, in respect of such Refinanced Indebtedness; provided, further, that
notwithstanding the foregoing, a refinancing of Indebtedness under Section
3.1(d) with Indebtedness which is secured by a Lien on any Collateral,
shall constitute Permitted Refinancing Indebtedness to the extent such refinancing,
refunding, extending, renewing or replacing Indebtedness is permitted under the
terms of the Intercreditor Agreement and the relevant holders of such
refinancing, refunding, extending, renewing or replacing Indebtedness become
party to the Intercreditor Agreement.


 


“Permitted Sale-Leaseback”
means any sale of real property (with or without improvements thereon) by
Borrower to a Person who is not an Affiliate of Borrower and the entering into
by Borrower as lessee of a lease of such real property (and, if included in
such transfer) the improvements thereon so long as (i) the consideration
received by Borrower for such sale is at least equal to the fair market value
of such real property (and any included improvements thereon), (ii) the sole
consideration received for such sale is cash, (iii) the Net Proceeds of such
sale are applied as required by Section 1.9, (iv) such lease is on
current market terms for the area in which such real property is located as
reasonably determined by Borrower, (v) after giving effect to such sale and
lease and the repayment of Indebtedness with the proceeds of such sale,
Borrower is in compliance on a pro forma basis with the covenants set forth in Section
4 recomputed for the most recently ended Fiscal Quarter for which information
is available and (vi) no Default or Event of Default then exists or would
result from such sale or lease.


 


“Person” means any
individual, sole proprietorship, partnership, joint venture, trust,
unincorporated organization, association, corporation, limited liability company,
institution, public benefit corporation, other entity or government (whether
federal, state, county, city,


 


S-22





















 


municipal, local, foreign, or otherwise,
including any instrumentality, division, agency, body or department thereof).


 


“Plan” means, at any
time, an “employee benefit plan,” as defined in Section 3(3) of ERISA, that any
Credit Party or ERISA Affiliate maintains, contributes to or has an obligation
to contribute to on behalf of participants who are or were employed by any
Credit Party.


 


“Pledge Agreement”
means the Pledge Agreement of even date herewith entered into by and among
Agent, on behalf of itself and Lenders, Borrower and Penhall Company, as
amended, modified or supplemented from time to time.


 


“Preferred Stock to be
Redeemed” means 10,000 shares of Borrower’s Senior Exchangeable 10.50% Preferred
Stock, par value $0.01 per share, outstanding on the Closing Date


 


“Prime Rate” shall mean the rate which DBTCA announces, from time to time, as its
prime lending rate, the Prime Rate to change when and as such prime lending
rate changes.  The Prime Rate is a reference
rate and does not necessarily represent the lowest or best
rate actually charged by DBTCA to any customer of DBTCA.  Borrower acknowledges that DBTCA may, from
time to time, make commercial loans or other loans at rates of interest at,
above or below the Prime Rate.


 


“Principal Office”
shall mean the Agent’s “Principal Office” as set forth on Annex E, or
such other office as the Agent may from time to time designate in writing to Borrower
and each applicable Lender.


 


“Pro Forma” means the
unaudited consolidated and consolidating balance sheets of Borrower and its
Subsidiaries prepared in accordance with GAAP as of September 30, 2005 after
giving effect to the Related Transactions. 
The Pro Forma is annexed hereto as Annex D.


 


“Pro Rata Share”
means with respect to all matters relating to any Lender, the percentage obtained
by dividing (i) the aggregate outstanding principal balance of the Loans
held by that Lender, by (ii) the outstanding principal balance of the
Loans held by all Lenders, as such percentages may be adjusted by assignments
pursuant to Section 8.1.


 


“Projections” means
Borrower’s forecasted consolidated and consolidating:  (a) balance sheets; (b) profit and
loss statements; and (c) cash flow statements and otherwise consistent
with the historical Financial Statements of Borrower, together with appropriate
supporting details and a statement of underlying assumptions.  Notwithstanding the foregoing, to the extent Borrower
provides projections containing more detail than is required above to the First
Lien Agent, Borrower shall also provide such projections to the Lenders.


 


“Qualified Plan”
means a Pension Plan that is intended to be tax-qualified under Section 401(a)
of the IRC.


 


“Qualified Subordinated
Debt” means, Indebtedness of Borrower and any Guarantor which is
subordinated to the prior payment in full of the Obligations on terms customary
for high yield senior subordinated debt or mezzanine debt and on terms
otherwise reasonably satisfactory to the Agent; provided
that each of the following conditions is met: (i) such Indebtedness


 


S-23





















 


does not mature prior to the date that is one
year following the Maturity Date, (ii) no payments of principal with respect to
such Indebtedness (including without limitation scheduled amortization payments
and mandatory prepayments) are required to be made prior to the date that is
one year following the Maturity Date, (iii) the terms and conditions governing
such Indebtedness (including without limitation covenants and events of
default) are no more restrictive in any material respect than the terms and conditions
of this Agreement and (iv) such Indebtedness otherwise is issued on market
terms.


 


“Real Estate” has the
meaning ascribed to it in Section 5.12.


 


“Refinancing” means
the redemption by Borrower of the Senior Unsecured Notes and the Preferred
Stock to be Redeemed.


 


“Register” has the meaning ascribed to it in Section 1.2(b).


 


“Related Parties”
shall mean, with respect to any specified Person, such Person’s Affiliates and
the respective directors, officers, employees, agents and advisors of such
Person and such Person’s Affiliates.


 


“Related Transactions”
means the initial borrowing under the Revolving Loan on the Closing Date, the Refinancing,
the amendment of the Borrower’s preferred stock contemplated by Section 3.19,
the payment of all fees, costs and expenses associated with all of the
foregoing and the execution and delivery of all of the Related Transactions Documents.


 


“Related Transactions
Documents” means the Loan Documents, the documents evidencing, creating or
governing the Refinancing, and all other agreements or instruments executed in
connection with the Related Transactions.


 


“Release” means any
release, threatened release, spill, emission, leaking, pumping, pouring,
emitting, emptying, escape, injection, deposit, disposal, discharge, dispersal,
dumping, leaching or migration of Hazardous Material in the indoor or outdoor
environment, including the movement of Hazardous Material through or in the
air, soil, surface water, ground water or property.


 


“Replacement Lender”
has the meaning ascribed to it in Section 1.18.


 


“Requirement of Law”
shall mean as to any Person, the governing documents of such Person, and any
law, treaty, rule or regulation or determination of an arbitrator or a court or
other Governmental Authority, in each case applicable to or binding upon such
Person or any of its Real Property or personal property or to which such Person
or any of its property of any nature is subject.


 


“Requisite Lenders”
means Lenders having more than 50% of the aggregate outstanding amount of the
Loans.


 


“Responsible Officer”
of any Person shall mean any executive officer or financial officer of such
Person and any other officer or similar official thereof responsible for the
administration of the obligations of such Person in respect of this Agreement.


 


S-24





















 


“Restricted Payment”
means, with respect to any Credit Party, (a) the declaration or payment of
any dividend or the incurrence of any liability to make any other payment or distribution
of cash or other property or assets in respect of Stock; (b) any payment
on account of the purchase, redemption, defeasance, sinking fund or other
retirement of such Credit Party’s Stock or any other payment or distribution
made in respect thereof, either directly or indirectly; (c) any payment
made to redeem, purchase, repurchase or retire, or to obtain the surrender of,
any outstanding warrants, options or other rights to acquire Stock of such
Credit Party now or hereafter outstanding; (d) any payment of a claim for
the rescission of the purchase or sale of, or for material damages arising from
the purchase or sale of, any shares of such Credit Party’s Stock or of a claim
for reimbursement, indemnification or contribution arising out of or related to
any such claim for damages or rescission; (e) any payment, loan,
contribution, or other transfer of funds or other property to any Stockholder
of such Credit Party other than payment of compensation in the ordinary course
of business to Stockholders who are employees of such Credit Party; and (f) any
payment of management fees (or other fees of a similar nature) or out-of-pocket
expenses in connection therewith by such Credit Party to any Stockholder of
such Credit Party or its Affiliates.


 


“Retiree Welfare Plan”
means, at any time, a Welfare Plan that provides for continuing coverage or
benefits for any participant or any beneficiary of a participant after such
participant’s termination of employment, other than continuation coverage
provided pursuant to Section 4980B of the IRC and at the sole expense of the
participant or the beneficiary of the participant.


 


“Revolving Credit
Agreement” shall mean the Amended and Restated Credit agreement, dated as
of the Closing Date, among Borrower, the other credit parties thereto,  each of the financial institutions from time
to time party thereto as lenders, the First Lien Agent and the other parties
from time to time party thereto.


 


“Revolving Credit
Documents” shall mean, collectively, the Revolving Credit Agreement and “Loan
Documents” under and as defined in the Revolving Credit Agreement or any
agreements, documents or instruments associated with Permitted Refinancing Indebtedness
related thereto.


 


“Revolving Credit
Facility” shall mean the revolving credit facility obtained by Borrower
pursuant to the terms of the Revolving Credit Agreement.


 


“S&P” means
Standard & Poor’s Ratings Services, a division of the McGraw-Hill Companies,
Inc.


 


“Security Agreement”
means the Security Agreement of even date herewith entered into by and among
Agent, on behalf of itself and Lenders, and each Credit Party that is a
signatory thereto, as amended, modified or supplemented from time to time.


 


“Senior Unsecured Notes”
means those certain 12% Senior Unsecured Notes due 2006 issued by Borrower
pursuant to the Senior Unsecured Notes Indenture in an aggregate original
principal amount of $100,000,000.


 


S-25





















 


“Senior Unsecured Notes
Indenture” means the Indenture, dated August 1, 1998, between Penhall
International Corporation (as successor to Penhall Acquisition Corp.) and
United States Trust Company, as Trustee, as supplemented through the Closing
Date.


 


“Short Term Rentals”
means rental payments due to Borrower or any of its Subsidiaries from the
rental of tools and like property leased by such Person as lessor under leases
of not more than one year’s duration.


 


“Solvent” means, with
respect to any Person on a particular date, that on such date (a) the fair
value of the property of such Person is greater than the total amount of liabilities,
including subordinated and contingent liabilities, of such Person; (b) the
present fair saleable value of the assets of such Person is not less than the
amount that will be required to pay the probable liability of such Person on
its debts and liabilities, including subordinated and contingent liabilities as
they become absolute and matured; (c) such Person does not intend to, and
does not believe that it will, incur debts or liabilities beyond such Person’s
ability to pay as such debts and liabilities mature; and (d) such Person
is not engaged in a business or transaction, and is not about to engage in a
business or transaction, for which such Person’s property would constitute an
unreasonably small capital.  The amount
of contingent liabilities (such as Litigation, guaranties and pension plan
liabilities) at any time shall be computed as the amount that, in light of all
the facts and circumstances existing at the time, represents the amount that
can be reasonably be expected to become an actual or matured liability.


 


“SPC” shall have the
meaning given in Section 9.4(g).


 


“Specified Asset
Disposition” means any Asset Disposition or series or related series of
Asset Dispositions involving assets with a fair market value in excess of
$500,000.


 


“Specified Equity
Issuance” shall mean any issuance or sale by Borrower of any Capital Stock
of Borrower or the receipt by Borrower of any capital contribution, as
applicable, except (a) any issuance of directors’ qualifying shares,
(b) sales or issuances of common stock of Borrower to management or
employees of Borrower or any of its Subsidiaries, and (c) any capital contribution
from, or issuance of Capital Stock of Borrower to, BRS or any BRS Related
Party.


 


“Specified Recovery Event”
shall mean any settlement of or payment in respect of any property or casualty
insurance claim or any taking under power of eminent domain or by condemnation
or similar proceeding of or relating to any property or asset of Borrower or
any of its Subsidiaries; provided that
any such event or series of related events causing damage or destruction in an
amount, or a taking of property having a fair market value, not in excess of
$500,000 in the aggregate in any Fiscal Year of Borrower shall be deemed not to
be a Specified Recovery Event for purposes of this Agreement.


 


“Statement” has the
meaning ascribed to it in Section 4.4(c).


 


“Statutory Reserves”
shall mean a fraction (expressed as a decimal), the numerator of which is the
number one and the denominator of which is the number one minus the aggregate
of the maximum reserve percentages (including any marginal, special, emergency
or supplemental reserves) expressed as a decimal established by the Federal
Reserve Board and any


 


S-26





















 


other banking authority, domestic or foreign,
to which the Agent or any Lender (including any branch, Affiliate or other
fronting office making or holding a Loan) is subject for eurocurrency funding
(currently referred to as “Eurocurrency Liabilities” in Regulation D of
the Board).  Eurodollar Loans shall be
deemed to constitute eurocurrency funding and to be subject to such reserve
requirements without benefit of or credit for proration, exemptions or offsets
that may be available from time to time to any Lender under such
Regulation D or any comparable regulation. 
Statutory Reserves shall be adjusted automatically on and as of the
effective date of any change in any reserve percentage.


 


“Stock” means all
shares, options, warrants, general or limited partnership interests, membership
interests or other equivalents (regardless of how designated) of or in a
corporation, partnership, limited liability company or equivalent entity
whether voting or nonvoting, including common stock, preferred stock or any
other “equity security” (as such term is defined in Rule 3a11-1 of the General
Rules and Regulations promulgated by the Securities and Exchange Commission
under the Securities Exchange Act of 1934).


 


“Stockholder” means,
with respect to any Person, each holder of Stock of such Person.


 


“Subsidiary” means,
with respect to any Person, (a) any corporation of which an aggregate of
more than 50% of the outstanding Stock having ordinary voting power to elect a
majority of the board of directors of such corporation (irrespective of
whether, at the time, Stock of any other class or classes of such corporation
shall have or might have voting power by reason of the happening of any contingency)
is at the time, directly or indirectly, owned legally or beneficially by such
Person or one or more Subsidiaries of such Person, or with respect to which any
such Person has the right to vote or designate the vote of 50% or more of such
Stock whether by proxy, agreement, operation of law or otherwise, and
(b) any partnership or limited liability company in which such Person
and/or one or more Subsidiaries of such Person shall have an interest (whether
in the form of voting or participation in profits or capital contribution) of
more than 50% or of which any such Person is a general partner or may exercise
the powers of a general partner.  Unless
the context otherwise requires, each reference to a Subsidiary shall be a reference
to a Subsidiary of Borrower.


 


“Subsidiary Guaranty”
means the Subsidiary Guaranty of even date herewith executed by each of the
Guarantors in favor of Agent, on behalf of itself and Lenders, as amended, modified
or supplemented from time to time.


 


“Target” has the
meaning ascribed to it in Section 3.6(b).


 


“Tax” shall mean any present or future
tax, levy, impost, duty, assessment, charge, fee, deduction or withholding of
any nature and whatever called, by whomsoever, on whomsoever and wherever
imposed, levied, collected, withheld or assessed.


 


“Terminated Lender”
shall have the meaning given in Section 1.18.


 


“Title IV Plan” means
a Pension Plan (other than a Multiemployer Plan), that is covered by Title IV
of ERISA, and that any Credit Party or ERISA Affiliate maintains, contributes


 


S-27





















 


to or has an obligation to contribute to on
behalf of participants who are or were employed by any of them.


 


“Trademark Security
Agreements” means the Trademark Security Agreements made in favor of Agent,
on behalf of itself and Lenders, by each applicable Credit Party, in each case,
as amended, modified or supplemented from time to time.


 


“Trademark License”
means rights under any written agreement now owned or hereafter acquired by any
Credit Party granting any right to use any Trademark.


 


“Trademarks” means
all of the following now owned or hereafter adopted or acquired by any Credit
Party: (a) all trademarks, trade names, corporate names, business names,
trade styles, service marks, logos, internet domain names, other source or
business identifiers, prints and labels on which any of the foregoing have
appeared or appear, designs and general intangibles of like nature (whether
registered or unregistered), all registrations and recordings thereof, and all
applications in connection therewith, including registrations, recordings and applications
in the United States Patent and Trademark Office or in any similar office or
agency of the United States, any state or territory thereof, or any other
country or any political subdivision thereof; (b) all reissues, extensions
or renewals thereof; and (c) all goodwill associated with or symbolized by
any of the foregoing.


 


“Type” with respect to any Loan, shall
refer to such Loan’s status as an ABR Loan or a Eurodollar Loan.


 


“Unfunded Pension
Liability” means, at any time, the aggregate amount, if any, of the sum of
(a) the amount by which the present value of all accrued benefits under
each Title IV Plan exceeds the fair market value of all assets of such Title IV
Plan allocable to such benefits in accordance with Title IV of ERISA, all determined
as of the most recent valuation date for each such Title IV Plan using the actuarial
assumptions for funding purposes in effect under such Title IV Plan, and
(b) for a period of 5 years following a transaction which might reasonably
be expected to be covered by Section 4069 of ERISA, the liabilities (whether or
not accrued) that could be avoided by any Credit Party or any ERISA Affiliate
as a result of such transaction.


 


“Welfare Plan” means
a Plan described in Section 3(1) of ERISA.


 


Rules of construction with
respect to accounting terms used in the Agreement or the other Loan Documents
shall be as set forth or referred to in this Annex A.  All other undefined terms contained in any of
the Loan Documents shall, unless the context indicates otherwise, have the
meanings provided for by the Code to the extent the same are used or defined
therein; in the event that any term is defined differently in different
Articles or Divisions of the Code, the definition contained in Article or
Division 9 shall control.  Unless otherwise
specified, references in the Agreement or any of the Appendices to a Section,
subsection or clause refer to such Section, subsection or clause as contained
in the Agreement.  The words “herein,” “hereof”
and “hereunder” and other words of similar import refer to the Agreement as a
whole, including all Annexes, Exhibits and Schedules, as the same may from time
to time be amended, restated, modified or supplemented, and not to any
particular section, subsection or clause contained in the Agreement or any such
Annex, Exhibit or Schedule.


 


S-28





















 


Wherever from the context it
appears appropriate, each term stated in either the singular or plural shall
include the singular and the plural, and pronouns stated in the masculine,
feminine or neuter gender shall include the masculine, feminine and neuter
genders.  The words “including”, “includes”
and “include” shall be deemed to be followed by the words “without limitation”;
the word “or” is not exclusive; references to Persons include their respective
successors and assigns (to the extent and only to the extent permitted by the
Loan Documents) or, in the case of governmental Persons, Persons succeeding to
the relevant functions of such Persons; and all references to statutes and
related regulations shall include any amendments of the same and any successor
statutes and regulations.  Whenever any
provision in any Loan Document refers to the knowledge (or an analogous phrase)
of any Credit Party, such words are intended to signify that such Credit Party
has actual knowledge or awareness of a particular fact or circumstance or that
such Credit Party, if it had exercised reasonable diligence, would have known
or been aware of such fact or circumstance.


 


S-29





















 


ANNEX B


to


CREDIT
AGREEMENT


 


PRO
RATA SHARES AND COMMITMENT AMOUNTS


 




	
  Lender

  	
   

  	
  Commitment

  	
   

  	
  Pro Rata Share

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Deutsche
  Bank Trust Company Americas

  	
   

  	
  $

  	
  105,000,000

  	
   

  	
  100

  	
  %

  
							






 


S-1





















 


ANNEX C


to


CREDIT AGREEMENT


 


CLOSING CHECKLIST


 


1.                                       Credit Agreement: 
This Agreement or counterparts hereof shall have been duly executed by,
and delivered to, Borrower, Agent and Lenders.


 


2.                                       Term Notes:  Duly
executed originals of the Notes for each Lender, dated the Closing Date, shall
have been delivered to Agent.


 


3.                                       Subsidiary Guaranty: 
Duly executed originals of the Guaranty from each Subsidiary of Borrower
dated the Closing Date, and all documents, instruments and agreements executed
pursuant thereto shall have been delivered to Agent.


 


4.                                       Security Agreement: 
Duly executed originals of the Security Agreement executed by each
Credit Party, dated the Closing Date, and all instruments, documents and
agreements executed pursuant thereto shall have been delivered to Agent.


 


5.                                       Pledge Agreement: 
Duly executed originals of the Pledge Agreement, and duly executed
control letters from each of the Credit Parties that is a limited liability
company shall have been delivered to Agent.


 


6.                                       Intercreditor Agreement. Duly executed originals of the
Intercreditor Agreement executed by the Agent, the First Lien Agent and the
Credit Parties shall have been delivered to the Agent.


 


7.                                       Insurance: 
Satisfactory evidence shall have been delivered to Agent that the
insurance policies required by Section 2.2 are in full force and effect,
together with appropriate evidence showing loss payable and/or additional
insured clauses or endorsements, as requested by Agent, in favor of Agent, on
behalf of Lenders.


 


8.                                       [Assignment of Business Interruption Insurance:  A duly executed assignment of business
interruption insurance policy to Agent in form and substance reasonably
satisfactory to Agent, obtaining the insurer’s consent thereto.](1)


 


9.                                       Perfection Certificates  Duly
executed originals of the perfection certificates, executed by each Credit
Party, along with schedules attached thereto.


 


10.                                 Security Interests and Code Filings. Evidence satisfactory
to Agent shall have been delivered to Agent that Agent (for the benefit of
itself and Lenders) has a valid and perfected


 










(1)                                  TBD.


 





















 


security
interest in the Collateral, including (i) financing statements under the Code
and other applicable documents as Agent may request in order to perfect its security
interests in the Collateral and (ii) copies of Code search reports listing all
effective financing statements that name any Credit Party as debtor, together
with copies of such financing statements, none of which shall cover the
Collateral, except for those relating to Permitted Encumbrances.


 


11.                                 Trademark Security Agreement:  Duly executed originals of the Trademark
Security Agreement dated the Closing Date and signed by each Credit Party that
owns Trademarks, in form and substance reasonably satisfactory to Agent, shall
have been delivered to Agent.


 


12.                                 Control Agreements: 
Duly executed originals of Control Agreements in form and substance
reasonably satisfactory to Agent shall have been delivered to Agent with
respect to all bank accounts (other than Excluded Accounts) of the Credit
Parties as required by Section 2.9.


 


13.                                 Certificate of Formation and Good Standing:  For each Credit Party, (a) its articles or
certificate of incorporation or certificate of formation, as applicable, and
all amendments thereto, and (b) good standing certificates in its state of
incorporation or formation, as applicable certified by the applicable Secretary
of State or other authorized Governmental Authority shall have been delivered
to Agent.


 


14.                                 By-laws and Resolutions: 
For each Credit Party, (a) its by-laws or operating agreement, as
applicable, together with all amendments thereto and (b) resolutions of such
Person’s Board of Directors or Board of Members, as applicable, approving and
authorizing the execution, delivery and performance of the Loan Documents to
which it is a party and the transactions to be consummated in connection
therewith, each certified as of the Closing Date by such Person’s secretary or
an assistant secretary as being in full force and effect without any modification
or amendment shall have been delivered to Agent.


 


15.                                 Incumbency Certificates: 
For each Credit Party, signature and incumbency certificates of the
officers of such Person executing any of the Loan Documents, certified as of
the Closing Date by such Person’s secretary or an assistant secretary as being
true, accurate, correct and complete shall have been delivered to Agent.


 


16.                                 Opinions of Counsel: 
Duly executed originals of an opinion of Dechert LLP (“Dechert”),
special New York counsel for the Credit Parties, duly executed originals of an
opinion of Heller Ehrman, LLP special California counsel for the Credit
Parties, duly executed originals of an opinion of Lewis & Roca LLP, special
Arizona counsel for the Credit Parties; duly executed originals of an opinion
of Oppenheimer, Wolff & Donnelly LLP, special Minnesota counsel for the
Credit Parties and duly executed originals of an opinion of Barnes &
Thornburg LLP, special Indiana counsel for the Credit Parties, each dated the
Closing Date, shall have been delivered to Agent.


 


17.                                 Officer’s Certificate: 
Duly executed originals of a certificate of an authorized officer of
each Credit Party, dated the Closing Date, stating that, since June 30, 2005
(a) no event or


 





















 


condition has
occurred or is existing which could reasonably be expected to have a Material
Adverse Effect; (b) there has been no material adverse change in the assets,
liabilities, properties, prospects or condition, financial or otherwise of any
Credit party; (c) no Litigation has been commenced against such Credit Party
which, if successful, would have a Material Adverse Effect or could challenge
any of the transactions contemplated by the Agreement and the other Loan
Documents; (d) there have been no Restricted Payments made by any Credit Party
except as provided by the Revolving Credit Agreement; (e) there has been no
material increase in liabilities, liquidated or contingent, and no material
decrease in assets of Borrower or any of its Subsidiaries; and (f) (i) Consolidated
Total Debt (other than the Preferred Stock to be Redeemed and the Senior
Unsecured Notes), after giving effect to the initial fundings under the
Revolving Credit Agreement and fundings under the Credit Agreement and the
application of proceeds thereof, does not exceed $122,000,000, Borrower shall
have a minimum trailing twelve month Consolidated Adjusted EBITDA of not less
than $26,800,000 for the most recently ended month for which financial
statements are available and (iii) the ratio of Consolidated Total Debt to Consolidated
Adjusted EBITDA shall be less than 4.75:1.0 as of the Closing Date.  Borrower owns 100% of the Stock of Penhall,
that BRS owns approximately 70% and that management owns approximately 30% of
the voting Stock of Borrower and that Borrower is capitalized with
approximately $28,600,000 in liquidation preference of preferred stock plus
accreted dividends (excluding the Preferred Stock to be Redeemed) and
approximately $1,000,000 (in book value) of common stock.


 


18.                                 Waivers:  Landlord’s
waivers and consents, bailee letters and mortgagee agreements in form and
substance reasonably satisfactory to Agent, in each case, as required pursuant
to Section 2.6 shall have been delivered to Agent.


 


19.                                 Audited Financials; Financial Condition:  The Financial Statements, Projections and
other materials set forth in Section 5.5, all certified by an authorized
officer of Holdings, shall have been delivered to Agent.  Agent shall have further received a certificate
of an authorized officer of each Credit Party to the effect that (a) such
Credit Party will be Solvent upon the consummation of the transactions
contemplated herein; (b) the Projections are based upon estimates and
assumptions stated therein, all of which such Credit Party believes to be
reasonable and fair in light of current conditions and current facts known to
such Credit Party and, as of the Closing Date, reflect such Credit Party’s good
faith and reasonable estimates of its future financial performance and of the
other information projected therein for the period set forth therein; and (c)
containing such other statements with respect to the solvency of such Credit
Party and matters related thereto as Agent shall request.


 


20.                                 Projections    Agent shall have received
Projections for the Borrower through the end of the fifth year after the
Closing Date.


 


21.                                 Pro Forma:  Copies of
the Pro Forma shall have been delivered to Agent.


 


22.                                 Evidence of Irrevocable Deposit of Funds to Retire the Senior Unsecured
Notes:  Agent shall have
received evidence satisfactory to it that the Senior Unsecured Notes have been


 





















 


irrevocably
called for redemption and that funds sufficient to pay the redemption price
thereto are deposited with the trustee under the Senior Unsecured Notes Indenture.


 


23.                                 Evidence of Notice of Redemption of Preferred Stock to be Redeemed.
Agent shall have received evidence satisfactory to it that the Borrower’s Preferred
Stock to be Redeemed has been irrevocably called for redemption.


 


24.                                 Amendment and Restatement of Revolving Credit Facility. Agent
shall have received evidence (i) satisfactory to it that the Credit Parties
have entered into the Revolving Credit Facility which provides for up to
$55,000,000 in availability and such Revolving Credit Facility shall have
become effective and (ii) duly executed copies of the other First Lien Loan Documents.


 


25.                                 Management Services Agreement. Agent shall have received a
copy of the Management Services Agreement, dated as of August 4, 1998, that
shall have been certified by an Officer of the Borrower as being accurate and
complete.


 


26.                                 Other Documents: 
Agent shall have received such other certificates, documents and
agreements respecting any Credit Party as Agent may, in its sole discretion,
request.


 





















 


ANNEX D


to


CREDIT AGREEMENT


 


PRO FORMA


 


[Please See Attached]


 





















 


ANNEX E


to


CREDIT AGREEMENT


 


PRINCIPAL OFFICE


 


Deutsche Bank Trust Company Americas


Global Credit Products


Leveraged Loan Portfolio


60 Wall Street, NYC60-1104


New York, NY 10005-2858


Fax: (212) 797-5690