Exhibit 10.1


 


AMENDED AND RESTATED CREDIT AGREEMENT


 


DATED AS OF NOVEMBER 1, 2005


 


by and among


 


PENHALL INTERNATIONAL CORP.,


 


PENHALL COMPANY,


 


PENHALL LEASING, L.L.C.,


 


CAPITOL DRILLING SUPPLIES, INC.


 


and


 


BOB MACK CO., INC., as Borrowers


 


and


 


THE OTHER PERSONS PARTY HERETO THAT ARE


 


DESIGNATED AS CREDIT PARTIES


 


and


 


GENERAL ELECTRIC CAPITAL CORPORATION


 


as Agent, L/C Issuer and a Lender


 


and


 


THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO


 


as Lenders




 





 





















 


TABLE OF CONTENTS


 


	
  SECTION 1.

  	
  AMOUNTS AND TERMS OF LOANS

  	
   

  
	
   

  	
   

  	
   

  
	
  1.1.

  	
  Loans

  	
   

  
	
   

  	
   

  	
   

  
	
  1.2.

  	
  Interest
  and Applicable Margins

  	
   

  
	
   

  	
   

  	
   

  
	
  1.3.

  	
  Fees

  	
   

  
	
   

  	
   

  	
   

  
	
  1.4.

  	
  Payments

  	
   

  
	
   

  	
   

  	
   

  
	
  1.5.

  	
  Prepayments

  	
   

  
	
   

  	
   

  	
   

  
	
  1.6.

  	
  Maturity

  	
   

  
	
   

  	
   

  	
   

  
	
  1.7.

  	
  Eligible Accounts

  	
   

  
	
   

  	
   

  	
   

  
	
  1.8.A.

  	
  Eligible Short-Term Rentals

  	
   

  
	
   

  	
   

  	
   

  
	
  1.8.B.

  	
  Eligible Parts and Supplies

  	
   

  
	
   

  	
   

  	
   

  
	
  1.8.C.

  	
  Eligible Equipment

  	
   

  
	
   

  	
   

  	
   

  
	
  1.8.D.

  	
  Eligible Real Estate

  	
   

  
	
   

  	
   

  	
   

  
	
  1.9.

  	
  Loan Accounts

  	
   

  
	
   

  	
   

  	
   

  
	
  1.10.

  	
  Yield
  Protection; Illegality

  	
   

  
	
   

  	
   

  	
   

  
	
  1.11.

  	
  Taxes

  	
   

  
	
   

  	
   

  	
   

  
	
  1.12.

  	
  Application and Allocation of
  Payments

  	
   

  
	
   

  	
   

  	
   

  
	
  1.13

  	
  Borrower Representative

  	
   

  
	
   

  	
   

  	
   

  
	
  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.

  	
  Amendment of Preferred Stock
  Terms

  	
   

  
	
   

  	
   

  	
   

  
	
  2.10.

  	
  Cash Management Systems

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 3.

  	
  NEGATIVE COVENANTS

  	
   

  
	
   

  	
   

  	
   

  
	
  3.1.

  	
  Indebtedness

  	
   

  
	
   

  	
   

  	
   

  
	
  3.2.

  	
  Liens and Related
  Matters

  	
   

  
	
   

  	
   

  	
   

  
	
  3.3.

  	
  Investments

  	
   

  



 


i





















 


	
  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

  	
   

  
	
   

  	
   

  	
   

  
	
  3.11.

  	
  Change
  of Name or Location

  	
   

  
	
   

  	
   

  	
   

  
	
  3.12.

  	
  Fiscal
  Year

  	
   

  
	
   

  	
   

  	
   

  
	
  3.13.

  	
  Press
  Release; Public Offering Materials

  	
   

  
	
   

  	
   

  	
   

  
	
  3.14.

  	
  Subsidiaries

  	
   

  
	
   

  	
   

  	
   

  
	
  3.15.

  	
  Bank
  Accounts

  	
   

  
	
   

  	
   

  	
   

  
	
  3.16.

  	
  Hazardous
  Materials

  	
   

  
	
   

  	
   

  	
   

  
	
  3.17.

  	
  ERISA

  	
   

  
	
   

  	
   

  	
   

  
	
  3.18.

  	
  Sale-Leasebacks

  	
   

  
	
   

  	
   

  	
   

  
	
  3.19.

  	
  Prepayments
  of Other Indebtedness

  	
   

  
	
   

  	
   

  	
   

  
	
  3.20.

  	
  Changes
  to Management Services Agreements

  	
   

  
	
   

  	
   

  	
   

  
	
  3.21.

  	
  Changes
  in Depreciation Schedule

  	
   

  
	
   

  	
   

  	
   

  
	
  3.22.

  	
  OFAC

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.

  	
  FINANCIAL
  COVENANTS/REPORTING

  	
   

  
	
   

  	
   

  	
   

  
	
  4.1.

  	
  Capital
  Expenditure Limits

  	
   

  
	
   

  	
   

  	
   

  
	
  4.2.

  	
  Lease
  Limits

  	
   

  
	
   

  	
   

  	
   

  
	
  4.3.

  	
  Omitted

  	
   

  
	
   

  	
   

  	
   

  
	
  4.4.

  	
  Omitted

  	
   

  
	
   

  	
   

  	
   

  
	
  4.5.

  	
  Minimum
  Interest Coverage Ratio

  	
   

  
	
   

  	
   

  	
   

  
	
  4.6.

  	
  Maximum
  Leverage Ratio

  	
   

  
	
   

  	
   

  	
   

  
	
  4.7.

  	
  Omitted

  	
   

  
	
   

  	
   

  	
   

  
	
  4.9.

  	
  Financial
  Statements and Other Reports

  	
   

  
	
   

  	
   

  	
   

  
	
  4.10.

  	
  Accounting
  Terms; Utilization of GAAP for Purposes of Calculations under Agreement

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 5.

  	
  REPRESENTATIONS AND
  WARRANTIES

  	
   

  
	
   

  	
   

  	
   

  
	
  5.1.

  	
  Disclosure

  	
   

  
	
   

  	
   

  	
   

  
	
  5.2.

  	
  No
  Material Adverse Effect

  	
   

  



 


ii





















 


	
  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

  	
   

  
	
   

  	
   

  	
   

  
	
  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 and
  Disbursement Accounts

  	
   

  
	
   

  	
   

  	
   

  
	
  5.17.

  	
  Agreements
  and Other Documents

  	
   

  
	
   

  	
   

  	
   

  
	
  5.18.

  	
  Insurance

  	
   

  
	
   

  	
   

  	
   

  
	
  5.19.

  	
  Omitted

  	
   

  
	
   

  	
   

  	
   

  
	
  5.20.

  	
  Omitted

  	
   

  
	
   

  	
   

  	
   

  
	
  5.21.

  	
  Taxes

  	
   

  
	
   

  	
   

  	
   

  
	
  5.22.

  	
  Anti-Terrorism

  	
   

  
	
   

  	
   

  	
   

  
	
  5.23.

  	
  Closing
  Availability and Leverage; Capital Structure

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.

  	
  DEFAULT, RIGHTS AND
  REMEDIES

  	
   

  
	
   

  	
   

  	
   

  
	
  6.1.

  	
  Event
  of Default

  	
   

  
	
   

  	
   

  	
   

  
	
  6.2.

  	
  Suspension
  or Termination of Commitments

  	
   

  
	
   

  	
   

  	
   

  
	
  6.3.

  	
  Acceleration
  and Other Remedies

  	
   

  
	
   

  	
   

  	
   

  
	
  6.4.

  	
  Performance
  by Agent

  	
   

  
	
   

  	
   

  	
   

  
	
  6.5.

  	
  Application
  of Proceeds

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 7.

  	
  CONDITIONS TO LOANS

  	
   

  
	
   

  	
   

  	
   

  
	
  7.1.

  	
  Conditions
  to Initial Loans

  	
   

  
	
   

  	
   

  	
   

  
	
  7.2.

  	
  Conditions
  to All Loans

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 8.

  	
  ASSIGNMENT AND
  PARTICIPATION

  	
   

  
	
   

  	
   

  	
   

  
	
  8.1.

  	
  Assignment
  and Participations

  	
   

  
	
   

  	
   

  	
   

  
	
  8.2.

  	
  Agent

  	
   

  



 


iii





















 


	
  8.3.

  	
  Set
  Off and Sharing of Payments

  	
   

  
	
   

  	
   

  	
   

  
	
  8.4.

  	
  Disbursement
  of Funds

  	
   

  
	
   

  	
   

  	
   

  
	
  8.5.

  	
  Disbursements
  of Advances; Payment

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 9.

  	
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  
	
  9.1.

  	
  Indemnities

  	
   

  
	
   

  	
   

  	
   

  
	
  9.2.

  	
  Amendments and
  Waivers

  	
   

  
	
   

  	
   

  	
   

  
	
  9.3.

  	
  Notices

  	
   

  
	
   

  	
   

  	
   

  
	
  9.4.

  	
  Failure
  or Indulgence Not Waiver; Remedies Cumulative

  	
   

  
	
   

  	
   

  	
   

  
	
  9.5.

  	
  Marshaling;
  Payments Set Aside

  	
   

  
	
   

  	
   

  	
   

  
	
  9.6.

  	
  Severability

  	
   

  
	
   

  	
   

  	
   

  
	
  9.7.

  	
  Lenders’
  Obligations Several; Independent Nature of Lenders’ Rights

  	
   

  
	
   

  	
   

  	
   

  
	
  9.8.

  	
  Headings

  	
   

  
	
   

  	
   

  	
   

  
	
  9.9.

  	
  Applicable
  Law

  	
   

  
	
   

  	
   

  	
   

  
	
  9.10.

  	
  Successors
  and Assigns

  	
   

  
	
   

  	
   

  	
   

  
	
  9.11.

  	
  No
  Fiduciary Relationship; Limited Liability

  	
   

  
	
   

  	
   

  	
   

  
	
  9.12.

  	
  Construction

  	
   

  
	
   

  	
   

  	
   

  
	
  9.13.

  	
  Confidentiality

  	
   

  
	
   

  	
   

  	
   

  
	
  9.14.

  	
  CONSENT
  TO JURISDICTION

  	
   

  
	
   

  	
   

  	
   

  
	
  9.15.

  	
  WAIVER
  OF JURY TRIAL

  	
   

  
	
   

  	
   

  	
   

  
	
  9.16.

  	
  Survival
  of Warranties and Certain Agreements

  	
   

  
	
   

  	
   

  	
   

  
	
  9.17.

  	
  Entire
  Agreement

  	
   

  
	
   

  	
   

  	
   

  
	
  9.18.

  	
  Counterparts;
  Effectiveness

  	
   

  
	
   

  	
   

  	
   

  
	
  9.19.

  	
  Replacement of
  Lenders

  	
   

  
	
   

  	
   

  	
   

  
	
  9.20.

  	
  Delivery of
  Termination Statements and Mortgage Releases

  	
   

  
	
   

  	
   

  	
   

  
	
  9.21.

  	
  Subordination
  of Intercompany Debt

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 10.

  	
  CROSS-GUARANTY

  	
   

  
	
   

  	
   

  	
   

  
	
  10.1.

  	
  Cross-Guaranty

  	
   

  
	
   

  	
   

  	
   

  
	
  10.2.

  	
  Waivers
  by Borrowers

  	
   

  
	
   

  	
   

  	
   

  
	
  10.3.

  	
  Benefit
  of Guaranty

  	
   

  
	
   

  	
   

  	
   

  
	
  10.4.

  	
  Waiver
  of Subrogation, Etc.

  	
   

  
	
   

  	
   

  	
   

  
	
  10.5.

  	
  Election
  of Remedies

  	
   

  
	
   

  	
   

  	
   

  
	
  10.6.

  	
  Limitation

  	
   

  
	
   

  	
   

  	
   

  
	
  10.7.

  	
  Contribution
  with Respect to Guaranty Obligations

  	
   

  



 


iv





















 


	
  10.8.

  	
  Liability
  Cumulative

  	
   

  
	
   

  	
   

  	
   

  
	
  10.9.

  	
  Intercreditor
  Agreement

  	
   

  
	
   

  	
   

  	
   

  
	
  10.10.

  	
  Effectiveness of
  Amendment and Restatement of Existing Credit Agreement

  	
   

  



 


v





















 


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

  	
  -

  	
  Lenders’ Bank Accounts

  
	
   

  	
   

  	
   

  
	
  Exhibits

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit 1.1(a)(i)

  	
  -

  	
  Revolving Note

  
	
  Exhibit 1.1(a)(ii)

  	
  -

  	
  Notice of Revolving Credit Advance

  
	
  Exhibit 1.1(c)

  	
  -

  	
  Swing Line Note

  
	
  Exhibit 1.2(e)

  	
  -

  	
  Notice of Continuation/Conversion

  
	
  Exhibit 3.1(c)

  	
  -

  	
  Intercompany Note

  
	
  Exhibit 4.9(e)(i)

  	
  -

  	
  Penhall Borrowing Base Certificate

  
	
  Exhibit 4.9(e)(ii)

  	
  -

  	
  Penhall Leasing Borrowing Base Certificate

  
	
  Exhibit 4.9(e)(iii)

  	
  -

  	
  Bob Mack Borrowing Base Certificate

  
	
  Exhibit 4.9(e)(iv)

  	
  -

  	
  Holdings Borrowing Base Certificate

  
	
  Exhibit 4.9(e)(v)

  	
  -

  	
  Capitol Borrowing Base Certificate

  
	
  Exhibit 4.9(l)

  	
  -

  	
  Compliance and Pricing Certificate

  
	
  Exhibit 8.1

  	
  -

  	
  Assignment Agreement

  
	
   

  	
   

  	
   

  
	
  Schedules

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 1.1(d)(vii)

  	
  -

  	
  Letters of Credit

  
	
  Schedule 2.7

  	
  -

  	
  Corporate and Trade Names

  
	
  Schedule 3.1

  	
  -

  	
  Existing Indebtedness

  
	
  Schedule 3.2

  	
  -

  	
  Liens

  
	
  Schedule 3.3(e)

  	
  -

  	
  Investments

  
	
  Schedule 3.4

  	
  -

  	
  Contingent Obligations

  
	
  Schedule 3.7

  	
  -

  	
  Permitted Dispositions

  
	
  Schedule 3.8

  	
  -

  	
  Affiliate Transactions

  
	
  Schedule 3.9

  	
  -

  	
  Business Description

  
	
  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

  



 





















 


AMENDED AND RESTATED CREDIT AGREEMENT


 


This AMENDED AND RESTATED
CREDIT AGREEMENT is dated as of November 1, 2005 and entered into by and
among PENHALL INTERNATIONAL CORP., an Arizona corporation (“Holdings”),
PENHALL COMPANY, a California corporation (“Penhall”), PENHALL LEASING,
L.L.C., a California limited liability company (“Penhall Leasing”),
CAPITOL DRILLING SUPPLIES, INC., an Indiana corporation (“Capitol”) and
BOB MACK CO., INC., a California corporation 
(“Bob Mack”) (Holdings, Penhall, Penhall Leasing, Capitol and Bob
Mack are sometimes referred to herein as the “Borrowers” and
individually as a “Borrower”), the other persons designated as “Credit
Parties” on the signature pages hereof, the financial
institutions who are or hereafter become parties to this Agreement as Lenders,
and GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation (in its individual capacity “GE Capital”), as the
initial L/C Issuer and as Agent.


 


R  E  C  I  T
A  L  S:


 


WHEREAS,  Borrowers (other than Capitol (the “Existing
Borrowers”)) are parties to that certain Credit Agreement, dated as of May 22,
2003, as amended by Amendment No. 1 dated as of July 2, 2003, Amendment No. 2, dated as of October 2,
2003, Amendment No. 3, dated as of October 28, 2003, Amendment
No. 4, dated as of June 7, 2004, and Amendment No. 5, dated as
of November 30, 2004, among the Borrowers, the Lenders (as defined
therein) and Agent (as amended, modified, or supplemented to the date hereof, the
“Existing Credit Agreement”); and


 


WHEREAS, Capitol wishes
to join the Credit Agreement as a Borrower effective on the Amendment Effective
Date;


 


WHEREAS, Borrowers desire
that Lenders extend a revolving credit facility to Borrowers to (i) refinance
existing indebtedness of Borrowers under the Existing Credit Agreement, (ii) redeem
all of the issued and outstanding shares of Senior Preferred Stock (as defined
hereinafter), (iii) provide working capital financing for Borrowers and (iv) provide
funds for other general corporate purposes of Borrowers; and


 


WHEREAS, in connection
therewith, the parties hereto desire to amend and restate the terms and
provisions of the Existing Credit Agreement in the form hereof; and


 


WHEREAS, Existing
Borrowers desire to continue to secure and Capitol desires to secure all of
their Obligations (as hereinafter defined) under the Loan Documents (as
hereinafter defined) by granting to Agent, for the benefit of Agent and
Lenders, a security interest in and lien upon substantially all of their
existing and after-acquired personal and real property; and


 


WHEREAS, Existing
Borrowers are willing to continue to pledge to Agent and Capitol to pledge to
Agent, for the benefit of Agent and Lenders, all of the Stock of their wholly
owned Subsidiaries to secure the Obligations; and


 


WHEREAS, each Credit
Party has agreed to continue 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 their existing and after-acquired personal and real property; and


 


WHEREAS, each Existing
Borrower is willing to continue to guaranty and Capitol is willing to guaranty
all of the Obligations of each other Borrower in accordance with the provisions
of Section 10; and


 





















 


WHEREAS, each Credit
Party that is not a Borrower under this Agreement is willing to guaranty all of
the Obligations of Borrowers; 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, Borrowers, Credit Parties, Lenders and Agent agree that
subject to the terms and conditions hereof, the Existing Credit Agreement be
and hereby is amended and restated in its entirety as this Agreement:


 


SECTION 1.


 


AMOUNTS AND TERMS OF LOANS


 


1.1.         Loans.  Subject to the terms and conditions of this
Agreement and in reliance upon the representations and warranties of Borrowers
and the other Credit Parties contained herein:


 


(a)           Revolving Loans.


 


(i)            Each Revolving Lender
agrees, severally and not jointly, to make available to Borrowers from time to
time until the Commitment Termination Date its Pro Rata Share of advances (each
a “Revolving Credit Advance”) requested by Borrower Representative on
behalf of the Borrowers hereunder.  The
Pro Rata Share of the Revolving Loan of any Revolving Lender (including,
without duplication, Swing Line Loans) shall not at any time exceed its
separate Revolving Loan Commitment. 
Revolving Credit Advances may be repaid and reborrowed; provided, that the amount of any Revolving Credit Advance to
be made at any time shall not exceed Borrowing Availability.  Borrowing Availability may be further reduced
by Reserves imposed by Agent in its reasonable credit judgment.  Moreover, the sum of the Revolving Loan and
Swing Line Loan outstanding to any Borrower shall not exceed at any time that
Borrower’s separate Borrowing Base.  All
Revolving Loans shall be repaid in full on the Commitment Termination
Date.  Each Borrower shall execute and
deliver to each Revolving Lender a note to evidence the Revolving Loan
Commitment of that Revolving Lender. 
Each note shall be in the maximum principal amount of the Revolving Loan
Commitment of the applicable Revolving Lender, dated the Amendment Effective
Date and substantially in the form of Exhibit 1.1(a)(i) (each
as amended, modified, extended, substituted or replaced from time to time, a “Revolving
Note” and, collectively, the “Revolving Notes”).  Other than pursuant to Section 1.1(a)(ii),
if at any time the outstanding Revolving Loans (including the Swing Line Loans)
exceed the Borrowing Base or the outstanding balance of the Revolving Loan of
any Borrower (including the Swing Line Loans advanced to that Borrower) exceeds
that Borrower’s separate Borrowing Base (any such excess Revolving Loans are
herein referred to collectively as “Overadvances”), Lenders shall not be
obligated to make Revolving Credit Advances, no additional Letters of Credit
shall be issued and, except as provided in Section 1.1(a)(ii) below,
Revolving Loans must be repaid immediately and Letters of Credit cash
collateralized in an amount sufficient to eliminate any Overadvances.  Furthermore, if, at any time, the outstanding
balance of the Revolving Loan of any Borrower (including, without duplication,
Swing Line Loans) exceeds that Borrower’s separate Borrowing Base (including,
without duplication, Swing Line Loans), the applicable Borrower shall immediately
repay its Revolving Credit Advances in the amount of such excess (and, if
necessary, shall provide cash collateral for its Letter of Credit
Obligations).  All Overadvances shall
constitute Index Rate Loans and shall bear interest at the Default Rate.  Revolving Credit Advances which are to be
made as Index Rate Loans may be requested in any amount with one (1) Business
Day’s prior written notice required for funding requests equal to or greater
than $5,000,000.  For funding requests
for such Loans less than $5,000,000, written notice must be provided by 1:00 p.m.
(New York


 


2





















 


time) on the Business Day on which such Revolving
Credit Advance is to be made.  All
requests for Revolving Credit Advances that are to be made as LIBOR Loans
require three (3) Business Days’ prior written notice. Written notices for
funding requests shall be in the form attached as Exhibit 1.1(a)(ii) (“Notice
of Revolving Credit Advance”).  Each
Revolving Credit Advance to Penhall Leasing shall be in a minimum amount of
$250,000.  Each Revolving Credit Advance
to Holdings, Penhall, Capitol and Bob Mack shall be in a minimum amount of
$100,000.


 


(ii)           If Borrower
Representative on behalf of Borrowers requests that Revolving Lenders make, or
permit to remain outstanding any Overadvances, Agent may, in its sole
discretion, elect to make, or permit to remain outstanding such Overadvances; provided, however, that Agent may not cause Revolving
Lenders to make, or permit to remain outstanding, (a) aggregate Revolving
Loans (including, without duplication, Swing Line Loans) in excess of the
Maximum Amount or (b) Overadvances in an aggregate amount in excess of
$5,000,000.  If an Overadvance is made,
or permitted to remain outstanding, pursuant to the preceding sentence, then
all Revolving Lenders shall be bound to make, or permit to remain outstanding
such Overadvance based upon their Pro Rata Shares of the Revolving Loan
Commitments in accordance with the terms of this Agreement.  If an Overadvance remains outstanding for
more than ninety (90) days during any one hundred eighty (180) day period,
Revolving Loans must be repaid immediately in an amount sufficient to eliminate
all of such Overadvances.  Furthermore,
holders of a majority of the Revolving Loan Commitment may prospectively revoke
Agent’s ability to make or permit Overadvances by written notice to Agent.  Any Overadvance may be made as a Swing Line
Advance.


 


(b)           Loan Balance.  Immediately prior to the Amendment Effective
Date, the outstanding principal balance of the Revolving Credit Advances under
and as defined in the Existing Credit Agreement is $6,000,000.  The Revolving Credit Advance to be made on
the Amendment Effective Date (together with the outstanding principal amount of
the “Revolving Credit Advances” under (and as such term is defined in) the
Existing Credit Agreement) shall not exceed $17,000,000.


 


(c)           Swing Line Facility.


 


(i)            Agent shall notify the
Swing Line Lender upon Agent’s receipt of any Notice of Revolving Credit Advance.  Subject to the terms and conditions hereof,
the Swing Line Lender may, in its discretion, make available from time to time
until the Commitment Termination Date advances (each, a “Swing Line Advance”)
in accordance with any such notice.  The
provisions of this Section 1.1(c) shall not relieve Revolving
Lenders of their obligations to make Revolving Credit Advances under Section 1.1(a);
provided that if the Swing Line Lender
makes a Swing Line Advance pursuant to any such notice, such Swing Line Advance
shall be in lieu of any Revolving Credit Advance that otherwise may be made by
Revolving Lenders pursuant to such notice. 
Except as provided in Section 1.1(a)(ii) above, no
Swing Line Advance shall be made if (A) such Swing Line Advance, when
added to the other Swing Line Advances then outstanding, shall exceed the Swing
Line Commitment or (B) such Swing Line Advance shall exceed Borrowing
Availability (the lesser of (A) and (B), “Swing Line Availability”).  Moreover, except for Overadvances, the Swing
Line Loan outstanding to any Borrower shall not exceed at any time that
Borrower’s separate Borrowing Base less the Revolving Loan outstanding to such
Borrower.  Until the Commitment
Termination Date, Borrowers may from time to time borrow, repay and reborrow
under this Section 1.1(c). 
Each Swing Line Advance shall be made pursuant to a Notice of Revolving
Credit Advance delivered by Borrower Representative on behalf of the applicable
Borrower to Agent in accordance with Section 1.1(a).  Unless the Swing Line Lender has received at
least one (1) Business Day’s prior written notice from Requisite Lenders
instructing it not to make a Swing Line Advance, the Swing Line Lender shall,
notwithstanding the failure of any condition precedent set forth in Section 7.2,
be entitled to fund that Swing Line Advance, and to have each Revolving Lender
make Revolving Credit Advances in accordance with Section 1.1(c)(iii) or
purchase participating interests in accordance with


 


3





















 


Section 1.1(c)(iv).  Notwithstanding any other provision of this
Agreement or the other Loan Documents, the Swing Line Loan shall constitute an
Index Rate Loan.  Borrowers shall repay
the aggregate outstanding principal amount of the Swing Line Loan upon demand
therefor by Agent. The entire unpaid balance of the Swing Line Loan and all
other noncontingent Obligations shall be immediately due and payable in full in
immediately available funds on the Commitment Termination Date if not sooner
paid in full.  Each Swing Line Advance
shall be in a minimum amount of $250,000.


 


(ii)           Each Borrower shall
execute and deliver to the Swing Line Lender a promissory note to evidence the
Swing Line Commitment.  Each note shall
be in the principal amount of the Swing Line Commitment of the Swing Line
Lender, dated the Amendment Effective Date and substantially in the form of Exhibit 1.1(c) (each
as amended, modified, extended, substituted or replaced from time to time, a “Swing
Line Note” and, collectively the “Swing Line Notes”).  Each Swing Line Note shall represent the
obligation of each Borrower to pay the amount of the Swing Line Commitment or,
if less, the aggregate unpaid principal amount of all Swing Line Advances made
to such Borrower together with interest thereon as prescribed in Section 1.2.


 


(iii)          The Swing Line Lender,
at any time and from time to time in its sole and absolute discretion (but no
less frequently than weekly), may on behalf of any Borrower (and each Borrower
hereby irrevocably authorizes the Swing Line Lender to so act on its behalf)
request each Revolving Lender (including the Swing Line Lender) to make a
Revolving Credit Advance to each Borrower (which shall be an Index Rate Loan)
in an amount equal to that Revolving Lender’s Pro Rata Share of the principal
amount of the applicable Borrower’s Swing Line Loan (the “Refunded Swing
Line Loan”) outstanding on the date such notice is given.  Unless any of the events described in Sections
6.1(f) and 6.1(g) has occurred (in which event the procedures of Section 1.1(c)(iv) shall
apply) and regardless of whether the conditions precedent set forth in this
Agreement to the making of a Revolving Credit Advance are then satisfied, each
Revolving Lender shall disburse directly to Agent, its Pro Rata Share of a
Revolving Credit Advance on behalf of the Swing Line Lender, prior to 3:00 p.m.
(New York time), in immediately available funds on the Business Day next
succeeding the date that notice is given. 
The proceeds of those Revolving Credit Advances shall be immediately
paid to the Swing Line Lender and applied to repay the Refunded Swing Line Loan
of the applicable Borrower.


 


(iv)          If, prior to refunding a
Swing Line Loan with a Revolving Credit Advance pursuant to Section 1.1(c)(iii),
one of the events described in Sections 6.1(f) or 6.1(g) has
occurred, then, subject to the provisions of Section 1.1(c)(v) below,
each Revolving Lender shall, on the date such Revolving Credit Advance was to
have been made for the benefit of the applicable Borrower, purchase from the
Swing Line Lender an undivided participation interest in the Swing Line Loan to
such Borrower in an amount equal to its Pro Rata Share (determined with respect
to Revolving Loans) of such Swing Line Loan. 
Upon request, each Revolving Lender shall promptly transfer to the Swing
Line Lender, in immediately available funds, the amount of its participation
interest.


 


(v)           Each Revolving Lender’s
obligation to make Revolving Credit Advances in accordance with Section 1.1(c)(iii) and
to purchase participation interests in accordance with Section 1.1(c)(iv) shall
be absolute and unconditional and shall not be affected by any circumstance,
including (A) any setoff, counterclaim, recoupment, defense or other right
that such Revolving Lender may have against the Swing Line Lender, any Borrower
or any other Person for any reason whatsoever; (B) the occurrence or
continuance of any Default or Event of Default; (C) any inability of any
Borrower to satisfy the conditions precedent to borrowing set forth in this
Agreement at any time or (D) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing.  Swing Line Lender shall be entitled to
recover, on demand, from each Revolving Lender the amounts required pursuant to
Sections 1.1.(c)(iii) or 1.1(c)(iv), as the case may be.  If any Revolving Lender does not make
available such amounts to Agent or the Swing Line Lender, as applicable, the
Swing Line Lender shall be


 


4





















 


entitled to recover, on demand, such amount on demand
from such Revolving Lender, together with interest thereon for each day from
the date of non-payment until such amount is paid in full at the Federal Funds
Rate for the first two (2) Business Days and at the Index Rate thereafter.


 


(vi)          Immediately prior to the
Amendment Effective Date, the outstanding principal balance of the Swing Line
Advances under and as defined in the Existing Credit Agreement is $0.


 


(d)           Letters of Credit.  The Revolving Loan Commitment may, in
addition to advances under the Revolving Loan, be utilized, upon the request of
Borrower Representative on behalf of the applicable Borrower, for the issuance
of Letters of Credit.  Immediately upon
the issuance by an L/C Issuer of a Letter of Credit, and without further action
on the part of Agent or any of the Lenders, each Revolving Lender shall be
deemed to have purchased from such L/C Issuer a participation in such Letter of
Credit (or in its obligation under a risk participation agreement with respect
thereto) equal to such Revolving Lender’s Pro Rata Share of the aggregate
amount available to be drawn under such Letter of Credit.


 


(i)            Maximum Amount.  The aggregate amount of Letter of Credit
Obligations with respect to all Letters of Credit outstanding at any time shall
not exceed $35,000,000 (“L/C Sublimit”).


 


(ii)           Reimbursement.  Borrowers shall be irrevocably and
unconditionally obligated forthwith without presentment, demand, protest or
other formalities of any kind (including for purposes of Section 10),
to reimburse any L/C Issuer on demand in immediately available funds for any
amounts paid by such L/C Issuer with respect to a Letter of Credit, including
all reimbursement payments, Fees, Charges, costs and expenses paid by such L/C
Issuer.  Borrowers hereby authorize and
direct Agent, at Agent’s option, to debit Borrowers’ account (by increasing the
outstanding principal balance of the Revolving Credit Advances) in the amount
of any payment made by an L/C Issuer with respect to any Letter of Credit.  All amounts paid by an L/C Issuer with
respect to any Letter of Credit that are not immediately repaid by Borrowers
with the proceeds of a Revolving Credit Advance or otherwise shall bear
interest at the interest rate applicable to Revolving Loans which are Index
Rate Loans plus, at the election of Agent or Requisite Lenders, an additional
two percent (2.00%) per annum.  Each
Revolving Lender agrees to fund its Pro Rata Share of any Revolving Loan made
pursuant to this Section 1.1(d)(ii).  In the event Agent elects not to debit
Borrowers’ account and Borrowers fail to reimburse the L/C Issuer in full on
the date of any payment in respect of a Letter of Credit, Agent shall promptly
notify each Revolving Lender of the amount of such unreimbursed payment and the
accrued interest thereon and each Revolving Lender, on the next Business Day
prior to 3:00 p.m. (New York time), shall deliver to Agent an amount equal
to its Pro Rata Share thereof in same day funds.  Each Revolving Lender hereby absolutely and
unconditionally agrees to pay to the L/C Issuer upon demand by the L/C Issuer
such Revolving Lender’s Pro Rata Share of each payment made by the L/C Issuer
in respect of a Letter of Credit and not immediately reimbursed by Borrowers or
satisfied through a debit of Borrowers’ account.  Each Revolving Lender acknowledges and agrees
that its obligations pursuant to this subsection in respect of Letters of
Credit are absolute and unconditional and shall not be affected by any
circumstance whatsoever, including setoff, counterclaim, the occurrence and
continuance of a Default or an Event of Default or any failure by Borrowers to
satisfy any of the conditions set forth in Section 7.2.  If any Revolving Lender fails to make
available to the L/C Issuer the amount of such Revolving Lender’s Pro Rata
Share of any payments made by the L/C Issuer in respect of a Letter of Credit
as provided in this Section 1.1(d)(ii), the L/C Issuer shall be
entitled to recover such amount on demand from such Revolving Lender together
with interest at the Index Rate.


 


5





















 


(iii)          Request for Letters
of Credit.  Borrower Representative
shall give Agent at least three (3) Business Days’ prior written notice
specifying the date a Letter of Credit is requested to be issued, the amount
and the name and address of the beneficiary, a description of the transactions
proposed to be supported thereby and the name of the Borrower for whose account
such Letter of Credit is to be issued. 
If Agent informs Borrower Representative that the L/C Issuer cannot
issue the requested Letter of Credit directly, such Borrower Representative may
request that L/C Issuer arrange for the issuance of the requested Letter of
Credit under a risk participation agreement with another financial institution
reasonably acceptable to Agent, L/C Issuer and Borrower Representative.  The issuance of any Letter of Credit under
this Agreement shall be subject to the conditions that the Letter of Credit (i) supports
a transaction entered into in the ordinary course of business of Borrowers and (ii) is
in a form, is for an amount and contains such terms and conditions as are
reasonably satisfactory to the L/C Issuer and, in the case of standby letters
of credit, Agent.  The initial notice
requesting the issuance of a Letter of Credit shall be accompanied by the form
of the Letter of Credit and the Master Standby Agreement or Master Documentary
Agreement, as applicable, and an application for a letter of credit, if any,
then required by the L/C Issuer completed in a manner satisfactory to such L/C
Issuer.  If any provision of any
application or reimbursement agreement is inconsistent with the terms of this
Agreement, then the provisions of this Agreement, to the extent of such
inconsistency, shall control.


 


(iv)          Expiration Dates of
Letters of Credit.  The expiration
date of each Letter of Credit shall be on a date which is not later than the
earlier of (a) one year from its date of issuance or (b) the
thirtieth (30th) day prior to the date set forth in clause (a) of the
definition of the term Commitment Termination Date. Notwithstanding the
foregoing, a Letter of Credit may provide for automatic extensions of its
expiration date for one (1) or more successive one (1) year periods provided that the L/C Issuer has the right to terminate such
Letter of Credit on each such annual expiration date and no renewal term may
extend the term of the Letter of Credit to a date that is later than the
thirtieth (30th) day prior to the date set forth in clause (a) of the
definition of the term Commitment Termination Date.  The L/C Issuer may elect not to renew any
such Letter of Credit and, upon direction by Agent or Requisite Lenders, shall
not renew any such Letter of Credit at any time during the continuance of an
Event of Default, provided that, in the case of a
direction by Agent or Requisite Lenders, the L/C Issuer receives such
directions prior to the date notice of non-renewal is required to be given by
the L/C Issuer and the L/C Issuer has had a reasonable period of time to act on
such notice.


 


(v)           Obligations Absolute.  The obligation of Borrowers to reimburse the
L/C Issuer, Agent and Lenders for payments made in respect of Letters of Credit
issued by the L/C Issuer shall be unconditional and irrevocable and shall be
paid under all circumstances strictly in accordance with the terms of this
Agreement, including the following circumstances: (a) any lack of validity
or enforceability of any Letter of Credit; (b) any amendment or waiver of
or any consent or departure from all or any of the provisions of any Letter of
Credit or any Loan Document; (c) the existence of any claim, set-off,
defense or other right which Borrowers, any of their Subsidiaries or Affiliates
or any other Person may at any time have against any beneficiary of any Letter
of Credit, Agent, any L/C Issuer, any Lender or any other Person, whether in
connection with this Agreement, any other Loan Document or any other related or
unrelated agreements or transactions; (d) any draft or other document
presented under any Letter of Credit proving to be forged, fraudulent, invalid
or insufficient in any respect or any statement therein being untrue or
inaccurate in any respect; (e) payment under any Letter of Credit against
presentation of a draft or other document that does not substantially comply
with the terms of such Letter of Credit; or (f) any other act or omission
to act or delay of any kind of any L/C Issuer, Agent, any Lender or any other
Person or any other event or circumstance whatsoever that might, but for the
provisions of this Section 1.1(d)(v), constitute a legal or
equitable discharge of Borrowers’ obligations hereunder.


 


(vi)          Obligations of L/C
Issuers.  Each L/C Issuer (other than
GE Capital) hereby agrees that it will not issue a Letter of Credit hereunder
until it has provided Agent with written


 


6





















 


notice specifying the amount and intended issuance
date of such Letter of Credit and Agent has returned a written acknowledgment
of such notice to L/C Issuer.  Each L/C
Issuer (other than GE Capital) further agrees to provide to Agent:  (a) a copy of each Letter of Credit
issued by such L/C Issuer promptly after its issuance; (b) a weekly report
summarizing available amounts under Letters of Credit issued by such L/C
Issuer, the dates and amounts of any draws under such Letters of Credit, the
effective date of any increase or decrease in the face amount of any Letters of
Credit during such week and the amount of any unreimbursed draws under such
Letters of Credit; and (c) such additional information reasonably
requested by Agent from time to time with respect to the Letters of Credit
issued by such L/C Issuer.  Without
limiting the generality of the foregoing, it is expressly understood and agreed
by Borrowers that the absolute and unconditional obligation of Borrowers to
Agent and Lenders hereunder to reimburse payments made under a Letter of Credit
will not be excused by the gross negligence or willful misconduct of the L/C
Issuer.  However, the foregoing shall not
be construed to excuse an L/C Issuer from liability to Borrowers to the extent
of any direct damages (as opposed to consequential damages, with Borrowers
hereby waiving all claims for any consequential damages to the extent permitted
by applicable law) suffered by Borrowers that are not subject to
indemnification under the Master Standby Agreement or the Master Documentary
Agreement.


 


(vii)         Outstanding Letters of
Credit.  Immediately prior to the
Amendment Effective Date, the Letters of Credit listed on Schedule 1.1(d)(vii) hereto
issued under the Existing Credit Agreement are and shall remain outstanding
under this Agreement.


 


(e)           Funding
Authorization.  The proceeds of all
Loans made pursuant to this Agreement subsequent to the Amendment Effective
Date are to be funded by Agent by wire transfer to the account designated by
Borrower Representative below (the “Disbursement Account”):


 


	
  Bank:

  	
  Wells Fargo

  
	
  ABA No.:

  	
  121000248

  
	
  Bank Address:

  	
  2030 Main Street Suite 900, Irvine, CA 92614

  
	
  Account No.:

  	
  4945086494

  
	
  Reference:

  	
  Penhall International -
  Concentration Account

  



 


Borrower Representative shall provide Agent with written notice of any
change in the foregoing instructions at least three (3) Business Days
before the desired effective date of such change.


 


1.2.         Interest
and Applicable Margins.


 


(a)           Borrowers shall pay
interest to Agent, for the ratable benefit of Lenders, in accordance with the
various Loans being made by each Lender, in arrears on each applicable Interest
Payment Date, at the following rates:  (i) with
respect to the Revolving Credit Advances which are designated as Index Rate
Loans (and for all other Obligations not otherwise set forth below), the Index
Rate plus the Applicable Revolver Index Margin per annum or, with respect to
Revolving Credit Advances which are designated as LIBOR Loans, at the election
of Borrower Representative, the applicable LIBOR Rate plus the Applicable
Revolver LIBOR Margin per annum; and (ii) with respect to the Swing Line
Loan, the Index Rate plus the Applicable Revolver Index Margin per annum.


 


The Applicable Margins
are as follows:


 


	
  Applicable Revolver Index Margin

  	
   

  	
  1.50

  	
  %

  
	
  Applicable Revolver LIBOR Margin

  	
   

  	
  2.50

  	
  %

  
	
  Applicable L/C Margin

  	
   

  	
  2.50

  	
  %

  



 


7





















 


Interest accrued and unpaid under the Existing Credit Agreement up to
and including the Business Day immediately preceding the Amendment Effective
Date shall accrue at the “Applicable Margins” (under and as such term is
defined in the Existing Credit Agreement) in effect immediately prior to the
Amendment Effective Date and shall be paid on the respective Interest Payment
Dates that such interest would have been payable in the absence of this
amendment and restatement.


 


The Applicable Margins
shall be adjusted (up or down) prospectively on a quarterly basis as determined
by Holdings’ consolidated financial performance, commencing with the first day
of the first calendar month that occurs more than one Business Day after Agent
shall have received the Financial Statements of Holdings and its Subsidiaries
for the period ending December 31, 2005 (the “Initial Adjustment Date”).  Adjustments in Applicable Margins will be
determined by reference to the following grids:


 


	
  If Monthly Average Borrowing
  Availability is:

  	
   

  	
  Level of Applicable Margins:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  <$10,000,000

  	
   

  	
  Level I

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  >$10,000,000 and <$30,000,000

  	
   

  	
  Level II

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  >$30,000,000

  	
   

  	
  Level III

  	
   

  



 


	
   

  	
   

  	
  Applicable Margins

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Applicable

  Revolver Index

  Margin

  	
   

  	
  Applicable Revolver 

  LIBOR Margin

  	
   

  	
  Applicable L/C Margin

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Level I

  	
   

  	
  1.75

  	
  %

  	
  2.75

  	
  %

  	
  2.75

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Level II

  	
   

  	
  1.50

  	
  %

  	
  2.50

  	
  %

  	
  2.50

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Level III

  	
   

  	
  1.25

  	
  %

  	
  2.25

  	
  %

  	
  2.25

  	
  %

  



 


All adjustments in the Applicable Margins after the Initial Adjustment
Date shall be implemented quarterly on a prospective basis, for each calendar
quarter commencing at least one (1) day after the date of delivery to
Lenders of the quarterly Compliance and Pricing Certificate evidencing the need
for an adjustment.  Concurrently with the
delivery of such Compliance and Pricing Certificate, Borrower Representative
shall deliver to Agent and Lenders a certificate, signed by its chief financial
officer, setting forth in reasonable detail the basis for the continuance of,
or any change in, the Applicable Margins. 
Failure to timely deliver such Compliance and Pricing Certificate shall,
in addition to any other remedy provided for in this Agreement, result in an
increase in the Applicable Margins to the highest level set forth in the
foregoing grid, until the first day following the delivery of such Compliance
and Pricing Certificate demonstrating that such an increase is not
required.  If any Default or Event of
Default has occurred and is continuing at the time any reduction in the Applicable
Margins is to be implemented, that reduction shall be deferred until the first
day of the first calendar month following the date on which all Defaults or
Events of Default are waived or cured.


 


8





















 


(b)           If any payment on any
Loan becomes due and payable on a day other than a Business Day, the maturity
thereof will be extended to the next succeeding Business Day (except as set
forth in the definition of LIBOR Period) and, with respect to payments of
principal, interest thereon shall be payable at the then applicable rate during
such extension.


 


(c)           All computations of
Fees calculated on a per annum basis and interest shall be made by Agent on the
basis of a 360-day year, in each case for the actual number of days occurring
in the period for which such Fees and interest are payable.  The Index Rate is a floating rate determined
for each day.  Each determination by
Agent of an interest rate and Fees hereunder shall be final, binding and
conclusive on Borrowers, absent manifest error.


 


(d)           So long as an Event of
Default has occurred and is continuing under Section 6.1(a), (b), (f) or
(g) and without notice of any kind, or so long as any other Event of
Default has occurred and is continuing and at the election of Agent (or upon
the written request of Requisite Lenders) confirmed by written notice from
Agent to Borrower Representative, the interest rates applicable to the Loans
and the Letter of Credit Fee shall be increased by up to two percentage points
(2%) per annum above the rates of interest or the rate of such Fee otherwise
applicable hereunder (“Default Rate”), and all outstanding Obligations
shall bear interest at the Default Rate applicable to such Obligations.  Interest and Letter of Credit Fees at the
Default Rate shall accrue from the initial date of such Event of Default until
that Event of Default is cured or waived and shall be payable upon demand, but
in any event, shall be payable on the next regularly scheduled payment date set
forth herein for such Obligation.


 


(e)           Borrower Representative
shall have the option to (i) request that any Revolving Credit Advance be
made as a LIBOR Loan, (ii) convert at any time all or any part of
outstanding Loans (other than the Swing Line Loan) from Index Rate Loans to
LIBOR Loans, (iii) convert any LIBOR Loan to an Index Rate Loan, subject
to payment of the LIBOR Breakage Fee in accordance with Section 1.3(e) if
such conversion is made prior to the expiration of the LIBOR Period applicable
thereto, or (iv) continue all or any portion of any Loan (other than the
Swing Line Loan) as a LIBOR Loan upon the expiration of the applicable LIBOR
Period and the succeeding LIBOR Period of that continued Loan shall commence on
the first day after the last day of the LIBOR Period of the Loan to be
continued.  Any Loan or group of Loans
having the same proposed LIBOR Period to be made or continued as, or converted
into, a LIBOR Loan must be in a minimum amount of $1,000,000 and integral multiples of $100,000 in excess of such
amount.  Any such election must be made
by 1:00 p.m. (New York time) on the third
Business Day prior to (1) the date of any proposed Revolving Credit
Advance which is to bear interest at the LIBOR Rate, (2) the end of each
LIBOR Period with respect to any LIBOR Loans to be continued as such, or (3) the
date on which Borrower Representative wishes to convert any Index Rate Loan
(other than the Swing Line Loan) to a LIBOR Loan for a LIBOR Period designated
by Borrower Representative in such election. 
If no election is received with respect to an existing LIBOR Loan by
1:00 p.m. (New York time) on the third Business Day prior to the end of
the LIBOR Period with respect thereto, that LIBOR Loan shall be converted to an
Index Rate Loan at the end of its LIBOR Period. 
Borrower Representative must make such election by notice to Agent in
writing, by fax or overnight courier.  In
the case of any conversion or continuation, such election must be made pursuant
to a written notice (a “Notice of Conversion/Continuation”) in the form
of Exhibit 1.2(e). 
Notwithstanding anything to the contrary contained herein, Borrower
Representative shall not make any request under clause (i) or clause (ii) of
this paragraph (e) until the earlier of (A) five (5) days after
the Amendment Effective Date and (B) the date that Agent shall have
notified Borrower Representative in writing that GE Capital has completed the
Primary Syndication (as defined in the GE Capital Fee Letter), except such
LIBOR Loan based on a one week LIBOR Rate. 
No Loan shall be made, converted into or continued as a LIBOR Loan if an
Event of Default has occurred and is continuing and Agent or Requisite Lenders
have determined not to make or continue any Loan as a LIBOR Loan as a result
thereof.


 


9





















 


(f)            Notwithstanding
anything to the contrary set forth in this Section 1.2, if a court
of competent jurisdiction determines in a final order that any rate of interest payable hereunder exceeds the highest rate
of interest permissible under law (the “Maximum Lawful Rate”), then so
long as the Maximum Lawful Rate would be so exceeded, such rate of interest
payable hereunder shall be equal to the Maximum Lawful Rate; provided, however, that
if at any time thereafter such rate of interest payable hereunder is less than
the Maximum Lawful Rate, Borrowers shall continue to pay interest hereunder at
the Maximum Lawful Rate until such time as the total interest received by
Agent, on behalf of Lenders, is equal to the total interest that would have
been received had such interest rate payable hereunder been (but for the
operation of this paragraph) the interest rate payable since the Amendment
Effective Date as otherwise provided in this Agreement.  Thereafter, such interest hereunder shall be
paid at the rate(s) of interest and in the manner provided in Sections 1.2(a) through
(e), unless and until such rate of interest again exceeds the Maximum
Lawful Rate, and at that time this paragraph shall again apply.  In no event shall the total interest received
by any Lender pursuant to the terms hereof exceed the amount that such Lender
could lawfully have received had the interest due hereunder been calculated for
the full term hereof at the Maximum Lawful Rate.  If the Maximum Lawful Rate is calculated
pursuant to this paragraph, such interest shall be calculated at a daily rate
equal to the Maximum Lawful Rate divided by the number of days in the year in
which such calculation is made.  If,
notwithstanding the provisions of this Section 1.2(f), a court of
competent jurisdiction shall determine by a final, non-appealable order that a
Lender has received interest hereunder in excess of the Maximum Lawful Rate,
Agent shall, to the extent permitted by applicable law, promptly apply such
excess as specified in Section 1.5(e) and thereafter shall
refund any excess to Borrowers or as such court of competent jurisdiction may
otherwise order.


 


1.2.A.     Swap
Related Reimbursement Obligations.


 


(a)           Borrowers
agree to reimburse GE Capital in immediately available funds in the amount of
any payment made by GE Capital under a Swap Related L/C (such reimbursement
obligation, whether contingent upon payment by GE Capital under the Swap
Related L/C or otherwise, being herein called a “Swap Related Reimbursement
Obligation”).  No Swap Related
Reimbursement Obligation for any Swap Related L/C may exceed the amount of the
payment obligations owed by Borrowers under the interest rate protection or
hedging agreement or transaction supported by the Swap Related L/C.


 


(b)           A
Swap Related Reimbursement Obligation shall be due and payable by Borrowers
within one (1) Business Day after the date on which the related payment is
made by GE Capital under the Swap Related L/C.


 


(c)           Any
Swap Related Reimbursement Obligation shall, during the period in which it is
unpaid, bear interest at the rate per annum equal to the LIBOR Rate plus one
percent (1%), as if the unpaid amount of the Swap Related Reimbursement
Obligation were a LIBOR Loan, and not at any otherwise applicable Default
Rate.  Such interest shall be payable
upon demand.  The following additional
provisions apply to the calculation and charging of interest by reference to
the LIBOR Rate:


 


(i)            The
LIBOR Rate shall be determined for each successive one-month LIBOR Period
during which the Swap Related Reimbursement Obligation is unpaid,
notwithstanding the occurrence of any Event of Default and even if the LIBOR
Period were to extend beyond the Commitment Termination Date.


 


10





















 


(ii)           If
a Swap Related Reimbursement Obligation is paid during a monthly period for
which the LIBOR Rate is determined, interest shall be pro-rated and charged for
the portion of the monthly period during which the Swap Related Reimbursement
Obligation was unpaid.  Section 1.3(e) shall
not apply to any payment of a Swap Related Reimbursement Obligation during the
monthly period.


 


(iii)          Notwithstanding
the last paragraph of the definition of “LIBOR Rate”, if the LIBOR Rate is no
longer available from Telerate News Service, the LIBOR Rate shall be determined
by GE Capital from such financial reporting service or other information
available to GE Capital as in GE Capital’s reasonable discretion indicates GE
Capital’s cost of funds.


 


(d)           Except
as provided in the foregoing provisions of this Section 1.2A and in
Section 9.1, Borrower shall not be obligated to pay to GE Capital
or any of its Affiliates any Letter of Credit Fee, or any other fees, charges
or expenses, in respect of a Swap Related L/C or arranging for any interest
rate protection or hedging agreement or transaction supported by the Swap
Related L/C.  GE Capital and its
Affiliates shall look to the beneficiary of a Swap Related L/C for payment of
any such letter of credit fees or other fees, charges or expenses and such
beneficiary may factor such fees, charges, or expenses into the pricing of any
interest rate protection or hedging arrangement or transaction supported by the
Swap Related L/C.


 


(e)           If
any Swap Related L/C is revocable prior to its scheduled expiry date, GE
Capital agrees not to revoke the Swap Related L/C unless the Commitment
Termination Date or an Event of Default has occurred and is continuing.


 


(f)            GE
Capital or any of its Affiliates shall be permitted to (i) provide
confidential or other information furnished to it by any of the Credit Parties
(including, without limitation, copies of any documents and information in or
referred to in the Closing Checklist, Financial Statements and Compliance
Certificates) to a beneficiary or potential beneficiary of a Swap Related L/C
and (ii) receive confidential or other information from the beneficiary or
potential beneficiary relating to any agreement or transaction supported or to
be supported by the Swap Related L/C. 
However, no confidential information shall be provided to any Person
under this paragraph unless the Person has agreed to comply with the covenant
substantially as contained in Section 9.13 of this Agreement.


 


1.3.         Fees.


 


(a)           Fee Letter.  Borrowers shall pay to GE Capital,
individually, the Fees specified in that certain fee letter dated as of November 1,
2005 among Penhall and GE Capital (the “GE Capital Fee Letter”), at the
times specified for payment therein.


 


(b)           Unused Line Fee.  As additional compensation for the Revolving
Lenders, Borrowers shall pay to Agent, jointly and severally, for the ratable
benefit of such Lenders, in arrears, on the first Business Day of each month
prior to the Commitment Termination Date and on the Commitment Termination
Date, a fee for Borrowers’ non-use of available funds in an amount equal to one
half of one percent (.50%) per annum multiplied by the difference between
(x) the Maximum Amount (as it may be reduced from time to time) and
(y) the average for the period of the daily closing balances of the
Revolving Loan (including, without duplication, Swing Line Loans and Letter of
Credit Obligations) outstanding during the period for which such Fee is due.


 


(c)           Omitted.


 


11





















 


(d)           Letter of Credit Fee.  Borrowers agree, jointly and severally, to
pay to Agent for the benefit of Revolving Lenders, as compensation to such
Revolving Lenders for Letter of Credit Obligations incurred hereunder, (i) all
costs and expenses incurred by Agent or any Lender on account of such Letter of
Credit Obligations, and (ii) for each month during which any Letter of
Credit Obligation shall remain outstanding, a fee (the “Letter of Credit Fee”)
in an amount per annum equal to the Applicable L/C Margin multiplied by the
average daily undrawn face amount of all Letters of Credit issued by such L/C
Issuer, which shall be paid to such L/C Issuer in arrears, on the first
Business Day of each month and on the Commitment Termination Date, and (y) on
demand, such fees (including all per annum fees), charges and expenses of such
L/C Issuer in respect of the issuance, negotiation, acceptance, amendment,
transfer and payment of such Letter of Credit or otherwise payable pursuant to
the application and related documentation under which such Letter of Credit is
issued.


 


(e)           LIBOR Breakage Fee.  Upon (i) any default by any Borrower in
making any borrowing of, conversion into or continuation of any LIBOR Loan
following Borrower Representative’s delivery to Agent of any LIBOR Loan request
in respect thereof or (ii) any payment of a LIBOR Loan on any day that is
not the last day of the LIBOR Period applicable thereto (regardless of the
source of such prepayment and whether voluntary, by acceleration or otherwise),
Borrowers shall pay Agent, for the benefit of all Lenders that funded or were
prepared to fund any such LIBOR Loan, the LIBOR Breakage Fee.


 


(f)            Omitted.


 


(g)           Expenses and
Attorneys’ Fees.  Borrowers agree to
promptly pay all fees, charges, costs and expenses (including reasonable
attorneys’ fees and expenses and the allocated cost of internal legal staff)
incurred by Agent in connection with any matters contemplated by or arising out
of the Loan Documents, in connection with the examination, review, due
diligence investigation, documentation, negotiation, closing and syndication of
the transactions contemplated herein and in connection with the continued
administration of the Loan Documents including any amendments, modifications,
consents and waivers.  Borrowers agree to reimburse Agent for all due
and payable out of pocket costs (including reasonable fees and expenses) as
incurred by Agent to (i) third party auditors, and a fee of $800
per audit day per in-house auditor, plus reasonable out of pocket expenses
incurred by any such auditors in each case for up to three audits per Fiscal
Year (unless an Event of Default shall have occurred and be continuing in which
case such audits will be conducted as frequently as requested by Agent at the
expense of Borrowers), (ii) third party parts and supplies and
equipment/inventory appraisers, plus out of pocket expenses incurred by such
appraisers, in each case for up to three parts and supplies and
equipment/inventory appraisals per Fiscal Year (unless an Event of Default have
occurred and be continuing in which case such appraisals will be conducted as
frequently as requested by Agent at the expense of Borrowers), and (iii) third
party real estate appraisers, plus out of pocket expenses incurred by such
appraisers.


 


1.4.         Payments.  All payments by Borrowers of the Obligations
shall be without deduction, defense, setoff or counterclaim and shall be made
in same day funds and delivered to Agent, for the benefit of Agent and Lenders,
as applicable, by wire transfer to the following account or such other place as
Agent may from time to time designate in writing.


 


ABA No. 021-001-033


Account Number 502-328-54


Deutsche Bank Trust Company Americas


New York, New York


ACCOUNT NAME: GECC/CAF DEPOSITORY


Reference:  GE
Capital re Penhall – CFN 5134


 


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Borrowers shall receive credit on the day of receipt for funds received
by Agent by 2:00 p.m. (New York time). 
In the absence of timely receipt, such funds shall be deemed to have
been paid on the next Business Day. 
Whenever any payment to be made hereunder shall be stated to be due on a
day that is not a Business Day, the payment may be made on the next succeeding
Business Day and such extension of time shall be included in the computation of
the amount of interest and Fees due hereunder.


 


Borrowers hereby
authorize Lenders to make Revolving Credit Advances or Swing Line Advances, on
the basis of their Pro Rata Shares, for the payment of interest, Fees and
expenses, Letter of Credit reimbursement obligations and any amounts required
to be deposited with respect to outstanding Letter of Credit Obligations
pursuant to Sections 1.5(g) or 6.3.


 


1.5.         Prepayments.


 


(a)           Voluntary
Prepayments of Loans.  At any time,
Borrowers may prepay the Loans, in whole or in part, without premium or penalty
subject to the payment of LIBOR Breakage
Fees, if applicable.


 


(b)           Omitted.


 


(c)           Prepayments from
Asset Dispositions.  Except as
otherwise provided in Section 1.5(f) hereof, immediately upon
receipt of any Net Proceeds in excess of $250,000 for any single transaction or
series of related transactions during any Fiscal Year, Borrowers shall repay
the Revolving Credit Advances (without reduction of the Revolving Loan
Commitment) by an amount equal to the amount of such excess Net Proceeds.  Borrowers or their Subsidiaries may reinvest
all remaining Net Proceeds of such Asset Disposition (other than from a
Permitted Sale-Leaseback), within one hundred and eighty (180) days, in
productive replacement assets of a kind then used or usable in the business of
Borrowers.  If Borrowers do not intend to
so reinvest such Net Proceeds or if the period set forth in the immediately
preceding sentence expires without Borrowers having reinvested such Net
Proceeds, Borrowers shall prepay the Revolving Credit Advances (without
reduction of the Revolving Loan Commitment) in an amount equal to such
remaining Net Proceeds of such Asset Disposition, provided
that if such Net Proceeds relate to assets not included in the determination of
Borrowing Base no such prepayment in respect of the Revolving Credit Advances shall
be required.  The payments on the
Revolving Credit Advances shall be applied in accordance with Section 1.5(e).


 


(d)           Prepayments from
Issuance of Stock.  Immediately upon
the receipt by Holdings, any Borrower or any of their Subsidiaries of the
proceeds of the issuance of Stock (other than Stock issued to Holdings,
Borrowers, any Subsidiary of Borrower or members of Holdings management)],
Holdings shall prepay the Loans in an amount equal to such Net Proceeds.  The payments shall be applied in accordance
with Section 1.5(e).


 


(e)           Application of
Proceeds.  With respect to any
prepayments made by any Borrower pursuant to Section 1.5(a), Section 1.5(c) and
Section 1.5(d), such prepayments shall be applied as follows: first, to reduce the outstanding
principal balance of the Swing Line Loan outstanding to that Borrower until the
same has been repaid in full; second, to
the Revolving Credit Advances outstanding to that Borrower until the same has
been repaid in full and, except in the case of prepayments made pursuant to Section 1.5(a),
as a permanent reduction of the Revolving Loan Commitment; third,
to the principal balances of the Swing Line Loan outstanding to each other
Borrower, pro rata, until the same have been repaid in full; and fourth, to the principal balance of
the Revolving Credit Advances made to each other Borrower, pro rata, until the
same has been repaid in full and, except in the case of prepayments made
pursuant to Section 1.5(a) and 1.5(c),  as a permanent reduction of the Revolving
Loan Commitment.  Considering each type
of Loan being prepaid separately, any such prepayment shall be applied first to


 


13





















 


Index Rate Loans of the type required to be prepaid
before application to LIBOR Loans of the type required to be prepaid, in each
case in a manner which minimizes any resulting LIBOR Breakage Fee.


 


(f)            Application of
Prepayments from Insurance Proceeds. 
Prepayments from insurance in accordance with Section 2.2 or
condemnation proceeds shall be applied as follows: insurance proceeds from
casualties or losses to cash, Parts and Supplies, Equipment, Fixtures and Real
Estate shall be applied first, to the Swing Line Loans and second to the
Revolving Credit Advances of the Borrower that incurred such casualties with
losses and then to the Swing Line Loans and last to the Revolving Credit
Advances of the other Borrowers (pro rata in each case).  The Revolving Loan Commitment and the Swing
Line Loan Commitment shall be permanently reduced by the amount of any such
prepayments.


 


(g)           Letter of Credit
Obligations.  In the event any
Letters of Credit are outstanding at the time that the Revolving Loan
Commitment is terminated, Borrowers shall (1) deposit with Agent for the
benefit of all Revolving Lenders cash in an amount equal to 105% of the
aggregate outstanding Letter of Credit Obligations to be available to Agent to
reimburse payments of drafts drawn under such Letters of Credit and pay any
Fees and expenses related thereto and (2) prepay the fee payable under Section 1.3(d) with
respect to such Letters of Credit for the full remaining terms of such Letters
of Credit.  Upon termination of any such
Letter of Credit, the unearned portion of such prepaid fee attributable to such
Letter of Credit shall be refunded to Borrowers.


 


(h)           Prepayments under Sections
1.5(c), 1.5(d) and 1.5(f) shall be accompanied by accrued and
unpaid interest on the amount prepaid.


 


1.6.         Maturity.  All of the Obligations shall become due and
payable as otherwise set forth herein, but in any event all of the remaining
Obligations shall become due and payable upon termination of this
Agreement.  Until all Obligations have
been fully paid and satisfied (other than contingent indemnification obligations
to the extent no unsatisfied claim has been asserted), the Revolving Loan
Commitment has been terminated and all Letters of Credit have been terminated
or otherwise secured to the satisfaction of Agent, Agent shall be entitled to
retain the security interests in the Collateral granted under the Collateral
Documents and the ability to exercise all rights and remedies available to them
under the Loan Documents and applicable laws. 
Notwithstanding anything contained in this Agreement to the contrary, upon
any termination of the Revolving Loan Commitment, all of the Obligations shall
be due and payable.


 


1.7.         Eligible
Accounts.  All of the Accounts owned
by any Borrower and reflected in the most recent Borrowing Base Certificate
delivered by such Borrower to Agent shall be “Eligible Accounts” for
purposes of this Agreement, except any Account to which any of the exclusionary
criteria set forth below applies.  Agent
shall have the right to establish, modify or eliminate Reserves against
Eligible Accounts from time to time in its reasonable credit judgment.  In addition, Agent reserves the right, at any
time and from time to time after the Closing Date upon five (5) days’
prior written notice, to adjust any of the criteria set forth below, to
establish new criteria and to adjust advance rates with respect to Eligible
Accounts, in its reasonable credit judgment, subject to the approval of
Supermajority Revolving Lenders in the case of adjustments, new criteria or
changes in advance rates which have the effect of making more credit available.  Eligible Accounts shall not include any
Account of any Borrower:


 


(a)           that does not arise
from the sale of goods or the performance of services by such Borrower in the
ordinary course of its business;


 


(b)           (i) upon which
such Borrower’s right to receive payment is not absolute or is contingent upon
the fulfillment of any condition whatsoever or (ii) as to which such
Borrower is not able to bring suit or otherwise enforce its remedies against
the Account Debtor through judicial process, or


 


14





















 


(iii) if the Account represents progress billing
in excess of cost or percentage of completion of the applicable contract or is
subject to the equitable lien of a surety bond issuer;


 


(c)           to the extent that any
defense, counterclaim, setoff or dispute is asserted as to such Account;


 


(d)           that is not a true and
correct statement of bona fide indebtedness incurred in the amount of the
Account for merchandise sold to or services rendered and accepted by the
applicable Account Debtor;


 


(e)           with respect to which
an invoice, reasonably acceptable to Agent in form and substance, has not been
sent to the applicable Account Debtor (including, without limitation, accrued
but unbilled Accounts of “Division 40”);


 


(f)            that (i) is not
owned by such Borrower or (ii) is subject to any right, claim, security
interest or other interest of any other Person, other than Liens in favor of
Agent, on behalf of itself and Lenders and Permitted Encumbrances of the type
described in clauses (a), (g) or (l) of the definition of such term;


 


(g)           that arises from a sale
to any director, officer, other employee or Affiliate of any Credit Party, or
to any entity that has any common officer or director with any Credit Party;


 


(h)           that is the obligation
of an Account Debtor that is the United States government or a political
subdivision thereof, unless Agent, in its sole discretion, has agreed to the
contrary in writing and such Borrower, if necessary or desirable, has complied
with respect to such obligation with the Federal Assignment of Claims Act of
1940, or any applicable state, county or municipal law restricting the
assignment thereof with respect to such obligation;


 


(i)            that is the obligation
of an Account Debtor located in a foreign country, other than Canada, unless
payment thereof is assured by a letter of credit assigned and delivered to
Agent, satisfactory to Agent as to form, amount and issuer;


 


(j)            to the extent such
Borrower or any Subsidiary thereof is liable for goods sold or services
rendered by the applicable Account Debtor to such Borrower or any Subsidiary
thereof but only to the extent of the potential offset;


 


(k)           that arises with
respect to goods that are delivered on a bill-and-hold, cash-on-delivery basis
or placed on consignment, guaranteed sale or other terms by reason of which the
payment by the Account Debtor is or may be conditional;


 


(l)            that is in default; provided, that without limiting the generality of the
foregoing, an Account shall be deemed in default upon the occurrence of any of
the following:


 


(i)            the Account is not
paid within the earlier of: 60 days following its due date or 90 days following
its original invoice date;


 


(ii)           the Account Debtor
obligated upon such Account suspends business, makes a general assignment for
the benefit of creditors or fails to pay its debts generally as they come due;
or


 


15





















 


(iii)          a petition is filed by
or against any Account Debtor obligated upon such Account under any bankruptcy
law or any other federal, state or foreign (including any provincial)
receivership, insolvency relief or other law or laws for the relief of debtors;


 


(m)          that is the obligation
of an Account Debtor if 50% or more of the Dollar amount of all Accounts owing
by that Account Debtor are ineligible under clause (i) of paragraph (l) of
this Section 1.7;


 


(n)           as to which Agent’s
Lien thereon, on behalf of itself and Lenders, is not a first priority
perfected Lien;


 


(o)           as to which any of the
representations or warranties in the Loan Documents are untrue;


 


(p)           to the extent such
Account is evidenced by a judgment, Instrument or Chattel Paper;


 


(q)           to the extent such
Account exceeds any credit limit established by Agent, in its reasonable credit
judgment, following five (5) days’ prior written notice of such limit by
Agent to Borrower Representative;


 


(r)            to the extent that
such Account, together with all other Accounts owing to such Account Debtor and
its Affiliates as of any date of determination exceed 15% of all Eligible
Accounts of all Borrowers;


 


(s)            that is payable in any
currency other than Dollars or Canadian Dollars;


 


(t)            that constitutes a “retention”
Account; or


 


(u)           that is otherwise
unacceptable to Agent in its reasonable credit judgment.


 


1.8.A.     Eligible Short-Term Rentals. 
All of the Short-Term Rentals owned by any Borrower and reflected in the
most recent Borrowing Base Certificate delivered by such Borrower to Agent
shall be “Eligible Short-Term Rentals” for purposes of this Agreement,
except any Short-Term Rentals to which any of the exclusionary criteria set
forth below applies.  Agent shall have
the right, following five (5) days’ prior written notice by Agent to
Borrower Representative, to establish, modify, or eliminate Reserves against
Eligible Short-Term Rentals from time to time in its reasonable credit
judgment.  In addition, Agent reserves
the right, at any time and from time to time after the Closing Date to adjust
any of the criteria set forth below, to establish new criteria and to adjust
advance rates with respect to Eligible Short-Term Rentals in its reasonable
credit judgment, subject to the approval of Supermajority Revolving Lenders in
the case of adjustments, new criteria
or changes in advance rates which have the
effect of making more credit available.  Eligible Short-Term Rentals shall not include
any Short-Term Rentals of any Borrower:


 


(a)           not subject to a
written lease agreement;


 


(b)           not subject to a first
priority perfected security interest of Agent on behalf of Lenders;


 


(c)           any portion of such Short-Term
Rental that has not been billed or is not due within thirty (30) days of the
applicable date of determination;


 


16





















 


(d)           upon which such
Borrower is not able to bring suit or otherwise enforce its remedies against
the relevant lessee through judicial process;


 


(e)           that (i) are not
owned by such Borrower or (ii) are subject to any right, claim, security
interest or other interest of any other Person, other than Liens in favor of
Agent, on behalf of itself and Lenders and Permitted Encumbrances of the type
described in clauses (a), (g) or (l) of the definition of such term;


 


(f)            that are the
obligation of a lessee that is the United States government or a political
subdivision thereof, unless Agent, in its sole discretion, has agreed to the
contrary in writing and such Borrower, if necessary or desirable, has complied
with respect to such obligation with the Federal Assignment of Claims Act of
1940, or any applicable state, county or municipal law restricting the
assignment thereof with respect to such obligation;


 


(g)           that are the obligation
of a lessee located in a foreign country, other than Canada;


 


(h)           to the extent that such
Short-Term Rental, together with other Short-Term Rentals at such time, exceeds
$500,000 in the aggregate;


 


(i)            that are in default or
due under a lease in default; provided, that
without limiting the generality of the foregoing, a Short-Term Rental shall be
deemed in default upon the occurrence of any of the following:


 


(i)            the Short-Term Rental
is not paid within the earlier of: 60 days following its due date or 90 days
following its original invoice date;


 


(ii)           the lessee obligated
upon such Short-Term Rental suspends business, makes a general assignment for
the benefit of creditors or fails to pay its debts generally as they come due;
or


 


(iii)          a petition is filed by
or against any lessee obligated upon such Short-Term Rental under any
bankruptcy law or any other federal, state or foreign (including any
provincial) receivership, insolvency relief or other law or laws for the relief
of debtors;


 


(j)            that are the
obligation of a lessee if fifty percent (50%) or more of the Dollar amount of
all Short-Term Rental owing by that lessee are ineligible under clause (i) of
paragraph (i) of this Section 1.8(A);


 


(k)           as to which any of the
representations or warranties in the Loan Documents are untrue;


 


(l)            to the extent such
Short-Term Rental exceeds any credit limit established by Agent, in its
reasonable credit judgment, following five (5) days’ prior written notice
of such limit by Agent to Borrower Representative;


 


(m)          that are payable in any
currency other than Dollars or Canadian Dollars; or


 


(n)           that are otherwise
unacceptable to Agent in its reasonable credit judgment.


 


1.8.B.     Eligible Parts and Supplies. 
All of the Parts and Supplies owned by any Borrower and reflected in the
most recent Borrowing Base Certificate delivered by such Borrower to Agent
shall be


 


17





















 


“Eligible Parts and Supplies” for purposes of this Agreement,
except any Parts and Supplies to which any of the exclusionary criteria set
forth below applies.  Agent shall have
the right, following five (5) days’ prior written notice by Agent to
Borrower Representative, to establish, modify, or eliminate Reserves against
Eligible Parts and Supplies from time to time in its reasonable credit
judgment.  In addition, Agent reserves
the right, at any time and from time to time after the Closing Date to adjust
any of the criteria set forth below, to establish new criteria and to adjust
advance rates with respect to Eligible Parts and Supplies in its reasonable
credit judgment, subject to the approval of Supermajority Revolving Lenders in
the case of adjustments, new criteria
or changes in advance rates which have the
effect of making more credit available. 
Eligible Parts and Supplies shall not include any Parts and Supplies of
any Borrower that:


 


(a)           is not owned by such
Borrower free and clear of all Liens and rights of any other Person (including
the rights of a purchaser that has made progress payments and the rights of a
surety that has issued a bond to assure such Borrower’s performance with
respect to such Parts and Supplies), except the Liens in favor of Agent, on
behalf of itself and Lenders and Permitted Encumbrances of the type described
in clauses (a), (d), (e), (g) or (l) of the definition of such term;


 


(b)           (i)  is not
located on premises owned, leased or rented by such Borrower and set forth in
the various subschedules to Schedule III to the Security Agreement
(excluding Parts and Supplies mounted on, affixed to or otherwise placed in a
motor vehicle owned by such Borrower and such motor vehicle is located at the
residence of the driver authorized to drive such motor vehicle, provided that such motor vehicle (A) is covered by a
certificate of title on which the interest of Agent has been noted, free and
clear of all Liens except those in favor of Agent and Lenders and Permitted
Encumbrances of the type described in clauses (a), (d), (e), (g) or (l) of
the definition of such term, and (B) is equipped with a global positioning
tracking device (that is permanently affixed to such motor vehicle) that
enables such Borrower to determine at all times the movement and location of
such motor vehicle or (ii) is stored at a leased location, unless Agent
has given its prior consent thereto and unless (x) a reasonably satisfactory
landlord waiver has been delivered to Agent within thirty (30) days after the
Closing Date, or (y) Reserves equal to three months’ rent (based upon base rent
and such Borrower’s pro rata share of operating costs, utilities and taxes
payable by such Borrower under the lease, but excluding any supplemental rent
or other costs, expenses or amounts or any indemnities payable thereunder, upon
default or otherwise) have been established with respect thereto, or (iii) is
stored with a bailee or warehouseman unless a reasonably satisfactory,
acknowledged bailee letter has been received by Agent and Reserves reasonably
satisfactory to Agent have been established with respect thereto, or (iv) is
located at an owned location subject to a mortgage in favor of a lender other
than Agent, unless a reasonably satisfactory mortgagee waiver has been
delivered to Agent, or (v) is located at any site if the aggregate book
value of Parts and Supplies, together with Equipment of any Borrower, at any
such location is less than $100,000;


 


(c)           is placed on
consignment or is in transit, except for Parts and Supplies in transit between
domestic locations of Credit Parties as to which Agent’s Liens have been
perfected at origin and destination;


 


(d)           is covered by (i) a
negotiable document of title, unless such document has been delivered to Agent
with all necessary endorsements, free and clear of all Liens except those in
favor of Agent and Lenders or (ii) a certificate of title unless (x)
Borrower sells goods of that kind and that Parts and Supplies is held for sale
or lease or is on lease by Borrower as lessor or (y) the Lien of Agent has been
noted on such certificate of title in accordance with applicable state law;


 


(e)           is excess, obsolete,
unsaleable, shopworn, seconds, damaged or unfit for sale;


 


18





















 


(f)            is stored in,
installed in or affixed to any property subject to any Lien having priority
over the Lien of Agent for the benefit of Agent and the ratable benefit of
Lenders (including Permitted Encumbrances) and the holder of such Lien has not
entered into an intercreditor agreement in form and substance satisfactory to
Agent as to such Lien;


 


(g)           is not subject to a
first priority lien in favor of Agent on behalf of itself and Lenders subject
to Permitted Encumbrances of the type described in clauses (a), (d), (e), (g) or
(l) of the definition of such term;


 


(h)           breaches any of the
representations or warranties pertaining to Parts and Supplies set forth in the
Loan Documents;


 


(i)            omitted;


 


(j)            consists of Hazardous
Materials or goods that can be transported or sold only with licenses that are
not readily available;


 


(k)           is not covered by
casualty insurance reasonably acceptable to Agent;


 


(l)            omitted;


 


(m)          is otherwise
unacceptable to Agent in its reasonable credit judgment.


 


Notwithstanding anything
to the contrary contained in this Agreement, until there has been a
determination of Net Orderly Liquidation Value of Parts and Supplies, none of
the Parts and Supplies shall be Eligible Parts and Supplies.


 


1.8.C.     Eligible Equipment. All of the Equipment owned by any
Borrower and reflected in the most recent Borrowing Base Certificate delivered
by such Borrower to Agent shall be “Eligible Equipment” for purposes of
this Agreement, except any Equipment to which any of the exclusionary criteria
set forth below applies.  Agent shall
have the right, following five (5) days’ prior written notice by Agent to
Borrower Representative, to establish, modify, or eliminate Reserves against
Eligible Equipment from time to time in its reasonable credit judgment.  In addition, Agent reserves the right, at any
time and from time to time after the Closing Date, to adjust any of the
criteria set forth below, to establish new criteria and to adjust advance rates
with respect to Eligible Equipment in its
reasonable credit judgment, subject to the approval of Supermajority Revolving
Lenders in the case of adjustments, new criteria
or changes in advance rates which have the
effect of making more credit available. 
Eligible Equipment shall not include any Equipment of any Borrower that:


 


(a)           is not owned by such
Borrower free and clear of all Liens and rights of any other Person (including
the rights of a purchaser that has made progress payments and the rights of a
surety that has issued a bond to assure such Borrower’s performance with
respect to that Equipment), except the Liens in favor of Agent, on behalf of
itself and Lenders and Permitted Encumbrances of the type described in clauses
(a), (d), (e), (g) or (l) of the definition of such term;


 


(b)           (i) is not located
on premises owned, leased or rented by such Borrower and set forth in the
various subschedules to Schedule III to the Security Agreement
(unless, at any time, such Equipment is being used at a construction or similar
site or, if such Equipment is mounted on, affixed to or otherwise placed in a
motor vehicle or such Equipment is a motor vehicle owned by such Borrower, such
motor vehicle is located at the residence of the driver authorized to drive the
motor vehicle, provided that such motor vehicle (A) is
covered by a certificate of title on which the interest of Agent has been


 


19





















 


noted, free and clear of all Liens except those in
favor of Agent and Lenders and Permitted Encumbrances of the type described in
clauses (a), (d), (e), (g) or (l) of the definition of such term, and (B) is
equipped with a global positioning tracking device (that is permanently affixed
to such motor vehicle) that enables such Borrower to determine at all times the
movement and location of such motor vehicle or (ii) is stored at a leased
location, unless Agent has given its prior consent thereto and unless (x) a
reasonably satisfactory landlord’s waiver has been delivered to Agent within
(30) days after the Closing Date, or (y) Reserves equal to three months’ rent
(based upon base rent and such Borrower’s pro rata share of operating costs,
utilities and taxes payable by such Borrower under the lease, but excluding any
supplemental rent or other costs, expenses or amounts or any indemnities
payable thereunder, upon default or otherwise) have been established with
respect thereto, or (iii) is stored with a bailee or warehouseman unless a
reasonably satisfactory, acknowledged bailee letter has been received by Agent
and Reserves reasonably satisfactory to Agent have been established with
respect thereto, or (iv) is located at an owned location subject to a
mortgage in favor of a lender other than Agent, unless a reasonably
satisfactory mortgagee waiver has been delivered to Agent, or (v) is
located at any site if the aggregate book value of Equipment, together with
Parts and Supplies of any Borrower, at any such location is less than $100,000;


 


(c)           that is covered by a
certificate of title unless the interest of Agent has been noted on such
certificate of title, free and clear of all Liens except those in favor of
Agent and Lenders and Permitted Encumbrances of the type described in clauses
(a), (d), (e), (g) or (l) of the definition of such term;


 


(d)           is excess, obsolete,
unsaleable, shopworn, seconds, damaged or unfit for sale;


 


(e)           is not a vehicle or a
construction tool used by such Borrower in the ordinary course of its business;


 


(f)            is not subject to a
first priority lien in favor of Agent on behalf of itself and Lenders subject
to Permitted Encumbrances of the type described in clauses (a), (d), (e), (g) or
(l) of the definition of such term;


 


(g)           breaches any of the
representations or warranties pertaining to Equipment set forth in the Loan
Documents;


 


(h)           that is Parts and
Supplies;


 


(i)            consists of Hazardous
Materials or goods that can be transported or sold only with licenses that are
not readily available;


 


(j)            is not covered by
casualty insurance reasonably acceptable to Agent; or


 


(k)           is otherwise
unacceptable to Agent in its reasonable credit judgment.


 


1.8.D.     Eligible Real Estate. 
Eligible Real Estate of any Borrower shall be that real estate and
improvements thereon that Agent has specifically identified and approved in
writing and as to which, following an independent appraisal thereof, Agent has
assigned an Appraised Forced Liquidation Value and to which none of the
criteria below applies.  Agent shall have
the right, following five (5) days’ prior written notice by Agent to
Borrower Representative, to establish, modify or eliminate Reserves against
Eligible Real Estate from time to time in its reasonable credit judgment.  In addition, Agent reserves the right, at any
time and from time to time after the Closing Date, to adjust any of the
criteria set forth below, to establish new criteria and to adjust advance rates
with respect to Eligible Real Estate in its


 


20





















 


reasonable credit judgment, subject to the approval of the
Supermajority Revolving Lenders in the case of adjustments, new criteria or
changes in advance rates that have the effect of making more credit
available.  Eligible Real Estate shall
not include any real estate:


 


(a)           that is not owned by
such Borrower free and clear of all Liens and rights of any other Person,
except the Liens in favor of Agent, on behalf of itself and Lenders and
Permitted Encumbrances of the type described in clauses (a), (d), (e) (g),
(h), (j) or (l) of the definition of such term;


 


(b)           as to which Agent has
not received a loan policy of title insurance in favor of Agent and in form and
amount, and issued by a title insurance company, satisfactory to Agent, in its
reasonable discretion, together with such endorsements thereto as Agent shall
require, in its reasonable discretion (provided such endorsements are available
in the jurisdiction where such Real Estate is located);


 


(c)           as to which Agent has
not received an environmental report satisfactory to Agent, in its sole
discretion;


 


(d)           that is not subject to
a first priority Lien in favor of Agent on behalf of itself and Lenders subject
only to Permitted Encumbrances;


 


(e)           that breaches any of
the representations or warranties pertaining to Real Estate set forth in the
Loan Documents; or


 


(f)            that is not covered by
casualty insurance reasonably acceptable to Agent.


 


1.9.         Loan
Accounts.  Agent shall maintain a
loan account (the “Loan Account”) on its books to record: all Advances,
all payments made by Borrowers, and all other debits and credits as provided in
this Agreement with respect to the Loans or any other Obligations.  All entries in the Loan Account shall be made
in accordance with Agent’s customary accounting practices as in effect from
time to time.  The balance in the Loan
Account, as recorded on Agent’s most recent printout or other written
statement, shall, absent manifest error, be presumptive evidence of the amounts
due and owing to Agent and Lenders by Borrowers; provided
that any failure to so record or any error in so recording shall not limit or
otherwise affect any Borrower’s duty to pay the Obligations.  Agent shall render to Borrower Representative
a monthly accounting of transactions with respect to the Loans setting forth
the balance of the Loan Account as to each Borrower for the immediately
preceding month.  Unless Borrower
Representative notifies Agent in writing of any objection to any such
accounting (specifically describing the basis for such objection), within
forty-five (45) days after the date thereof, each and every such accounting
shall, absent manifest error, be deemed final, binding and conclusive on
Borrowers in all respects as to all matters reflected therein.  Only those items expressly objected to in
such notice shall be deemed to be disputed by Borrowers.  Notwithstanding any provision herein contained
to the contrary, any Lender may elect (which election may be revoked) to
dispense with the issuance of Notes to that Lender and may rely on the Loan
Account as evidence of the amount of Obligations from time to time owing to it.


 


1.10.       Yield
Protection; Illegality.


 


(a)           Capital Adequacy and
Other Adjustments.  In the event that
any Lender shall have determined that the adoption after the date hereof of any
law, treaty, governmental (or quasi-governmental) rule, regulation, guideline
or order regarding capital adequacy, reserve requirements or similar
requirements or compliance by any Lender or any corporation controlling such
Lender with any request or directive regarding capital adequacy, reserve
requirements or similar requirements (whether or not having the force of law
and whether or not failure to comply therewith would be unlawful) from any


 


21





















 


central bank or governmental agency or body having
jurisdiction does or shall have the effect of increasing the amount of capital,
reserves or other funds required to be maintained by such Lender or any
corporation controlling such Lender and thereby reducing the rate of return on
such Lender’s or such corporation’s capital as a consequence of its obligations
hereunder, then Borrowers shall from time to time within fifteen (15) days
after notice and demand to Borrower Representative from such Lender (together
with the certificate referred to in the next sentence and with a copy to Agent)
pay to Agent, for the account of such Lender, additional amounts sufficient to
compensate such Lender for such reduction. 
A certificate as to the amount of such cost and showing the basis of the
computation of such cost submitted by such Lender to Borrower Representative
and Agent shall, absent manifest error, be final, conclusive and binding for
all purposes.


 


(b)           Increased LIBOR
Funding Costs; Illegality. 
Notwithstanding anything to the contrary contained herein, if the
introduction of or any change in any law, rule, regulation, treaty or directive
(or any change in the interpretation thereof) shall make it unlawful, or any
central bank or other Governmental Authority shall assert that it is unlawful,
for any Lender to agree to make or to make or to continue to fund or maintain
any LIBOR Loan, then, unless that Lender is able to make or to continue to fund
or to maintain such LIBOR Loan at another branch or office of that Lender
without, in that Lender’s opinion, adversely affecting it or its Loans or the
income obtained therefrom, on notice thereof and demand therefor by such Lender
to Borrower Representative through Agent, (i) the obligation of such
Lender to agree to make or to make or to continue to fund or maintain LIBOR
Loans shall terminate and (ii) each Borrower shall forthwith prepay in
full all outstanding LIBOR Loans owing by such Borrower to such Lender,
together with interest accrued thereon, unless Borrower Representative
on behalf of such Borrower, within five (5) Business Days after the
delivery of such notice and demand, converts all LIBOR Loans into Index Rate
Loans. If, after the date hereof, the introduction of, change in or
interpretation of any law, rule, regulation, treaty or directive would impose
or increase reserve requirements (other than as taken into account in the
definition of LIBOR) or otherwise increase the cost to any Lender of making or
maintaining a LIBOR Loan, then Borrowers shall from time to time within fifteen
(15) days after notice and demand from Agent to Borrower Representative
(together with the certificate referred to in the next sentence) pay to Agent,
for the account of all such affected Lenders, additional amounts sufficient to
compensate such Lenders for such increased cost.  A certificate as to the amount of such cost
and showing the basis of the computation of such cost submitted by Agent on
behalf of all such affected Lenders to Borrower Representative shall, absent
manifest error, be final, conclusive and binding for all purposes.


 


1.11.       Taxes.


 


(a)           No Deductions.  Except
as provided by law or as otherwise provided in this Section 1.11, any
and all payments or reimbursements made hereunder (including any payments made
pursuant to Section 10) or under the Notes or other Loan Documents
shall be made free and clear of and without deduction for any and all Charges,
taxes, levies, imposts, deductions or withholdings, and all liabilities with
respect thereto of any nature whatsoever imposed by any taxing authority (collectively, “Taxes”),
excluding (i) Taxes imposed
on Agent’s or a Lender’s net income by the jurisdiction in which Agent or such
Lender is organized; (ii) withholding
Taxes that are imposed on amounts payable to Agent or Lender to the extent that
the obligation to withhold amounts existed on the date that such Agent or
Lender became a party to this Agreement in the capacity under which such Person
makes a claim under clause (b), except in each case to the extent such
Agent or Lender is an assignee of any other Person that was entitled, at the
time the assignment of such other Person became effective, to receive
additional amounts under clause (b) or (iii) Taxes that are
directly attributable to the failure (other than as a result of a change in any
applicable law) by any Lender to deliver the documentation required to be
delivered pursuant to clause (g) below (collectively, “Excluded
Taxes” and all such non-Excluded Taxes, “Non-Excluded Taxes”).


 


22





















 


(b)           Additional Payments. 
If any Taxes shall be required by law to be deducted from or in respect
of any amount payable under any Loan Document to any Agent or Lender (i) in
the case of Non-Excluded Taxes, such amount shall be increased as necessary to
ensure that, after all required deductions for Non-Excluded Taxes are made
(including deductions applicable to any increases to any amount under this Section 1.11),
such Agent or Lender receives, on an after-tax basis, the amount it would have
received had no such deductions been made, (ii) the relevant Borrower
shall make such deductions, (iii) the relevant Borrower shall timely pay
the full amount deducted to the relevant taxing authority or other Governmental
Authority in accordance with applicable law and (iv) within 30 days after
such payment is made, the relevant Borrower shall deliver to Agent, at its
address referred to on the signature pages hereof, an original or
certified copy of a receipt evidencing such payment (or other evidence
satisfactory to the Agent).  If
Agent or such Lender becomes entitled to claim any additional amounts pursuant
to this Section 1.11(b), it shall promptly notify Borrower Representative
of the event by reason of which Agent or such Lender has become so
entitled.  A certificate as to any
additional amounts payable pursuant to the foregoing sentence submitted by
Agent or such Lender to Borrower Representative (with a copy to Agent) shall,
absent manifest error, be final, conclusive and binding for all purposes.


 


(c)           Other Taxes. In
addition, the Borrowers agree to pay, and authorize Agent to pay in their name,
as necessary, any current or future stamp or documentary taxes or any other
excise or property taxes, charges, assessments or similar levies that arise
from any payment made hereunder or from the execution, delivery or registration
of, or otherwise with respect to, this Agreement, the other Loan Documents or
any Loans made or Letters of Credit issued hereunder (“Other Taxes”).


 


(d)           Indemnification.
The Borrowers shall indemnify Agent and each Lender for the full amount of
Non-Excluded Taxes and Other Taxes paid by Agent or such Lender, as the case
may be, and any liability (including penalties, interest and expenses other
than penalties, interest and expenses resulting from the Lender’s gross
negligence) arising therefrom or with respect thereto, whether or not such
Non-Excluded Taxes or Other Taxes were correctly or legally asserted by the
relevant taxing authority or other Governmental Authority.  Such indemnification shall be made within 30
days after the date Agent or any Lender, as the case may be, makes written
demand therefor.  A certificate of Agent or Lender claiming any compensation under this clause
(d), setting forth the amounts to be paid thereunder and delivered to the
Borrower with copy to Agent, shall be conclusive, binding and final for all
purposes, absent manifest error.


 


(e)           Tax Refunds.  If Lender or Agent, as the case may be,
determines that it is entitled to receive a refund or credit of such Tax or
Other Tax, as to which Borrower has made an additional payment under this Section 1.11
or if Lender or Agent has been indemnified pursuant to this Section 1.11,
Lender or Agent shall promptly notify such Borrower of the availability of such
refund or credit.  Lender or Agent, as
the case may be, shall apply for such refund or credit, at Borrower’s expense,
within 30 days after receipt of instruction from Borrower to apply for such
refund, and in the case of any application for refund or credit made by a
Borrower, Lender shall deliver to such Borrower, at such Borrower’s request,
such certificates, forms or other documentation as may be reasonably necessary
to assist such Borrower in such application. 
If any Lender or Agent determines in its sole discretion that it has
received a refund or credit with respect to any Tax or Other Tax as to which
Borrower has made an additional payment under Section 1.11 or if
Lender or Agent has been indemnified pursuant to this Section 1.11,
Lender or Agent shall promptly notify Borrower and shall, within 30 days of
receipt of such refund or the benefit of such credit, repay the amount of such
refund or the benefit of such credit to such Borrower, plus any interest
received with respect thereto, net of all reasonable out-of-pocket expenses of
Agent or such Lender; provided,
however, that the Borrower, upon the request of such Agent or Lender, agrees to
repay the amount paid over to the Borrower to such Agent or Lender in the event
such Agent or Lender is required to repay such refund, offset, reduction, or
credit.


 


23





















 


(f)            Mitigation. Agent and Lenders shall use their reasonable efforts
to avoid or reduce any Non-Excluded Taxes by taking any appropriate action
(including assigning their rights hereunder to a related entity or a different
office) which, as determined at such Agent or Lender’s sole discretion, would
not be otherwise disadvantageous to such Agent or Lender.


 


(g)           Tax Forms.


 


(i)            Prior to becoming a Lender under this Agreement and on
or before a previously delivered Certificate of Exemption (as defined below)
expires or becomes inapplicable or obsolete, other than by reason of a change
in the applicable rules as in effect at the time a Lender becomes a Lender
under this Agreement, each Lender that is not a “United
States person” (as such term is defined in IRC Section 7701(a)(30)) for
U.S. federal income tax purposes (a “Foreign Lender”) shall provide to Borrower
Representative and Agent a properly completed and executed IRS Form W-8BEN
or Form W-8ECI or other applicable form, certificate or document
prescribed by the IRS of the United States certifying as to such Foreign Lender’s
entitlement to an exemption from, or a reduction in, United States federal
withholding tax under the applicable rules as in effect at the time the
Lender becomes a Lender under this Agreement with respect to payments to be
made to such Foreign Lender under this Agreement and under the Notes (a “Certificate
of Exemption”).  Notwithstanding
anything herein to the contrary, if a Foreign Lender is unable to provide or
does not provide a Certificate of Exemption to Borrower Representative and
Agent claiming an exemption from United States withholding tax within the time
periods set forth in the preceding sentence, Borrowers shall withhold Taxes
from payments to such Foreign Lender at the applicable statutory and treaty
rates (taking into account such Foreign Lender’s compliance with applicable
certification requirements), provided that
all such withholding shall cease (or be reduced to the applicable treaty rate)
upon delivery by such Foreign Lender of a Certificate of Exemption to Borrower
Representative and Agent.


 


(ii)           Prior to becoming a Lender under this Agreement and on
or before a previously delivered Certificate of Exemption (as defined below)
expires or becomes inapplicable or obsolete, other than by reason of a change
in the applicable rules as in effect at the time a Lender becomes a Lender
under this Agreement, each Lender that is a “United
States person” (as such term is defined in IRC Section 7701(a)(30)) for
U.S. federal income tax purposes (a “US Lender”) shall provide to Borrower
Representative and Agent a properly completed and executed IRS Form W-9
(certifying that such US Lender is entitled to an exemption from U.S. backup
withholding tax) or any successor form. 
Notwithstanding any other provision of this Section 1.11, a
US Lender shall not be required to deliver any Certificate of Exemption or
other certificate pursuant to this paragraph that such US Lender is not legally
able to deliver.


 


1.12.        Application and
Allocation of Payments.


 


(a)           So long as no Event of Default has occurred and is
continuing, (i) payments consisting of proceeds of Accounts and Short-Term
Rentals received by Agent in the ordinary course of business shall be applied,
first, to the Swing Line Loan and, second, to the Revolving Loan; (ii) payments
matching specific scheduled payments then due shall be applied to those
scheduled payments; (iii) voluntary prepayments shall be applied in
accordance with the provisions of Sections 1.5(a) and 1.5(e); and (iv) mandatory
prepayments shall be applied as set forth in Sections 1.5(c), 1.5(d), 1.5(e) and
1.5(f);


 


(b)           All payments and prepayments applied to a particular
Loan shall be applied ratably to the portion thereof held by each Lender as
determined by its Pro Rata Share.


 


(c)           As to any payment not referred to in paragraph (a) or
(b) of this Section 1.12, and as to all payments made when an
Event of Default has occurred and is continuing or following the


 


24





















 


Commitment Termination Date, Borrowers hereby
irrevocably waive the right to direct the application of any and all payments
received from or on behalf of Borrowers, and Borrowers hereby irrevocably agree
that Agent shall have the continuing exclusive right to apply any and all such
payments against the Obligations as Agent may deem advisable notwithstanding
any previous entry by Agent in the Loan Account or any other books and records.


 


(d)           In the absence of a specific determination by Agent
with respect thereto, payments shall be applied to amounts then due and payable
in the following order: (1) to Fees and Agent’s expenses reimbursable
hereunder; (2) to interest on the Swing Line Loan; (3) to principal
payments on the Swing Line Loan; (4) to interest on the other Loans and
unpaid Swap Related Reimbursement Obligations, ratably in proportion to the
interest accrued as to each Loan and unpaid Swap Related Reimbursement
Obligation, as applicable; (5) to principal payments on the other Loans
and unpaid Swap Related Reimbursement Obligations and to provide cash
collateral for Letter of Credit Obligations in the manner described in Section 6.3,
ratably to the aggregate, combined principal balance of the other Loans, unpaid
Swap Related Reimbursement Obligations and outstanding Letter of Credit
Obligations; and (6) to all other Obligations including expenses of
Lenders to the extent reimbursable under Section 9.1.


 


1.13        Borrower Representative. 
Each Borrower hereby designates Penhall (the “Borrower Representative”)
as its representative and agent on its behalf for the purposes of issuing
Notices of Revolving Credit Advances and Notices of Conversion/Continuation,
giving instructions with respect to the disbursement of the proceeds of the
Loans, selecting interest rate options, requesting Letters of Credit, giving
and receiving all other notices and consents hereunder or under any of the
other Loan Documents and taking all other actions (including in respect of
compliance with covenants) on behalf of any Borrower or Borrowers under the
Loan Documents.  Borrower Representative
hereby accepts such appointment.  Agent
and each Lender may regard any notice or other communication pursuant to any
Loan Document from Borrower Representative as a notice or communication from
all Borrowers.  Each warranty, covenant,
agreement and undertaking made on its behalf by Borrower Representative shall
be deemed for all purposes to have been made by such Borrower and shall be
binding upon and enforceable against such Borrower to the same extent as it if
the same had been made directly by such Borrower.


 


SECTION 2.



AFFIRMATIVE COVENANTS


 


Each Credit Party
executing this Agreement jointly and severally agrees as to all Credit Parties
that from and after the Closing Date and until the Termination Date:


 


2.1.          Compliance with Laws and Contractual
Obligations.  Each Credit Party 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
any Credit Party 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 such
Credit Party or any of its Subsidiaries 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 (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 such
Credit Party or any of its Subsidiaries, for which the loss, suspension,
revocation or failure to obtain


 


25





















 


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 any Credit Party 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.  Each Credit Party 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)           The Credit Parties shall, at their sole cost and
expense, maintain the policies of insurance described on Schedule 5.18
as in effect on the Amendment Effective Date 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 any Credit Party 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 any Credit Party or pay any premiums therefor.  By doing so, Agent shall not be deemed to
have waived any Default or Event of Default arising from any Credit Party’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 Borrowers to Agent and shall be additional Obligations
hereunder secured by the Collateral.


 


(b)           Agent reserves the right at any time upon any change
in any Credit Party’s risk profile (including any change in the product mix
maintained by any Credit Party or any laws affecting the potential liability of
such Credit Party) to require additional forms and limits of insurance to, in
Agent’s reasonable opinion, adequately protect both Agent’s and Lenders’
interests in all or any portion of the Collateral and to ensure that each
Credit Party is protected by insurance in amounts and with coverage customary
for its industry.  If reasonably
requested by Agent, each Credit Party 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)           Each Credit Party 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 or assignee, 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 Default or Event of Default has
occurred and is continuing or the anticipated insurance proceeds exceed
$2,000,000, 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; provided that
Agent shall not settle any claim without each Credit Party’s consent, such
consent not to be unreasonably withheld or delayed, provided
that no such consent shall be


 


26





















 


required while a Default or Event of Default is
continuing.  Agent shall have no duty to
exercise any rights or powers granted to it pursuant to the foregoing
power-of-attorney.  Each Borrower shall
promptly notify Agent of any loss, damage, or destruction to the Collateral in
the amount of $250,000 or more, whether or not covered by insurance.  After deducting from any insurance proceeds
the expenses, if any, incurred by Agent in the collection or handling thereof,
Agent may, at its option, apply such proceeds to the reduction of the
Obligations in accordance with Section 1.5(f), provided
that in the case of insurance proceeds pertaining to any Credit Party other
than a Borrower, such insurance proceeds shall be applied, in the case of a
Credit Party that is a Subsidiary of Borrower, as if such Borrower owned the
property that generated such proceeds and in the case of a Credit Party (other
than a Borrower) that owns the Stock of a Borrower, as if any Borrower owned
the property that generated such proceeds, or permit or require each Credit
Party to use such money, or any part thereof, to replace, repair, restore or
rebuild the Collateral in a diligent and expeditious manner with materials and
workmanship of substantially the same quality as existed before the loss,
damage or destruction. Notwithstanding the foregoing, if the casualty giving
rise to such insurance proceeds could not reasonably be expected to have a
Material Adverse Effect and such insurance proceeds do not exceed $2,000,000 in
the aggregate, Agent shall permit the applicable Credit Party to replace,
restore, repair or rebuild the property; provided that
if such Credit Party has not completed or entered into binding agreements to
complete such replacement, restoration, repair or rebuilding within 180 days of
such casualty, Agent may apply such insurance proceeds to the Obligations in
accordance with Section 1.5(f); provided that
in the case of insurance proceeds pertaining to any Credit Party other than a
Borrower, such insurance proceeds shall be applied, in the case of a Credit
Party that is a Subsidiary of Borrower, as if such Borrower owned the property
that generated such proceeds and in the case of a Credit Party (other than a
Borrower) that owns the Stock of a Borrower, as if any Borrower owned the
property that generated such proceeds, or permit or require each Credit Party
to use such money, or any part thereof, to replace, repair, restore or rebuild
the Collateral in a diligent and expeditious manner with materials and
workmanship of substantially the same quality as existed before the loss,
damage or destruction.  All insurance
proceeds that are to be made available to such Borrower to replace, repair,
restore or rebuild the Collateral shall be applied by Agent to reduce the
outstanding principal balance of the Revolving Loan (which application shall
not result in a permanent reduction of the Revolving Loan Commitment).  All insurance proceeds made available to any
Credit Party that is not a Borrower to replace, repair, restore or rebuild Collateral
shall be deposited in a cash collateral account.  Thereafter, such funds shall be made
available to such Borrower or such Credit Party, as applicable, to provide
funds to replace, repair, restore or rebuild the Collateral as follows: (i) such
Borrower shall request a Revolving Credit Advance or release from the cash
collateral account be made to such Borrower or such Credit Party, as applicable
in the amount requested to be released; (ii) so long as the conditions set
forth in Section 7.2 have been met and subject to the provisions of
any Mortgage encumbering such Collateral, Revolving Lenders shall make such
Revolving Credit Advance or Agent shall release funds from the cash collateral
account; and (iii) in the case of insurance proceeds applied against the
Revolving Loan, the Reserve established with respect to such insurance proceeds
shall be reduced by the amount of such Revolving Credit Advance.  To the extent not used to replace, repair,
restore or rebuild the Collateral, such insurance proceeds shall be applied in
accordance with Section 1.5(f); provided that
in the case of insurance proceeds pertaining to any Credit Party other than a
Borrower, such insurance proceeds shall be applied, in the case of a Credit
Party that is a Subsidiary of Borrower, as if such Borrower owned the property
that generated such proceeds and in the case of a Credit Party (other than a
Borrower) that owns the Stock of a Borrower, as if any Borrower owned the
property that generated such proceeds.


 


2.3.          Inspection; Lender Meeting. 
Each Credit Party shall permit any authorized representatives of Agent
to visit, audit and inspect any of the properties of such Credit Party 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


 


27





















 


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,
each Credit Party will participate and will cause key management personnel of
each Credit Party and its Subsidiaries to participate in a meeting with Agent
and Lenders at least once during each year, which meeting shall be held at such
time and such place as may be reasonably requested by Agent.


 


2.4.          Organizational Existence. 
Except as otherwise permitted by Section 3.6, each Credit
Party 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. 
Each Credit Party shall and shall cause each 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 such Credit Party
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 a Credit Party or its Subsidiaries in excess of
$100,000; and (d) promptly forward to Agent a copy of any order, notice,
request for information or any communication or report received by such Credit
Party 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 $100,000, 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 any Credit Party 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 each Credit Party 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 Borrowers’ 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. 
Borrowers 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. 
Each Credit Party 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 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. With respect to such
locations or warehouse space leased or owned as of the Closing Date and
thereafter, if Agent has not received a landlord or mortgagee agreement or
bailee letter as of the Closing Date (or, if later, as of the


 


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date such location is acquired or leased), the
Eligible Parts and Supplies and Eligible Equipment at that location shall, in
Agent’s discretion, be subject to such Reserves as may be established by Agent
in its reasonable credit judgment.  After
the Amendment Effective Date, no real property or warehouse space shall be
leased by any Credit Party or its Subsidiary and no Parts and Supplies shall be
shipped to a processor or converter under arrangements established after the
Amendment Effective Date without the prior written consent of Agent (which
consent, in Agent’s discretion, may be conditioned upon the exclusion from the
Borrowing Base of Eligible Parts and Supplies and Eligible Equipment at that
location or the establishment of Reserves acceptable to Agent) or, unless and
until a reasonably satisfactory landlord agreement or bailee letter, as
appropriate, shall first have been obtained with respect to such location.  Each Credit Party 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. 
Each Credit Party shall at all times maintain, preserve and protect all
of its assets and properties used or useful in the conduct of its business, 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; and transact business only in such limited liability
company, corporate and trade names as are set forth in Schedule 2.7,
which schedule may be updated by the Credit Parties from time to time with
twenty (20) days’ prior written notice to Agent.


 


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 ten (10) days
after the Amendment Effective Date, for all motor vehicles owned by each Credit
Party as of the Amendment Effective Date that are covered by a certificate of
title and as to which the lien of the Agent is not noted thereon, such Credit
Party shall submit for reissuance with the appropriate state motor vehicle
office such motor vehicle title certificates with Agent’s Lien noted thereon.


 


(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 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 Amendment Effective Date, 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.


 


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(e)           Promptly, and in any event within 30 days after the
acquisition by Borrowers or its Subsidiaries of assets or personal property of
the type that would have constituted Collateral on the Amendment Effective Date
and investments of the type that would have constituted Collateral on the
Amendment Effective Date, Borrowers will take, or will cause their 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, 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.


 


(f)            Each Credit Party shall (i) cause each Person,
upon its becoming a Subsidiary of such Credit Party (provided
that this shall not be construed to constitute consent by any of the Lenders to
any transaction referred to above which is not expressly permitted by the terms
of this Agreement), promptly to guaranty the Obligations and to grant to Agent,
for the benefit of Agent and Lenders, a security interest 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 a Borrower and such Person is a “controlled foreign corporation”,
as defined in Section 957(a) of the IRC (a “CFC”), of such
Borrower, then such Borrower shall (a) not be obligated to cause such CFC
to comply with clause (i) of this subsection (e) and nothing in
this Agreement shall cause any CFC to have any obligation under this Agreement,
and (b) pledge or cause to be pledged one hundred percent (100%) of the
non-voting Stock of such CFC and no more than sixty-five percent (65%) of all
of the voting 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).


 


2.9.          Amendment of
Preferred Stock Terms.  Not later than thirty (30)
days following the Amendment Effective Date Holdings shall complete an amendment,
in form and substance reasonably satisfactory to Agent, of the terms of
Holdings’ Series A Preferred Stock in order eliminate the mandatory
redemption provisions contained therein.


 


2.10.        Cash Management Systems. Credit Parties shall, and shall cause each
of their Subsidiaries to, enter into Control Agreements with respect to each
deposit account maintained by any Credit Party or any Subsidiary of any Credit
Party as of or after the Closing Date. 
Each such Control Agreement shall be in form and substance satisfactory
to Agent.  Borrowers shall enter into
lockbox agreements in form and substance and with banks acceptable to Agent and
shall direct all Account Debtors to make payments on all Accounts into the
lockboxes established under such agreements. 
All payments received in the lockboxes shall promptly, subject to Section 6.5,
(i) first, be applied to the outstanding Obligations other than Letter of
Credit Obligations, until paid in full and (ii) second, following such
payment in full, be remitted to the Borrowers.


 


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SECTION 3.



NEGATIVE COVENANTS


 


Each Credit Party
executing this Agreement jointly and severally agrees as to all Credit Parties
that from and after the Amendment Effective Date until the Termination Date:


 


3.1.          Indebtedness. 
The Credit Parties shall not and shall not cause or permit their
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;


 


(b)           Indebtedness outstanding on the Amendment Effective
Date described in Schedule 3.1 and refinancings thereof or
amendments or modifications thereto that do not have the effect of increasing
the principal amount thereof or changing the amortization thereof (other than
to extend the same) and that are otherwise on terms and conditions no less
favorable to any Credit Party than the terms of the Indebtedness being
refinanced, amended or modified;


 


(c)           Indebtedness consisting of intercompany loans and
advances made by any Borrower to another Borrower; provided,
that:  (i) such obligor Borrower
shall have executed and delivered to each such obligee Borrower, 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 Borrower to such
obligee Borrower, which Intercompany Notes shall be substantially in the form
of Exhibit 3.1(c) and shall be pledged and delivered to Agent
pursuant to the applicable Pledge Agreement or Security Agreement as additional
collateral security for the Obligations; (ii) such obligee Borrower shall
record all intercompany transactions on its books and records in a manner
reasonably satisfactory to Agent; (iii) the obligations of such obligor
Borrower under any such Intercompany Notes shall be subordinated to the
Obligations of such obligor Borrower hereunder pursuant to Section 9.21;  (iv) at the time any such intercompany
loan or advance is made to such obligor Borrower and after giving effect
thereto, such obligor Borrower shall be Solvent; (v) no Default or Event
of Default would occur and be continuing after giving effect to any such
proposed intercompany loan; (vi) such obligor Borrower shall have
Borrowing Availability of not less than $1.00 after giving effect to such
intercompany loan; and (vii) such obligor Borrower shall be creditworthy
as determined by Agent.


 


(d)           Second Lien Debt incurred by Borrowers in an amount
not to exceed $105,000,000 in aggregate principal amount at any time
outstanding, less any repayments of principal thereunder (other than
any repayment made from proceeds of a Permitted Refinancing of Second Lien
Debt);


 


(e)           until the date forty-five (45) days following the
Amendment Effective Date Indebtedness under the Senior Unsecured Notes not to
exceed $100,000,000 in aggregate principal amount, less principal payments made
thereon; so long as concurrently with the making of the loan under the Second
Lien Credit Agreement, Holdings deposits cash proceeds thereof with the trustee
for the Senior Unsecured Notes in an amount sufficient to pay the redemption
price of all Senior Unsecured Notes;


 


(f)            Indebtedness at any time outstanding secured by
purchase money Liens or incurred with respect to Capital Leases which does not
exceed $4,000,000 in aggregate principal amount (or notional principal) at any
time outstanding;


 


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(g)           Indebtedness incurred by a Credit Party as a Permitted
Refinancing of Second Lien Debt, so long as the proceeds of such Indebtedness
are applied to repay principal thereof and to pay accrued interest and fees on
the Second Lien Debt being repaid, and transaction expenses (including closing
fees) incurred in connection with such Indebtedness and so long as after giving
effect to any such incurrence Holdings and its Subsidiaries on a pro forma
Consolidated Basis are in compliance with Section 4.6;


 


(h)           surety bonds entered into in the ordinary course of
business or which are secured by collateral which is a Permitted Encumbrance;


 


(i)            any other Indebtedness not to exceed $500,000 in
aggregate principal amount at any time outstanding; or


 


(j)            Indebtedness permitted by Section 3.6(b)(iv)(B).


 


3.2.          Liens and Related Matters.


 


(a)           No Liens.  The Credit
Parties shall not and shall not cause or permit their Subsidiaries to directly or
indirectly create, incur, assume or permit to exist any Lien on or with respect
to any property or asset of such Credit Party 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 Amendment Effective Date hereof and
renewals and extensions thereof, as set forth on Schedule 3.2).


 


(b)           No Negative Pledges.  The Credit
Parties shall not and shall not cause or permit their Subsidiaries to directly
or indirectly enter into or assume any agreement (other than the Loan
Documents, the Second Lien Loan Documents as in effect on the Amendment
Effective Date (as to the assets covered thereby), and other secured
Indebtedness permitted by this Agreement so long as the agreements with respect
to such other secured Indebtedness do not prohibit any Permitted Encumbrances)
prohibiting the creation or assumption of any Lien upon its properties or assets,
whether now owned or hereafter acquired.


 


(c)           No Restrictions on Subsidiary Distributions to
Borrowers.  Except as provided herein and in the Second
Lien Credit Agreement, the Credit Parties shall not and shall not cause or
permit their 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 any Borrower or any other Subsidiary; (2) pay any Indebtedness
owed to any Borrower or any other Subsidiary; (3) make loans or advances
to any Borrower or any other Subsidiary; or (4) transfer any of its
property or assets to any Borrower or any other Subsidiary.


 


3.3.          Investments. 
The Credit Parties shall not and shall not cause or permit their
Subsidiaries to directly or indirectly make or own any Investment in any Person
except:


 


(a)           Borrowers and their Subsidiaries may make and own Investments
in Cash Equivalents subject to Control Agreements in favor of Agent; provided that such Cash Equivalents are not subject to
setoff rights;


 


(b)           Borrowers may make intercompany loans to other
Borrowers to the extent permitted under Section 3.1;


 


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(c)           Borrowers and their 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 $100,000 in the aggregate
at any time outstanding;


 


(d)           Borrowers and their Subsidiaries may make capital
contributions to their wholly owned Domestic Subsidiaries that are Guarantors
in an amount not to exceed $250,000 in the aggregate reduced by the amount of
Investments made pursuant to Section 3.1(c);


 


(e)           Borrowers and their Subsidiaries may own the
Investments listed on Schedule 3.3(e) and outstanding on the
Amendment Effective Date;


 


(f)            Borrowers may make investments constituting Permitted
Acquisitions; and


 


(g)           transfers between Credit Parties permitted pursuant to
this Section 3.


 


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


 


(a)           Letter of Credit Obligations;


 


(b)           omitted;


 


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


 


(d)           those arising with respect to a Credit Party
guaranteeing the Indebtedness of another Credit Party so long as, in the event
such guaranteed Indebtedness is subordinated, such guarantee shall be equally
subordinated;


 


(e)           those existing on the Amendment Effective Date and
described in Schedule 3.4;


 


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


 


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


 


(h)           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;


 


(i)            those incurred with respect to the Second Lien Debt,
other Indebtedness of a Credit Party permitted by Section 3.1 and other
obligations of a Credit Party 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;


 


(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.


 


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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)           Wholly owned Subsidiaries of a Borrower may make
Restricted Payments to such Borrower;


 


(d)           Borrower may make Restricted Payments with respect to
the payment of accrued dividends on and redemption of the issued and outstanding
Senior Preferred Stock being redeemed within 45 days of the Amendment Effective
Date in accordance with its terms as in effect on the Amendment Effective Date;


 


(e)           Borrowers may pay management fees and reasonable
out-of-pocket expenses payable semi-annually pursuant to the BRS Management
Services Agreement and management fees and reasonable out of pocket expenses
payable monthly pursuant to the Company 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, Holdings may repurchase Stock owned by employees, officers or
directors of the Borrowers or any of their Subsidiaries or their authorized
representatives upon the death, disability or termination of employment of such
employees, officers or directors, or as otherwise required by existing
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, in the case of the limit
imposed by clause (x), (i) the aggregate cash proceeds actually received
from any reissuance of Stock during such calendar year by the Borrowers or any
of their Subsidiaries to employees, officers or directors of the Borrowers or
their Subsidiaries and (ii) the aggregate cash proceeds actually received
in such calendar year from any payments on life insurance policies in which the
Borrowers or any of their Subsidiaries is the beneficiary with respect to any
employees, officers or directors of the Borrowers or any of their Subsidiaries
which proceeds are used to purchase the Stock of the Borrowers or any of their
Subsidiaries held by any such employees, officers or directors, plus, in the
case of the limit imposed by clause (y) the aggregate amount received by
Borrowers under paragraphs (i) and (ii) of this Section 3.5(f) during
the term of this Agreement.


 


3.6.          Restriction on Fundamental Changes;
Permitted Acquisitions.


 


(a)           The Credit Parties shall not and shall not cause or
permit their 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 amendment
referred to in Section 2.9) by-laws, partnership agreement or
operating agreement in any way adversely affecting the Lenders unless required
by law;


 


(ii)           enter into any transaction of merger or consolidation
except, upon not less than five (5) Business Days’ prior written notice to
Agent, any wholly owned Subsidiary of a Borrower may be merged with or into any
other wholly owned Subsidiary of such Borrower (and in


 


34





















 


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); or


 


(iv)          acquire by purchase or otherwise all or any
substantial part of the business or assets of any other Person except as set
forth in paragraph (b) below.


 


(b)           Borrowers 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) Business Days’
prior written notice of such proposed Permitted Acquisition, which notice shall
include a reasonably detailed description of such proposed Permitted Acquisition;


 


(ii)           such Permitted Acquisition shall only involve assets
located in the United States or Canada and comprise a business, or those assets
of a business, of the type engaged in by Borrowers as of the Amendment
Effective Date, and which business would not subject Agent or any Lender to
regulatory or third party approvals in connection with the exercise of its
rights and remedies under this Agreement or any other Loan Documents other than
approvals applicable to the exercise of such rights and remedies with respect
to Borrowers prior to such Permitted Acquisition;


 


(iii)          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;


 


(iv)          no additional Indebtedness, Guaranteed Indebtedness,
Contingent Obligations or other liabilities shall be incurred, assumed or
otherwise be reflected on a consolidated balance sheet of Borrowers and Target
after giving effect to such Permitted Acquisition, except (A) Loans made
hereunder, (B) Indebtedness issued to seller in such Permitted Acquisition
(so long as such Indebtedness (x) is either unsecured or secured only by assets
(other than Stock) being acquired in such Permitted Acquisition and (y)
together with all other such Indebtedness issued to sellers in Permitted
Acquisitions, does not exceed $1,000,000 in aggregate principal amount) and (C) ordinary
course trade payables, accrued expenses and unsecured Indebtedness of the
Target to the extent no Default or Event of Default has occurred and is
continuing or would result after giving effect to such Permitted Acquisition;


 


(v)           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 Borrowers and Target) shall not
exceed $2,000,000 and the portion thereof allocable to goodwill and intangible
assets for all such Permitted Acquisitions during any Fiscal Year shall not
exceed $1,000,000;


 


(vi)          the Target’s EBITDA for the trailing twelve-month
period preceding the date of the Permitted Acquisition, as determined based
upon the Target’s financial statements for its most recently completed Fiscal
Year and its most recent interim financial period completed within sixty (60)
days prior to the date of consummation of such Permitted Acquisition shall not
be negative;


 


35





















 


(vii)         the business and assets acquired in such Permitted
Acquisition shall be free and clear of all Liens (other than Permitted
Encumbrances);


 


(viii)        at or prior to the closing of any Permitted
Acquisition, Agent will be granted a first priority (except in those assets
acquired from a seller securing Indebtedness issued to such seller as permitted
by clause (iv)(B) above) perfected Lien (subject to Permitted
Encumbrances) in all assets acquired pursuant thereto or in the assets and
Stock of the Target, and Holdings and Borrowers and the Target shall have
executed such documents and taken such actions as may be required by Agent in
connection therewith;


 


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


 


(A)          a pro forma consolidated balance sheet, income
statement and cash flow statement of Holdings 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 Holdings and its Subsidiaries
in accordance with GAAP consistently applied, but taking into account such
Permitted Acquisition and the funding of all Loans in connection therewith, and
such Acquisition Pro Forma shall reflect that (x) on a pro forma basis,
Holdings and its Subsidiaries would have had a Leverage Ratio not in excess of
1.2 to 1.0 for the four quarter period reflected in the Compliance and Pricing
Certificate most recently delivered to Agent pursuant to Section 4.9(l)
prior to the consummation of such Permitted Acquisition (after giving effect to
such Permitted Acquisition and all Loans funded, and other Indebtedness issued,
assumed, incurred or guaranteed, in connection therewith as if made on the
first day of such period), (y) average daily Borrowing Availability for the
ninety (90) day period preceding the consummation of such Permitted Acquisition
would have exceeded $10,000,000 on a pro forma basis (after giving effect to
such Permitted Acquisition and all Loans funded in connection therewith as if
made on the first day of such period) and the Acquisition Projections (as
hereinafter defined) shall reflect that such Borrowing Availability of
$10,000,000 shall continue for at least ninety (90) days after the consummation
of such Permitted Acquisition, and (z) 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 Borrowers would have been in compliance with the
financial covenants set forth in Section 4 for the four quarter
period reflected in the Compliance and Pricing Certificate most recently
delivered to Agent pursuant to Section 4.9(l) prior to the
consummation of such Permitted Acquisition (after giving effect to such
Permitted Acquisition and all Loans funded, and other Indebtedness issued,
assumed, incurred or guaranteed, in connection therewith as if made on the
first day of such period);


 


(B)           updated versions of the most recently delivered
Projections covering the three (3) year period commencing on the date of
such Permitted Acquisition and otherwise prepared in accordance with the
Projections (the “Acquisition Projections”) and based upon historical
financial data of a recent date reasonably satisfactory to Agent, taking into
account such Permitted Acquisition; and


 


(C)           a certificate of the chief financial officer of
Borrower Representative to the effect that: (w) Borrowers (after taking into
consideration all rights of contribution and indemnity Borrower has against
Holdings and each other Subsidiary of Holdings) will be Solvent upon the
consummation of the Permitted Acquisition; (x) the Acquisition Pro Forma fairly
presents the financial condition of Holdings and its Subsidiaries (on a consolidated
basis) as of the date thereof after giving effect to the Permitted Acquisition;
(y) the Acquisition Projections are reasonable estimates of the future
financial performance of Holdings and its Subsidiaries subsequent to the date
thereof based upon the historical performance of Holdings and its Subsidiaries
and the Target and show that Holdings and its Subsidiaries shall continue to be
in compliance with the financial covenants set forth in Section 4
for the


 


36





















 


three (3) year period thereafter; and
(z) Holdings and its Subsidiaries have completed their due diligence
investigation with respect to the Target and such Permitted Acquisition, which
investigation was conducted in a manner similar to that which would have been
conducted by a prudent purchaser of a comparable business and the results of
which investigation were delivered to Agent and Lenders;


 


(x)            on or prior to the date of such Permitted Acquisition,
Agent shall have received, in form and substance reasonably satisfactory to
Agent, copies of the acquisition agreement and related agreements and
instruments, and all opinions, certificates, lien search results and other
documents reasonably requested by Agent, including those specified in Section 2.8(e);
and


 


(xi)           at the time of such Permitted Acquisition and after
giving effect thereto, no Default or Event of Default has occurred and is
continuing.


 


Notwithstanding
the foregoing, the Accounts, Short-Term Rentals, Parts and Supplies, Equipment
and Real Estate of the Target shall not be included in Eligible Accounts,
Eligible Short-Term Rentals, Eligible Parts and Supplies, Eligible Equipment
and Eligible Real Estate without the prior written consent of Agent and
Requisite Lenders.  Notwithstanding the
foregoing, in the event that Stock of Target is acquired in such Permitted
Acquisition, no such property shall be included in the Aggregate Borrowing Base
unless (i) such Target becomes a Borrower under this Agreement pursuant to
an accession or similar agreement in form and substance satisfactory to Agent, (ii) such
Target shall have delivered in connection therewith such documents,
certificates and legal opinions as Agent shall have reasonably requested in
connection with such agreement and (iii) this Agreement shall have been
amended in a manner satisfactory to Agent and Requisite Lenders in order to
introduce into the Aggregate Borrowing Base a separate Borrowing Base for such
Target (including applicable definitions thereof and a Borrowing Base Certificate
therefor).


 


3.7.          Disposal of Assets or Subsidiary Stock. 
Except as described on Schedule 3.7, the Credit Parties
shall not and shall not cause or permit their 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 Borrowers and their
Subsidiaries (excluding sales of Accounts and Stock of any of Holdings’
Subsidiaries) if all of the following conditions are met:  (i) the market value of assets sold or
otherwise disposed of in any single transaction or series of related
transactions does not exceed $100,000 and the aggregate market value of assets
sold or otherwise disposed of in any Fiscal Year does not exceed $250,000; (ii) the
consideration received is at least equal to the fair market value of such
assets; (iii) the sole consideration received is cash; (iv) the Net
Proceeds of such Asset Disposition are applied as required by Sections 1.5(c) and
(d), as applicable; (v) after giving effect to the Asset Disposition
and the repayment of Indebtedness with the proceeds thereof, Borrowers are 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 and (c) Permitted Sale-Leasebacks.


 


3.8.          Transactions with Affiliates. 
The Credit Parties shall not and shall not cause or permit their
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 any Credit Party, 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 any such Credit Party or any of


 


37





















 


its Subsidiaries and upon fair and reasonable terms
which are fully disclosed to Agent and are no less favorable to any such Credit
Party 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 any
such Credit Party or any of its Subsidiaries, (d) payment of director’s
fees not to exceed $100,000 in the aggregate for any Fiscal Year of Holdings
and (e) upon notice to Agent, transfers of assets by any Borrower to any
other Borrower, provided that (i) if such
assets are covered by a negotiable document of title, such document shall be
delivered to Agent with all necessary endorsements, free and clear of all Liens
except those in favor of Agent and Lenders, (ii) if such assets are
covered by a certificate of title, such certificate of title shall be re-issued
in the name of the transferee Borrower and the Lien of Agent shall be noted on
such certificate of title in accordance with applicable state law, and (iii) if
such assets constitute real property, such real property shall be free and
clear of all Liens and rights of any other Person, except the Lien in favor of
Agent and Lenders and Permitted Encumbrances of the type described in clause
(a), (d), (e), (g), (h), (j) or (l) of the definition of such term, and Agent
shall have received a loan policy of title insurance in favor of Agent and in
form and amount, and issued by a title insurance company satisfactory to Agent
in its reasonable discretion, together with such endorsements thereto as Agent
shall require in its reasonable discretion, provided further,
that in each instance, the transfer of ownership from the transferor Borrower
to the transferee Borrower shall be recorded in accordance with applicable
law.  Concurrently with any such
transfer, the transferor Borrower shall repay any Revolving Credit Advances or
cash collateralize Letter of Credit Obligations necessitated by the reduction
in its Borrowing Base and, in the event any such transferred assets include any
assets included in the transferor’s most recent Borrowing Base Certificate, at
least five (5) Business Days’ prior to consummating such transfer, such
transferor Borrower shall deliver to Agent a pro forma Borrowing Base
Certificate taking into account such transfer.


 


3.9.          Conduct of Business. 
The Credit Parties shall not and shall not cause or permit their
Subsidiaries to directly or indirectly engage in any business other than
businesses of the type described on Schedule 3.9.


 


3.10.        Changes Relating to Indebtedness. 
The Credit Parties shall not and shall not cause or permit their
Subsidiaries to directly or indirectly change or amend the terms of any of its
Indebtedness (a) permitted by Section 3.1(b), Section 3.1(f) or
Section 3.1(i) if the effect of such amendment is to: (i) increase
the interest rate on such Indebtedness; (ii) change the dates upon which
payments of principal or interest are due on or principal amount of such
Indebtedness; (iii) change any event of default or add or make more
restrictive any covenant with respect to such Indebtedness; (iv) change
the redemption or prepayment provisions of such Indebtedness; (v) change
the subordination provisions thereof (or the subordination terms of any
guaranty thereof); (vi) change or amend any other term if such change or
amendment would materially increase the obligations of the obligor or confer
additional material rights on the holder of such Indebtedness in a manner
adverse to any Credit Party or Lenders; or (vii) increase the portion of
interest payable in cash with respect to any Indebtedness for which interest is
payable by the issuance of payment-in-kind notes or is permitted to accrue or (b) permitted
by Section 3.1(d) in a manner prohibited by the Intercreditor
Agreement.


 


3.11.        Change of Name or Location. No Credit Party shall (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
organization, in each case without at least thirty (30) days’ prior written
notice to Agent and after Agent’s written acknowledgment, which shall not be
unreasonably delayed, that 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 be in the


 


38





















 


continental United States.  Without limiting the foregoing, no Credit
Party shall 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
Lenders and after Agent’s written acknowledgment that 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.


 


3.12.        Fiscal Year. 
No Credit Party shall change its Fiscal Year or permit any of its
Subsidiaries to change their respective fiscal years.


 


3.13.        Press Release; Public Offering Materials. 
Each Credit Party executing this Agreement agrees that neither it nor
its Affiliates will in the future issue any press releases or other public
disclosure, including any prospectus, proxy statement or other materials filed
with any Governmental Authority relating to a public offering of the Stock of
any Credit Party, using the name of GE Capital or its affiliates or referring
to this Agreement, the other Loan Documents or the Related Transactions
Documents without at least two (2) Business Days’ prior notice to GE
Capital and without the prior written consent of GE Capital unless (and only to
the extent that) such Credit Party or Affiliate is required to do so under law
and then, in any event, such Credit Party or Affiliate will consult with GE
Capital before issuing such press release or other public disclosure.  Each Credit Party consents to the publication
by Agent or any Lender of a tombstone or similar advertising material relating
to the financing transactions contemplated by this Agreement.  Agent or such Lender shall provide a draft of
any such tombstone or similar advertising material to each Credit Party for
review and comment prior to the publication thereof.  Agent reserves the right to provide to
industry trade organizations information necessary and customary for inclusion
in league table measurements. 
Notwithstanding the foregoing, the parties hereto may disclose the
United States federal tax treatment and tax structure of the transactions
contemplated by the Loan Documents as further provided in Section 9.13.


 


3.14.        Subsidiaries. 
The Credit Parties shall not and shall not cause or permit their Subsidiaries
to directly or indirectly establish, create or acquire any new Subsidiary
except in connection with Permitted Acquisitions.


 


3.15.        Bank Accounts. 
The Credit Parties shall not and shall not cause or permit their
Subsidiaries to establish any new bank accounts without prior written notice to
Agent and 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
satisfactory to Agent.  No Credit Party
shall and no Credit Party shall cause or permit any of its Subsidiaries to
establish after the Amendment Effective Date any securities account or
commodities account other than a securities account or commodities account
subject to a Control Agreement in favor of Agent and in form and substance
satisfactory to Agent.


 


3.16.        Hazardous Materials. 
The Credit Parties shall not and shall not cause or permit their
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 the Credit Parties or any of their 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.


 


3.17.        ERISA.  The Credit
Parties 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.


 


39





















 


3.18.        Sale-Leasebacks. 
The Credit Parties 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.


 


3.19.        Prepayments of Other Indebtedness. 
The Credit Parties shall not, directly or indirectly, voluntarily
purchase, redeem, defease or prepay any principal of, premium, if any, interest
or other amount payable in respect of any Indebtedness, other than (i) the
Obligations; (ii) Indebtedness secured by a Permitted Encumbrance if the
asset securing such Indebtedness has been sold or otherwise disposed of in
accordance with Section 3.7(b) and a prepayment of such
Indebtedness is required in respect of such sale or disposition, and (iii) intercompany
Indebtedness reflecting amounts owing to Borrowers.  Credit Parties shall not make any prepayments
or repayments of principal of the Second Lien Debt, other than Permitted Second
Lien Prepayments or any prepayments of any Permitted Refinancing of Second Lien
Debt described in clause (ii) of the definition of such term, that are
substantially the same as Permitted Second Lien Prepayments.


 


3.20.        Changes to Management Services Agreements. 
The Credit Parties shall not and shall not cause or permit any of their
Subsidiaries to change or amend the terms of the Management Services
Agreements.


 


3.21.        Changes in Depreciation Schedule. 
No Credit Party shall change or amend the schedules or methodology used
to calculate depreciation on its assets (except as required by applicable law
or by a change in GAAP).


 


3.22.        OFAC.  No Credit
Party (i) will become a person whose property or interests in property are
blocked or subject to blocking pursuant to Section 1 of Executive Order
13224 of September 23, 200l Blocking Property and Prohibiting Transactions
With Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg.
49079 (2001)) or the Global Terrorism Sanctions Regulations, 31 C.F.R. Part 594,
(ii) will engage in any dealings or transactions prohibited by Section 2
of such executive order, or be otherwise associated with any such person in any
manner violative of Section 2 or the Global Terrorism Sanctions
Regulations, 31 C.F.R. Part 594, or (iii) will otherwise become a
person on the list of Specially Designated Nationals and Blocked Persons or
subject to the limitations or prohibitions under any other OFAC regulation or
executive order.


 


SECTION 4.



FINANCIAL COVENANTS/REPORTING


 


Credit Parties covenant
and agree that from and after the date hereof until the Termination Date,
Credit Parties shall perform and comply with, and shall cause each of the other
Credit Parties to perform and comply with, all covenants in this Section 4
applicable to such Person.


 


4.1.          Capital Expenditure Limits. 
Holdings and its Subsidiaries on a consolidated basis shall not make
Capital Expenditures during any of the following periods that exceed in the
aggregate the amount set forth opposite such period (the “Capex Limit”):  


 


	
  Period

  	
   

  	
  Maximum Capital Expenditures per Period

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  For Fiscal Year ending June 30, 2006 and
  each Fiscal Year ending thereafter

  	
   

  	
   

  	
  $

  	
  16,500,000

  	
   

  	
   

  
							



 


40





















 


; 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 100% of the Capex Limit for the
immediately prior period less the amount of Capital Expenditures expended in
such immediately 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 Capital Expenditures in that succeeding
period.


 


4.2.          Lease Limits. 
Holdings will not and will not permit any of its Subsidiaries directly
or indirectly to become or remain liable in any way, whether directly or by
assignment or as a guarantor or other surety, for the obligations of the lessee
under any operating lease, synthetic lease or similar off-balance sheet
financing with respect to equipment, if the aggregate amount of all rents (or
substantially equivalent payments) paid by Holdings and its Subsidiaries under
all such leases would exceed $1,000,000 in any Fiscal Year of Holdings.


 


4.3.          Omitted.


 


4.4.          Omitted.


 


4.5.          Minimum Interest Coverage Ratio. 
Holdings 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:


 


	
  Minimum Interest

  Coverage Ratio

  	
   

  	
  Period

  	
   

  
	
  1.70:1.00

  	
   

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

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  1.80:1.00

  	
   

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

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  1.90:1.00

  	
   

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

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2.00:1.00

  	
   

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

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2.10:1.00

  	
   

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

  	
   

  



 


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


 


	
  Maximum

  Leverage Ratio

  	
   

  	
  Period

  	
   

  
	
  5.25:1.00

  	
   

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

  	
   

  



 


41





















 


	
  5.00:1.00

  	
   

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

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  4.75:1.00

  	
   

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

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  4.50:1.00

  	
   

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

  	
   

  



 


4.7.          Omitted.


 


4.8.          Omitted.


 


4.9.          Financial Statements and Other Reports. 
Holdings 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 Representative
will deliver each of the Financial Statements and other reports described below
to Agent (and each Lender in the case of the Financial Statements and other
reports described in Sections (4.9)(a), (b), (c), (e), (g), (h), (i), and
(l).


 


(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 Borrowers’ Fiscal Year), Borrower Representative
will deliver (1) the consolidated and consolidating balance sheets of
Holdings 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 Holdings 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 4.9(g) and (3) a
schedule of the outstanding Indebtedness for borrowed money of Holdings
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 Borrowers, Borrower Representative will deliver (1) the
consolidated and consolidating balance sheets of Holdings 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 Holdings 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 4.9(g) and
(3) a schedule of the outstanding Indebtedness for borrowed money of
Holdings 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 Borrowers, Borrower Representative will deliver (1) the
consolidated and consolidating balance sheets of Holdings 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


 


42





















 


Fiscal Year, (2) a schedule of the
outstanding Indebtedness for borrowed money of Holdings 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 and (3) a report with respect to the
consolidated Financial Statements from a firm of Certified Public Accountants
selected by Borrowers 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 Representative will deliver copies of all significant
reports submitted by Borrowers’ 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 Holdings or its
Subsidiaries made by such accountants,
including any comment letter submitted by such accountants to management in
connection with their services.


 


(e)           Additional Deliveries.


 


(i)            To Agent, upon its request, and in any event no less
frequently than noon New York time fifteen (15) Business Days after the end of
each Fiscal Month (together with a copy of any of the following reports
requested by any Lender in writing after the Amendment Effective Date), each of
the following reports, each of which shall be prepared by Borrowers as of the
last day of the immediately preceding Fiscal Month or the date 2 days prior to
the date of any such request:


 


(A)          a Borrowing Base Certificate with respect to each
Borrower, accompanied by such supporting detail and documentation as shall be
requested by Agent in its reasonable discretion (in substantially the same form
as Exhibits 4.9(e)(i), 4.9(e)(ii), 4.9(e)(iii) and Exhibits 4.9(e)(iv) (each,
a “Borrowing Base Certificate”);


 


(B)           with respect to each Borrower, a summary of Equipment
and Parts and Supplies by location and type, in each case accompanied by such
supporting detail and documentation as shall be requested by Agent in its
reasonable discretion; and


 


(C)           with respect to each Borrower, a monthly trial balance
showing Accounts and Short-Term Rentals outstanding aged from invoice date as
follows:  1 to 30 days, 31 to 60 days, 61
to 90 days and 91 days or more, accompanied by such supporting detail and
documentation as shall be requested by Agent in its reasonable discretion.


 


(ii)           Upon the request of Agent, on a weekly basis or at
such more frequent intervals as Agent may request from time to time (together
with a copy of all or any part of such delivery requested by any Lender in
writing after the Amendment Effective Date), collateral reports with respect to
each Borrower, including all additions and reductions (cash and non-cash) with
respect to Accounts and Short-Term Rentals of each Borrower, in each case
accompanied by such supporting detail and documentation as shall be requested
by Agent in its reasonable discretion each of which shall be prepared by the
applicable Borrower as of the last day of the immediately preceding week or the
date 2 days prior to the date of any request;]


 


(iii)          To Agent, at the time of delivery of each of the
monthly Financial Statements delivered pursuant to this Section 4.9:


 


(A)          a reconciliation of the accounts receivable aging to
each Borrowers’ most recent Borrowing Base Certificate, general ledger and
monthly Financial Statements delivered


 


43





















 


pursuant to this Section 4.9, in each case
accompanied by such supporting detail and documentation as shall be requested
by Agent in its reasonable discretion;


 


(B)           a reconciliation of the summary of Equipment and Parts
and Supplies delivered in accordance with Section 4.9(e)(i)(B) to
each Borrower’s most recent Borrowing Base Certificate, general ledger and
monthly Financial Statements delivered pursuant to this Section 4.9,
in each case accompanied by such supporting detail and documentation as shall
be requested by Agent in its reasonable discretion;


 


(C)           an aging of accounts payable and a reconciliation of
that accounts payable aging to each Borrower’s general ledger and monthly
Financial Statements delivered pursuant to this Section 4.9, in
each case accompanied by such supporting detail and documentation as shall be
requested by Agent in its reasonable discretion;


 


(D)          a reconciliation of the outstanding Loans as set forth
in the monthly Loan Account statement provided by Agent to each Borrower’s
general ledger and monthly Financial Statements delivered pursuant to this Section 4.9,
in each case accompanied by such supporting detail and documentation as shall
be requested by Agent in its reasonable discretion;


 


(iv)          To Agent, at the time of delivery of each of the
annual Financial Statements delivered pursuant to this Section 4.9,
(i) a listing of government contracts of each Borrower subject to the
Federal Assignment of Claims Act of 1940; and (ii) a list of any
applications for the registration of any Patent, Trademark or Copyright filed
by any Credit Party with the United States Patent and Trademark Office, the United
States Copyright Office or any similar office or agency in the prior Fiscal
Quarter;


 


(f)            Appraisals; Inspections.


 


(i)            From time to time, if Agent or any Lender determines
that obtaining appraisals is necessary in order for Agent or such Lender to comply
with applicable laws or regulations, Agent will, at Borrowers’ expense, obtain
appraisal reports in form and substance and from appraisers satisfactory to
Agent stating the then current fair market values of all or any portion of the
Real Estate owned by Credit Parties.  In
addition to the foregoing, at Borrower’s expense, at any time while and so long
as an Event of Default shall have occurred and be continuing and in the absence
of an Event of Default not more than three during the calendar year, Agent may
obtain appraisal reports in form and substance and from appraisers satisfactory
to Agent stating the then current market values of all or any portion of the
Real Estate and personal property owned by any of the Credit Parties.  Agent intends to conduct three appraisals of
parts and supplies and equipment/inventory per Fiscal Year unless an Event of
Default shall have occurred and be continuing, in which case such audits shall
be as frequently as Agent requests at Borrower’s expense.


 


(ii)           Borrowers, at their own expense, shall deliver to
Agent the results of each physical verification, if any, that Borrowers or any
of their Subsidiaries may in their discretion have made, or caused any other
Person to have made on their behalf, of all or any portion of their Parts and
Supplies and Equipment (and, if a Default or an Event of Default has occurred
and is continuing, Borrowers shall, upon the request of Agent, conduct, and
deliver the results of, such physical verifications as Agent may require).


 


(iii)          Notwithstanding the foregoing, so long as no Event of
Default has occurred and is continuing Agent and any Lender shall only obtain a
Real Estate appraisal report pursuant


 


44





















 


to this Section 4.9(f) for that portion
of the Real Estate that Agent, such Lender and Borrowers have agreed will be
included in the Aggregate Borrowing Base


 


(g)           Projections.  As soon as
available and in any event no later than the 60th day following the first day
of each of Holdings’ Fiscal Years, Borrower Representative will deliver
Projections of Holdings and its Subsidiaries for the forthcoming three (3) fiscal
years, year by year, and for the forthcoming fiscal year, month by month.


 


(h)           SEC Filings and Press Releases. 
Promptly upon their becoming available, Borrower Representative will
deliver copies of (1) all Financial Statements, reports, notices and proxy
statements sent or made available by Holdings or any of its Subsidiaries to
their Stockholders, (2) all regular and periodic reports and all
registration statements and prospectuses, if any, filed by Holdings 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 Holdings or any of its Subsidiaries to the public concerning developments in
the business of any such Person.


 


(i)            Events of Default, Etc.  Promptly upon
any officer of any Credit Party obtaining knowledge of any of the following
events or conditions, Borrower Representative shall deliver copies of all
notices given or received by such Credit Party or any of their Subsidiaries
with respect to any such event or condition and a certificate of Borrower
Representative’s chief executive officer specifying the nature and period of
existence of such event or condition and what action such Credit Party or
Subsidiary thereof has taken, is taking and proposes to take with respect
thereto:  (1) any condition or event
that constitutes, or which could reasonably be expected to result in the
occurrence of, an Event of Default or Default; (2) any notice that any
Person has given to any Credit Party or any of their Subsidiaries or any other
action taken with respect to a claimed default or event or condition of the
type referred to in Section 6.1(b); (3) any event or condition
that could reasonably be expected to result in any Material Adverse Effect; or (4) any
default or event of default with respect to any material Indebtedness of any
Credit Party or any of its Subsidiaries.


 


(j)            Litigation.  Promptly upon
any officer of any Credit Party 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 such Credit Party after due inquiry, threatened against or affecting any
Credit Party or any of its Subsidiaries or any property of any Credit Party or
any of its Subsidiaries (“Litigation”) not previously disclosed by
Borrower Representative to Agent or (2) any material development in any
action, suit, proceeding, governmental investigation or arbitration at any time
pending against or affecting any Credit Party or any property of any Credit
Party which, in each case, could reasonably be expected to have a Material
Adverse Effect, Borrower Representative will promptly give notice thereof to
Agent and provide such other information as may be reasonably available to them
to enable Agent and its counsel to evaluate such matter.


 


(k)           Notice of Corporate and other Changes. 
Borrower Representative shall provide prompt written notice of (1) all
states in which a Credit Party becomes qualified after the Amendment Effective
Date to transact business, (2) any change after the Amendment Effective in
the authorized and issued Stock of any Credit Party or any Subsidiary of any
Credit Party or any amendment to their articles or certificate of
incorporation, by-laws, partnership agreement or other organizational
documents, (3) any Subsidiary created or acquired by any Credit Party or
any of its Subsidiaries after the Amendment Effective Date, such notice, in
each case, to identify the applicable jurisdictions, capital structures or
Subsidiaries, as applicable, and (4) any other event that occurs after the
Amendment Effective Date which would cause any of the representations and
warranties in Section 5 of this Agreement or in any other Loan
Document to be untrue or misleading in any material respect.  The foregoing notice requirement shall not


 


45





















 


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.


 


(l)            Compliance and Pricing Certificate. 
Together with each delivery of Financial Statements of Holdings and its
Subsidiaries pursuant to Section 4.9(b) and Section 4.9(c) Borrowers
will deliver a fully and properly completed Compliance and Pricing Certificate
(in substantially the same form as Exhibit 4.9(l) (the “Compliance
and Pricing Certificate”) signed by each Borrower’s chief executive officer
or chief financial officer.


 


(m)          Customer Concentration.  Borrower
Representative shall provide prompt written notice if the Accounts of any
customer exceed in the aggregate an amount equal to fifteen percent (15%) of
the aggregate of all Accounts of Borrowers or any of their Subsidiaries at any
time.


 


(n)           Other Information.  With
reasonable promptness, Borrower Representative will deliver such other
information and data with respect to any Credit Party or any Subsidiary of any
Credit Party as from time to time may be reasonably requested by Agent.


 


(o)           Taxes.  Borrower
Representative 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.


 


4.10.        Accounting Terms; Utilization of GAAP for
Purposes of Calculations under Agreement.  For purposes
of this Agreement, all accounting terms not otherwise defined herein shall have
the meanings assigned to such terms in conformity with GAAP.  Financial statements and other information
furnished to Agent pursuant to Section 4.9 or any other section (unless
specifically indicated otherwise) shall be prepared in accordance with GAAP as
in effect at the time of such preparation; provided that
no Accounting Change shall affect financial covenants, standards or terms in
this Agreement; provided further that Holdings
shall prepare footnotes to the Financial Statements required to be delivered
hereunder that show the differences between the Financial Statements delivered
(which reflect such Accounting Changes) and the basis for calculating financial
covenant compliance (without reflecting such Accounting Changes).  All such adjustments described in clause (c) of
the definition of the term Accounting Changes resulting from expenditures made
subsequent to the Closing Date (including capitalization of costs and expenses
or payment of pre-Closing Date liabilities) shall be treated as expenses in the
period the expenditures are made.


 


SECTION 5.



REPRESENTATIONS AND WARRANTIES


 


To induce Agent and
Lenders to enter into the Loan Documents, to make Loans and to issue or cause
to be issued Letters of Credit, Borrowers and the other Credit Parties
executing this Agreement, jointly and severally, represent, warrant and
covenant to Agent and each Lender that the following statements are and, after
giving effect to the Related Transactions, will remain true, correct and
complete until the Termination Date with respect to all Credit Parties:


 


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


 


46





















 


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 and through the Amendment Effective Date there
have been no events or changes in facts or circumstances affecting any Credit
Party 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 any Credit Party 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.  Each of the
Credit Parties and each of their 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 Amendment Effective Date in which each Credit Party is
qualified to do business are set forth on Schedule 5.4(a).  Each of the Credit Parties and each of their
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
Amendment Effective Date:  (i) the
authorized Stock of each of the Credit Parties and each of their Subsidiaries
is as set forth on Schedule 5.4(b); (ii) all issued and
outstanding Stock of each of the Credit Parties and each of their Subsidiaries
is duly authorized and validly issued, fully paid, nonassessable, free and
clear of all Liens other than those in favor of Agent for the benefit of Agent
and Lenders and those in favor of Second Lien Agent for the benefit of Second
Lien Agent and Second Lien 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 each of the
Credit Parties and each of their Subsidiaries and the percentage of their fully-diluted
ownership of the Stock of each of the Credit Parties and each of their
Subsidiaries is set forth on Schedule 5.4(b); and (iv) no
Stock of any Credit Party or any of their Subsidiaries, other than those
described above, are issued and outstanding. 
Except as provided in Schedule 5.4(b), as
of the Amendment Effective Date, there are no preemptive or other outstanding
rights, options, warrants, conversion rights or similar agreements or understandings
for the purchase or acquisition from any Credit Party or any of their
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


 


47





















 


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 Holdings 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 of Holdings and its Subsidiaries, for the
Fiscal Year then ended, audited by KPMG LLP.


 


(b)           The consolidated balance sheet at September 30,
2005 and the related statement of income of Holdings and its Subsidiaries for
the three (3) months then ended.


 


The Projections delivered on or prior to the Amendment Effective Date
and in connection with this amendment and restatement and the updated
Projections delivered pursuant to Section 4.9(i) represent and
will represent as of the date thereof the good faith estimate of Borrowers and
their senior management concerning the most probable course of their business.


 


5.6.          Intellectual Property. 
Each of the Credit Parties and its Subsidiaries owns, is licensed to use
or otherwise has the right to use, all Intellectual Property used in or
necessary for the conduct of its business as currently conducted that is
material to the condition (financial or other), business or operations of such
Credit Party 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 Amendment
Effective 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 the Credit Parties’ knowledge the use of such Intellectual Property by the
Credit Parties and their 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.


 


5.7.          Investigations, Audits, Etc. 
As of the Amendment Effective Date, except as set forth on Schedule 5.7,
no Credit Party or 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
Amendment Effective Date, no Credit Party or Subsidiary of a Credit Party nor
any of their respective employees is subject to any collective bargaining
agreement, (b) as of the Amendment Effective Date, no petition for
certification or union election is pending with respect to the employees of any
Credit Party or any of their Subsidiaries and no union or collective bargaining
unit has sought such certification or recognition with respect to the employees
of any Credit Party or any of their Subsidiaries, (c) there are no
strikes, slowdowns, work stoppages or controversies pending or, to the
best knowledge of any Credit Party after due inquiry, threatened between any
Credit Party or any of their 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 each Credit Party and each of their 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


 


48





















 


on Schedule 5.8, as of the Amendment
Effective Date, neither Borrower nor any of its Subsidiaries is party to an
employment contract.


 


5.9.          Solvency.  Each of the
Credit Parties and its Subsidiaries is Solvent.


 


5.10.        Litigation; Adverse Facts. 
Except as set forth on Schedule 5.10, there are no judgments
outstanding against any Credit Party or any of its Subsidiaries or affecting
any property of any Credit Party or any of its Subsidiaries, nor is there any
Litigation pending, or to the best knowledge of any Credit Party threatened,
against any Credit Party 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, each Credit Party 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 U-1, as applicable, referred to in Regulation U.


 


(b)           Borrowers shall utilize the proceeds of the Loans solely
for the discharge and redemption of the Senior Unsecured Notes, prepayment of
premiums payable in connection therewith, payment of accrued interest on the
Senior Unsecured Notes, the redemption of the issued and outstanding shares of
Senior Preferred Stock, payment of transaction expenses relating to the
foregoing and for the financing of Borrowers’ ordinary working capital and
general corporate needs.  Schedule 5.11
contains a description of Borrowers’ sources and uses of funds as of the
Amendment Effective Date, including Loans and Letter of Credit Obligations to
be made or incurred on that date, and a funds flow memorandum detailing how
funds from each source are to be transferred for particular uses.


 


5.12.        Ownership of Property; Liens. 
As of the Amendment Effective Date, the real estate (together with any
real estate acquired by any Credit Party after the Amendment Effective 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 any
Credit Party or any of its Subsidiaries. 
Each of the Credit Parties 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 any Credit Party or any
of its Subsidiaries is a lessor, sublessor or assignor as of the Amendment
Effective Date.  As of the Amendment
Effective Date, each of the Credit Parties 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 Amendment Effective Date, none of
the properties and assets of any Credit Party or any of its Subsidiaries are
subject to any Liens other than Permitted Encumbrances, and there are no facts,
circumstances or conditions known to any Borrower that may result in any Liens
(including Liens arising under Environmental Laws) other than Permitted
Encumbrances against the properties or assets of any Credit Party or any of its
Subsidiaries.  Each of the Credit Parties
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 such Credit Party’s or


 


49





















 


Subsidiary’s right, title and interest in and to all
such Real Estate and other properties and assets, including, without
limitation, the Titled Vehicles.  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 Amendment Effective
Date.  As of the Amendment Effective
Date, no portion of any Credit Party’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 Amendment Effective 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.  The Liens granted to Agent, on behalf of
itself and the Lenders, pursuant to the Collateral Documents will at all times,
be fully perfected first priority Liens in and to the Collateral described
therein, subject, as to priority, only to Permitted Encumbrances.


 


5.13.        Environmental Matters.


 


(a)           Except as set forth in Schedule 5.13, as
of the Amendment Effective 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 the Credit Parties or their Subsidiaries in excess
of $100,000 in the aggregate; (ii) no Credit Party and no Subsidiary of a
Credit Party 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 the Credit Parties or their Subsidiaries in excess of $100,000
in the aggregate; (iii) the Credit Parties and their Subsidiaries are and
have been in compliance with all Environmental Laws, except for such
noncompliance that could not reasonably be expected to result in Environmental
Liabilities of the Credit Parties or their Subsidiaries in excess of $100,000
in the aggregate; (iv) the Credit Parties and their 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 the Credit Parties or their
Subsidiaries in excess of $100,000 in the aggregate, and all such Environmental
Permits are valid, uncontested and in good standing; (v) no Credit Party
and no Subsidiary of a Credit Party 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 such
Credit Party or Subsidiary that could reasonably be expected to be in excess of
$100,000 in the aggregate, and no Credit Party or Subsidiary of a Credit Party
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
$50,000 in the aggregate or injunctive relief against, or that alleges criminal
misconduct by any Credit Party or any Subsidiary of a Credit Party; (vii) no
notice has been received by any Credit Party or any Subsidiary of a Credit
Party identifying any of them as a “potentially responsible party” or
requesting information under CERCLA or analogous state statutes, and to the
knowledge of the Credit Parties, there are no facts, circumstances or
conditions that may result in any of the Credit Parties or their Subsidiaries
being identified as a “potentially responsible party” under CERCLA or analogous
state statutes; and (viii) the Credit Parties have provided to Agent
copies of all existing environmental reports prepared by or on behalf of any
Credit Party or in the possession or control of any Credit Party, reviews and
audits and all written information pertaining to actual or potential
Environmental Liabilities, in each case relating to any of the Credit Parties
or their Subsidiaries.


 


(b)           Each Credit Party hereby acknowledges and agrees that
Agent (i) is not now in control of any of the Real Estate or environmental
affairs of such Credit Party or its Subsidiaries, (ii)  to


 


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the best of such Credit Party’s knowledge, before the
possession or control by such Credit Party 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 any Credit
Party’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.


 


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. 
Copies of all such listed Plans, together with a copy of the latest form
IRS/DOL 5500-series for each such Plan in effect as of the Amendment Effective
Date have been delivered to Agent. 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 the Credit
Parties 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 any Credit Party nor 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 any Credit
Party nor 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 any 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 of any finder’s or brokerage fees in connection therewith other than
under the Management Services Agreements.


 


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5.16.        Deposit and Disbursement 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 Amendment Effective
Date, including any Disbursement Accounts, 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 Amendment Effective Date, each Credit Party has provided to
Agent or its counsel, on behalf of Lenders, accurate and complete copies (or
summaries) of all of the following agreements or documents to which it is
subject and each of which is listed in 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 Amendment
Effective 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.


 


5.19.        Omitted.


 


5.20.        Omitted.


 


5.21.        Taxes.  All Tax
returns required to be filed by the Credit Parties have been timely and
properly filed and all Taxes that are due (other than Taxes being contested in
good faith by appropriate proceedings and for which adequate reserves have been
provided in accordance with GAAP) have been paid, except where the failure to
file Tax returns or pay Taxes would not have a Material Adverse Effect.  No Governmental Authority has asserted any
claim for Taxes, or to any Credit Party’s knowledge, has threatened to assert
any claim for Taxes that would, if not paid by a Credit Party, have a Material
Adverse Effect.  All Taxes required by
law to be withheld or collected and remitted (including, without limitation,
income tax, unemployment insurance and workmen’s compensation premiums) with
respect to the Credit Parties have been withheld or collected and paid to the
appropriate Governmental Authorities (or are properly being held for such
payment), except for amounts the nonpayment of which would not be reasonably
likely to have a Material Adverse Effect. 
None of the Credit Parties has been notified that either the IRS or any
other Governmental Authority has raised or intends to raise any adjustments
with respect to Taxes of the Credit Parties, which adjustments would be
reasonably likely to have a Material Adverse Effect.


 


5.22.        Anti-Terrorism. 
Neither the borrowing of the Loans by Borrowers, nor any other Related
Transaction, nor the use of the respective proceeds thereof, shall cause the
Lenders or Agent to violate the U.S. Bank Secrecy Act, as amended, and any
applicable regulations thereunder or any of the sanctions programs administered
by the U.S. Department of the Treasury’s Office of Foreign Assets Control, (“OFAC”),
any regulations promulgated thereunder by OFAC or under any affiliated or
successor governmental or quasi-governmental office, bureau or agency and any
enabling legislation or executive order relating thereto.  Without limiting the foregoing, no Credit Party
(i) is a person whose property or interests in property are blocked or
subject to blocking pursuant to Section 1 of Executive Order 13224 of September 23,
200l Blocking Property and Prohibiting Transactions With Persons Who Commit,


 


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Threaten to Commit, or Support Terrorism (66 Fed. Reg.
49079 (2001)) or the Global Terrorism Sanctions Regulations, 31 C.F.R. Part 594,
(ii) engages in any dealings or transactions prohibited by Section 2
of such executive order, or be otherwise associated with any such person in any
manner violative of Section 2 or the Global Terrorism Sanctions
Regulations, 31 C.F.R. Part 594, or (iii) is a person on the list of
Specially Designated Nationals and Blocked Persons maintained by OFAC or
subject to the limitations or prohibitions under any other OFAC regulation or
OFAC-related executive order.  The Credit
Parties are in compliance, in all material respects, with the Uniting and
Strengthening of America by Providing the Appropriate Tools Required to
Intercept and Obstruct Terrorism Act of 2001 and 18 U.S.C. §§ 1956,
1957.  No part of the proceeds of the
Loans or Letters of Credit will be used, directly or indirectly, for any
payments to any governmental official or employee, political party, official of
a political party, candidate for political office, or anyone else acting in an
official capacity, in order to obtain, retain or direct business or obtain any
improper advantage, in violation of the United States Foreign Corrupt Practices
Act of 1977, as amended.


 


5.23.        Closing Availability and Leverage;
Capital Structure.  As of the Amendment Effective Date and after
giving effect to the funding of the Loans to be made and Letters of Credit to
be issued on the Amendment Effective Date, (i) Funded Debt of Holdings and
its Subsidiaries on a consolidated basis, after giving effect to the initial
fundings including issuances of Letters of Credit under the Amended and
Restated Credit Agreement and the incurrence of the Second Lien Debt and the
application of proceeds thereof, does not exceed $122,000,000, (ii) Borrower
shall have a minimum trailing twelve month EBITDA of not less than $26,800,000
for the most recently ended month for which financial statements are available,
(iii) the ratio of Funded Debt to EBITDA shall be less than 4.75:1.00 as
of the Amendment Effective Date, (iv) as of the Amendment Effective Date,
after giving effect to the consummation of the Related Transactions, Borrowing
Availability is not less than $15,000,000 and (v) Holdings owns 100% of
the Stock of Penhall, that Sponsor owns approximately 70% and that management
owns approximately 30% of the voting Stock of Holdings and that Holdings is
capitalized with approximately $28,600,000 in liquidation preference of preferred
stock plus accreted dividends (excluding the Senior Preferred Stock that is
being redeemed) and approximately $1,000,000 (in book value) of common stock.


 


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
to repay Revolving Loans to reduce their balance to the maximum amount of
Revolving Loans then permitted to be outstanding or to reimburse any L/C Issuer
for any payment made by such L/C Issuer under or in respect of any Letter of
Credit 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) Any
Credit Party 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 $100,000 or (2) breach
or default of any Credit Party or any of its Subsidiaries, or the occurrence of
any condition or event, with respect 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 individual


 


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principal amount in excess of $1,000,000 or having an
aggregate principal amount in excess of $1,000,000 to become or be declared due
prior to their stated maturity; or


 


(c)           Breach of Certain Provisions; Breach of Warranty. 
Failure of any Credit Party to perform or comply with any term or
condition contained in that portion of Section 2.2 relating to the
Credit Parties’ obligation to maintain insurance, Section 2.3, Section 3
or Section 4; or


 


(d)           Borrowing Base Certificate; Breach of Warranty. 
Any information contained in any Borrowing Base Certificate is untrue or
incorrect in any respect (other than inadvertent, immaterial errors not
exceeding $1,000,000 in the aggregate in any Borrowing Base Certificate), or
any representation or warranty herein or in any Loan Document or in any written
statement, report, financial statement or certificate (other than a Borrowing
Base 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
Representative of notice from Agent or Requisite Lenders of such default or (2) actual
knowledge of any 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, 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 (1) an amount in any individual case in excess of $300,000 or (2) an
amount in the aggregate at any time in excess of $700,000 (in either case to
the extent not adequately covered by insurance in Agent’s sole discretion 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


 


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(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 or Second Lien 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)            Damage; Casualty.  Any event
occurs, whether or not insured or insurable, as a result of which
revenue-producing activities cease or are substantially curtailed at any
facility of any Credit Party generating more than 10% of the consolidated
revenues of Holdings and its Subsidiaries for the Fiscal Year preceding such
event and such cessation or curtailment continues for more than 30 days; or


 


(m)          Business Activities.  Holdings
engages in any type of business activity other than the ownership of Stock of
Borrowers, ownership of Real Estate, performance of its obligations under the
Related Transaction Documents to which it is a party or any document governing
or evidencing Indebtedness incurred in connection with a Permitted Refinancing
of Second Lien Debt and, until the date forty-five (45) days following the
Amendment Effective Date, the Senior Unsecured Notes and Senior Unsecured Notes
Indenture.


 


(n)           Change of Control.  A Change of
Control occurs; or


 


(o)           Subordinated and Second Lien Indebtedness. 
The failure of any Credit Party or any creditor of any Borrower or any
of its Subsidiaries to comply with the terms of any subordination or
intercreditor agreement or any debt or lien subordination provisions of any
note or other document running to the benefit of Agent or Lenders, or if any
such document becomes null and void or any party denies further liability under
any such document or provides notice to that effect.


 


6.2.         Suspension or Termination of Commitments. 
Upon the occurrence of any Default or Event of Default, Agent may, and
at the request of Requisite Lenders Agent shall, without notice or demand,
immediately suspend or terminate all or any portion of Lenders’ obligations to
make additional Loans or issue or cause to be issued Letters of Credit under
the Revolving Loan Commitment; provided that,
in the case of a Default, if the subject condition or event is waived by
Requisite Lenders or cured within any applicable grace or cure period, the
Revolving Loan Commitment shall be reinstated.


 


6.3.         Acceleration and Other Remedies. 
Upon the occurrence of any Event of Default described in Sections 6.1(f) or
6.1(g), the Commitments shall be immediately terminated and all of the
Obligations, including the Revolving 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 (including for purposes of Section 10)
by Borrowers, and the Commitments shall thereupon terminate.  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 Representative (a) reduce
the aggregate amount of the Commitments from time to time, (b) 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, (c) terminate all or any portion of the
obligations of Agent, L/C Issuers and


 


55





















 


Lenders to make Revolving Credit Advances and issue
Letters of Credit, (d) demand that Borrowers immediately deliver cash to
Agent for the benefit of L/C Issuers (and Borrowers shall then immediately so
deliver) in an amount equal to 105% of the aggregate outstanding Letter of
Credit Obligations and (e) exercise any other remedies which may be
available under the Loan Documents or applicable law.  Borrowers hereby grant to Agent, for the
benefit of L/C Issuers and each Lender with a participation in any Letters of
Credit then outstanding, a security interest in such cash collateral to secure
all of the Letter of Credit Obligations. 
Any such cash collateral shall be made available by Agent to L/C Issuers
to reimburse L/C Issuers for payments of drafts drawn under such Letters of
Credit and any Fees, Charges and expenses of L/C Issuers with respect to such
Letters of Credit and the unused portion thereof, after all such Letters of
Credit shall have expired or been fully drawn upon, shall be applied to repay
any other Obligations.  After all such
Letters of Credit shall have expired or been fully drawn upon and all
Obligations shall have been satisfied and paid in full, the balance, if any, of
such cash collateral shall be returned to Borrowers.  Borrowers shall from time to time execute and
deliver to Agent such further documents and instruments as Agent may request
with respect to such cash collateral.


 


6.4.         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 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 1.2(d) 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.


 


6.5.         Application of Proceeds. 
Notwithstanding anything to the contrary contained in this Agreement,
upon the occurrence and during the continuance of an Event of Default all
payments shall be applied as set forth in Section 1.12(c).


 


SECTION 7.



CONDITIONS TO LOANS


 


The effectiveness of the
amendment and restatement of the Existing Credit Agreement and the obligations
of Lenders and L/C Issuers to make Loans and to issue or cause to be issued
Letters of Credit in each case, from and after the Amendment Effective Date,
are subject to satisfaction of all of the applicable conditions set forth
below.


 


7.1.         Conditions to Initial Loans. 
The effectiveness of the amendment and restatement of the Existing
Credit Agreement and the obligations of Lenders and L/C Issuers to make the
initial Loans and to issue or cause to be issued Letters of Credit on the
Amendment Effective Date are, in addition to the conditions precedent specified
in Section 7.2, 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, all in form and substance, or in a manner, satisfactory to Agent and
Lenders.


 


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7.2.         Conditions to All Loans. 
Except as otherwise expressly provided herein, no Lender or L/C Issuer
shall be obligated to fund any Advance or incur any Letter of Credit
Obligation, if, as of the date thereof (the “Funding Date”):


 


(a)           any representation or warranty by any Credit Party
contained herein or in any other Loan Document is untrue or incorrect in any
material respect (without duplication of any materiality qualifier contained
therein) as of such date, except to the extent that such representation or
warranty expressly relates to an earlier date, and Agent or Requisite Lenders
have determined not to make such Advance or incur such Letter of Credit
Obligation as a result of the fact that such warranty or representation is
untrue or incorrect;


 


(b)           any Default or Event of Default has occurred and is
continuing or would result after giving effect to any Advance (or the incurrence
of any Letter of Credit Obligation), and Agent or Requisite Lenders shall have
determined not to make any Advance or incur any Letter of Credit Obligation as
a result of that Default or Event of Default; or


 


(c)           after giving effect to any Advance (or the incurrence
of any Letter of Credit Obligations), (i) the outstanding amount of the
aggregate Revolving Loan would exceed remaining Borrowing Availability (except
as provided in Section 1.1(a)(ii)) or (ii) the outstanding
amount of the Revolving Loan of the applicable Borrower would exceed such
Borrower’s separate Borrowing Base less the outstanding amount of the Swing
Line Loan to that Borrower.


 


The request and acceptance by any Borrower of the proceeds of any
Advance, the incurrence of any Letter of Credit Obligations or the conversion
or continuation of any Loan into, or as, a LIBOR Loan shall be deemed to
constitute, as of the date thereof, (i) a representation and warranty by
Credit Parties that the conditions in this Section 7.2 have been
satisfied and (ii) a reaffirmation by Borrowers of the cross guaranty
provisions set forth in Section 10 and of the granting and
continuance of Agent’s Liens, on behalf of itself and Lenders, pursuant to the
Collateral Documents.


 


SECTION 8.



ASSIGNMENT AND PARTICIPATION


 


8.1.         Assignment and Participations.


 


(a)           Subject to the terms of this Section 8.1,
any Lender may make an assignment to a Qualified Assignee of, or sale of
participations in, at any time or times, the Loan Documents, Loans, Letter of
Credit Obligations and any Commitment or any portion thereof or interest
therein, including any Lender’s rights, title, interests, remedies, powers or
duties thereunder.  Any assignment by a
Lender shall:  (i) require the
consent of Agent (which consent shall not be unreasonably withheld or delayed
with respect to a Qualified Assignee) and the execution of an assignment
agreement (an “Assignment Agreement” substantially in the form attached
hereto as Exhibit 8.1 and otherwise in form and substance
reasonably satisfactory to, and acknowledged by, Agent); (ii) be
conditioned on such assignee Lender representing to the assigning Lender and
Agent that it is purchasing the applicable Loans to be assigned to it for its
own account, for investment purposes and not with a view to the distribution
thereof; (iii) after giving effect to any such partial assignment, the
assignee Lender shall have Commitments in an amount at least equal to
$5,000,000 and the assigning Lender shall have
retained Commitments in an amount at least equal to $5,000,000; and (iv) require
a payment to Agent of an assignment fee of $3,500.  Notwithstanding the above, Agent may in its
sole and absolute discretion permit any assignment by a Lender to a Person or
Persons that are not Qualified Assignees. 
In the case of an assignment by a Lender under this Section 8.1,
the assignee shall have, to the extent of such assignment, the same rights,
benefits


 


57





















 


and obligations as all other Lenders hereunder.  The assigning Lender shall be relieved of its
obligations hereunder with respect to its Commitments or assigned portion
thereof from and after the date of such assignment.  Borrowers hereby acknowledge and agree that
any assignment shall give rise to a direct obligation of Borrowers to the
assignee and that the assignee shall be considered to be a “Lender.”  In all instances, each Lender’s liability to
make Loans hereunder shall be several and not joint and shall be limited to
such Lender’s Pro Rata Share of the applicable Commitment.  In the event Agent or any Lender assigns or
otherwise transfers all or any part of the Obligations, Agent or any such
Lender shall so notify Borrowers and Borrowers shall, upon the request of Agent
or such Lender, execute new Notes in exchange for the Notes, if any, being
assigned.  Notwithstanding the foregoing
provisions of this Section 8.1(a), (a) any Lender may at any
time pledge the Obligations held by it and such Lender’s rights under this
Agreement and the other Loan Documents to a Federal Reserve Bank, (b) any
Lender that is an investment fund may assign the Obligations held by it and
such Lender’s rights under this Agreement and the other Loan Documents to
another investment fund managed by the same investment advisor or pledge such
Obligations and rights to trustee for the benefit of its investors and (c) any
Lender may assign the Obligations to an Affiliate of such Lender or to a Person
that is a Lender prior to the date of such assignment.


 


(b)           Any participation by a Lender of all or any part of
its Commitments shall be made with the understanding that all amounts payable
by Borrowers hereunder shall be determined as if that Lender had not sold such
participation, and that the holder of any such participation shall not be entitled
to require such Lender to take or omit to take any action hereunder except
actions directly affecting (i) any reduction in the principal amount of,
or interest rate or Fees payable with respect to, any Loan in which such holder
participates, (ii) any extension of the scheduled amortization of the
principal amount of any Loan in which such holder participates or the final
maturity date thereof, and (iii) any release of all or substantially all
of the Collateral (other than in accordance with the terms of this Agreement,
the Collateral Documents or the other Loan Documents).  Solely for purposes of Sections 1.10,
1.11, 8.3 and 9.1, Borrowers acknowledge and agree that a participation
shall give rise to a direct obligation of Borrowers to the participant and the
participant shall be considered to be a “Lender.”  Except as set forth in the preceding sentence
no Borrower or any other Credit Party shall have any obligation or duty to any
participant.  Neither Agent nor any
Lender (other than the Lender selling a participation) shall have any duty to
any participant and may continue to deal solely with the Lender selling a
participation as if no such sale had occurred.


 


(c)           Except as expressly provided in this Section 8.1,
no Lender shall, as between Borrowers and that Lender, or Agent and that
Lender, be relieved of any of its obligations hereunder as a result of any
sale, assignment, transfer or negotiation of, or granting of participation in,
all or any part of the Loans, the Notes or other Obligations owed to such
Lender.


 


(d)           Each Credit Party shall assist each Lender permitted
to sell assignments or participations under this Section 8.1 as
required to enable the assigning or selling Lender to effect any such
assignment or participation, including the execution and delivery of any and
all agreements, notes and other documents and instruments as shall be requested
and the prompt preparation of informational materials for, and the
participation of management in meetings with, potential assignees or
participants, all on a timetable established by Agent in its sole
discretion.  Each Credit Party executing
this Agreement shall certify the correctness, completeness and accuracy of all
descriptions of the Credit Parties and their respective affairs contained in
any selling materials provided by it and all other information provided by it
and included in such materials, except that any Projections delivered by
Borrowers shall only be certified by Borrowers as having been prepared by
Borrowers in compliance with the representations contained in Section 5.5.  Agent shall maintain, on behalf of Borrowers,
in its offices located at 299 Park Avenue, New York, New York 10171 a “register”
for recording the name, address, commitment and Loans owing to each
Lender.  The entries in such register
shall be presumptive evidence of the amounts due and owing to


 


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each Lender in the absence of manifest error.  Borrowers, Agent and each Lender may treat
each Person whose name is recorded in such register pursuant to the terms
hereof as a Lender for all purposes of this Agreement.  The register described herein shall be
available for inspection by Borrower and any Lender, at any reasonable time
upon reasonable prior notice.


 


(e)           A Lender may furnish any information concerning Credit
Parties in the possession of such Lender from time to time to assignees and
participants (including prospective assignees and participants); provided that such Lender shall obtain from assignees or
participants confidentiality covenants substantially equivalent to those
contained in Section 9.13.


 


(f)            So long as no Event of Default has occurred and is
continuing, no Lender shall assign or sell participations in any portion of its
Loans or Commitments to a potential Lender or participant, if, as of the date
of the proposed assignment or sale, the assignee Lender or participant would be
eligible to demand payment in respect of capital adequacy or similar
requirements under Section 1.10(a), to demand increased costs or be
entitled not to fund LIBOR Loans under Section 1.10(b), or would
subject Credit Parties to increased costs in accordance with Section 1.11.


 


8.2.         Agent.


 


(a)           Appointment.  Each Lender
hereby designates and appoints GE Capital as its Agent under this Agreement and
the other Loan Documents, and each Lender hereby irrevocably authorizes Agent
to execute and deliver the Collateral Documents and to take such action or to
refrain from taking such action on its behalf under the provisions of this
Agreement and the other Loan Documents and to exercise such powers as are set
forth herein or therein, together with such other powers as are reasonably
incidental thereto.  Agent is authorized
and empowered to amend, modify, or waive any provisions of this Agreement or
the other Loan Documents on behalf of Lenders subject to the requirement that
certain of Lenders’ consent be obtained in certain instances as provided in
this Section 8.2 and Section 9.2.  The provisions of this Section 8.2
are solely for the benefit of Agent and Lenders and neither Borrowers nor any
other Credit Party shall have any rights as a third party beneficiary of any of
the provisions hereof.  In performing its
functions and duties under this Agreement, Agent shall act solely as agent of
Lenders and does not assume and shall not be deemed to have assumed any
obligation toward or relationship of agency or trust with or for Borrowers or
any other Credit Party.  Agent may
perform any of its duties hereunder, or under the Loan Documents, by or through
its agents or employees.  By signing in
the spaces below, the Lenders hereby authorize and direct GE Capital, in its
capacity as Agent for the Lenders, to execute and deliver the Collateral
Documents.


 


(b)           Nature of Duties.  The duties of
Agent shall be mechanical and administrative in nature.  Agent shall not have by reason of this
Agreement a fiduciary relationship in respect of any Lender.  Nothing in this Agreement or any of the Loan
Documents, express or implied, is intended to or shall be construed to impose
upon Agent any obligations in respect of this Agreement or any of the Loan
Documents except as expressly set forth herein or therein.  Each Lender shall make its own independent
investigation of the financial condition and affairs of each Credit Party in
connection with the extension of credit hereunder and shall make its own
appraisal of the creditworthiness of each Credit Party, and Agent shall have no
duty or responsibility, either initially or on a continuing basis, to provide
any Lender with any credit or other information with respect thereto (other
than as expressly required herein).  If
Agent seeks the consent or approval of any Lenders to the taking or refraining
from taking any action hereunder, then Agent shall send notice thereof to each Lender.  Agent shall promptly notify each Lender any
time that the Requisite Lenders or Supermajority Revolving Lenders have
instructed Agent to act or refrain from acting pursuant hereto.


 


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(c)           Rights, Exculpation, Etc. 
Neither Agent nor any of its officers, directors, employees or agents
shall be liable to any Lender for any action taken or omitted by them hereunder
or under any of the Loan Documents, or in connection herewith or therewith,
except that Agent shall be liable to the extent of its own gross negligence or
willful misconduct as determined by a final non-appealable order by a court of
competent jurisdiction.  Agent shall not
be liable for any apportionment or distribution of payments made by it in good
faith and if any such apportionment or distribution is subsequently determined
to have been made in error the sole recourse of any Lender to whom payment was
due but not made, shall be to recover from other Lenders any payment in excess
of the amount to which they are determined to be entitled (and such other
Lenders hereby agree to return to such Lender any such erroneous payments
received by them).  In no event shall
Agent be liable for punitive, special, consequential, incidental, exemplary or
other similar damages.  In performing its
functions and duties hereunder, Agent shall exercise the same care which it
would in dealing with loans for its own account, but neither Agent nor any of
its agents or representatives shall be responsible to any Lender for any
recitals, statements, representations or warranties herein or for the
execution, effectiveness, genuineness, validity, enforceability,
collectibility, or sufficiency of this Agreement or any of the Loan Documents
or the transactions contemplated thereby, or for the financial condition of any
Credit Party.  Agent shall not be
required to make any inquiry concerning either the performance or observance of
any of the terms, provisions or conditions of this Agreement or any of the Loan
Documents or the financial condition of any Credit Party, or the existence or
possible existence of any Default or Event of Default.  Agent may at any time request instructions
from Requisite Lenders, Supermajority Revolving Lenders or all affected Lenders
with respect to any actions or approvals which by the terms of this Agreement
or of any of the Loan Documents Agent is permitted or required to take or to
grant.  If such instructions are promptly
requested, Agent shall be absolutely entitled to refrain from taking any action
or to withhold any approval and shall not be under any liability whatsoever to
any Person for refraining from any action or withholding any approval under any
of the Loan Documents until it shall have received such instructions from the
Requisite Lenders, Supermajority Revolving Lenders or such other portion of the
Lenders as shall be prescribed by this Agreement.  Without limiting the foregoing, no Lender
shall have any right of action whatsoever against Agent as a result of Agent
acting or refraining from acting under this Agreement or any of the other Loan
Documents in accordance with the instructions of Requisite Lenders,
Supermajority Revolving Lenders or all affected Lenders, as applicable; and,
notwithstanding the instructions of Requisite Lenders, Supermajority Revolving
Lenders or all affected Lenders, as applicable, Agent shall have no obligation
to take any action if it believes, in good faith, that such action is deemed to
be illegal by Agent or exposes Agent to any liability for which it has not
received satisfactory indemnification in accordance with Section 8.2(e).


 


(d)           Reliance.  Agent shall
be entitled to rely, and shall be fully protected in relying, upon any written
or oral notices, statements, certificates, orders or other documents or any
telephone message or other communication (including any writing, telex, fax or
telegram) believed by it in good faith to be genuine and correct and to have
been signed, sent or made by the proper Person, and with respect to all matters
pertaining to this Agreement or any of the Loan Documents and its duties
hereunder or thereunder.  Agent shall be
entitled to rely upon the advice of legal counsel, independent accountants, and
other experts selected by Agent in its sole discretion.


 


(e)           Indemnification.  Lenders will
reimburse and indemnify Agent for and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including, without limitation, attorneys’ fees and expenses),
advances or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by, or asserted against Agent in any way relating to or arising
out of this Agreement or any of the Loan Documents or any action taken or
omitted by Agent under this Agreement or any of the Loan Documents, in
proportion to each Lender’s Pro Rata Share, but only to the extent that any of
the foregoing is not reimbursed by Borrowers; provided,
however, that no Lender shall be liable
for any portion of such liabilities, obligations, losses, damages, penalties,
actions,


 


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judgments, suits, costs, expenses, advances or
disbursements to the extent resulting from Agent’s gross negligence or willful
misconduct as determined by a final non-appealable order by a court of
competent jurisdiction.  If any indemnity
furnished to Agent for any purpose shall, in the opinion of Agent, be
insufficient or become impaired, Agent may call for additional indemnity and cease,
or not commence, to do the acts indemnified against even if so directed by the
Requisite Lenders, Supermajority Revolving Lenders or such other portion of the
Lenders as shall be prescribed by this Agreement until such additional
indemnity is furnished.  The obligations
of Lenders under this Section 8.2(e) shall survive the payment
in full of the Obligations and the termination of this Agreement.


 


(f)            GE Capital Individually.  With respect
to its Commitments hereunder, GE Capital shall have and may exercise the same
rights and powers hereunder and is subject to the same obligations and
liabilities as and to the extent set forth herein for any other Lender.  The terms “Lenders”, “Requisite Lenders”, “Supermajority
Revolving Lenders” or any similar terms shall, unless the context clearly otherwise
indicates, include GE Capital in its individual capacity as a Lender or one of
the Requisite Lenders or Supermajority Revolving Lenders.  GE Capital, either directly or through
strategic affiliations, may lend money to, acquire equity or other ownership
interests in, provide advisory services to and generally engage in any kind of
banking, trust or other business with any Credit Party as if it were not acting
as Agent pursuant hereto and without any duty to account therefor to Lenders.  GE Capital, either directly or through
strategic affiliations, may accept fees and other consideration from any Credit
Party for services in connection with this Agreement or otherwise without
having to account for the same to Lenders.


 


(g)           Successor Agent.


 


(i)            Resignation.  Agent may
resign from the performance of all its agency functions and duties hereunder at
any time by giving at least thirty (30) Business Days’ prior written notice to
Borrower Representative and Lenders. 
Such resignation shall take effect upon the acceptance by a successor
Agent of appointment pursuant to clause (ii) below or as otherwise
provided in clause (ii) below.


 


(ii)           Appointment of Successor. 
Upon any such notice of resignation pursuant to clause (i) above,
Requisite Lenders shall appoint a successor Agent which, unless an Event of
Default has occurred and is continuing, shall be reasonably acceptable to
Borrowers.  If a successor Agent shall
not have been so appointed within the thirty (30) Business Day period referred
to in clause (i) above, the retiring Agent, upon notice to Borrower
Representative, shall then appoint a successor Agent who shall serve as Agent
until such time, if any, as Requisite Lenders appoint a successor Agent as
provided above.


 


(iii)          Successor Agent.  Upon the acceptance
of any appointment as Agent under the Loan Documents by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations under the Loan
Documents.  After any retiring Agent’s
resignation as Agent, the provisions of this Section 8.2 shall
continue to inure to its benefit as to any actions taken or omitted to be taken
by it in its capacity as Agent.


 


(h)           Collateral Matters.


 


(i)            Release of Collateral.  Lenders
hereby irrevocably authorize Agent, at its option and in its discretion, to
release any Lien granted to or held by Agent upon any Collateral (x) upon
the Termination Date or (y) constituting property being sold or disposed
of if Borrowers (or any of them)


 


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certify to Agent that the sale or disposition is made
in compliance with the provisions of this Agreement (and Agent may rely in good
faith conclusively on any such certificate, without further inquiry).


 


(ii)           Confirmation of Authority; Execution of Releases. 
Without in any manner limiting Agent’s authority to act without any
specific or further authorization or consent by Lenders (as set forth in Section 8.2(h)(i)),
each Lender agrees to confirm in writing, upon request by Agent or Borrower
Representative, the authority to release any Collateral conferred upon Agent
under clauses (x) and (y) of Section 8.2(h)(i).  Upon receipt by Agent of any required
confirmation from the Requisite Lenders of its authority to release any
particular item or types of Collateral, and upon at least ten (10) Business
Days’ prior written request by Borrower Representative, Agent shall (and is
hereby irrevocably authorized by Lenders to) execute such documents as may be
necessary to evidence the release of the Liens granted to Agent upon such
Collateral; provided, however,
that (x) Agent shall not be required to execute any such document on terms
which, in Agent’s opinion, would expose Agent to liability or create any
obligation or entail any consequence other than the release of such Liens
without recourse or warranty, and (y) such release shall not in any manner
discharge, affect or impair the Obligations or any Liens upon (or obligations
of any Credit Party, in respect of), all interests retained by any Credit
Party, including the proceeds of any sale, all of which shall continue to
constitute part of the Collateral.


 


(iii)          Absence of Duty.  Agent shall
have no obligation whatsoever to any Lender, L/C Issuer or any other Person to
assure that the property covered by the Collateral Documents exists or is owned
by Borrowers or any other Credit Party or is cared for, protected or insured or
has been encumbered or that the Liens granted to Agent have been properly or
sufficiently or lawfully created, perfected, protected or enforced or are
entitled to any particular priority, or to exercise at all or in any particular
manner or under any duty of care, disclosure or fidelity, or to continue
exercising, any of the rights, authorities and powers granted or available to
Agent in this Section 8.2(h) or in any of the Loan Documents,
it being understood and agreed that in respect of the property covered by the
Collateral Documents or any act, omission or event related thereto, Agent may
act in any manner it may deem appropriate, in its discretion, given Agent’s own
interest in property covered by the Collateral Documents as one of the Lenders
and that Agent shall have no duty or liability whatsoever to any of the other
Lenders, provided that Agent shall exercise the
same care which it would in dealing with loans for its own account.


 


(i)            Agency for Perfection.  Agent and
each Lender hereby appoint each other Lender as agent for the purpose of
perfecting Agent’s security interest in assets which, in accordance with the
Code in any applicable jurisdiction, can be perfected by possession or
control.  Should any Lender (other than
Agent) obtain possession or control of any such assets, such Lender shall
notify Agent thereof, and, promptly upon Agent’s request therefor, shall
deliver such assets to Agent or in accordance with Agent’s instructions or
transfer control to Agent in accordance with Agent’s instructions.  Each Lender agrees that it will not have any
right individually to enforce or seek to enforce any Collateral Document or to
realize upon any collateral security for the Loans unless instructed to do so
by Agent in writing, it being understood and agreed that such rights and
remedies may be exercised only by Agent.


 


(j)            Notice of Default.  Agent shall
not be deemed to have knowledge or notice of the occurrence of any Default or
Event of Default except with respect to defaults in the payment of principal,
interest and Fees required to be paid to Agent for the account of Lenders,
unless Agent shall have received written notice from a Lender or Borrower
Representative referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a “notice of default”.  Agent will use reasonable efforts to notify
each Lender of its receipt of any such notice, unless such notice is with
respect to defaults in the payment of principal, interest and fees, in which
case Agent will notify each Lender of its receipt of such notice.  Agent shall take such action with respect to
such Default or Event of


 


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Default as may be requested by Requisite Lenders in
accordance with Section 6. 
Unless and until Agent has received any such request, Agent may (but
shall not be obligated to) take such action, or refrain from taking such
action, with respect to such Default or Event of Default as it shall deem
advisable or in the best interests of Lenders.


 


(k)           Lender Actions against Collateral. 
Each Lender agrees that it will not take any action, nor institute any
actions or proceedings, with respect to the Loans, against any Borrower or any
Credit Party hereunder or under the other Loan Documents or against any of the
Real Estate encumbered by Mortgages without the consent of the Requisite
Lenders.  With respect to any action by
Agent to enforce the rights and remedies of Agent and the Lenders under this
Agreement and the other Loan Documents, each Lender hereby consents to the
jurisdiction of the court in which such action is maintained, and agrees to
deliver its Notes to Agent to the extent necessary to enforce the rights and
remedies of Agent for the benefit of the Lenders under the Mortgages in
accordance with the provisions hereof.


 


8.3.         Set Off and Sharing of Payments. 
In addition to any rights now or hereafter granted under applicable law
and not by way of limitation of any such rights, during the continuance of any
Event of Default, each Lender is hereby authorized by Borrowers at any time or
from time to time, with reasonably prompt subsequent notice to Borrower
Representative (any prior or contemporaneous notice being hereby expressly
waived) to set off and to appropriate and to apply any and all (A) balances
held by such Lender at any of its offices for the account of any Borrower or
any of its Subsidiaries (regardless of whether such balances are then due to
Borrower or its Subsidiaries), and (B) other property at any time held or
owing by such Lender to or for the credit or for the account of any Borrower or
any of its Subsidiaries, against and on account of any of the Obligations;
except that no Lender shall exercise any such right without the prior written
consent of Agent.  Any Lender exercising
a right to set off shall purchase for cash (and the other Lenders shall sell)
interests in each of such other Lender’s Pro Rata Share of the Obligations as
would be necessary to cause all Lenders to share the amount so set off with
each other Lender in accordance with their respective Pro Rata Shares.  Borrowers agree, to the fullest extent
permitted by law, that any Lender may exercise its right to set off with
respect to amounts in excess of its Pro Rata Share of the Obligations and upon
doing so shall deliver such amount so set off to Agent for the benefit of all
Lenders in accordance with their Pro Rata Shares.


 


8.4.         Disbursement of Funds. 
Agent may, on behalf of Lenders, disburse funds to Borrowers for Loans
requested.  Each Lender shall reimburse
Agent on demand for all funds disbursed on its behalf by Agent, or if Agent so
requests, each Lender will remit to Agent its Pro Rata Share of any Loan before
Agent disburses same to Borrowers.  If
Agent elects to require that each Lender make funds available to Agent prior to
a disbursement by Agent to Borrowers, Agent shall advise each Lender by
telephone or fax of the amount of such Lender’s Pro Rata Share of the Loan
requested by Borrower Representative no later than 1:00 p.m. (New York
time) on the Funding Date applicable thereto, and each such Lender shall pay
Agent such Lender’s Pro Rata Share of such requested Loan, in same day funds,
by wire transfer to Agent’s account on such Funding Date.  If any Lender fails to pay the amount of its
Pro Rata Share within one (1) Business Day after Agent’s demand, Agent
shall promptly notify Borrower Representative, and Borrowers shall immediately
repay such amount to Agent.  Any
repayment required pursuant to this Section 8.4 shall be without
premium or penalty.  Nothing in this Section 8.4
or elsewhere in this Agreement or the other Loan Documents, including the
provisions of Section 8.5, shall be deemed to require Agent to
advance funds on behalf of any Lender or to relieve any Lender from its
obligation to fulfill its commitments hereunder or to prejudice any rights that
Agent or Borrowers may have against any Lender as a result of any default by
such Lender hereunder.


 


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8.5.         Disbursements of Advances; Payment.


 


(a)           Advances; Payments.


 


(i)            Revolving Lenders shall refund or participate in the
Swing Line Loan in accordance with clauses (iii) and (iv) of Section 1.1(c).  If the Swing Line Lender declines to make a
Swing Line Loan or if Swing Line Availability is zero, Agent shall notify
Revolving Lenders, promptly after receipt of a Notice of Revolving Credit
Advance and in any event prior to 1:00 p.m. (New York time) on the date
such Notice of a Revolving Credit Advance is received, by fax, telephone or
other similar form of transmission.  Each
Revolving Lender shall make the amount of such Lender’s Pro Rata Share of such
Revolving Credit Advance available to Agent in same day funds by wire transfer
to Agent’s account as set forth in Section 1.1(e) not later
than 3:00 p.m. (New York time) on the
requested Funding Date in the case of an Index Rate Loans and not later than
11:00 a.m. (New York time) on the requested Funding Date in the case of a
LIBOR Loan.  After receipt of such wire
transfers (or, in Agent’s sole discretion, before receipt of such wire
transfers), subject to the terms hereof, Agent shall make the requested
Revolving Credit Advance to Borrowers as designated by Borrower Representative
in the Notice of Revolving Credit Advance. 
All payments by each Revolving Lender shall be made without setoff,
counterclaim or deduction of any kind.


 


(ii)           At least once each calendar week or more frequently at
Agent’s election (each, a “Settlement Date”), Agent shall advise each
Lender by telephone or fax of the amount of such Lender’s Pro Rata Share of
principal, interest and Fees paid for the benefit of Lenders with respect to
each applicable Loan.  Provided that each
Lender has funded all payments and Advances required to be made by it and
purchased all participations required to be purchased by it under this
Agreement and the other Loan Documents as of such Settlement Date, Agent shall
pay to each Lender such Lender’s Pro Rata Share of principal, interest and Fees
paid by Borrowers since the previous Settlement Date for the benefit of such
Lender on the Loans held by it. Such payments shall be made by wire transfer to
such Lender’s account (as specified by such Lender in Annex E or the
applicable Assignment Agreement) not later than 2:00 p.m. (New York time)
on the next Business Day following each Settlement Date. To the extent that any
Lender (a “Non-Funding Lender”) has failed to fund all such payments and
Advances or failed to fund the purchase of all such participations, Agent shall
be entitled to set off the funding shortfall against that Non-Funding Lender’s
Pro Rata Share of all payments received from Borrowers.


 


(b)           Availability of Lender’s Pro Rata Share. 
Agent may assume that each Revolving Lender will make its Pro Rata Share
of each Revolving Credit Advance available to Agent on each Funding Date.  If such Pro Rata Share is not, in fact, paid
to Agent by such Revolving Lender when due, Agent will be entitled to recover
such amount on demand from such Revolving Lender without setoff, counterclaim
or deduction of any kind.  If any
Revolving Lender fails to pay the amount of its Pro Rata Share forthwith upon
Agent’s demand, Agent shall promptly notify Borrower Representative and
Borrowers shall immediately repay such amount to Agent.  Nothing in this Section 8.5(b) or
elsewhere in this Agreement or the other Loan Documents shall be deemed to
require Agent to advance funds on behalf of any Revolving Lender or to relieve
any Revolving Lender from its obligation to fulfill its Commitments hereunder
or to prejudice any rights that Borrowers may have against any Revolving Lender
as a result of any default by such Revolving Lender hereunder.  To the extent that Agent advances funds to
Borrowers on behalf of any Revolving Lender and is not reimbursed therefor on
the same Business Day as such Advance is made, Agent shall be entitled to
retain for its account all interest accrued on such Advance until reimbursed by
the applicable Revolving Lender.


 


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(c)           Return of Payments.


 


(i)            If Agent pays an amount to a Lender under this
Agreement in the belief or expectation that a related payment has been or will
be received by Agent from Borrowers and such related payment is not received by
Agent, then Agent will be entitled to recover such amount from such Lender on
demand without setoff, counterclaim or deduction of any kind.


 


(ii)           If Agent determines at any time that any amount
received by Agent under this Agreement must be returned to any Borrower or paid
to any other Person pursuant to any insolvency law or otherwise, then,
notwithstanding any other term or condition of this Agreement or any other Loan
Document, Agent will not be required to distribute any portion thereof to any
Lender.  In addition, each Lender will
repay to Agent on demand any portion of such amount that Agent has distributed
to such Lender, together with interest at such rate, if any, as Agent is
required to pay to any Borrower or such other Person, without setoff,
counterclaim or deduction of any kind.


 


(d)           Non-Funding Lenders.  The failure
of any Non-Funding Lender to make any Revolving Credit Advance or any payment
required by it hereunder, or to purchase any participation in any Swing Line
Loan or Letter of Credit Obligation to be made or purchased by it on the date
specified therefor shall not relieve any other Lender (each such other
Revolving Lender, an “Other Lender”) of its obligations to make such
Advance or purchase such participation on such date, but neither any Other
Lender nor Agent shall be responsible for the failure of any Non-Funding Lender
to make an Advance, purchase a participation or make any other payment required
hereunder.  Notwithstanding anything set
forth herein to the contrary, a Non-Funding Lender shall not have any voting or
consent rights under or with respect to any Loan Document or constitute a “Lender”
or a “Revolving Lender” (or be included in the calculation of “Requisite
Lenders” or “Supermajority Revolving Lenders” hereunder) for any voting or
consent rights under or with respect to any Loan Document.


 


(e)           Dissemination of Information. 
Agent shall use reasonable efforts to provide Lenders with any notice of
Default or Event of Default received by Agent from, or delivered by Agent to,
any Credit Party, with notice of any Event of Default of which Agent has
actually become aware and with notice of any action taken by Agent following
any Event of Default; provided, that
Agent shall not be liable to any Lender for any failure to do so.


 


(f)            Actions in Concert.  Anything in
this Agreement to the contrary notwithstanding, each Lender hereby agrees with
each other Lender that no Lender shall take any action to protect or enforce
its rights arising out of this Agreement or the Notes (including exercising any
rights of setoff) without first obtaining the prior written consent of Agent
and Requisite Lenders, it being the intent of Lenders that any such action to
protect or enforce rights under this Agreement and the Notes shall be taken in
concert and at the direction or with the consent of Agent or Requisite Lenders.  Agent is authorized to issue all notices to
be issued by or on behalf of the Lenders under the Intercreditor Agreement or
with respect to the Second Lien Debt.


 


SECTION 9.



MISCELLANEOUS


 


9.1.         Indemnities. 
Borrowers agree, jointly and severally, to indemnify, pay, and hold
Agent, each Lender, each L/C Issuer and their respective officers, directors,
employees, agents, and attorneys (the “Indemnitees”) harmless from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, claims, costs and expenses (including all reasonable
fees and expenses of counsel to such Indemnitees) of any kind or nature
whatsoever that may be imposed on,


 


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incurred by, or asserted against the Indemnitee as a
result of such Indemnitees being a party to this Agreement or the transactions
consummated pursuant to this Agreement or otherwise relating to any of the
Related Transactions; provided, that
Borrowers shall have no obligation to an Indemnitee hereunder with respect to
liabilities to the extent resulting from the gross negligence or willful
misconduct of that Indemnitee as determined by a court of competent
jurisdiction.  If and to the extent that
the foregoing undertaking may be unenforceable for any reason, Borrowers agree
to make the maximum contribution to the payment and satisfaction thereof which
is permissible under applicable law.


 


9.2.         Amendments and Waivers.


 


(a)           Except for actions expressly permitted to be taken by
Agent, no amendment, modification, termination or waiver of any provision of
this Agreement or any other Loan Document, or any consent to any departure by
any Credit Party therefrom, shall in any event be effective unless the same
shall be in writing and signed by Borrowers, and by Requisite Lenders,
Supermajority Revolving Lenders or all affected Lenders, as applicable.  Except as set forth in clauses (b) and (c) below,
all such amendments, modifications, terminations or waivers requiring the
consent of any Lenders shall require the written consent of Requisite Lenders.


 


(b)           No amendment, modification, termination or waiver of
or consent with respect to any provision of this Agreement that increases the
percentage advance rates set forth in the definition of the Holdings Borrowing
Base Certificate, Penhall Borrowing Base, the Bob Mack Borrowing Base, the
Capital Borrowing Base or the Penhall Leasing Borrowing Base, or that makes
less restrictive the nondiscretionary criteria for exclusion from Eligible
Accounts, Eligible Short-Term Rentals, Eligible Parts and Supplies and Eligible
Equipment set forth in Exhibits 4.9(e)(i), 4.9(e)(ii), and 4.9(e)(iii) and
from Eligible Real Estate set forth in Exhibit 4.9(e)(iv), shall be
effective unless the same shall be in writing and signed by Agent,
Supermajority Revolving Lenders and Borrowers. 
No amendment, modification, termination or waiver of or consent with
respect to any provision of this Agreement that waives compliance with the
conditions precedent set forth in Section 7.2 to the making of any
Loan or the incurrence of any Letter of Credit Obligations shall be effective
unless the same shall be in writing and signed by Agent, Requisite Lenders and
Borrowers. Furthermore, no amendment, modification, termination or waiver
affecting the rights or duties of Agent or L/C Issuer, or of GE Capital in
respect of any Swap Related Reimbursement Obligations, under this Agreement or
any other Loan Document, including any release of any Guaranty or Collateral
requiring a writing signed by all Lenders, shall be effective unless in writing
and signed by Agent or L/C Issuer or GE Capital, as the case may be, in
addition to Lenders required hereinabove to take such action.


 


(c)           No amendment, modification, termination or waiver
shall, unless in writing and signed by Agent and each Lender directly affected
thereby:  (i) increase the principal
amount of any Lender’s Commitment (which action shall be deemed to directly
affect all Lenders); (ii) reduce the principal of, rate of interest on or
Fees payable with respect to any Loan or Letter of Credit Obligations of any
affected Lender; (iii) extend any scheduled payment date or final maturity
date of the principal amount of any Loan of any affected Lender; (iv) waive,
forgive, defer, extend or postpone any payment of interest or Fees as to any
affected Lender (which action shall be deemed only to affect those Lenders to
whom such payments are made); (v) release any Guaranty or, except as
otherwise permitted in Section 3.7, release Collateral with a book
value exceeding 5% of the book value of all assets in the aggregate in any one (1) year
(which action shall be deemed to directly affect all Lenders); (vi) change
the percentage of the Commitments or of the aggregate unpaid principal amount
of the Loans that shall be required for Lenders or any of them to take any
action hereunder (which action shall be deemed to directly affect all Lenders);
and (vii) amend or waive this Section 9.2 or the definitions
of the terms “Requisite Lenders” or “Supermajority Revolving Lenders” insofar
as such definitions affect the substance of this Section 9.2 (which
action shall be deemed to directly affect all Lenders).  Furthermore, no amendment, modification,


 


66





















 


termination or waiver affecting the rights or duties
of Agent or L/C Issuers under this Agreement or any other Loan Document shall
be effective unless in writing and signed by Agent or L/C Issuers, as the case
may be, in addition to Lenders required hereinabove to take such action.  Each amendment, modification, termination or
waiver shall be effective only in the specific instance and for the specific
purpose for which it was given.  No
amendment, modification, termination or waiver shall be required for Agent to
take additional Collateral pursuant to any Loan Document.  No amendment, modification, termination or
waiver of any provision of any Note shall be effective without the written
concurrence of the holder of that Note. 
No notice to or demand on any Credit Party in any case shall entitle
such Credit Party or any other 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 9.2 shall be binding upon each holder
of the Notes at the time outstanding and each future holder of the Notes.


 


9.3.         Notices.  Any notice or
other communication required shall be in writing addressed to the respective
party as set forth below and may be personally served, telecopied, sent by
overnight courier service or U.S. mail and shall be deemed to have been
given:  (a) if delivered in person,
when delivered; (b) if delivered by fax, on the date of transmission if
transmitted on a Business Day before 4:00 p.m. (New York Time); (c) if delivered by overnight courier, one (1) Business
Day after delivery to the courier properly addressed; or (d) if delivered
by U.S. mail, four (4) Business Days after deposit with postage prepaid
and properly addressed.


 


Notices shall be
addressed as follows:


 


	
  If to Borrower Representative:

  	
   

  	
  PENHALL COMPANY

  
	
   

  	
   

  	
  1801 W. Penhall Way

  
	
   

  	
   

  	
  Anaheim,
  California 92801

  
	
   

  	
   

  	
  ATTN: Chief
  Financial Officer

  
	
   

  	
   

  	
  Fax: (714)
  778-5638

  
	
   

  	
   

  	
   

  
	
  Notice address for service of process:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  PENHALL COMPANY

  
	
   

  	
   

  	
  933 Ransom Road

  
	
   

  	
   

  	
  Lancaster, New York 14086

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  With a copy to:

  	
   

  	
  DECHERT LLP

  
	
   

  	
   

  	
  4000 Bell Atlantic Tower

  
	
   

  	
   

  	
  2929 Arch Street

  
	
   

  	
   

  	
  Philadelphia,
  Pennsylvania 19104

  
	
   

  	
   

  	
  ATTN: Gary
  Green

  
	
   

  	
   

  	
  Fax: (215)
  994-2222

  
	
   

  	
   

  	
   

  
	
  If to Agent or GE Capital:

  	
   

  	
  GENERAL ELECTRIC

  
	
   

  	
   

  	
  CORPORATION

  
	
   

  	
   

  	
  299 Park
  Avenue

  
	
   

  	
   

  	
  New York,
  New York 10171

  
	
   

  	
   

  	
  ATTN:
  Penhall Account Officer

  
	
   

  	
   

  	
  Fax: (646)
  428-7398

  



 


67





















 


	
  With a copy to:

  	
   

  	
  GENERAL ELECTRIC CAPITAL

  
	
   

  	
   

  	
  CORPORATION

  
	
   

  	
   

  	
  201 Merritt 7, P.O. Box 5201

  
	
   

  	
   

  	
  Stamford, Connecticut 06851

  
	
   

  	
   

  	
  ATTN: Corporate Counsel

  
	
   

  	
   

  	
  Corporate Financial Services – Global
  Sponsor Finance

  
	
   

  	
   

  	
  Fax: (203) 956-4216

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  and

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  GENERAL ELECTRIC CAPITAL

  
	
   

  	
   

  	
  CORPORATION

  
	
   

  	
   

  	
  299 Park Avenue

  
	
   

  	
   

  	
  New York, New York 10171

  
	
   

  	
   

  	
  ATTN: Corporate Counsel

  
	
   

  	
   

  	
  Corporate Financial Services – Global
  Sponsor Finance

  
	
   

  	
   

  	
  Fax: (646) 428-7398

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  and

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  KING & SPALDING LLP

  
	
   

  	
   

  	
  1185 Avenue of the Americas

  
	
   

  	
   

  	
  New York, New York 10036

  
	
   

  	
   

  	
  ATTN: Robert S. Finley, Esq.

  
	
   

  	
   

  	
  Fax: (212) 556-2222

  
	
   

  	
   

  	
   

  
	
  If to a Lender:

  	
   

  	
  To the address set forth on the signature
  page hereto or in the applicable Assignment Agreement

  



 


9.4.         Failure or Indulgence Not Waiver;
Remedies Cumulative.  No failure or delay on the part of Agent or
any Lender to exercise, nor any partial exercise of, any power, right or
privilege hereunder or under any other Loan Documents shall impair such power,
right, or privilege or be construed to be a waiver of any Default or Event of
Default.  All rights and remedies
existing hereunder or under any other Loan Document are cumulative to and not
exclusive of any rights or remedies otherwise available.


 


9.5.         Marshaling; Payments Set Aside. 
Neither Agent nor any Lender shall be under any obligation to marshal
any assets in payment of any or all of the Obligations.  To the extent that Borrowers make payment(s)
or Agent enforces its Liens or Agent or any Lender exercises its right of
set-off, and such payment(s) or the proceeds of such enforcement or set-off is
subsequently invalidated, declared to be fraudulent or preferential, set aside,
or required to be repaid by anyone, then to the extent of such recovery, the
Obligations or part thereof originally intended to be satisfied, and all Liens,
rights and remedies therefor, shall be revived and continued in full force and
effect as if such payment had not been made or such enforcement or set-off had
not occurred.


 


9.6.         Severability. 
The invalidity, illegality, or unenforceability in any jurisdiction of
any provision under the Loan Documents shall not affect or impair the remaining
provisions of the Loan Documents.


 


9.7.         Lenders’ Obligations Several; Independent
Nature of Lenders’ Rights.  The obligation of each Lender
hereunder is several and not joint and no Lender shall be responsible for the
obligation or commitment of any other Lender hereunder.  In the event that any Lender at any time
should fail to make


 


68





















 


a Loan as herein provided, the
Lenders, or any of them, at their sole option, may make the Loan that was to
have been made by the Lender so failing to make such Loan.  Nothing contained in any Loan Document and no
action taken by Agent or any Lender pursuant hereto or thereto shall be deemed
to constitute Lenders to be a partnership, an association, a joint venture or
any other kind of entity.  The amounts
payable at any time hereunder to each Lender shall be a separate and
independent debt.


 


9.8.         Headings.  Section and subsection headings are
included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purposes or be given substantive effect.


 


9.9.         Applicable Law. 
THIS AGREEMENT AND EACH OF THE OTHER LOAN DOCUMENTS WHICH DOES NOT
EXPRESSLY SET FORTH APPLICABLE LAW SHALL BE GOVERNED BY AND SHALL BE CONSTRUED
AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES WHICH SHALL BE DEEMED NOT TO
INCLUDE SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.


 


9.10.       Successors and Assigns. 
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns except that
Borrowers may not assign their rights or obligations hereunder without the
written consent of all Lenders.  Nothing
contained in this Section 9 shall require the consent of any party for GE
Capital to assign any of its rights in respect of any Swap Related
Reimbursement Obligation.


 


9.11.       No Fiduciary Relationship; Limited
Liability.  No provision in the Loan Documents and no
course of dealing between the parties shall be deemed to create any fiduciary
duty owing to any Credit Party by Agent or any Lender.  Each Credit Party agrees that neither Agent
nor any Lender shall have liability to such Credit Party (whether sounding in
tort, contract or otherwise) for losses suffered by such Credit Party in
connection with, arising out of, or in any way related to the transactions
contemplated and the relationship established by the Loan Documents, or any
act, omission or event occurring in connection therewith, unless and to the
extent that it is determined that such losses resulted from the gross
negligence or willful misconduct of the party from which recovery is sought as
determined by a final non-appealable order by a court of competent
jurisdiction.  Neither Agent nor any
Lender shall have any liability with respect to, and each Credit Party hereby
waives, releases and agrees not to sue for, any special, indirect or consequential
damages suffered by such Credit Party in connection with, arising out of, or in
any way related to the Loan Documents or the transactions contemplated thereby.


 


9.12.       Construction. 
Agent, each Lender, Borrowers and each other Credit Party acknowledge
that each of them has had the benefit of legal counsel of its own choice and
has been afforded an opportunity to review the Loan Documents with its legal
counsel and that the Loan Documents shall be construed as if jointly drafted by
Agent, each Lender, Borrowers and each other Credit Party.


 


9.13.       Confidentiality. 
Agent and each Lender agree to exercise their best efforts to keep
confidential any non-public information delivered pursuant to the Loan
Documents and identified as such by Borrowers and not to disclose such information
to Persons other than to potential assignees or participants or to Persons
employed by or engaged by Agent, a Lender or a Lender’s assignees or
participants including attorneys, auditors, professional consultants, rating
agencies, insurance industry associations and portfolio management
services.  The confidentiality provisions
contained in this Section 9.13 shall not apply to disclosures (i) required
to be made by Agent or any Lender to any regulatory or governmental agency or
pursuant to legal process or (ii) consisting of general portfolio
information that does not identify Borrowers. 
The obligations of Agent and Lenders under this Section 9.13
shall supersede and replace the obligations of Agent and Lenders under any
confidentiality


 


69





















 


agreement in respect of this financing executed and
delivered by Agent or any Lender prior to the date hereof.  Notwithstanding anything herein to the
contrary, non-public information shall not include, and each party (and each
employee, representative or other agent of such party) may disclose to any and
all Persons, without limitation of any kind, any information with respect to
the United States federal tax treatment and tax structure of the transactions
contemplated hereby and all materials of any kind (including opinions or other
United States federal tax analyses) that are provided to such party relating to
such tax treatment and tax structure.  To
the extent not inconsistent with the immediately preceding sentence, this
authorization does not extend to disclosure of any other information, including
without limitation (a) the identities of participants or potential
participants in this transaction, (b) the existence or status of any
negotiations, or (c) any other term or detail, or portion of any documents
or other materials, not related to the tax treatment or tax structure of the
transaction.


 


9.14.       CONSENT TO JURISDICTION. 
BORROWERS AND CREDIT PARTIES HEREBY CONSENT TO THE JURISDICTION OF ANY
STATE OR FEDERAL COURT LOCATED WITHIN NEW YORK COUNTY, STATE OF NEW YORK AND
IRREVOCABLY AGREE THAT, SUBJECT TO AGENT’S ELECTION, ALL ACTIONS OR PROCEEDINGS
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS SHALL BE LITIGATED IN SUCH COURTS.  BORROWERS AND CREDIT PARTIES EXPRESSLY SUBMIT
AND CONSENT TO THE JURISDICTION OF THE AFORESAID COURTS AND WAIVE ANY DEFENSE
OF FORUM NON CONVENIENS.  BORROWERS AND
CREDIT PARTIES HEREBY WAIVE PERSONAL SERVICE OF ANY AND ALL PROCESS AND AGREE
THAT ALL SUCH SERVICE OF PROCESS MAY BE
MADE UPON BORROWERS AND CREDIT PARTIES BY CERTIFIED OR REGISTERED MAIL, RETURN
RECEIPT REQUESTED, ADDRESSED TO BORROWER REPRESENTATIVE, AT THE ADDRESS SET
FORTH IN THIS AGREEMENT AND SERVICE SO MADE SHALL
BE COMPLETE TEN (10) DAYS AFTER THE SAME HAS BEEN POSTED.  IN ANY
LITIGATION, TRIAL, ARBITRATION OR OTHER DISPUTE RESOLUTION PROCEEDING RELATING
TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, ALL DIRECTORS, OFFICERS,
EMPLOYEES AND AGENTS OF BORROWERS, CREDIT PARTIES OR ANY OF THEIR AFFILIATES
SHALL BE DEEMED TO BE EMPLOYEES OR MANAGING AGENTS OF BORROWERS OR SUCH CREDIT
PARTIES FOR PURPOSES OF ALL APPLICABLE LAW OR COURT RULES REGARDING THE
PRODUCTION OF WITNESSES BY NOTICE FOR TESTIMONY (WHETHER IN A DEPOSITION, AT
TRIAL OR OTHERWISE).  BORROWERS AND
CREDIT PARTIES AGREE THAT AGENT’S OR ANY LENDER’S COUNSEL IN ANY SUCH DISPUTE
RESOLUTION PROCEEDING MAY EXAMINE ANY OF THESE INDIVIDUALS AS IF UNDER
CROSS-EXAMINATION AND THAT ANY DISCOVERY DEPOSITION OF ANY OF THEM MAY BE
USED IN THAT PROCEEDING AS IF IT WERE AN EVIDENCE DEPOSITION.  BORROWERS AND CREDIT PARTIES IN ANY EVENT WILL USE ALL COMMERCIALLY REASONABLE
EFFORTS TO PRODUCE IN ANY SUCH DISPUTE RESOLUTION PROCEEDING, AT THE TIME AND
IN THE MANNER REQUESTED BY AGENT OR ANY LENDER, ALL PERSONS, DOCUMENTS (WHETHER
IN TANGIBLE, ELECTRONIC OR OTHER FORM) OR OTHER THINGS UNDER THEIR CONTROL AND
RELATING TO THE DISPUTE.


 


9.15.       WAIVER OF JURY TRIAL. 
BORROWERS, CREDIT PARTIES, AGENT AND EACH LENDER HEREBY WAIVE THEIR
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.  BORROWERS, CREDIT PARTIES, AGENT AND EACH
LENDER ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A
BUSINESS RELATIONSHIP, THAT EACH HAS RELIED ON THE WAIVER IN ENTERING INTO THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS AND THAT EACH WILL CONTINUE TO RELY ON
THE WAIVER IN THEIR RELATED FUTURE DEALINGS. 
BORROWERS, CREDIT PARTIES, AGENT AND EACH LENDER WARRANT AND REPRESENT


 


70





















 


THAT EACH HAS HAD THE OPPORTUNITY OF REVIEWING THIS
JURY WAIVER WITH LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES
ITS JURY TRIAL RIGHTS.


 


9.16.       Survival of Warranties and Certain
Agreements.  All agreements, representations and
warranties made herein shall survive the execution and delivery of this
Agreement, the making of the Loans, issuances of Letters of Credit and the
execution and delivery of the Notes. 
Notwithstanding anything in this Agreement or implied by law to the
contrary, the agreements of Borrowers set forth in Sections 1.3(g),
1.9, 1.10, 1.11, 2.5 and 9.1 shall survive the repayment of the Obligations
and the termination of this Agreement.


 


9.17.       Entire Agreement. 
This Agreement, the Notes and the other Loan Documents embody the entire
agreement among the parties hereto and supersede all prior commitments,
agreements, representations, and understandings, whether oral or written,
relating to the subject matter hereof, and may not be contradicted or varied by
evidence of prior, contemporaneous, or subsequent oral agreements or
discussions of the parties hereto.  All
Exhibits, Schedules and Annexes referred to herein are incorporated in this
Agreement by reference and constitute a part of this Agreement.


 


9.18.       Counterparts; Effectiveness. 
This Agreement and any amendments, waivers, consents or supplements may
be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed an original, but all of which counterparts together shall constitute but
one in the same instrument.  This
Agreement shall become effective upon the execution of a counterpart hereof by
each of the parties hereto.


 


9.19.       Replacement of Lenders.


 


(a)           Within fifteen (15) days after receipt by Borrower
Representative of written notice and demand from any Lender for payment
pursuant to Section 1.10 or 1.11 or, as provided in this Section 9.19,
in the case of certain refusals by any Lender to consent to certain proposed
amendments, modifications, terminations or waivers with respect to this
Agreement that have been approved by Requisite Lenders, Supermajority Revolving
Lenders or all affected Lenders, as applicable (any such Lender demanding such
payment or refusing to so consent being referred to herein as an “Affected
Lender”), Borrowers may, at their option, notify Agent and such Affected
Lender of its intention to do one of the following:


 


(i)            Borrowers may obtain, at Borrowers’ expense, a
replacement Lender (“Replacement Lender”) for such Affected Lender,
which Replacement Lender shall be reasonably satisfactory to Agent.  In the event Borrowers obtain a Replacement
Lender that will purchase all outstanding Obligations owed to such Affected
Lender and assume its Commitments hereunder within ninety (90) days following
notice of Borrowers’ intention to do so, the Affected Lender shall sell and
assign all of its rights and delegate all of its obligations under this
Agreement to such Replacement Lender in accordance with the provisions of Section 8.1,
provided that Borrowers have reimbursed
such Affected Lender for any administrative fee payable pursuant to Section 8.1
and, in any case where such replacement occurs as the result of a demand for
payment pursuant to Section 1.10 or 1.11, paid all amounts required
to be paid to such Affected Lender pursuant to Section 1.10 or 1.11
through the date of such sale and assignment; or


 


(ii)           Borrowers may, with Agent’s consent, prepay in full
all outstanding Obligations owed to such Affected Lender and terminate such
Affected Lender’s Pro Rata Share of the Revolving Loan Commitment, in which
case the Revolving Loan Commitment will be reduced by the amount of such Pro
Rata Share.  Borrowers shall, within
ninety (90) days following notice of their


 


71





















 


intention to do so, prepay in full all outstanding
Obligations owed to such Affected Lender (including, in any case where such
prepayment occurs as the result of a demand for payment for increased costs,
such Affected Lender’s increased costs for which it is entitled to
reimbursement under this Agreement through the date of such prepayment), and
terminate such Affected Lender’s obligations under the Revolving Loan
Commitment.


 


(b)           In the case of a Non-Funding Lender pursuant to Section 8.5(a),
at Borrower Representative’s request, Agent or a Person acceptable to Agent
shall have the right with Agent’s consent and in Agent’s sole discretion (but
shall have no obligation) to purchase from any Non-Funding Lender, and each
Non-Funding Lender agrees that it shall, at Agent’s request, sell and assign to
Agent or such Person, all of the Loans and Commitments of that Non-Funding
Lender for an amount equal to the principal balance of all Loans held by such
Non-Funding Lender and all accrued interest and Fees with respect thereto
through the date of sale, such purchase and sale to be consummated pursuant to
an executed Assignment Agreement.


 


(c)           If, in connection with any proposed amendment,
modification, waiver or termination pursuant to Section 9.2 (a “Proposed
Change”):


 


(i)            requiring the consent of all affected Lenders, the
consent of Requisite Lenders is obtained, but the consent of other Lenders
whose consent is required is not obtained (any such Lender whose consent is not
obtained as described in this clause (i) and in clauses (ii) and (iii) below
being referred to as a “Non-Consenting Lender”),


 


(ii)           requiring the consent of Supermajority Revolving
Lenders, the consent of Requisite Lenders is obtained, but the consent of
Supermajority Revolving Lenders is not obtained,


 


(iii)          requiring the consent of Requisite Lenders, the
consent of Lenders holding 51% or more of the aggregate Commitments is
obtained, but the consent of Requisite Lenders is not obtained,


 


then, so long as Agent is not a Non-Consenting Lender, at Borrower
Representative’s request Agent, or a Person reasonably acceptable to Agent,
shall have the right with Agent’s consent and in Agent’s sole discretion (but
shall have no obligation) to purchase from such Non-Consenting Lenders, and
such Non-Consenting Lenders agree that they shall, upon Agent’s request, sell
and assign to Agent or such Person, all of the Loans and Commitments of such
Non-Consenting Lenders for an amount equal to the principal balance of all
Loans held by the Non-Consenting Lenders and all accrued interest and Fees with
respect thereto through the date of sale, such purchase and sale to be
consummated pursuant to an executed Assignment Agreement.


 


9.20.       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 Representative
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
Representative termination statements, mortgage


 


72





















 


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.


 


9.21.       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 Termination Date, in each case,
except with the prior written consent of Agent.


 


(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 9.21
before the Termination 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, Agent for the benefit of 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).


 


SECTION 10.


 


CROSS-GUARANTY


 


10.1.       Cross-Guaranty. 
Each Borrower hereby agrees that such Borrower is jointly and severally
liable for, and hereby absolutely and unconditionally guarantees to Agent and
Lenders and their respective successors and assigns, the full and prompt
payment (whether at stated maturity, by


 


73





















 


acceleration or otherwise) and performance of, all
Obligations owed or hereafter owing to Agent and Lenders by each other
Borrower.  Each Borrower agrees that its
guaranty obligation hereunder is a continuing guaranty of payment and
performance and not of collection, that its obligations under this Section 10
shall not be discharged until payment and performance, in full, of the
Obligations has occurred, and that its obligations under this Section 10
shall be absolute and unconditional, irrespective of, and unaffected by:


 


(a)           the genuineness, validity, regularity, enforceability
or any future amendment of, or change in, this Agreement, any other Loan
Document or any other agreement, document or instrument to which any Borrower
is or may become a party;


 


(b)           the absence of any action to enforce this Agreement
(including this Section 10) or any other Loan Document or the
waiver or consent by Agent and Lenders with respect to any of the provisions
thereof;


 


(c)           the existence, value or condition of, or failure to
perfect its Lien against, any security for the Obligations or any action, or
the absence of any action, by Agent and Lenders in respect thereof (including
the release of any such security);


 


(d)           the insolvency of any Credit Party; or


 


(e)           any other action or circumstances that might otherwise
constitute a legal or equitable discharge or defense of a surety or guarantor.


 


Each Borrower shall be regarded, and shall be in the same position, as
principal debtor with respect to the Obligations guaranteed hereunder.


 


10.2.       Waivers by Borrowers. 
Each Borrower expressly waives all rights it may have now or in the
future under any statute, or at common law, or at law or in equity, or
otherwise, to compel Agent or Lenders to marshal assets or to proceed in
respect of the Obligations guaranteed hereunder against any other Credit Party,
any other party or against any security for the payment and performance of the
Obligations before proceeding against, or as a condition to proceeding against,
such Borrower.  It is agreed among each
Borrower, Agent and Lenders that the foregoing waivers are of the essence of
the transaction contemplated by this Agreement and the other Loan Documents and
that, but for the provisions of this Section 10 and such waivers,
Agent and Lenders would decline to enter into this Agreement.


 


10.3.       Benefit of Guaranty. 
Each Borrower agrees that the provisions of this Section 10
are for the benefit of Agent and Lenders and their respective successors,
transferees, endorsees and assigns, and nothing herein contained shall impair,
as between any other Borrower and Agent or Lenders, the obligations of such
other Borrower under the Loan Documents.


 


10.4.       Waiver of Subrogation, Etc. 
Notwithstanding anything to the contrary in this Agreement or in any
other Loan Document, and except as set forth in Section 10.7, each
Borrower hereby expressly and irrevocably waives until the Termination Date any
and all rights at law or in equity to subrogation, reimbursement, exoneration,
contribution, indemnification or set off and any and all defenses available to
a surety, guarantor or accommodation co-obligor.  Each Borrower acknowledges and agrees that
this waiver is intended to benefit Agent and Lenders and shall not limit or
otherwise affect such Borrower’s liability hereunder or the enforceability of
this Section 10, and that Agent, Lenders and their respective
successors and assigns are intended third party beneficiaries of the waivers
and agreements set forth in this Section 10.4 and their rights
under this Section 10.4 shall survive payment in full of the
Obligations.


 


74





















 


The foregoing waiver shall not be deemed to limit or
prohibit the payment of indebtedness or other obligations of any Borrower to
any other Borrower or other Person which is incurred in the ordinary course of
business and which is otherwise permitted under this Agreement or any other
Loan Document.


 


10.5.       Election of Remedies. 
If Agent or any Lender may, under applicable law, proceed to realize its
benefits under any of the Loan Documents giving Agent or such Lender a Lien upon
any Collateral, whether owned by any Borrower or by any other Person, either by
judicial foreclosure or by non-judicial sale or enforcement, Agent or any
Lender may, at its sole option, determine which of its remedies or rights it
may pursue without affecting any of its rights and remedies under this Section 10.  If, in the exercise of any of its rights and
remedies, Agent or any Lender shall forfeit any of its rights or remedies,
including its right to enter a deficiency judgment against any Borrower or any
other Person, whether because of any applicable laws pertaining to “election of
remedies” or the like, each Borrower hereby consents to such action by Agent or
such Lender and waives any claim based upon such action, even if such action by
Agent or such Lender shall result in a full or partial loss of any rights of
subrogation that each Borrower might otherwise have had but for such action by
Agent or such Lender.  Any election of
remedies that results in the denial or impairment of the right of Agent or any
Lender to seek a deficiency judgment against any Borrower shall not impair any
other Borrower’s obligation to pay the full amount of the Obligations.  In the event Agent or any Lender shall bid at
any foreclosure or trustee’s sale or at any private sale permitted by law or
the Loan Documents, Agent or such Lender may bid all or less than the amount of
the Obligations and the amount of such bid need not be paid by Agent or such
Lender but shall be credited against the Obligations.  The amount of the successful bid at any such
public sale, whether Agent, Lender or any other party is the successful bidder,
shall be conclusively deemed to be the fair market value of the Collateral and
the difference between such bid amount and the remaining balance of the
Obligations shall be conclusively deemed to be the amount of the Obligations
guaranteed under this Section 10, notwithstanding that any present
or future law or court decision or ruling may have the effect of reducing the
amount of any deficiency claim to which Agent or any Lender might otherwise be
entitled but for such bidding at any such sale.


 


10.6.       Limitation. 
Notwithstanding any provision herein contained to the contrary, each
Borrower’s liability under this Section 10 (which liability is in
any event in addition to amounts for which such Borrower is primarily liable
under Section 1) shall be limited to an amount not to exceed as of
any date of determination the greater of:


 


(a)           the net amount of all Loans advanced to any other
Borrower under this Agreement and then re-loaned or otherwise transferred to,
or for the benefit of, such Borrower; and


 


(b)           the amount that could be claimed by Agent and Lenders
from such Borrower under this Section 10 without rendering such
claim voidable or avoidable under Section 548 of Chapter 11 of the
Bankruptcy Code or under any applicable state Uniform Fraudulent Transfer Act,
Uniform Fraudulent Conveyance Act or similar statute or common law after taking
into account, among other things, such Borrower’s right of contribution and
indemnification from each other Borrower under Section 10.7.


 


10.7.       Contribution with Respect to Guaranty
Obligations.


 


(a)           To the extent that any Borrower shall make a payment
under this Section 10 of all or any of the Obligations (other than
Loans made to that Borrower for which it is primarily liable) (a “Guarantor
Payment”) that, taking into account all other Guarantor Payments then
previously or concurrently made by any other Borrower, exceeds the amount that
such Borrower would otherwise have paid if each Borrower had paid the aggregate
Obligations satisfied by such Guarantor Payment in the same proportion that
such Borrower’s “Allocable Amount” (as defined below) (as determined
immediately prior to such Guarantor Payment) bore to the aggregate Allocable
Amounts of each of the


 


75





















 


Borrowers as determined immediately prior to the
making of such Guarantor Payment, then, following indefeasible payment in full
in cash of the Obligations and termination of the Commitments, such Borrower
shall be entitled to receive contribution and indemnification payments from,
and be reimbursed by, each other Borrower for the amount of such excess, pro
rata based upon their respective Allocable Amounts in effect immediately prior
to such Guarantor Payment.


 


(b)           As of any date of determination, the “Allocable
Amount” of any Borrower shall be equal to the maximum amount of the claim
that could then be recovered from such Borrower under this Section 10
without rendering such claim voidable or avoidable under Section 548 of
Chapter 11 of the Bankruptcy Code or under any applicable state Uniform
Fraudulent Transfer Act, Uniform Fraudulent Conveyance Act or similar statute
or common law.


 


(c)           This Section 10.7 is intended only to
define the relative rights of Borrowers and nothing set forth in this Section 10.7
is intended to or shall impair the obligations of Borrowers, jointly and
severally, to pay any amounts as and when the same shall become due and payable
in accordance with the terms of this Agreement, including Section 10.1.  Nothing contained in this Section 10.7
shall limit the liability of any Borrower to pay the Loans made directly or
indirectly to that Borrower and accrued interest, Fees and expenses with
respect thereto for which such Borrower shall be primarily liable.


 


(d)           The parties hereto acknowledge that the rights of
contribution and indemnification hereunder shall constitute assets of the
Borrower to which such contribution and indemnification is owing.


 


(e)           The rights of the indemnifying Borrowers against other
Credit Parties under this Section 10.7 shall be exercisable upon
the full and indefeasible payment of the Obligations and the termination of the
Commitments.


 


10.8.       Liability Cumulative. 
The liability of Borrowers under this Section 10 is in
addition to and shall be cumulative with all liabilities of each Borrower to
Agent and Lenders under this Agreement and the other Loan Documents to which
such Borrower is a party or in respect of any Obligations or obligation of the
other Borrower, without any limitation as to amount, unless the instrument or
agreement evidencing or creating such other liability specifically provides to
the contrary.


 


10.9.       Intercreditor
Agreement.  EACH LENDER HEREUNDER (A) ACKNOWLEDGES
THAT IT HAS RECEIVED A COPY OF THE INTERCREDITOR AGREEMENT, (B) AGREES
THAT IT WILL BE BOUND BY AND WILL TAKE NO ACTIONS CONTRARY TO THE PROVISIONS OF
THE INTERCREDITOR AGREEMENT AND (C) AUTHORIZES AND INSTRUCTS AGENT TO
ENTER INTO THE INTERCREDITOR AGREEMENT, AS AGENT AND ON BEHALF OF SUCH LENDER.


 


10.10.     Effectiveness
of Amendment and Restatement of Existing Credit Agreement. 
The amendment and restatement of the Existing Credit Agreement
contemplated hereby shall become effective on the Amendment Effective Date, and
thereafter shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. 
Prior to the Amendment Effective Date, the Existing Credit Agreement
shall remain in full force and effect and shall not be affected hereby.  After the Amendment Effective Date, all “Obligations”
of Borrowers under the Existing Credit Agreement shall become Obligations of
Borrowers hereunder, continuously secured by the Liens granted under the
Collateral Documents, and the provision of the Existing Credit Agreement shall
be superseded by the provisions hereof.


 


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[Remainder of page intentionally
left blank.]


 


77





















 


Witness the due execution
hereof by the respective duly authorized officers of the undersigned as of the
date first written above.


 


	
   

  	
  PENHALL COMPANY,

  
	
   

  	
  as a Borrower

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeffrey E. Platt

  
	
   

  	
  Name:

  	
  Jeffrey E. Platt

  
	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  BOB MACK CO., INC.,

  
	
   

  	
  as a Borrower

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeffrey E. Platt

  
	
   

  	
  Name:

  	
  Jeffrey E. Platt

  
	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  
	
   

  	
  PENHALL LEASING, L.L.C.,

  
	
   

  	
  as a Borrower

  
	
   

  	
  BY: PENHALL COMPANY, its sole member

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeffrey E. Platt

  
	
   

  	
  Name:

  	
  Jeffrey E. Platt

  
	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  
	
   

  	
  PENHALL INTERNATIONAL CORP.,

  
	
   

  	
  as a Borrower

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeffrey E. Platt

  
	
   

  	
  Name:

  	
  Jeffrey E. Platt

  
	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  
	
   

  	
  CAPITOL DRILLING SUPPLIES, INC.,

  
	
   

  	
  as a Borrower

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeffrey E. Platt

  
	
   

  	
  Name:

  	
  Jeffrey E. Platt

  
	
   

  	
  Title:

  	
  Vice President

  
					



 





















 


	
   

  	
  PENHALL INVESTMENTS, INC.,

  
	
   

  	
  as a Credit Party

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeffrey E. Platt

  
	
   

  	
  Name:

  	
  Jeffrey E. Platt

  
	
   

  	
  Title:

  	
  Vice President

  
					



 


[SIGNATURE PAGE TO PENHALL CREDIT AGREEMENT]


 





















 


	
   

  	
  GENERAL ELECTRIC CAPITAL CORPORATION,

  
	
   

  	
  as Agent, an L/C Issuer and a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gina Provenzale

  
	
   

  	
  Name: Gina Provenzale

  
	
   

  	
  Its Duly Authorized Signatory

  



 


[SIGNATURE PAGE TO PENHALL CREDIT AGREEMENT]


 





















 


ANNEX A


 


to


 


AMENDED
AND RESTATED CREDIT 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:


 


“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 Holdings or any of its
Subsidiaries; (b) changes in accounting principles recommended by Holdings’
certified public accountants and implemented by Holdings; and (c) changes
in carrying value of any 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)(ix).


 


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


 


“Advances” means
any Revolving Credit Advance or Swing Line Advance, as the context may require.


 


“Affected Lender”
has the meaning ascribed to it in Section 9.19(a).


 





















 


“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
Borrowers, the immediate family members, spouses and lineal descendants of
individuals who are Affiliates of any 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 GE
Capital in its capacity as Agent for Lenders or its successor appointed
pursuant to Section 8.2.


 


“Aggregate Borrowing
Base” means as of any date of determination, an amount equal to (i) the
sum of the Holdings Borrowing Base, the Penhall Borrowing Base, the Penhall
Leasing Borrowing Base, the Bob Mack Borrowing Base and the Capitol Borrowing
Base; less (ii) any Reserves except to the extent already deducted
therefrom.


 


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


 


“Allocable Amount”
has the meaning ascribed to it in Section 10.7.


 


“Amendment Effective
Date” means November 1, 2005.


 


“Applicable L/C Margin”
means the per annum fee, from time to time in effect, payable with respect to
outstanding Letter of Credit Obligations as determined by reference to Section 1.2(a).


 


“Applicable Margins”
means collectively the Applicable L/C Margin, the Applicable Revolver Index
Margin and the Applicable Revolver LIBOR Margin.


 


“Applicable Revolver
Index Margin” means the per annum interest rate margin from time to time in
effect and payable in addition to the Index Rate applicable to the Revolving
Loan, as determined by reference to Section 1.2(a).


 


“Applicable Revolver
LIBOR Margin” means the per annum interest rate from time to time in effect
and payable in addition to the LIBOR Rate applicable to the Revolving Loan, as
determined by reference to Section 1.2(a).


 


“Appraised Forced
Liquidation Value” shall mean, at any time, as to any Real Estate owned by
Holdings, the appraised forced liquidation value determined most recently at or
prior to such time in writing by an independent real estate appraiser mutually
agreed upon by Agent and the Credit Parties, such determination to be made
using the same basis and or approach to valuation consistent with the approach
used in the initial determination.


 


“Appraised Net Orderly
Liquidation Value” shall mean, at any time, as to any Equipment or Parts
and Supplies owned by a Borrower, the appraised net orderly liquidation value
determined most recently at or prior to such time in writing by an independent
appraiser mutually agreed upon by Agent


 


A-2





















 


and the Credit Parties, such determination to be made
using the same basis and or approach to valuation consistent with the approach
used in the initial determination.


 


“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 Holdings’ Subsidiaries or (b) any or all of
the assets of Holdings 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 a Credit
Party or a Subsidiary thereof in a Permitted Sale-Leaseback.


 


“Assignment Agreement”
has the meaning ascribed to it in Section 8.1(a).


 


“Assumption and
Joinder Agreement” means the Assumption and Joinder Agreement to be
executed and delivered by Capitol on the Amendment Effective Date, in form and
substance satisfactory to the Agent.


 


“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.


 


“Bob Mack Borrowing
Base” means, as of any date of determination by Agent, from time to time,
an amount (calculated in Dollars or, in the case of Accounts or Short-Term
Rentals denominated in Canadian Dollars, in the U.S. Dollar Equivalent thereof)
equal to the sum at such time of:


 


(a)           up to 85% of the net amount of Bob Mack’s
Eligible Accounts plus Eligible Short-Term Rentals at such time; and


 


(b)           up to 80% of the Appraised Net Orderly
Liquidation Value of Bob Mack’s Eligible Parts and Supplies and Bob Mack’s
Eligible Equipment; less


 


(c)           such Reserves Agent may have applied
thereto.


 


“Borrower” and “Borrowers”
have the respective meanings ascribed to them in the preamble to the Agreement.


 


“Borrower
Representative” has the meaning ascribed to it in Section 1.13.


 


“Borrowing
Availability” means as of any date of determination the lesser of (a) the
Maximum Amount less the sum of the aggregate Revolving Loan (including, without
duplication, the outstanding Letter of Credit Obligations) and Swing Line Loan
then outstanding and (b) the Aggregate Borrowing Base less the sum of (i) the
sum of the aggregate Revolving Loan (including, without duplication, the
outstanding Letter of Credit Obligations), (ii) Swing Line Loan then
outstanding, and (iii) any Reserves required by Agent in its reasonable
credit judgment to the extent not already deducted therefrom.


 


“Borrowing Base
Certificate” has the meaning ascribed to it in Section 4.9(e).


 


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


 


A-3





















 


“BRS Management
Services Agreement” means that Management Agreement dated as of August 4,
1998 by and between BRS and Holdings 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).


 


“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 LIBOR Loans shall mean any such day that is also
a LIBOR Business Day.


 


“Canadian Dollars”
means lawful currency of Canada.


 


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


 


“Capitol Borrowing
Base” means, from and after the date, if any, that Agent shall have
completed its audit and appraisal of Capitol’s assets, as of any date of
determination by Agent, from time to time, an amount (calculated in Dollars or,
in the case of Accounts or Short-Term Rentals denominated in Canadian Dollars,
in the U.S. Dollar Equivalent thereof) equal to the sum at such time of:


 


(a)           up to 85% of the net amount of Capitol’s
Eligible Accounts plus Eligible Short-Term Rentals at such time; and


 


(b)           up to 80% of the Appraised Net Orderly
Liquidation Value of Capitol’s Eligible Parts and Supplies and Capital’s
Eligible Equipment; less


 


(c)           such Reserves Agent may have applied
thereto.


 


“Capital Expenditures”
has the meaning ascribed to it in Section 4.1 of Schedule 1
to Exhibit 4.9(l).


 


“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


 


A-4





















 


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 is at least (A) ”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.


 


“Certificate of
Exemption” has the meaning ascribed to it in Section 1.11(c).


 


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


 


“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 Holdings
on a fully diluted basis, (b) Holdings ceases to directly or indirectly
own and control all of the economic and voting rights associated with all of
the outstanding Stock of Penhall or (c) Penhall 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.


 


“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 May 22, 2003.


 


“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.


 


A-5





















 


“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 Holdings or a
Domestic Subsidiary of Holdings and (y) all Stock of any other CFC).


 


“Collateral Documents”
means the Security Agreement, the Pledge Agreement, the Guaranties, the Master
Reaffirmation, the Mortgages, the Trademark Security Agreements, the Copyright
Security Agreements, the Patent Security Agreements, any Control Agreements in
favor of Agent, the Intercreditor Agreement and all other agreements entered
into guaranteeing payment of, or granting a Lien upon property as security for
payment of, the Obligations or any portion thereof.


 


“Commitment
Termination Date” means the earliest of (a) November 1, 2010, (b) the
date of termination of Lenders’ obligations to make Advances and to incur
Letter of Credit Obligations or permit existing Loans to remain outstanding
pursuant to Section 6.3 and (c) the date of (i) indefeasible
prepayment in full by Borrowers of the Loans, and (ii) the cancellation
and return (or stand-by guarantee) of all Letters of Credit or the cash
collateralization of all Letter of Credit Obligations pursuant to Section 1.5(g),
and (iii) the permanent reduction of the Commitments to zero dollars ($0).


 


“Commitments”
means (a) as to any Lender, the aggregate of such Lender’s Revolving Loan
Commitment as set forth on Annex B to the Agreement or in the most
recent Assignment Agreement executed by such Lender and (b) as to all
Lenders, the aggregate of all Lenders’ Revolving Loan Commitments, which
aggregate commitment shall be fifty five million dollars ($55,000,000) on the
Amendment Effective Date, as such Commitments may be reduced, amortized or
adjusted from time to time in accordance with the Agreement.


 


“Company Management
Services Agreement” means that Management Services Agreement dated as of January 1,
2002 by and between Penhall and Penhall Leasing, as amended, modified or
supplemented from time to time in accordance with its terms.


 


“Compliance and
Pricing Certificate” has the meaning ascribed to it in Section 4.9(l).


 


“Consolidated Net
Income” has the meaning ascribed to it in Section 4.3 of Schedule 1
to Exhibit 4.9(l).


 


“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


 


A-6





















 


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 deposit account, lockbox account, securities account or commodities
account control agreements by and among the applicable Credit Party, 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.


 


“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.


 


“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 Holdings, Borrowers, and each of their
respective Subsidiaries and each other Person who executes this Agreement as a “Credit
Party” or a Guaranty or who grants a Lien on all or part of its assets to
secure all of part of the Obligations.


 


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


 


“Default Rate” has
the meaning ascribed to it in Section 1.2(d).


 


“Disbursement Account”
has the meaning ascribed to it in Section 1.1(e).


 


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


 


“Division 40”
means Penhall’s Division 40 Highway Services division, the customer base of which is comprised primarily of state departments of
transportation or general contractors performing work for state departments of
transportation.


 


“Domestic Subsidiary”
means any Subsidiary of Holdings that is a “United States person” under
and as defined in Section 770l(a)(30) of the IRC.


 


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“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.


 


 “EBITDA” has the meaning ascribed to it
in Schedule 3 to Exhibit 4.9(l).


 


“Eligible Accounts”
has the meaning ascribed to it in Schedule 1 to Exhibit 4.9(e)(i),
Exhibit 4.9(e)(ii) or Exhibit 4.9(e)(iii), as
applicable.


 


“Eligible Equipment”
has the meaning ascribed to it in Schedule 1 to Exhibit 4.9(e)(i),
Exhibit 4.9(e)(ii) or Exhibit 4.9(e)(iii), as
applicable.


 


“Eligible Parts and
Supplies” has the meaning ascribed to it in Schedule 1 to Exhibit 4.9(e)(i),
Exhibit 4.9(e)(ii) or Exhibit 4.9(e)(iii), as
applicable.


 


“Eligible Real Estate”
has the meaning ascribed to it in Schedule 1 to Exhibit 4.9(e)(iv).


 


“Eligible Short-Term
Rentals” has the meaning ascribed to it in Schedule 1 to Exhibit 4.9(e)(i),
Exhibit 4.9(e)(ii) or Exhibit 4.9(e)(iii), as
applicable.


 


“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 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.


 


A-8





















 


“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 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.


 


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


 


“Existing Borrowers”
has the meaning ascribed to it in the recitals.


 


“Existing Credit
Agreement” has the meaning ascribed to it in the recitals.


 


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


 


“Federal Funds Rate”
means, for any day, a floating rate equal to the weighted average of the rates
on overnight federal funds transactions among members of the Federal Reserve
System, as determined by Agent in its sole discretion, which determination
shall be final, binding and conclusive (absent manifest error).


 


A-9





















 


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


 


“Fees” means any
and all fees payable to Agent or any Lender pursuant to the Agreement or any of
the other Loan Documents.


 


“Financial Statements”
means the consolidated and consolidating income statements, statements of cash
flows and balance sheets of Holdings and its Subsidiaries delivered in
accordance with Section 4.9.


 


“Fiscal Month”
means any of the monthly accounting periods of Holdings.


 


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


 


“Fiscal Year”
means any of the annual accounting periods of Holdings 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”
has the meaning ascribed to it in Section 1.11(c).


 


“Funded Debt”
means, with respect to any Person, without duplication, all Indebtedness for
borrowed money 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
Borrowers, the Obligations (other than Letter of Credit Obligations in respect
of undrawn Letters of Credit), the Second Lien Debt and, without duplication,
Guaranteed Indebtedness consisting of guaranties of Funded Debt of other
Persons.


 


“Funding Date” has
the meaning ascribed to it in Section 7.2.


 


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


 


“GE Capital” has
the meaning ascribed to it in the Preamble.


 


“GE Capital Fee Letter”
has the meaning ascribed to it in Section 1.3(a).


 


“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


 


A-10





















 


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, choses 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.


 


“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 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.


 


“Guaranties”
means, collectively, the Subsidiary Guaranty and any other guaranty executed by
any Guarantor in favor of Agent and Lenders in respect of the Obligations.


 


“Guarantor Payment”
has the meaning ascribed to it on Section 10.7.


 


“Guarantors” means
Holdings, and each Subsidiary of each Borrower that is not a Borrower under
this Agreement and each other Person, if any, 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.


 


“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,”


 


A-11





















 


“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.


 


“Holdings” has the
meaning ascribed thereto in the recitals to the Agreement.


 


“Holdings Borrowing
Base” means, as of any date of determination by Agent, from time to time,
an amount equal to the sum at such time of:


 


(a)           up to 50% of the Appraised Forced
Liquidation Value of Holdings’ owned Real Estate; less


 


(b)           such Reserves as Agent may have applied
thereto.


 


“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 Index Rate as in
effect on the Amendment Effective 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
Holdings 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 Holdings or any of its Subsidiaries, so long as neither
Holdings nor any such Subsidiary is or, upon the passage of time or the
occurrence of any event (other than an asset sale or change of control), may
become obligated notwithstanding any prohibition in this Agreement to the
contrary to, 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).


 


“Indemnitees” has
the meaning ascribed to it in Section 9.1.


 


“Index Rate”
means, for any day, a floating rate equal to the higher of (i) the rate
publicly quoted from time to time by The Wall Street Journal
as the “base rate on corporate loans posted by at least 75% of the nation’s 30
largest banks” (or, if The Wall Street Journal ceases quoting
a base rate of the type described, the highest per annum rate of interest
published by the Federal Reserve Board in Federal Reserve statistical release
H.15 (519) entitled “Selected Interest Rates” as the Bank prime loan rate
or its equivalent), and (ii) the Federal Funds Rate plus 50 basis points
per annum.  Each change in


 


A-12





















 


any interest rate provided for in the Agreement based
upon the Index Rate shall take effect at the time of such change in the Index
Rate.


 


“Index Rate Loan”
means a Loan or portion thereof bearing interest by reference to the Index
Rate.


 


“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 9.21.


 


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


 


“Intercreditor
Agreement” means the intercreditor agreement dated as of the date hereof
entered into by and among Agent, Lenders, Second Lien Agent and Second Lien
Lenders, as the same may be amended, amended and restated, supplemented,
replaced or otherwise modified from time to time in accordance with its terms.


 


“Interest Coverage
Ratio” has the meaning ascribed to it in Section 4.5 of Schedule 1
to Exhibit 4.9(l).


 


“Interest Expense”
has the meaning ascribed to it in Section 4.4 of Schedule 1
to Exhibit 4.9(l).


 


“Interest Payment Date”
means (a) as to any Index Rate Loan, the first Business Day of each
calendar month to occur while such Loan is outstanding, and (b) as to any
LIBOR Loan, the last day of the applicable LIBOR Period or at the end of three (3) months
for any LIBOR Period that is longer than three (3) months; provided, that, in addition to the foregoing, each of
(x) the date upon which all of the Commitments have been terminated and
the Loans have been paid in full and (y) the Commitment Termination Date
shall be deemed to be an “Interest Payment Date” with respect to any
interest that has then accrued under the Agreement.


 


“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 Borrowers or
any of their Subsidiaries of any Stock, or other ownership interest in, any
other Person, and (ii) any direct or indirect loan, advance or capital
contribution by Borrowers or any of their Subsidiaries to any other Person,
including all indebtedness and accounts receivable from that other Person that
are not current assets or did not arise from sales to that other Person in the
ordinary course of business.


 


A-13





















 


“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.


 


“L/C Issuer” means
GE Capital or a Subsidiary thereof or a bank or other legally authorized Person
selected by or acceptable to Agent in its sole discretion, in such Person’s
capacity as an issuer of Letters of Credit hereunder.


 


“L/C Sublimit” has
the meaning ascribed to it in Section 1.1(d).


 


“Lenders” means GE
Capital, the other Lenders named on the signature pages of the Agreement,
and, if any such Lender shall decide to assign all or any portion of the
Obligations, such term shall include any assignee of such Lender.


 


“Letters of Credit”
means documentary or standby letters of credit issued for the account of
Borrowers by L/C Issuers, and bankers’ acceptances issued by Borrowers, for
which Agent and Lenders have incurred Letter of Credit Obligations.  The term “Letters of Credit” does not include
a Swap Related L/C.


 


“Letter of Credit Fee”
has the meaning ascribed to it in Section 1.3(d).


 


“Letter of Credit
Obligations” means all outstanding obligations incurred by Agent and
Lenders at the request of Borrower Representative, whether direct or indirect,
contingent or otherwise, due or not due, in connection with the issuance of any
Letters of Credit by any L/C Issuer or the purchase of a participation as set
forth in Section 1.1(d) with respect to any Letter of
Credit.  The amount of such Letter of
Credit Obligations shall equal the maximum amount that may be payable by Agent
and Lenders thereupon or pursuant thereto.


 


“Leverage Ratio”
has the meaning ascribed to it in Section 4.6 of Schedule 1
to Exhibit 4.9(l).


 


“LIBOR Breakage Fee”
means an amount equal to the amount of any losses, expenses, liabilities
(including, without limitation, any loss (including interest paid) and lost
opportunity cost in connection with the re-employment of such funds) that any
Lender may sustain as a result of (i) any default by any Borrower in
making any borrowing of, conversion into or continuation of any LIBOR Loan
following Borrower Representative’s delivery to Agent of any LIBOR Loan request
in respect thereof or (ii) any payment of a LIBOR Loan on any day that is
not the last day of the LIBOR Period applicable thereto (regardless of the
source of such prepayment and whether voluntary, by acceleration or otherwise).
For purposes of calculating amounts payable to a Lender under Section 1.3(e),
each Lender shall be deemed to have actually funded its relevant LIBOR Loan
through the purchase of a deposit


 


A-14





















 


bearing interest at LIBOR in an amount equal to the
amount of that LIBOR Loan and having a maturity and repricing characteristics
comparable to the relevant LIBOR Period; provided, however,
that each Lender may fund each of its LIBOR Loans in any manner it sees fit,
and the foregoing assumption shall be utilized only for the calculation of
amounts payable under Section 1.3(e).


 


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


 


“LIBOR Loans”
means a Loan or any portion thereof bearing interest by reference to the LIBOR
Rate.


 


“LIBOR Period”
means, with respect to any LIBOR Loan, each period commencing on a LIBOR
Business Day selected by Borrower Representative pursuant to the Agreement and
ending one, two, three or six months thereafter, as selected by Borrower
Representative’s irrevocable notice to Agent as set forth in Section 1.2(e);
provided, that the foregoing provision
relating to LIBOR Periods is subject to the following:


 


(a)           if any LIBOR Period would otherwise end
on a day that is not a LIBOR Business Day, such LIBOR Period shall be extended
to the next succeeding LIBOR Business Day unless the result of such extension
would be to carry such LIBOR Period into another calendar month in which event
such LIBOR Period shall end on the immediately preceding LIBOR Business Day;


 


(b)           any LIBOR Period that would otherwise
extend beyond the date set forth in clause (a) of the definition of “Commitment
Termination Date” shall end two (2) LIBOR Business Days prior to such
date;


 


(c)           any LIBOR Period that begins on the last
LIBOR 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 LIBOR
Period) shall end on the last LIBOR Business Day of a calendar month;


 


(d)           Borrower Representative shall select
LIBOR Periods so as not to require a payment or prepayment of any LIBOR Loan
during a LIBOR Period for such Loan; and


 


(e)           Borrower Representative shall select
LIBOR Periods so that there shall be no more than eight (8) separate LIBOR
Loans in existence at any one time.


 


“LIBOR Rate” means
for each LIBOR Period, a rate of interest determined by Agent equal to:


 


(a)           the offered rate for deposits in United
States Dollars for the applicable LIBOR Period that appears on Telerate Page 3750
as of 11:00 a.m. (London time), on the second full LIBOR Business Day next
preceding the first day of such LIBOR Period (unless such date is not a
Business Day, in which event the next succeeding Business Day will be used);
divided by


 


(b)           a number equal to 1.0 minus the
aggregate (but without duplication) of the rates (expressed as a decimal
fraction) of reserve requirements in effect on the day that is two (2) LIBOR
Business Days prior to the beginning of such LIBOR Period (including basic, supplemental,
marginal and emergency reserves under any regulations of the Federal Reserve
Board or other Governmental Authority having jurisdiction with respect thereto,
as now and from time to time in effect) for Eurocurrency funding (currently
referred to as “Eurocurrency


 


A-15





















 


Liabilities” in Regulation D of the Federal Reserve
Board that are required to be maintained by a member bank of the Federal
Reserve System.


 


If such interest rates
shall cease to be available from Telerate News Service, the LIBOR Rate shall be
determined from such financial reporting service or other information as shall
be available to Agent.


 


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


 


“Litigation” has
the meaning ascribed to it in Section 4.9(j).


 


“Loan Account” as
the meaning ascribed to it in Section 1.9.


 


“Loan Documents”
means the Agreement, the Notes, the Collateral Documents, the Assumption and
Joinder Agreement, the GE Capital Fee Letter 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 the
Revolving Loan.


 


“Management Services
Agreements” means the BRS Management Services Agreement and the Company
Management Services Agreement.


 


“Master Documentary
Agreement” means the Master Agreement for Documentary Letters of Credit dated
as of May 22, 2003 among the Borrowers and the L/C Issuer.


 


“Master Reaffirmation”
means the Master Reaffirmation of Loan Documents to be executed and delivered
by the Borrowers and the other Credit Parties (other than Capitol) on the
Amendment Effective Date, in form and substance satisfactory to the Agent.


 


“Master Standby
Agreement” means the Master Agreement for Standby Letters of Credit dated
as of May 22, 2003 among the Borrowers and the L/C Issuer.


 


“Material Adverse
Effect” means a material adverse effect on (a) the financial
conditions, assets, operations, business or prospects of any Borrower or any of
its Subsidiaries, (b) Borrowers’ ability to pay any of the Loans or any of
the other Obligations in accordance with the terms of the Agreement,


 


A-16





















 


(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.


 


“Maximum Amount”
means, as of any date of determination, an amount equal to the Revolving Loan
Commitment of all Lenders as of that date.


 


“Maximum Lawful Rate”
has the meaning ascribed to it in Section 1.2(f).


 


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


 


“Monthly Average
Borrowing Availability” means, for any period of three consecutive fiscal
months, the average (mean) of the amount of Borrowing Availability as of the
end of each of such fiscal months.


 


“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”
means cash proceeds received by Credit Parties or any of their Subsidiaries (a) from
any Asset Disposition (including insurance proceeds, awards of condemnation,
and payments under notes or other debt securities received in connection with
any Asset Disposition), and from all sales of Equipment or Parts and Supplies,
in each case, net of (i) selling expenses (including reasonable and customary
broker’s fees or commissions, legal fees, transfer and similar taxes incurred
by Borrowers or any of their Subsidiaries in connection therewith and Borrowers’
good faith estimate of income taxes paid 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 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 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 Borrowers to be payable arising
from such Asset Disposition; and (v) amounts required to be paid to any
person (other than Credit Parties) owning a beneficial interest in the subject
asset; and (b) from any issuance or disposition of Indebtedness or any
Stock, the cash proceeds thereof, net of all taxes and reasonable and customary
fees, commissions, costs and other expenses incurred by Credit Parties in
connection therewith.


 


“Non-Consenting Lender”
has the meaning ascribed to it in Section 9.19(c).


 


“Non-Funding Lender”
has the meaning ascribed to it in Section 8.5(a).


 


“Notes” means,
collectively, the Revolving Notes and the Swing Line Note.


 


A-17





















 


“Notice of
Conversion/Continuation” has the meaning ascribed to it in Section 1.2(e).


 


“Notice of Revolving
Credit Advance” has the meaning ascribed to it in Section 1.1(a).


 


“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,
letter of credit 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), Fees, Swap Related
Reimbursement Obligations, expenses, attorneys’ fees and any other sum
chargeable to any Credit Party under the Agreement or any of the other Loan
Documents.


 


“OFAC” has the
meaning ascribed to it in Section 5.20.


 


“Other Lender” has
the meaning ascribed to it in Section 8.5(d).


 


“Other Taxes” has
the meaning ascribed to it in Section 1.11(d).


 


“Overadvance” has
the meaning ascribed to it in Section 1.1(a).


 


“Parts and Supplies”
means as to any of Penhall, Bob Mack, Capitol or Penhall Leasing, its fuel,
diamond blades and diamond grinders used by such Borrower in conjunction with
such Borrower’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.


 


“Penhall Borrowing
Base” means, as of any date of determination by Agent, from time to time,
an amount (calculated in Dollars or, in the case of Accounts or Short-Term
Rentals denominated in Canadian Dollars, in the U.S. Dollar Equivalent thereof)
equal to the sum at such time of:


 


(a)           up to 85% of the net amount of Penhall’s Eligible Accounts plus
Eligible Short-Term Rentals at such time;
and


 


A-18





















 


(b)           up to 80% of the Appraised Net Orderly
Liquidation Value of Penhall’s Eligible Parts and Supplies and Penhall’s
Eligible Equipment; less


 


(c)           any Reserves Agent may have applied
thereto.


 


“Penhall Leasing
Borrowing Base” means, as of any date of determination by Agent, from time
to time, an amount (calculated in Dollars or, in the case of Accounts or
Short-Term Rentals denominated in Canadian Dollars, in the U.S. Dollar
Equivalent thereof) equal to the sum at such time of:


 


(a)           up to 85% of the net amount of Penhall
Leasing’s Eligible Accounts plus Eligible Short-Term Rentals at such time; and


 


(b)           up to 80% of the Appraised Net Orderly
Liquidation Value of Penhall Leasing’s Eligible Parts and Supplies and Penhall
Leasing’s Eligible Equipment; less


 


(c)           such Reserves as Agent may have applied
thereto.


 


“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 and securing liabilities in an outstanding
aggregate amount not in excess of $500,000 at any time, so long as such Liens
attach only to Equipment or Parts and Supplies; (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 Amendment Effective Date 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(i),
provided that the Liens attach only to
the assets financed by such Indebtedness, (l) Liens securing Second Lien Debt
permitted by Section 3.1(d) so long as such Liens are subject
to the Intercreditor Agreement and (m) Liens on assets acquired from a seller
in a Permitted Acquisition and securing Indebtedness held by such seller and permitted
by clause (b)(iv)(B) of the definition of “Permitted Acquisition”.


 


“Permitted Refinancing
of Second Lien Debt” means the prepayment of Second Lien Debt (and accrued
interest and fees payable in connection therewith) from the (i) refinancing
of all or any portion of the Second Lien Debt from the proceeds of unsecured
Subordinated Debt the terms of which are acceptable in all respect to the Agent
and, without limitation, require no amortization prior to the date


 


A-19





















 


6 months following the date referred to in clause (a) of
the definition of “Commitment Termination Date”, is subordinated to the prior
payment in full of the Obligations on terms acceptable to the Agent, and as to
which no Person, that is not a Credit Party, is an issuer or guarantor of such
Indebtedness and/or (ii) the refinancing in full of the Second Lien Debt
from the proceeds of second lien Indebtedness that are on terms effected in
accordance with the terms of the Intercreditor Agreement, and are subject to
intercreditor arrangements on substantially the same terms (as determined by
the Agent) as those set forth in the Intercreditor Agreement, and as to which
no Person, that is not a Credit Party, is an issuer or guarantor of such Indebtedness.


 


“Permitted
Sale-Leaseback” means any sale of real property (with or without
improvements thereon) by Holdings to a Person who is not an Affiliate of
Holdings and the entering into by Holdings 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 Holdings 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 1.5(c),
(iv) such lease is on current market terms for the area in which such real
property is located as reasonably determined by the Borrowers, (v) after
giving effect to such sale and lease and the repayment of Indebtedness with the
proceeds of such sale, Borrowers are 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 are 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 sale or
lease.


 


“Permitted Second Lien
Payments” means (i) in each Fiscal Year, no later than one hundred
five (105) days after the end of the immediately Fiscal Year, Holdings shall be
entitled to prepay the Second Lien Debt in an amount equal to (i) 50% of
Excess Cash Flow  (as such term is
defined in the Second Lien Credit Agreement as in effect on the Amendment
Effective Date) for such immediately preceding Fiscal Year, to the extent
required by the Second Lien Credit Agreement as in effect on the Amendment
Effective Date and (ii) in each Fiscal Year, (x) so long as no Event of
Default is continuing or would occur as a result thereof and (y) the Leverage
Ratio as of the last day of the applicable “Excess Cash Flow Period” (as such
term is defined in the Second Lien Credit Agreement as of the Amendment
Effective Date) is less than 4.00:1.00, an amount not exceeding 75% of Excess
Cash Flow (as so defined) for such immediately preceding Fiscal Year less the
amount of any mandatory prepayment in respect of such Excess Cash Flow for such
Excess Cash Flow Period, (ii) prepayments from the Net Proceeds of sales
or other dispositions of assets that are of a category that are not included in
the Aggregate Borrowing Base and which have not been used to prepay and
permanently reduce the Revolving Credit Commitment or reinvested in productive
replacement assets of a kind then used or usable in the business of Borrower
during the period required by the Second Lien Credit Agreement and (iii) so
long as no Event of Default is continuing or would occur as a result thereof, a
Permitted Refinancing of the Second Lien Debt.


 


 “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, 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.


 


A-20





















 


“Pledge Agreement”
means the Pledge Agreement dated as of May 22, 2003 entered into by and
among Agent, on behalf of itself and Lenders, Holdings and Penhall, as amended,
modified or supplemented from time to time.


 


“Pro Forma” means
the unaudited consolidated and consolidating balance sheets of Holdings and its
Subsidiaries prepared in accordance with GAAP as of the Amendment Effective
Date 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 (a) with respect
to the Revolving Loans prior to the Commitment Termination Date, the percentage
obtained by dividing (i) the Revolving Loan Commitment of that Lender by (ii) the
aggregate Revolving Loan Commitments of all Lenders, and (b) with respect
to the Revolving Loans on and after the Commitment Termination Date, 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 Holdings’ forecasted consolidated and consolidating:  (a) balance sheets; (b) profit and
loss statements; (c) cash flow statements; and (d) capitalization
statements, all prepared on a Subsidiary by Subsidiary or division-by-division
basis, if applicable, and otherwise consistent with the historical Financial
Statements of Holdings, together with appropriate supporting details and a
statement of underlying assumptions.


 


“Proposed Change”
has the meaning ascribed to it in Section 9.19(c).


 


“Qualified Assignee”
means (a) any Lender, any Affiliate of any Lender and, with respect to any
Lender that is an investment fund that invests in commercial loans, any other
investment fund that invests in commercial loans and that is managed or advised
by the same investment advisor as such Lender or by an Affiliate of such
investment advisor, and (b) any commercial bank, savings and loan association
or savings bank or any other entity which is an “accredited investor” (as
defined in Regulation D under the Securities Act of 1933) which extends credit
or buys loans as one of its businesses, including insurance companies, mutual
funds, lease financing companies and commercial finance companies, in each
case, which has a rating of BBB or higher from S&P and a rating of Baa2 or
higher from Moody’s at the date that it becomes a Lender and which, through its
applicable lending office, is capable of lending to Borrowers without the
imposition of any withholding or similar taxes; provided
that no Person determined by Agent to be acting in the capacity of a vulture
fund or distressed debt purchaser shall be a Qualified Assignee and no Person
or Affiliate of such Person (other than a Person that is already a Lender)
holding Second Lien Debt, Subordinated Debt or Stock issued by any Credit Party
shall be a Qualified Assignee.


 


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


 


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


 


“Refunded Swing Line
Loan” has the meaning ascribed to it in Section 1.1(c)(iii).


 


“Related Transactions”
means the initial borrowing under the Revolving Loan on the Amendment Effective
Date, the issuance of the Second Lien Debt, the payment and satisfaction in
full and retirement of all outstanding Senior Unsecured Notes, the redemption
of the Senior Preferred Stock, the payment of all Fees, costs and expenses associated
with all of the foregoing and the execution and


 


A-21





















 


delivery of all of the Related Transactions Documents
and the amendment to the Series A Preferred Stock contemplated by Section 2.9.


 


“Related Transactions
Documents” means the Loan Documents, the Second Lien Loan Documents 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 9.19(a).


 


“Requisite Lenders”
means Lenders having (a) more than 50% of the Commitments of all Lenders,
or (b) if the Commitments have been terminated, more than 50% of the
aggregate outstanding amount of the Loans.


 


“Reserves” means,
with respect to each Borrowing Base (a) reserves established by Agent from
time to time against Eligible Accounts, Eligible Short-Term Rentals, Eligible
Parts and Supplies, Eligible Equipment and Eligible Real Estate pursuant to Exhibits
4.9(e)(i), 4.9(e)(ii), 4.9(e)(iii) and/or 4.9(e)(iv) and (b) such
other reserves against Eligible Accounts, Eligible Short-Term Rentals, Eligible
Parts and Supplies, Eligible Equipment, Eligible Real Estate or Borrowing
Availability that Agent may, in its reasonable credit judgment, establish from
time to time.  Without limiting the
generality of the foregoing, Reserves established to ensure the payment of
accrued Interest Expenses or Indebtedness shall be deemed to be a reasonable
exercise of Agent’s credit judgment.


 


“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 or prepayment of principal of, premium, if any, or interest, fees or
other charges on or with respect to, and any redemption, purchase, retirement,
defeasance, sinking fund or similar payment and any claim for rescission with
respect to, any Subordinated Debt; (d) 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; (e) 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; (f) 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 (g) 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
Advance” has the meaning ascribed to it in Section 1.1(a).


 


A-22





















 


“Revolving Lenders”
means those Lenders having a Revolving Loan Commitment.


 


“Revolving Loan(s)”
means, at any time, the sum of (i) the aggregate amount of Revolving
Credit Advances outstanding to Borrowers (including Swing Line Advances) plus
(ii) the aggregate Letter of Credit Obligations incurred on behalf of
Borrowers.  Unless the context otherwise
requires, references to the outstanding principal balance of the Revolving Loan
shall include the outstanding balance of Letter of Credit Obligations.


 


“Revolving Loan
Commitment” means (a) as to any Lender, the commitment of such Lender
to make its Pro Rata Share of Revolving Credit Advances or incur its Pro Rata
Share of Letter of Credit Obligations (including, in the case of the Swing Line
Lender, its commitment to make Swing Line Advances as a portion of its
Revolving Loan Commitment) as set forth on Annex B or in the most recent
Assignment Agreement, if any, executed by such Lender and (b) as to all
Lenders, the aggregate commitment of all Lenders to make the Revolving Credit
Advances (including, in the case of the Swing Line Lender, Swing Line Advances)
or incur Letter of Credit Obligations, which aggregate commitment shall be
fifty five million dollars ($55,000,000) on the Amendment Effective Date, as such
amount may be adjusted, if at all, from time to time in accordance with the
Agreement.


 


“Revolving Notes”
has the meaning ascribed to it in Section 1.1(a).


 


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


 


“Second
Lien Agent” has the meaning ascribed to such term in the Intercreditor
Agreement.


 


“Second
Lien Credit Agreement” means the Second Lien Credit Agreement, dated as of
the date hereof, as amended, amended and restated, supplemented or otherwise
modified from time to time in accordance with the terms hereof, by and among
Holdings, Second Lien Lenders and Second Lien Agent.


 


“Second
Lien Debt” means the Indebtedness under the Second Lien Loan Documents.


 


“Second
Lien Lenders” has the meaning ascribed to the term “Lenders” in the Second
Lien Credit Agreement.


 


“Second
Lien Loan Documents” has the meaning ascribed to the term “Loan Documents”
in the Second Lien Credit Agreement as in effect on the Amendment Effective
Date.


 


“Security Agreement”
means the Security Agreement dated as of May 22, 2003 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 Preferred
Stock” means Holdings’ 10.5% Senior Exchangeable Preferred Stock.


 


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


 


A-23





















 


“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.


 


“Series A Preferred
Stock” means
Holdings’ 13% Series A Cumulative Preferred Stock.


 


“Series B Preferred
Stock” means
Holdings’ 13% Series B Cumulative Preferred Stock.


 


“Settlement Date”
has the meaning ascribed to it in Section 8.5(a)(ii).


 


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


 


“Software” means
all “software” as such term is defined in the Code, now owned or hereafter
acquired by any Credit Party, other than software embedded in any category of
Goods, including all computer programs and all supporting information provided
in connection with a transaction related to any program.


 


“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.


 


“Sponsor” means
BRS.


 


“Statement” has the
meaning ascribed to it in Section 4.9(c).


 


“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.


 


“Subordinated Debt”
means any Indebtedness of any Credit Party subordinated to the Obligations in a
manner and form reasonably satisfactory to Agent and Requisite Lenders in their
sole discretion, as to right and time of payment and as to any other rights and
remedies thereunder and shall in any event exclude the Second Lien Debt.


 


A-24





















 


“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 Holdings.


 


“Subsidiary Guaranty”
means the Subsidiary Guaranty dated as of May 22, 2003 executed by Penhall
Investments in favor of Agent, on behalf of itself and Lenders, as amended,
modified or supplemented from time to time.


 


“Supermajority
Revolving Lenders” means Lenders having (a) 80% or more of the
Revolving Loan Commitments of all Lenders, or (b) if the Revolving Loan
Commitments have been terminated, 80% or more of the aggregate outstanding
amount of the Revolving Loan (with the Swing Line Loan being attributed to the
Lender making such Loan).


 


“Swap Related L/C”
means a letter of credit or other credit enhancement provided by GE Capital to
the extent supporting the payment obligations by Borrower under an interest
rate protection or hedging agreement or transaction (including, but not limited
to, interest rate swaps, caps, collars, floors and similar transactions)
designed to protect or manage exposure to the fluctuations in the interest
rates applicable to any of the Loans, and which agreement or transaction
Borrower entered into as the result of a specific referral pursuant to which GE
Capital, GE Corporate Financial Services, Inc. or any other Affiliate of
GE Capital had arranged for Borrower to enter into such agreement or
transaction.  The term includes a Swap
Related L/C as it may be increased from time to time fully to support Borrower’s
payment obligations under any and all such interest rate protection or hedging
agreements or transactions.


 


“Swap Related
Reimbursement Obligation” has the meaning ascribed to it in Section 1.2A.


 


“Swing Line Advance”
has the meaning ascribed to it in Section 1.1(c).


 


 “Swing Line Availability” has the
meaning ascribed to it in Section 1.1(c).


 


“Swing Line Commitment”
means the commitment of the Swing Line Lender to make Swing Line Advances as
set forth on Annex B to the Agreement, which commitment constitutes a
subfacility of the Revolving Loan Commitment of the Swing Line Lender.


 


“Swing Line Lender”
means GE Capital.


 


“Swing Line Loan”
means at any time, the aggregate amount of Swing Line Advances outstanding to
Borrowers.


 


“Swing Line Note”
has the meaning ascribed to it in Section 1.1(c).


 


A-25





















 


“Tangible Assets”
means with regard to Holdings and its consolidated Subsidiaries, all tangible
assets of Holdings and its consolidated Subsidiaries as of any date of
determination calculated in accordance with GAAP.


 


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


 


“Taxes” has the
meaning ascribed to it in Section 1.11(a).


 


“Termination Date”
means the date on which (a) the Loans have been repaid in full in cash, (b) all
other Obligations under the Agreement and the other Loan Documents have been
completely discharged, (c) all Letter of Credit Obligations have been cash
collateralized in the amount set forth in Section 1.5(g), cancelled
or, with the consent of Agent in each instance, backed by standby letters of
credit acceptable to Agent and (d) no Borrower shall have any further
right to borrow any monies under the Agreement.


 


“Testing Period”
has the meaning ascribed to it in Section 1.3(g).


 


“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 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.


 


“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.


 


“U.S. Dollar
Equivalent” means as to Accounts and Short-Term Rentals denominated in
Canadian Dollars, the amount reflected in U.S. Dollars on the balance sheet of
Holdings and its Subsidiaries most recently delivered to Agent in accordance
with Section 4.9 for such Accounts and Short-Term Rentals on such
balance sheet.


 


A-26





















 


“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.


 


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.


 


A-27





















 


ANNEX B (from Annex A - Commitments
definition)


to


AMENDED
AND RESTATED CREDIT AGREEMENT


 


PRO RATA
SHARES AND COMMITMENT AMOUNTS


 


	
   

  	
   

  	
  Lender(s)

  	
   

  
	
   

  	
   

  	
  General Electric Capital Corporation

  	
   

  
	
  Revolving Loan Commitment (including a
  Swing Line Commitment of $5,000,000) of $55,000,000

  	
   

  	
   

  	
   

  



 





















 


ANNEX C


 


to


 


AMENDED
AND RESTATED CREDIT AGREEMENT


 


CLOSING
CHECKLIST


 


Part 1:  Financial Closing Checklist


 


A.                                    DOCUMENTS


 


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


 


2.                                       Revolving Notes and Swing Line
Notes:  Duly executed originals of the Revolving
Notes and the Swing Line Notes for each applicable Lender, dated the Amendment
Effective Date, if requested by the respective Lenders shall have been
delivered to Agent.


 


3.                                       Master Reaffirmation: 
Duly executed originals of a master consent and reaffirmation by
Holdings and the other Borrowers, in form and substance satisfactory to Agent,
pursuant to which, among other things, such Person consents to this Amendment
and Restatement of Existing Credit Agreement and reaffirms its obligations
under the Subsidiary Guaranty, the Pledge Agreement, the Security Agreement,
the Mortgages, the Trademark Security Agreements, the Patent Security
Agreements, the Copyright Agreements, the Master Documentary Agreement and the
Master Standby Agreement, as applicable is in effect and guarantees payment of
the Obligations and modifies such agreements to the extent reasonably required
by Agent.


 


4.                                       Assumption and Joinder Agreement: 
Duly executed original of an assumption and joinder by Capitol to the
Master Agreement for Documentary Letters of Credit, the Master Agreement for
Standby Letters of Credit, the Security Agreements, the Trademark Security
Agreements, the Patent Security Agreements, and the Copyright Agreements, as
applicable, in each case together with all instruments, documents and
agreements executed pursuant thereto and in form and substance satisfactory to
Agent.


 


5.                                       Collateral Documents: 
Duly executed originals of the Intercreditor Agreement by the parties
thereto and the Perfection Certificates by each of the Credit Parties.


 


6.                                       Pledge Amendment and Pledged
Stock:  Duly executed originals of an amendment to
the Pledge Agreement executed by Penhall and adding thereto the Stock of
Capitol, accompanied by (as applicable) certificates representing all of the
outstanding Stock of Capitol and stock powers/indorsements for such
certificates executed in blank.   Share
certificates representing all of the outstanding Stock being pledged pursuant
to the Pledge Agreement and stock powers for such share certificates executed
in blank, and duly executed control letters from each of the Credit Parties
that is a limited partnership or a limited liability company in form and
substance satisfactory to Agent, in each case which were not previously
delivered to Agent, shall have been delivered to Agent.


 


7.                                       Omitted:


 





















 


8.                                       Omitted.


 


9.                                       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.


 


10.                                 Assignment of Business
Interruption Insurance:  To the extent of any business
interruption policy that has not heretofore been assigned to Agent, a duly
executed assignment of business interruption insurance policy to Agent in form
and substance reasonably satisfactory to Agent, together with the insurer’s
consent thereto.


 


11.                                 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 first priority security interest in the Collateral,
including (i) such documents duly executed by each Credit Party (including
financing statements under the Code and other applicable documents (including
submitting for reissuance (within 10 days after the Amendment Effective Date)
with the appropriate state motor vehicle office motor vehicle title
certificates owned by such Credit Party with Agent’s Lien noted thereon) under
the laws of any jurisdiction with respect to the perfection of Liens) and as to
which the lien of the Agent is not noted thereon 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.


 


12.                                 Lockbox Account Agreements and
Blocked Account Agreements:  Duly executed
originals of Control Agreements in favor of Agent in form and substance reasonably
satisfactory to Agent shall have been delivered to Agent with respect to all
bank accounts of the Credit Parties and creating lockboxes and lockbox accounts
as required by Section 2.10 for any deposit
account for which no Control Agreement was previously delivered pursuant to the
Existing Credit Agreement.


 


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, (b) good standing certificates (including
verification of tax status) in its state of incorporation or formation, as
applicable, and (c) good standing certificates (including verification of
tax status) and certificates of qualification to conduct business in each
jurisdiction where its ownership or lease of property or the conduct of its
business requires such qualification, each dated a recent date prior to the
Amendment Effective Date and 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 Amendment Effective 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 Amendment


 


C-2





















 


Effective 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 and California counsel for the Credit Parties, duly executed
originals of an opinion of Barnes &
Thornburg LLP, special Indiana counsel for the Credit Parties, and duly
executed originals of an opinion of Lewis & Roca LLP, special Arizona
counsel for the Credit Parties, each dated the Amendment Effective Date, shall
have been delivered to Agent.


 


17.                                 Omitted.


 


18.                                 Fee Letter: 
Duly executed originals of the GE Capital Fee Letter in form and
substance satisfactory to GE Capital shall have been delivered to Agent.


 


19.                                 Officer’s Certificate: 
Duly executed originals of a certificate of an authorized officer of
each Credit Party, dated the Amendment Effective 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 permitted by
this Agreement; (e) there has been no material increase in liabilities, liquidated
or contingent, and no material decrease in assets of Holdings, Borrower or any
of their Subsidiaries and (f)(i) Funded Debt of Holdings and its
Subsidiaries on a consolidated basis, after giving effect to the initial
fundings under the Amended and Restated Credit Agreement and the incurrence of
the Second Lien Debt and the application of proceeds thereof, does not exceed
$122,000,000, (ii) Borrower shall have a minimum trailing twelve month
EBITDA of not less than $26,800,000 for the most recently ended month for which
financial statements are available, (iii) the ratio of Funded Debt
(including Letters of Credit) to EBITDA shall be less than 4.75:1.0 as of the
Amendment Effective Date and (iv) as of the Amendment Effective Date, and
after giving effect to the consummation of the Related Transactions, Borrower
shall have a minimum Borrowing Availability of not less than $15,000,000.  Holdings owns 100% of the Stock of Penhall,
that Sponsor owns approximately 70% and that management owns approximately 30%
of the voting Stock of Holdings and that Holdings is capitalized with
approximately $28,600,000 in liquidation preference of preferred stock plus
accreted dividends (excluding the Senior Preferred Stock that is being
redeemed) and approximately $1,000,000 (in book value) of common stock.


 


20.                                 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.


 


21.                                 Environmental Reports:  Agent shall have received such environmental review
and audit reports with respect t to the Real Estate of Capitol as Agent shall
have requested, and Agent shall be satisfied, in its sole discretion, with the
contents of all such environmental reports. 
Any environmental review and audit reports requested by Agent shall have
been prepared by a nationally recognized environmental engineering firm
acceptable to Agent and shall have been delivered to Agent at least ten (10) days
prior to the Amendment Effective Date.


 


22.                                 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


 


C-3





















 


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 Amendment Effective 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.


 


23.                                 Approvals: 
Copies of any third-party, Governmental Authority or other regulatory
approvals and consents necessary to consummate the Loan Documents shall have
been delivered to Agent.


 


24.                                 Certain Closing Conditions: Agent shall have received evidence
satisfactory to it that (i) Funded Debt of Holdings and its Subsidiaries
on a consolidated basis, after giving effect to the initial fundings under the
Amended and Restated Credit Agreement and the incurrence of the Second Lien
Debt and the application of proceeds thereof, does not exceed $122,000,000, (ii) Borrower
shall have a minimum trailing twelve month EBITDA of not less than $26,800,000
for the most recently ended month for which financial statements are available,
(iii) as of the Amendment Effective Date, and after giving effect to the
consummation of the Related Transactions, Borrower shall have a minimum
Borrowing Availability of not less than $15,000,000, (iv) the ratio of
Funded Debt to EBITDA shall be less than 4.75:1.0 as of the Amendment Effective
Date and (v) Holdings owns 100% of the Stock of Penhall, that Sponsor owns
approximately 70% and that management owns approximately 30% of the voting Stock
of Holdings and that Holdings is capitalized with approximately $28,600,000 in
liquidation preference of preferred stock plus accreted dividends (excluding
the Senior Preferred Stock that is being redeemed) and approximately $1,000,000
(in book value) of common stock.


 


25.                                 Pro Forma: 
Copies of the Pro Forma in form and substance satisfactory to Agent.


 


26.                                 Evidence of Redemption of Senior
Unsecured Notes Indenture and Redemption of Senior Preferred Stock: 
Agent shall have received evidence satisfactory to it that (i) the
Senior Unsecured Notes Indenture have been irrevocably called for redemption on
the Amendment Effective Date and funds sufficient to pay the redemption price
therefore are deposited with the trustee under the Senior Unsecured Notes Indenture
and (ii) the redemption of the Senior Preferred Stock.


 


27.                                 Funding of Second Lien Debt: 
Agent shall have received evidence (i) satisfactory to it that
Borrower shall have received not less than $105,000,000 in proceeds of the
Second Lien Debt pursuant to the Second Lien Loan Documents and (ii) duly
executed copies of the Second Lien Loan Documents, each in form and substance
satisfactory to Agent.


 


28.                                 Tax Forms: 
Borrower Representative and Agent shall have received a properly
completed and executed IRS Form W-9, W-8BEN or W-8ECI (whichever is
applicable) or other applicable form, certificate or document from each Lender.


 


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


 


C-4





















 


B.                                    NON-DOCUMENTARY CONDITIONS


 


30.                                 Payment of Fees: 
Borrowers shall have paid the Fees required to be paid on the Amendment
Effective Date, including but not limited to such Fees specified in the GE
Capital Fee Letter.


 


31.                                 Omitted.


 


32.                                 Due Diligence: 
Agent shall have completed its business, legal and environmental due
diligence with results reasonably satisfactory to Agent.


 


33.                                 Borrowing Availability: The Revolving Credit Advance made on
the Amendment Effective Date shall not exceed $17,000,000 and after giving
effect to any Revolving Credit Advance made, and Letters of Credit issued, on
the Amendment Effective Date, Borrowers shall have Borrowing Availability of at
least $15,000,000.


 


34.                                 Other Requirements: 
Such other requirements of any Credit Party as Agent may, in its sole
discretion, request.


 


C-5





















 


ANNEX D


to


AMENDED
AND RESTATED CREDIT AGREEMENT


 


PRO FORMA


 


See
attached.


 





















 


ANNEX E


to


AMENDED
AND RESTATED CREDIT AGREEMENT


 


WIRE
TRANSFER INFORMATION


 




	
  Name:

  	
  General Electric Capital Corporation

  
	
  Bank:

  	
  Deutsche Bank Trust Company Americas

  
	
   

  	
  New York, New York

  
	
  ABA #:

  	
  021001033

  
	
  Account #:

  	
  50232854

  
	
  Account Name:

  	
  GECC/CAF Depository

  
	
  Reference:

  	
  GE Capital Re: Penhall – CFN 5134

  






 





















 


Exhibit 4.9(e)(i)


 


BORROWING
BASE CERTIFICATE


 


PENHALL
COMPANY


 


Date:               ,
        


 


This Certificate is given
by Penhall Company (“Borrower”) pursuant to subsection 4.9(e) of
that certain Amended and Restated Credit Agreement dated as of November 1,
2005 among Borrower, the other Credit Parties party thereto, the Lenders from
time to time party thereto and General Electric Capital Corporation, as agent
for the Lenders (as such agreement may have been amended, restated,
supplemented or otherwise modified from time to time the “Credit Agreement”).  Capitalized terms used herein without
definition shall have the meanings set forth in the Credit Agreement.


 


The undersigned is duly
authorized to execute and deliver this Certificate on behalf of Borrower.  By executing this Certificate such officer
hereby certifies to Agent and Lenders that:


 


(a)                                  Attached hereto as Schedule 1
is a calculation of the proposed Borrowing Base for Borrower as of the above
date;


 


(b)                                 Based on such schedule, the proposed
Borrowing Base as of the above date is:


 


$                 


 


(c)                                  Agent shall have the right to establish
or modify or eliminate Reserves against Eligible Accounts, Eligible Short-Term
Rentals, Eligible Parts and Supplies and Eligible Equipment from time to time
in its reasonable credit judgment.  In
addition, Agent reserves the right at any time upon five (5) days’ prior
written notice to adjust any of the criteria set forth below and to establish
new criteria in its reasonable credit judgment, subject to the approval of
Supermajority Revolving Lenders in the case of adjustments which have the
effect of making more credit available. 
Borrower acknowledges that the exercise by Agent of any right pursuant
to this clause (c) shall have the effect of adjusting the proposed
Borrowing Base set forth above.


 


IN WITNESS WHEREOF,
Borrower has caused this Certificate to be executed by its                       
this          day of                  ,           .


 


	
   

  	
  PENHALL COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Its:

  	
   

  



 





















 


Schedule 1


to Exhibit 4.9(e)(i)


 


BORROWING
BASE CALCULATION


 


PENHALL
COMPANY


 


(“Borrower”)


 


	
  Accounts of
  the Borrower reflected as accounts receivable on the Borrower’s balance sheet
  (as of the date above), but solely to the extent of the unpaid portion of the
  obligations stated on the respective invoices issued to a customer of
  Borrower with respect to inventory sold and shipped or services performed in
  the ordinary course of business, net of any credits, rebates or offsets owed
  by Borrower to the respective customer.

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Less:       Ineligible
  Accounts:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accounts that do not arise from the sale of
  goods or the performance of services by Borrower in the ordinary course of
  its business;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accounts (i) upon which Borrower’s
  right to receive payment is not absolute or is contingent upon the
  fulfillment of any condition whatsoever or (ii) as to which Borrower is
  not able to bring suit or otherwise enforce its remedies against the Account
  Debtor through judicial process, or (iii) if the Account represents
  progress billing in excess of cost or percentage of completion of the
  applicable contract or is subject to the equitable lien of a surety bond
  issuer;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Any Account to the extent that any defense,
  counterclaim, setoff or dispute is asserted as to such Account;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accounts that are not true and correct
  statements of bona fide indebtedness incurred in the amount of such Account
  for merchandise sold to or services rendered and accepted by the applicable
  Account Debtor;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accounts with respect to which an invoice,
  reasonably acceptable to Agent in form and substance, has not been sent to
  the applicable Account Debtor (including, without limitation, accrued but
  unbilled Accounts of “Division 40”);

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accounts that (i) are not owned by
  Borrower or (ii) are subject to any right, claim, security interest or
  other interest of any other Person, other than Liens in favor of Agent, on
  behalf of itself and Lenders and Permitted Encumbrances of the type described
  in clauses (a), (g) or (l) of the definition of such term;

  	
   

  	
   

  	
   

  



 





















 


	
  Accounts that arise from a sale to any
  director, officer, other employee or Affiliate of any Credit Party, or to any
  entity that has any common officer or director with any Credit Party;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accounts that are the obligation of an
  Account Debtor that is the United States government or a political
  subdivision thereof, or department, agency or instrumentality thereof unless
  Agent, in its sole discretion, has agreed to the contrary in writing and
  Borrower, if necessary or desirable, has complied with respect to such
  obligation with the Federal Assignment of Claims Act of 1940, or any
  applicable state, county or municipal law restricting the assignment thereof
  with respect to such obligation;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accounts that are the obligations of an
  Account Debtor located in a foreign country other than Canada unless payment
  thereof is assured by a letter of credit assigned and delivered to Agent,
  satisfactory to Agent as to form, amount and issuer;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accounts to the extent Borrower or any
  Subsidiary thereof is liable for goods sold or services rendered by the
  applicable Account Debtor to Borrower or any Subsidiary thereof but only to
  the extent of the potential offset;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accounts that arise with respect to goods
  that are delivered on a bill-and-hold, cash-on-delivery basis or placed on
  consignment, guaranteed sale or other terms by reason of which the payment by
  the Account Debtor is or may be conditional;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accounts that are in default; provided, that, without limiting the generality of the
  foregoing, an Account shall be deemed in default upon the occurrence of any
  of the following:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (i)            the
  Account is not paid within the earlier of: sixty (60) days following its due
  date or ninety (90) days following its original invoice date;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (ii)           the
  Account Debtor obligated upon such Account suspends business, makes a general
  assignment for the benefit of creditors or fails to pay its debts generally
  as they come due; or

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (iii)          a
  petition is filed by or against any Account Debtor obligated upon such
  Account under any bankruptcy law or any other federal, state or foreign
  (including any provincial) receivership, insolvency relief or other law or
  laws for the relief of debtors;

  	
   

  	
   

  	
   

  



 


3





















 


	
  Accounts that are the obligations of an
  Account Debtor if 50% or more of the Dollar amount of all Accounts owing by
  that Account Debtor are ineligible under clause (i) of the immediately
  preceding criterion;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accounts as to which Agent’s Lien thereon,
  on behalf of itself and Lenders, is not a first priority perfected Lien;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accounts as to which any of the
  representations or warranties in the Loan Documents are untrue;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accounts that are evidenced by a judgment,
  Instrument or Chattel Paper;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accounts to the extent such Account exceeds
  any credit limit established by Agent, in its reasonable credit judgment,
  following five (5) days’ prior written notice of such limit by Agent to
  Borrower;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accounts to the extent that such Account,
  together with all other Accounts owing to such Account Debtor and its
  Affiliates as of any date of determination exceed 15% of all Eligible
  Accounts;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accounts that are payable in any currency
  other than Dollars or Canadian Dollars;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accounts that constitute a “retention”
  Account; or

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accounts that are otherwise unacceptable to
  Agent in its reasonable credit judgment.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total Ineligible Accounts

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total Eligible Accounts (Accounts less
  Total Ineligible Accounts)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Short-Term
  Rentals of the Borrower reflected on the Borrower’s balance sheet (as of the
  date above), but solely to the extent of the unpaid portion of the
  obligations stated on the respective invoices issued to a lessee obligated
  upon such Short-Term Rental with respect to tools and like property leased in
  the ordinary course of business, net of any credits, rebates or offsets owed
  by Borrower to such lessee.

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Less:       Ineligible
  Short-Term Rentals:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Short-Term Rentals not subject to a written
  lease agreement;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Short-Term Rentals not subject to a first
  priority perfected security interest of Agent on behalf of Lenders;

  	
   

  	
   

  	
   

  



 


4





















 


	
  Any portion of such Short-Term Rental that
  has not been billed or is not due within thirty (30) days of the applicable
  date of determination;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Short-Term Rentals upon which such Borrower
  is not able to bring suit or otherwise enforce its remedies against the
  relevant lessee through judicial process;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Short-Term Rentals that (i) are not
  owned by such Borrower, (ii) are subject to any right, claim, security
  interest or other interest of any other Person, other than Liens in favor of
  Agent, on behalf of itself and Lenders and Permitted Encumbrances of the type
  described in clauses (a), (g) or (l) of the definition of such term;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Short-Term Rentals that are the obligation
  of a lessee that is the United States government or a political subdivision
  thereof, unless Agent, in its sole discretion, has agreed to the contrary in
  writing and such Borrower, if necessary or desirable, has complied with
  respect to such obligation with the Federal Assignment of Claims Act of 1940,
  or any applicable state, county or municipal law restricting the assignment
  thereof with respect to such obligation;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Short-Term Rentals that are the obligation
  of a lessee located in a foreign country, other than Canada;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Short-Term Rentals in excess of $500,000 in
  the aggregate;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Short-Term Rentals that are in default or
  due under a lease in default; provided,
  that without limiting the generality of the foregoing, a Short-Term Rental
  shall be deemed in default upon the occurrence of any of the following:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (i)            the
  Short-Term Rental is not paid within the earlier of: 60 days following its
  due date or 90 days following its original invoice date;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (ii)           the
  lessee obligated upon such Short-Term Rental suspends business, makes a
  general assignment for the benefit of creditors or fails to pay its debts
  generally as they come due; or

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (iii)          a
  petition is filed by or against any lessee obligated upon such Short-Term
  Rental under any bankruptcy law or any other federal, state or foreign
  (including any provincial) receivership, insolvency relief or other law or
  laws for the relief of debtors;

  	
   

  	
   

  	
   

  



 


5





















 


	
  Short-Term Rentals that are the obligation
  of a lessee if fifty percent (50%) or more of the Dollar amount of all
  Short-Term Rental owing by that lessee are ineligible under clause
  (i) of the immediately preceding criterion;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Short-Term Rentals as to which any of the
  representations or warranties in the Loan Documents are untrue;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Short-Term Rentals to the extent such
  Short-Term Rental exceeds any credit limit established by Agent, in its
  reasonable credit judgment, following five (5) days’ prior written
  notice of such limit by Agent to Borrower Representative;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Short-Term Rentals that are payable in any
  currency other than Dollars or Canadian Dollars; or

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Short-Term Rentals that are otherwise
  unacceptable to Agent in its reasonable credit judgment.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total Ineligible Short-Term Rentals

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total Eligible Short-Term Rentals
  (Short-Term Rentals less Ineligible Short-Term Rentals)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total Eligible Accounts plus Total Eligible
  Short-Term Rentals

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Advance Rate (Total Eligible Accounts plus
  Total Eligible Short-Term Rentals)

  	
   

  	
  85

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Accounts and Short-Term Rentals
  Availability

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Parts and Supplies owned by, and in the
  possession of the Borrower, and located in the United States of America,
  reflected on the Borrower’s balance sheet (as of the date above), valued at
  the lower of cost or market (including adequate reserves for obsolete, slow
  moving or excess quantities), on a first-in, first-out basis

  	
   

  	
  $

  	
   

  



 


6





















 


	
  Less:       Ineligible
  Parts and Supplies:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Parts and Supplies that is not owned by
  Borrower free and clear of all Liens and rights of any other Person
  (including the rights of a purchaser that has made progress payments and the
  rights of a surety that has issued a bond to assure Borrower’s performance
  with respect to that Parts and Supplies), except the Liens in favor of Agent,
  on behalf of itself and Lenders and Permitted Encumbrances of the type
  described in clauses (a), (d), (e), (g) or (l) of the definition of such
  term;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Parts and Supplies that (i) is not
  located on premises owned, leased or rented by Borrower and set forth in the
  various subschedules to Schedule III to the Security Agreement
  (excluding Parts and Supplies mounted on, affixed to or otherwise placed in a
  motor vehicle owned by such Borrower and such motor vehicle is located at the
  residence of the driver authorized to drive such motor vehicle, provided that such motor vehicle (A) is covered by a
  certificate of title on which the interest of Agent has been noted, free and
  clear of all Liens except those in favor of Agent and Lenders and Permitted
  Encumbrances of the type described in clauses (a), (d), (e), (g) or (l)
  of the definition of such term, and (B) is equipped with a global
  positioning tracking device (that is permanently affixed to such motor
  vehicle) that enables such Borrower to determine at all times the movement
  and location of such motor vehicle) or (ii) is stored at a leased
  location, unless Agent has given its prior consent thereto and unless (x) a
  reasonably satisfactory landlord waiver has been delivered to Agent within
  thirty (30) days after the Closing Date, or (y) Reserves equal to three
  months’ rent (based upon base rent and such Borrower’s pro rata share of
  operating costs, utilities and taxes payable by such Borrower under the
  lease, but excluding any supplemental rent or other costs, expenses or
  amounts or any indemnities payable thereunder, upon default or otherwise)
  have been established with respect thereto, (iii) is stored with a
  bailee or warehouseman unless a reasonably satisfactory, acknowledged bailee
  letter has been received by Agent and Reserves reasonably satisfactory to
  Agent have been established with respect thereto, or (iv) is located at
  an owned location subject to a mortgage in favor of a lender other than
  Agent, unless a reasonably satisfactory mortgagee waiver has been delivered
  to Agent, or (v) is located at any site if the aggregate book value of
  Parts and Supplies, together with Equipment of Borrower, at any such location
  is less than $100,000;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Parts and Supplies that is placed on
  consignment or is in transit, except for Parts and Supplies in transit
  between domestic locations of Credit Parties as to which Agent’s Liens have
  been perfected at origin and destination;

  	
   

  	
   

  	
   

  



 


7





















 


	
  Parts and Supplies that is covered by
  (i) a negotiable document of title, unless such document has been
  delivered to Agent with all necessary endorsements, free and clear of all
  Liens except those in favor of Agent and Lenders or (ii) a certificate
  of title unless (x) Borrower sells goods of that kind and such Parts and
  Supplies is held for sale or lease or is on lease by Borrower as lessor or (y)
  the Lien of Agent has been noted on such certificate of title in accordance
  with applicable state law;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Parts and Supplies that is excess,
  obsolete, unsaleable, shopworn, seconds, damaged or unfit for sale;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Parts and Supplies stored in, installed in
  or affixed to any property subject to any Lien having priority over the Lien
  of Agent for the benefit of Agent and the ratable benefit of Lenders
  (including Permitted Encumbrances) and the holder of such Lien has not
  entered into an intercreditor agreement in form and substance satisfactory to
  Agent as to such Lien;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Parts and Supplies that is not subject to a
  first priority lien in favor of Agent on behalf of itself and Lenders subject
  to Permitted Encumbrances of the type described in clauses (a), (d), (e),
  (g) or (l) of the definition of such term;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Parts and Supplies that breaches any of the
  representations or warranties pertaining to Parts and Supplies set forth in
  the Loan Documents;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Parts and Supplies that consists of
  Hazardous Materials or goods that can be transported or sold only with
  licenses that are not readily available;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Parts and
  Supplies that is not covered by casualty insurance reasonably acceptable to
  Agent; or

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Parts and
  Supplies that is otherwise unacceptable to Agent in its reasonable credit
  judgment.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Notwithstanding
  anything to the contrary contained herein, until there has been a
  determination of Net Orderly Liquidation Value of Parts and Supplies, none of
  the Parts and Supplies shall be Eligible Parts and Supplies.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total Ineligible Parts and Supplies

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total Eligible Parts and Supplies (Parts
  and Supplies less Total Ineligible Parts and Supplies)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Advance Rate (up to 80% of the Appraised
  Net Orderly Liquidation Value of Eligible Parts and Supplies)

  	
   

  	
   

  	
  %

  



 


8





















 


	
  Parts and Supplies Availability

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Equipment
  owned by, and in the possession of the Borrower, and located in the United
  States of America, reflected as equipment on the Borrower’s balance sheet (as
  of the date above), valued at the lower of cost or market (including adequate
  reserves for obsolete, slow moving or excess quantities), on a first-in,
  first-out basis

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Less:       Ineligible
  Equipment:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Equipment that is not owned by Borrower free and clear of all Liens
  and rights of any other Person (including the rights of a purchaser that has
  made progress payments and the rights of a surety that has issued a bond to
  assure Borrower’s performance with respect to that Equipment), except the
  Liens in favor of Agent, on behalf of itself and Lenders and Permitted
  Encumbrances of the type described in clauses (a), (d), (e), (g) or (l) of
  the definition of such term;

  	
   

  	
   

  	
   

  



 


9





















 


	
  Equipment that (i) is not located on
  premises owned, leased or rented by Borrower and set forth in the various
  subschedules to Schedule III to the Security Agreement (unless,
  at any time, such Equipment is being used at a construction or similar site
  or, if such Equipment is mounted on, affixed to or otherwise placed in a
  motor vehicle or such Equipment is a motor vehicle owned by such Borrower,
  such motor vehicle is located at the residence of the driver authorized to
  drive the motor vehicle, provided that
  such motor vehicle (A) is covered by a certificate of title on which the
  interest of Agent has been noted, free and clear of all Liens except those in
  favor of Agent and Lenders and Permitted Encumbrances of the type described
  in clauses (a), (d), (e), (g) or (l) of the definition of such term, and
  (B) is equipped with a global positioning tracking device (that is
  permanently affixed to such motor vehicle) that enables such Borrower to
  determine at all times the movement and location of such motor vehicle) or
  (ii) is stored at a leased location, unless Agent has given its prior
  consent thereto and unless (x) a reasonably satisfactory landlord’s waiver
  has been delivered to Agent within thirty (30) days after the Closing Date,
  or (y) Reserves equal to three months’ rent (based upon base rent and such
  Borrower’s pro rata share of operating costs, utilities and taxes payable by
  such Borrower under the lease, but excluding any supplemental rent or other
  costs, expenses or amounts or any indemnities payable thereunder, upon
  default or otherwise) have been established with respect thereto,
  (iii) is stored with a bailee or warehouseman unless a reasonably
  satisfactory, acknowledged bailee letter has been received by Agent and Reserves
  reasonably satisfactory to Agent have been established with respect thereto,
  or (iv) is located at an owned location subject to a mortgage in favor
  of a lender other than Agent, unless a reasonably satisfactory mortgagee
  waiver has been delivered to Agent, or (v) is located at any site if the
  aggregate book value of Equipment, together with Parts and Supplies of
  Borrower, at any such location is less than $100,000;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Equipment that is covered by a certificate
  of title unless the interest of Agent has been noted on such certificate of
  title, free and clear of all Liens except those in favor of Agent and Lenders
  and Permitted Encumbrances of the type described in clauses (a), (d), (e),
  (g) or (l) of the definition of such term;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Equipment that is excess, obsolete,
  unsaleable, shopworn, seconds, damaged or unfit for sale;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Equipment that is not a vehicle or a
  construction tool used by such Borrower in the ordinary course of its
  business;

  	
   

  	
   

  	
   

  



 


10





















 


	
  Equipment that is not subject to a first
  priority lien in favor of Agent on behalf of itself and Lenders subject to
  Permitted Encumbrances of the type described in clauses (a), (d), (e),
  (g) or (l) of the definition of such term;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Equipment that breaches any of the
  representations or warranties pertaining to Equipment set forth in the Loan
  Documents;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Equipment that is Parts and Supplies;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Equipment that consists of Hazardous
  Materials or goods that can be transported or sold only with licenses that
  are not readily available;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Equipment that is not covered by casualty
  insurance reasonably acceptable to Agent; or

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Equipment that is otherwise unacceptable to
  Agent in its reasonable credit judgment.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total Ineligible Equipment

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total Eligible Equipment (Equipment less
  Total Ineligible Equipment)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Advance Rate (up to 80% of the Appraised
  Net Orderly Liquidation Value of Eligible Equipment)

  	
   

  	
   

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Equipment Availability

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Borrowing Base (Accounts Availability plus
  Parts and Supplies Availability plus Equipment Availability)

  	
   

  	
   

  	
   

  



 


11





















 


Exhibit 4.9(e)(ii)


 


BORROWING
BASE CERTIFICATE


 


PENHALL
LEASING, L.L.C.


 


Date:               ,       



 


This Certificate is given
by Penhall Leasing, L.L.C. (“Borrower”) pursuant to subsection 4.9(e) of
that certain Amended and Restated Credit Agreement dated as of November 1,
2005 among Borrower, the other Credit Parties party thereto, the Lenders from
time to time party thereto and General Electric Capital Corporation, as agent
for the Lenders (as such agreement may have been amended, restated,
supplemented or otherwise modified from time to time the “Credit Agreement”).  Capitalized terms used herein without definition
shall have the meanings set forth in the Credit Agreement.


 


The undersigned is duly
authorized to execute and deliver this Certificate on behalf of Borrower.  By executing this Certificate such officer
hereby certifies to Agent and Lenders that:


 


(a)                                  Attached
hereto as Schedule 1 is a calculation of the proposed Borrowing
Base for Borrower as of the above date;


 


(b)                                 Based
on such schedule, the proposed Borrowing Base as of the above date is:


 


$                      


 


(c)                                  Agent
shall have the right to establish or modify or eliminate Reserves against
Eligible Accounts, Eligible Short-Term Rentals, Eligible Parts and Supplies and
Eligible Equipment from time to time in its reasonable credit judgment.  In addition, Agent reserves the right at any
time upon five (5) days’ prior written notice to adjust any of the
criteria set forth below and to establish new criteria in its reasonable credit
judgment, subject to the approval of Supermajority Revolving Lenders in the
case of adjustments which have the effect of making more credit available.  Borrower acknowledges that the exercise by
Agent of any right pursuant to this clause (c) shall have the effect of
adjusting the proposed Borrowing Base set forth above.


 


IN WITNESS WHEREOF,
Borrower has caused this Certificate to be executed by its                      
this           day of                   ,             
..


 


	
   

  	
  PENHALL LEASING, L.L.C.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Its:

  	
   

  



 


12





















 


Schedule 1


to Exhibit 4.9(e)(ii)


 


BORROWING
BASE CALCULATION


 


PENHALL
LEASING, L.L.C.


 


(“Borrower”)


 


	
  Accounts of the Borrower reflected as
  accounts receivable on the Borrower’s balance sheet (as of the date above),
  but solely to the extent of the unpaid portion of the obligations stated on
  the respective invoices issued to a customer of Borrower with respect to
  inventory sold and shipped or services performed in the ordinary course of
  business, net of any credits, rebates or offsets owed by Borrower to the
  respective customer.

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Less:       Ineligible
  Accounts:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accounts that do not arise from the sale of
  goods or the performance of services by Borrower in the ordinary course of
  its business;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accounts (i) upon which Borrower’s
  right to receive payment is not absolute or is contingent upon the
  fulfillment of any condition whatsoever or (ii) as to which Borrower is
  not able to bring suit or otherwise enforce its remedies against the Account
  Debtor through judicial process, or (iii) if the Account represents
  progress billing in excess of cost or percentage of completion of the
  applicable contract or is subject to the equitable lien of a surety bond
  issuer;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Any Account to the extent that any defense,
  counterclaim, setoff or dispute is asserted as to such Account;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accounts that are not true and correct
  statements of bona fide indebtedness incurred in the amount of such Account
  for merchandise sold to or services rendered and accepted by the applicable
  Account Debtor;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accounts with respect to which an invoice,
  reasonably acceptable to Agent in form and substance, has not been sent to
  the applicable Account Debtor (including, without limitation, accrued but
  unbilled Accounts of “Division 40”);

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accounts that (i) are not owned by
  Borrower or (ii) are subject to any right, claim, security interest or
  other interest of any other Person, other than Liens in favor of Agent, on
  behalf of itself and Lenders and Permitted Encumbrances of the type described
  in clauses (a), (g) or (l) of the definition of such term;

  	
   

  	
   

  	
   

  



 





















 


	
  Accounts that arise from a sale to any
  director, officer, other employee or Affiliate of any Credit Party, or to any
  entity that has any common officer or director with any Credit Party;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accounts that are the obligation of an
  Account Debtor that is the United States government or a political
  subdivision thereof, unless Agent, in its sole discretion, has agreed to the
  contrary in writing and Borrower, if necessary or desirable, has complied
  with respect to such obligation with the Federal Assignment of Claims Act of
  1940, or any applicable state, county or municipal law restricting the
  assignment thereof with respect to such obligation;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accounts that are the obligations of an
  Account Debtor located in a foreign country other than Canada unless payment
  thereof is assured by a letter of credit assigned and delivered to Agent,
  satisfactory to Agent as to form, amount and issuer;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accounts to the extent Borrower or any
  Subsidiary thereof is liable for goods sold or services rendered by the
  applicable Account Debtor to Borrower or any Subsidiary thereof but only to
  the extent of the potential offset;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accounts that arise with respect to goods
  that are delivered on a bill-and-hold, cash-on-delivery basis or placed on
  consignment, guaranteed sale or other terms by reason of which the payment by
  the Account Debtor is or may be conditional;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accounts that are in default; provided, that, without limiting the generality of the
  foregoing, an Account shall be deemed in default upon the occurrence of any
  of the following:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (i)            the
  Account is not paid within the earlier of: sixty (60) days following its due
  date or ninety (90) days following its original invoice date;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (ii)           the
  Account Debtor obligated upon such Account suspends business, makes a general
  assignment for the benefit of creditors or fails to pay its debts generally
  as they come due; or

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (iii)          a
  petition is filed by or against any Account Debtor obligated upon such
  Account under any bankruptcy law or any other federal, state or foreign
  (including any provincial) receivership, insolvency relief or other law or
  laws for the relief of debtors;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accounts that are the obligations of an
  Account Debtor if 50% or more of the Dollar amount of all Accounts owing by
  that Account Debtor are ineligible under clause (i) of the immediately
  preceding criterion;

  	
   

  	
   

  	
   

  



 


2





















 


	
  Accounts as to which Agent’s Lien thereon,
  on behalf of itself and Lenders, is not a first priority perfected Lien;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accounts as to which any of the
  representations or warranties in the Loan Documents are untrue;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accounts that are evidenced by a judgment,
  Instrument or Chattel Paper;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accounts to the extent such Account exceeds
  any credit limit established by Agent, in its reasonable credit judgment,
  following five (5) days’ prior written notice of such limit by Agent to
  Borrower;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accounts to the extent that such Account,
  together with all other Accounts owing to such Account Debtor and its
  Affiliates as of any date of determination exceed 15% of all Eligible
  Accounts;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accounts that are payable in any currency
  other than Dollars or Canadian Dollars; or

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accounts that constitute a “retention” Account;
  or

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accounts that are otherwise unacceptable to
  Agent in its reasonable credit judgment.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total Ineligible Accounts

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total Eligible Accounts (Accounts less
  Total Ineligible Accounts)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Short-Term Rentals of the Borrower
  reflected on the Borrower’s balance sheet (as of the date above), but solely
  to the extent of the unpaid portion of the obligations stated on the
  respective invoices issued to a lessee obligated upon such Short-Term Rental
  with respect to tools or like property leased in the ordinary course of
  business, net of any credits, rebates or offsets owed by Borrower to such
  lessee.

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Less:       Ineligible
  Short-Term Rentals:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Short-Term Rentals not subject to a written
  lease agreement;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Short-Term Rentals not subject to a first
  priority perfected security interest of Agent on behalf of Lenders;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Any portion of such Short-Term Rental that
  has not been billed or is not due within thirty (30) days of the applicable
  date of determination;

  	
   

  	
   

  	
   

  



 


3





















 


	
  Short-Term Rentals upon which such Borrower
  is not able to bring suit or otherwise enforce its remedies against the
  relevant lessee through judicial process;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Short-Term Rentals that (i) are not
  owned by such Borrower, (ii) are subject to any right, claim, security
  interest or other interest of any other Person, other than Liens in favor of
  Agent, on behalf of itself and Lenders and Permitted Encumbrances of the type
  described in clauses (a), (g) or (l) of the definition of such term;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Short-Term Rentals that are the obligation
  of a lessee that is the United States government or a political subdivision
  thereof, unless Agent, in its sole discretion, has agreed to the contrary in
  writing and such Borrower, if necessary or desirable, has complied with
  respect to such obligation with the Federal Assignment of Claims Act of 1940,
  or any applicable state, county or municipal law restricting the assignment
  thereof with respect to such obligation;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Short-Term Rentals that are the obligation
  of a lessee located in a foreign country, other than Canada;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Short-Term Rentals in excess of $500,000 in
  the aggregate;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Short-Term Rentals that are in default or
  due under a lease in default; provided,
  that without limiting the generality of the foregoing, a Short-Term Rental
  shall be deemed in default upon the occurrence of any of the following:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (i)            the
  Short-Term Rental is not paid within the earlier of: 60 days following its
  due date or 90 days following its original invoice date;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (ii)           the
  lessee obligated upon such Short-Term Rental suspends business, makes a
  general assignment for the benefit of creditors or fails to pay its debts
  generally as they come due; or

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (iii)          a
  petition is filed by or against any lessee obligated upon such Short-Term
  Rental under any bankruptcy law or any other federal, state or foreign
  (including any provincial) receivership, insolvency relief or other law or
  laws for the relief of debtors;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Short-Term Rentals that are the obligation
  of a lessee if fifty percent (50%) or more of the Dollar amount of all
  Short-Term Rental owing by that lessee are ineligible under clause
  (i) of the immediately preceding criterion;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Short-Term Rentals as to which any of the
  representations or warranties in the Loan Documents are untrue;

  	
   

  	
   

  	
   

  



 


4





















 


	
  Short-Term Rentals to the extent such
  Short-Term Rental exceeds any credit limit established by Agent, in its
  reasonable credit judgment, following five (5) days’ prior written
  notice of such limit by Agent to Borrower Representative;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Short-Term Rentals that are payable in any
  currency other than Dollars or Canadian Dollars; or

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Short-Term Rentals that are otherwise
  unacceptable to Agent in its reasonable credit judgment.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total Ineligible Short-Term Rentals

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total Eligible Short-Term Rentals
  (Short-Term Rentals less Ineligible Short-Term Rentals)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total Eligible Accounts plus Total Eligible
  Short-Term Rentals

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Advance Rate (Total Eligible Accounts plus
  Total Eligible Short-Term Rentals)

  	
   

  	
  85

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Accounts and Short-Term Rentals
  Availability

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Parts and Supplies owned by, and in the
  possession of the Borrower, and located in the United States of America,
  reflected on the Borrower’s balance sheet (as of the date above), valued at
  the lower of cost or market (including adequate reserves for obsolete, slow
  moving or excess quantities), on a first-in, first-out basis

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Less:       Ineligible
  Parts and Supplies:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Parts and Supplies that is not owned by
  Borrower free and clear of all Liens and rights of any other Person
  (including the rights of a purchaser that has made progress payments and the
  rights of a surety that has issued a bond to assure Borrower’s performance
  with respect to that Parts and Supplies), except the Liens in favor of Agent,
  on behalf of itself and Lenders and Permitted Encumbrances of the type
  described in clauses (a), (d), (e), (g) or (l) of the definition of such
  term;

  	
   

  	
   

  	
   

  



 


5





















 


	
  Parts and Supplies that (i) is not
  located on premises owned, leased or rented by Borrower and set forth in the
  various subschedules to Schedule III to the Security Agreement
  (excluding Parts and Supplies mounted on, affixed to or otherwise placed in a
  motor vehicle owned by such Borrower and such motor vehicle is located at the
  residence of the driver authorized to drive such motor vehicle, provided that such motor vehicle (A) is covered by a
  certificate of title on which the interest of Agent has been noted, free and
  clear of all Liens except those in favor of Agent and Lenders and Permitted
  Encumbrances of the type described in clauses (a), (d), (e), (g) or (l)
  of the definition of such term, and (B) is equipped with a global
  positioning tracking device (that is permanently affixed to such motor
  vehicle) that enables such Borrower to determine at all times the movement
  and location of such motor vehicle) or (ii) is stored at a leased
  location, unless Agent has given its prior consent thereto and unless (x) a
  reasonably satisfactory landlord waiver has been delivered to Agent within
  thirty (30) days after the Closing Date, or (y) Reserves equal to three
  months’ rent (based upon base rent and such Borrower’s pro rata share of
  operating costs, utilities and taxes payable by such Borrower under the
  lease, but excluding any supplemental rent or other costs, expenses or
  amounts or any indemnities payable thereunder, upon default or otherwise)
  have been established with respect thereto, (iii) is stored with a
  bailee or warehouseman unless a reasonably satisfactory, acknowledged bailee
  letter has been received by Agent and Reserves reasonably satisfactory to Agent
  have been established with respect thereto, or (iv) is located at an
  owned location subject to a mortgage in favor of a lender other than Agent,
  unless a reasonably satisfactory mortgagee waiver has been delivered to
  Agent, or (v) is located at any site if the aggregate book value of
  Parts and Supplies, together with Equipment of Borrower, at any such location
  is less than $100,000;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Parts and Supplies that is placed on
  consignment or is in transit, except for Parts and Supplies in transit between
  domestic locations of Credit Parties as to which Agent’s Liens have been
  perfected at origin and destination;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Parts and Supplies that is covered by
  (i) a negotiable document of title, unless such document has been
  delivered to Agent with all necessary endorsements, free and clear of all
  Liens except those in favor of Agent and Lenders or (ii) a certificate
  of title unless (x) Borrower sells goods of that kind and such Parts and
  Supplies is held for sale or lease or is on lease by Borrower as lessor or
  (y) the Lien of Agent has been noted on such certificate of title in
  accordance with applicable state law;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Parts and Supplies that is excess,
  obsolete, unsaleable, shopworn, seconds, damaged or unfit for sale;

  	
   

  	
   

  	
   

  



 


6





















 


	
  Parts and Supplies stored in, installed in
  or affixed to any property subject to any Lien having priority over the Lien
  of Agent for the benefit of Agent and the ratable benefit of Lenders
  (including Permitted Encumbrances) and the holder of such Lien has not
  entered into an intercreditor agreement in form and substance satisfactory to
  Agent as to such Lien;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Parts and Supplies that is not subject to a
  first priority lien in favor of Agent on behalf of itself and Lenders subject
  to Permitted Encumbrances of the type described in clauses (a), (d), (e),
  (g) or (l) of the definition of such term;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Parts and Supplies that breaches any of the
  representations or warranties pertaining to Parts and Supplies set forth in
  the Loan Documents;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Parts and Supplies that consists of
  Hazardous Materials or goods that can be transported or sold only with
  licenses that are not readily available;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Parts and Supplies that is not covered by
  casualty insurance reasonably acceptable to Agent; or

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Parts and Supplies that is otherwise
  unacceptable to Agent in its reasonable credit judgment.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Notwithstanding anything to the contrary
  contained herein, until there has been a determination of Net Orderly
  Liquidation Value of Parts and Supplies, none of the Parts and Supplies shall
  be Eligible Parts and Supplies.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total Ineligible Parts and Supplies

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total Eligible Parts and Supplies (Parts
  and Supplies less Total Ineligible Parts and Supplies)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Advance Rate (up to 80% of the Appraised
  Net Orderly Liquidation Value of Eligible Parts and Supplies)%

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Parts and Supplies Availability

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Equipment owned by, and in the possession
  of the Borrower, and located in the United States of America, reflected as
  equipment on the Borrower’s balance sheet (as of the date above), valued at
  the lower of cost or market (including adequate reserves for obsolete, slow
  moving or excess quantities), on a first-in, first-out basis

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Less:       Ineligible
  Equipment:

  	
   

  	
   

  	
   

  



 


7





















 


	
  Equipment that is not owned by Borrower
  free and clear of all Liens and rights of any other Person (including the
  rights of a purchaser that has made progress payments and the rights of a
  surety that has issued a bond to assure Borrower’s performance with respect
  to that Equipment), except the Liens in favor of Agent, on behalf of itself
  and Lenders and Permitted Encumbrances of the type described in clauses (a),
  (d), (e), (g) or (l) of the definition of such term;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Equipment that (i) is not located on
  premises owned, leased or rented by Borrower and set forth in the various
  subschedules to Schedule III to the Security Agreement (unless,
  at any time, such Equipment is being used at a construction or similar site
  or, if such Equipment is mounted on, affixed to or otherwise placed in a
  motor vehicle or such Equipment is a motor vehicle owned by such Borrower,
  such motor vehicle is located at the residence of the driver authorized to
  drive the motor vehicle, provided that
  such motor vehicle (A) is covered by a certificate of title on which the
  interest of Agent has been noted, free and clear of all Liens except those in
  favor of Agent and Lenders and Permitted Encumbrances of the type described
  in clauses (a), (d), (e), (g) or (l) of the definition of such term, and
  (B) is equipped with a global positioning tracking device (that is
  permanently affixed to such motor vehicle) that enables such Borrower to
  determine at all times the movement and location of such motor vehicle) or
  (ii) is stored at a leased location, unless Agent has given its prior
  consent thereto and unless (x) a reasonably satisfactory landlord’s waiver
  has been delivered to Agent within thirty (30) days after the Closing Date,
  or (y) Reserves equal to three months’ rent (based upon base rent and such
  Borrower’s pro rata share of operating costs, utilities and taxes payable by
  such Borrower under the lease, but excluding any supplemental rent or other
  costs, expenses or amounts or any indemnities payable thereunder, upon
  default or otherwise) have been established with respect thereto,
  (iii) is stored with a bailee or warehouseman unless a reasonably
  satisfactory, acknowledged bailee letter has been received by Agent and Reserves
  reasonably satisfactory to Agent have been established with respect thereto,
  or (iv) is located at an owned location subject to a mortgage in favor
  of a lender other than Agent, unless a reasonably satisfactory mortgagee
  waiver has been delivered to Agent, or (v) is located at any site if the
  aggregate book value of Equipment, together with Parts and Supplies of
  Borrower, at any such location is less than $100,000;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Equipment that is covered by a certificate
  of title unless the interest of Agent has been noted on such certificate of
  title, free and clear of all Liens except those in favor of Agent and Lenders
  and Permitted Encumbrances of the type described in clauses (a), (d), (e),
  (g) or (l) of the definition of such term;

  	
   

  	
   

  	
   

  



 


8





















 


	
  Equipment that is excess, obsolete,
  unsaleable, shopworn, seconds, damaged or unfit for sale;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Equipment that is not a vehicle or a
  construction tool used by such Borrower in the ordinary course of its business;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Equipment that is not subject to a first
  priority lien in favor of Agent on behalf of itself and Lenders subject to
  Permitted Encumbrances of the type described in clauses (a), (d), (e),
  (g) or (l) of the definition of such term;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Equipment that breaches any of the
  representations or warranties pertaining to Equipment set forth in the Loan
  Documents;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Equipment that is Parts and Supplies;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Equipment that consists of Hazardous
  Materials or goods that can be transported or sold only with licenses that
  are not readily available;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Equipment that is not covered by casualty
  insurance reasonably acceptable to Agent; or

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Equipment that is otherwise unacceptable to
  Agent in its reasonable credit judgment.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total Ineligible Equipment

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total Eligible Equipment (Equipment less
  Total Ineligible Equipment)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Advance Rate (up to 80% of the Appraised
  Net Orderly Liquidation Value of Eligible Equipment)

  	
   

  	
   

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Equipment Availability

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Borrowing Base (Accounts Availability plus
  Parts and Supplies Availability plus Equipment Availability)

  	
   

  	
   

  	
   

  



 


9





















 


Exhibit 4.9(e)(iii)


 


BORROWING
BASE CERTIFICATE


 


BOB MACK
CO., INC


 


Date:              ,       


 


This Certificate is given
by Bob Mack Co., Inc. (“Borrower”) pursuant to subsection 4.9(e) of
that certain Amended and Restated Credit Agreement dated as of November 1,
2005 among Borrower, the other Credit Parties party thereto, the Lenders from
time to time party thereto and General Electric Capital Corporation, as agent
for the Lenders (as such agreement may have been amended, restated,
supplemented or otherwise modified from time to time the “Credit Agreement”).  Capitalized terms used herein without definition
shall have the meanings set forth in the Credit Agreement.


 


The undersigned is duly
authorized to execute and deliver this Certificate on behalf of Borrower.  By executing this Certificate such officer
hereby certifies to Agent and Lenders that:


 


(a)                                  Attached
hereto as Schedule 1 is a calculation of the proposed Borrowing
Base for Borrower as of the above date;


 


(b)                                 Based
on such schedule, the proposed Borrowing Base as of the above date is:


 


$                     


 


(c)                                  Agent
shall have the right to establish or modify or eliminate Reserves against
Eligible Accounts, Eligible Short-Term Rentals, Eligible Parts and Supplies and
Eligible Equipment from time to time in its reasonable credit judgment.  In addition, Agent reserves the right at any
time upon five (5) days’ prior written notice to adjust any of the
criteria set forth below and to establish new criteria in its reasonable credit
judgment, subject to the approval of Supermajority Revolving Lenders in the
case of adjustments which have the effect of making more credit available.  Borrower acknowledges that the exercise by
Agent of any right pursuant to this clause (c) shall have the effect of
adjusting the proposed Borrowing Base set forth above.


 


IN WITNESS WHEREOF,
Borrower has caused this Certificate to be executed by its                            
this          day of                     ,          
..


 


	
   

  	
  BOB MACK CO., INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Its:

  	
   

  



 


10





















 


Schedule 1


to Exhibit 4.9(e)(iii)


 


BORROWING
BASE CALCULATION


 


BOB MACK
CO., INC.


 


(“Borrower”)


 


	
  Accounts of the Borrower reflected as
  accounts receivable on the Borrower’s balance sheet (as of the date above),
  but solely to the extent of the unpaid portion of the obligations stated on
  the respective invoices issued to a customer of Borrower with respect to
  inventory sold and shipped or services performed in the ordinary course of
  business, net of any credits, rebates or offsets owed by Borrower to the
  respective customer.

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Less:       Ineligible
  Accounts:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accounts that do not arise from the sale of goods or
  the performance of services by Borrower in the ordinary course of its
  business;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accounts (i) upon which Borrower’s
  right to receive payment is not absolute or is contingent upon the
  fulfillment of any condition whatsoever or (ii) as to which Borrower is
  not able to bring suit or otherwise enforce its remedies against the Account
  Debtor through judicial process, or (iii) if the Account represents
  progress billing in excess of cost or percentage of completion of the
  applicable contract or is subject to the equitable lien of a surety bond
  issuer;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Any Account to the extent that any defense,
  counterclaim, setoff or dispute is asserted as to such Account;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accounts that are not true and correct
  statements of bona fide indebtedness incurred in the amount of such Account
  for merchandise sold to or services rendered and accepted by the applicable
  Account Debtor;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accounts with respect to which an invoice,
  reasonably acceptable to Agent in form and substance, has not been sent to
  the applicable Account Debtor (including, without limitation, accrued but
  unbilled Accounts of “Division 40”);

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accounts that (i) are not owned by
  Borrower or (ii) are subject to any right, claim, security interest or
  other interest of any other Person, other than Liens in favor of Agent, on
  behalf of itself and Lenders and Permitted Encumbrances of the type described
  in clauses (a), (g) or (l) of the definition of such term;

  	
   

  	
   

  	
   

  



 





















 


	
  Accounts that arise from a sale to any
  director, officer, other employee or Affiliate of any Credit Party, or to any
  entity that has any common officer or director with any Credit Party;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accounts that are the obligation of an
  Account Debtor that is the United States government or a political
  subdivision thereof, unless Agent, in its sole discretion, has agreed to the
  contrary in writing and Borrower, if necessary or desirable, has complied
  with respect to such obligation with the Federal Assignment of Claims Act of
  1940, or any applicable state, county or municipal law restricting the
  assignment thereof with respect to such obligation;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accounts that are the obligations of an
  Account Debtor located in a foreign country other than Canada unless payment
  thereof is assured by a letter of credit assigned and delivered to Agent,
  satisfactory to Agent as to form, amount and issuer;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accounts to the extent Borrower or any
  Subsidiary thereof is liable for goods sold or services rendered by the applicable
  Account Debtor to Borrower or any Subsidiary thereof but only to the extent
  of the potential offset;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accounts that arise with respect to goods
  that are delivered on a bill-and-hold, cash-on-delivery basis or placed on
  consignment, guaranteed sale or other terms by reason of which the payment by
  the Account Debtor is or may be conditional;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accounts that are in default; provided, that, without limiting the generality of the
  foregoing, an Account shall be deemed in default upon the occurrence of any
  of the following:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (i)            the Account is not paid within the
  earlier of: sixty (60) days following its due date or ninety (90) days
  following its original invoice date;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (ii)           the
  Account Debtor obligated upon such Account suspends business, makes a general
  assignment for the benefit of creditors or fails to pay its debts generally
  as they come due; or 

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (iii)          a
  petition is filed by or against any Account Debtor obligated upon such
  Account under any bankruptcy law or any other federal, state or foreign
  (including any provincial) receivership, insolvency relief or other law or
  laws for the relief of debtors;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accounts that are the obligations of an
  Account Debtor if 50% or more of the Dollar amount of all Accounts owing by
  that Account Debtor are ineligible under clause (i) of the immediately
  preceding criterion;

  	
   

  	
   

  	
   

  



 





















 


	
  Accounts as to which Agent’s Lien thereon,
  on behalf of itself and Lenders, is not a first priority perfected Lien;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accounts as to which any of the
  representations or warranties in the Loan Documents are untrue;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accounts that are evidenced by a judgment,
  Instrument or Chattel Paper;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accounts to the extent such Account exceeds
  any credit limit established by Agent, in its reasonable credit judgment,
  following five (5) days’ prior written notice of such limit by Agent to
  Borrower;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accounts to the extent that such Account,
  together with all other Accounts owing to such Account Debtor and its
  Affiliates as of any date of determination exceed 15% of all Eligible
  Accounts;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accounts that are payable in any currency
  other than Dollars or Canadian Dollars; or

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accounts that constitute a “retention”
  Account; or

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accounts that are otherwise unacceptable to
  Agent in its reasonable credit judgment.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total Ineligible Accounts

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total Eligible Accounts (Accounts less
  Total Ineligible Accounts)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Short-Term Rentals of the Borrower
  reflected on the Borrower’s balance sheet (as of the date above), but solely
  to the extent of the unpaid portion of the obligations stated on the
  respective invoices issued to a lessee obligated upon such Short-Term Rental
  with respect to tools or like property leased in the ordinary course of
  business, net of any credits, rebates or offsets owed by Borrower to such
  lessee.

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Less:       Ineligible
  Short-Term Rentals:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Short-Term Rentals not subject to a written
  lease agreement;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Short-Term Rentals not subject to a first
  priority perfected security interest of Agent on behalf of Lenders;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Any portion of such Short-Term Rental that
  has not been billed or is not due within thirty (30) days of the applicable
  date of determination;

  	
   

  	
   

  	
   

  



 





















 


	
  Short-Term Rentals upon which such Borrower
  is not able to bring suit or otherwise enforce its remedies against the
  relevant lessee through judicial process;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Short-Term Rentals that (i) are not
  owned by such Borrower, (ii) are subject to any right, claim, security
  interest or other interest of any other Person, other than Liens in favor of
  Agent, on behalf of itself and Lenders and Permitted Encumbrances of the type
  described in clauses (a), (g) or (l) of the definition of such term;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Short-Term Rentals that are the obligation
  of a lessee that is the United States government or a political subdivision
  thereof, unless Agent, in its sole discretion, has agreed to the contrary in
  writing and such Borrower, if necessary or desirable, has complied with
  respect to such obligation with the Federal Assignment of Claims Act of 1940,
  or any applicable state, county or municipal law restricting the assignment
  thereof with respect to such obligation;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Short-Term Rentals that are the obligation
  of a lessee located in a foreign country, other than Canada;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Short-Term Rentals in excess of $500,000 in
  the aggregate;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Short-Term Rentals that are in default or
  due under a lease in default; provided,
  that without limiting the generality of the foregoing, a Short-Term Rental
  shall be deemed in default upon the occurrence of any of the following:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (i)            the
  Short-Term Rental is not paid within the earlier of: 60 days following its
  due date or 90 days following its original invoice date;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (ii)           the
  lessee obligated upon such Short-Term Rental suspends business, makes a
  general assignment for the benefit of creditors or fails to pay its debts
  generally as they come due; or

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (iii)          a
  petition is filed by or against any lessee obligated upon such Short-Term
  Rental under any bankruptcy law or any other federal, state or foreign
  (including any provincial) receivership, insolvency relief or other law or
  laws for the relief of debtors;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Short-Term Rentals that are the obligation
  of a lessee if fifty percent (50%) or more of the Dollar amount of all
  Short-Term Rental owing by that lessee are ineligible under clause (i) of
  the immediately preceding criterion;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Short-Term Rentals as to which any of the
  representations or warranties in the Loan Documents are untrue;

  	
   

  	
   

  	
   

  



 





















 


	
  Short-Term Rentals to the extent such
  Short-Term Rental exceeds any credit limit established by Agent, in its
  reasonable credit judgment, following five (5) days’ prior written
  notice of such limit by Agent to Borrower Representative;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Short-Term Rentals that are payable in any
  currency other than Dollars or Canadian Dollars; or

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Short-Term Rentals that are otherwise
  unacceptable to Agent in its reasonable credit judgment.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total Ineligible Short-Term Rentals

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total Eligible Short-Term Rentals
  (Short-Term Rentals less Ineligible Short-Term Rentals)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total Eligible Accounts plus Total Eligible
  Short-Term Rentals

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Advance Rate (Total Eligible Accounts plus
  Total Eligible Short-Term Rentals)

  	
   

  	
  85

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Accounts and Short-Term Rentals
  Availability 

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Parts and Supplies owned by, and in the
  possession of the Borrower, and located in the United States of America,
  reflected on the Borrower’s balance sheet (as of the date above), valued at
  the lower of cost or market (including adequate reserves for obsolete, slow
  moving or excess quantities), on a first-in, first-out basis

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Less:       Ineligible
  Parts and Supplies:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Parts and Supplies that is not owned by
  Borrower free and clear of all Liens and rights of any other Person
  (including the rights of a purchaser that has made progress payments and the
  rights of a surety that has issued a bond to assure Borrower’s performance
  with respect to that Parts and Supplies), except the Liens in favor of Agent,
  on behalf of itself and Lenders and Permitted Encumbrances of the type
  described in clauses (a), (d), (e), (g) or (l) of the definition of such
  term;

  	
   

  	
   

  	
   

  



 





















 


	
  Parts and Supplies that (i) is not
  located on premises owned, leased or rented by Borrower and set forth in the
  various subschedules to Schedule III to the Security Agreement
  (excluding Parts and Supplies mounted on, affixed to or otherwise placed in a
  motor vehicle owned by such Borrower and such motor vehicle is located at the
  residence of the driver authorized to drive such motor vehicle, provided that such motor vehicle (A) is covered by a
  certificate of title on which the interest of Agent has been noted, free and
  clear of all Liens except those in favor of Agent and Lenders and Permitted
  Encumbrances of the type described in clauses (a), (d), (e), (g) or (l)
  of the definition of such term, and (B) is equipped with a global
  positioning tracking device (that is permanently affixed to such motor
  vehicle) that enables such Borrower to determine at all times the movement
  and location of such motor vehicle) or (ii) is stored at a leased
  location, unless Agent has given its prior consent thereto and unless (x) a
  reasonably satisfactory landlord waiver has been delivered to Agent within
  thirty (30) days after the Closing Date, or (y) Reserves equal to three
  months’ rent (based upon base rent and such Borrower’s pro rata share of
  operating costs, utilities and taxes payable by such Borrower under the
  lease, but excluding any supplemental rent or other costs, expenses or
  amounts or any indemnities payable thereunder, upon default or otherwise)
  have been established with respect thereto, (iii) is stored with a
  bailee or warehouseman unless a reasonably satisfactory, acknowledged bailee
  letter has been received by Agent and Reserves reasonably satisfactory to
  Agent have been established with respect thereto, or (iv) is located at
  an owned location subject to a mortgage in favor of a lender other than
  Agent, unless a reasonably satisfactory mortgagee waiver has been delivered
  to Agent, or (v) is located at any site if the aggregate book value of
  Parts and Supplies, together with Equipment of Borrower, at any such location
  is less than $100,000;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Parts and Supplies that is placed on
  consignment or is in transit, except for Parts and Supplies in transit
  between domestic locations of Credit Parties as to which Agent’s Liens have
  been perfected at origin and destination;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Parts and Supplies that is covered by (i) a
  negotiable document of title, unless such document has been delivered to
  Agent with all necessary endorsements, free and clear of all Liens except
  those in favor of Agent and Lenders or (ii) a certificate of title
  unless (x) Borrower sells goods of that kind and such Parts and Supplies is
  held for sale or lease or is on lease by Borrower as lessor or (y) the Lien
  of Agent has been noted on such certificate of title in accordance with
  applicable state law;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Parts and Supplies that is excess,
  obsolete, unsaleable, shopworn, seconds, damaged or unfit for sale;

  	
   

  	
   

  	
   

  



 





















 


	
  Parts and Supplies stored in, installed in
  or affixed to any property subject to any Lien having priority over the Lien
  of Agent for the benefit of Agent and the ratable benefit of Lenders
  (including Permitted Encumbrances) and the holder of such Lien has not
  entered into an intercreditor agreement in form and substance satisfactory to
  Agent as to such Lien;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Parts and Supplies that is not subject to a
  first priority lien in favor of Agent on behalf of itself and Lenders subject
  to Permitted Encumbrances of the type described in clauses (a), (d), (e), (g) or
  (l) of the definition of such term;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Parts and Supplies that breaches any of the
  representations or warranties pertaining to Parts and Supplies set forth in
  the Loan Documents;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Parts and Supplies that consists of
  Hazardous Materials or goods that can be transported or sold only with
  licenses that are not readily available;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Parts and Supplies that is not covered by
  casualty insurance reasonably acceptable to Agent; or

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Parts and Supplies that is otherwise
  unacceptable to Agent in its reasonable credit judgment.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Notwithstanding anything to the contrary
  contained herein, until there has been a determination of Net Orderly
  Liquidation Value of Parts and Supplies, none of the Parts and Supplies shall
  be Eligible Parts and Supplies.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total Ineligible Parts and Supplies

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total Eligible Parts and Supplies (Parts
  and Supplies less Total Ineligible Parts and Supplies)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Advance Rate (up to 80% of the Appraised
  Net Orderly Liquidation Value of Eligible Parts and Supplies)

  	
   

  	
   

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Parts and Supplies Availability

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Equipment owned by, and in the possession
  of the Borrower, and located in the United States of America, reflected as
  equipment on the Borrower’s balance sheet (as of the date above), valued at
  the lower of cost or market (including adequate reserves for obsolete, slow
  moving or excess quantities), on a first-in, first-out basis

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Less:       Ineligible
  Equipment:

  	
   

  	
   

  	
   

  



 





















 


	
  Equipment that is not owned by Borrower
  free and clear of all Liens and rights of any other Person (including the
  rights of a purchaser that has made progress payments and the rights of a
  surety that has issued a bond to assure Borrower’s performance with respect
  to that Equipment), except the Liens in favor of Agent, on behalf of itself
  and Lenders and Permitted Encumbrances of the type described in clauses (a),
  (d), (e), (g) or (l) of the definition of such term;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Equipment that (i) is not located on
  premises owned, leased or rented by Borrower and set forth in the various
  subschedules to Schedule III to the Security Agreement (unless,
  at any time, such Equipment is being used at a construction or similar site
  or, if such Equipment is mounted on, affixed to or otherwise placed in a
  motor vehicle or such Equipment is a motor vehicle owned by such Borrower,
  such motor vehicle is located at the residence of the driver authorized to
  drive the motor vehicle, provided that
  such motor vehicle (A) is covered by a certificate of title on which the
  interest of Agent has been noted, free and clear of all Liens except those in
  favor of Agent and Lenders and Permitted Encumbrances of the type described
  in clauses (a), (d), (e), (g) or (l) of the definition of such term, and
  (B) is equipped with a global positioning tracking device (that is
  permanently affixed to such motor vehicle) that enables such Borrower to
  determine at all times the movement and location of such motor vehicle) or (ii) is
  stored at a leased location, unless Agent has given its prior consent thereto
  and unless (x) a reasonably satisfactory landlord’s waiver has been delivered
  to Agent within thirty (30) days after the Closing Date, or (y) Reserves
  equal to three months’ rent (based upon base rent and such Borrower’s pro
  rata share of operating costs, utilities and taxes payable by such Borrower
  under the lease, but excluding any supplemental rent or other costs, expenses
  or amounts or any indemnities payable thereunder, upon default or otherwise)
  have been established with respect thereto, (iii) is stored with a
  bailee or warehouseman unless a reasonably satisfactory, acknowledged bailee
  letter has been received by Agent and Reserves reasonably satisfactory to
  Agent have been established with respect thereto, or (iv) is located at
  an owned location subject to a mortgage in favor of a lender other than
  Agent, unless a reasonably satisfactory mortgagee waiver has been delivered
  to Agent, or (v) is located at any site if the aggregate book value of
  Equipment, together with Parts and Supplies of Borrower, at any such location
  is less than $100,000;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Equipment that is covered by a certificate
  of title unless the interest of Agent has been noted on such certificate of
  title, free and clear of all Liens except those in favor of Agent and Lenders
  and Permitted Encumbrances of the type described in clauses (a), (d), (e), (g) or
  (l) of the definition of such term;

  	
   

  	
   

  	
   

  



 





















 


	
  Equipment that is excess, obsolete,
  unsaleable, shopworn, seconds, damaged or unfit for sale;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Equipment that is not a vehicle or
  construction tool used by such Borrower in the ordinary course of its
  business;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Equipment that is not subject to a first
  priority lien in favor of Agent on behalf of itself and Lenders subject to
  Permitted Encumbrances of the type described in clauses (a), (d), (e), (g) or
  (l) of the definition of such term;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Equipment that breaches any of the
  representations or warranties pertaining to Equipment set forth in the Loan
  Documents;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Equipment that is Parts and Supplies;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Equipment that consists of Hazardous
  Materials or goods that can be transported or sold only with licenses that
  are not readily available;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Equipment that is not covered by casualty
  insurance reasonably acceptable to Agent; or

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Equipment that is otherwise unacceptable to
  Agent in its reasonable credit judgment.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total Ineligible Equipment

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total Eligible Equipment (Equipment less
  Total Ineligible Equipment)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Advance Rate (up to 80% of the Appraised
  Net Orderly Liquidation Value of Eligible Equipment)

  	
   

  	
   

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Equipment Availability

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Borrowing Base (Accounts Availability plus
  Parts and Supplies Availability

  plus Equipment Availability)

  	
   

  	
   

  	
   

  



 





















 


Exhibit 4.9(e)(iv)


 


BORROWING
BASE CERTIFICATE


 


PENHALL
INTERNATIONAL CORP.


 


Date:                 ,
      


 


This Certificate is given
by Penhall International Corp. (“Borrower”) pursuant to subsection 4.9(e) of
that certain Amended and Restated Credit Agreement dated as of November 1,
2005 among Borrower, the other Credit Parties party thereto, the Lenders from
time to time party thereto and General Electric Capital Corporation, as agent
for the Lenders (as such agreement may have been amended, restated,
supplemented or otherwise modified from time to time the “Credit Agreement”).  Capitalized terms used herein without
definition shall have the meanings set forth in the Credit Agreement.


 


The undersigned is duly
authorized to execute and deliver this Certificate on behalf of Borrower.  By executing this Certificate such officer
hereby certifies to Agent and Lenders that:


 


(a)                                  Attached
hereto as Schedule 1 is a calculation of the proposed Borrowing
Base for Borrower as of the above date;


 


(b)                                 Based
on such schedule, the proposed Borrowing Base as of the above date is:


 


$                  


 


(c)                                  Agent
shall have the right to establish or modify or eliminate Reserves against
Eligible Real Estate from time to time in its reasonable credit judgment.  In addition, Agent reserves the right upon
five (5) days’ prior written notice at any time to adjust any of the
criteria set forth below and to establish new criteria in its reasonable credit
judgment, subject to the approval of Supermajority Revolving Lenders in the
case of adjustments which have the effect of making more credit available.  Borrower acknowledges that the exercise by
Agent of any right pursuant to this clause (c) shall have the effect of
adjusting the proposed Borrowing Base set forth above.


 


IN WITNESS WHEREOF,
Borrower has caused this Certificate to be executed by its                          
this          day of                    ,
       .


 


	
   

  	
  PENHALL INTERNATIONAL CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Its:

  	
   

  



 





















 


Schedule 1


to Exhibit 4.9(e)(iv)


 


BORROWING
BASE CALCULATION


 


PENHALL INTERNATIONAL
CORP.


 


(“Borrower”)


 


	
  Real Estate, and improvements thereon, of
  the Borrower that Agent has specifically identified and approved in writing
  and as to which, following an independent appraisal thereof, Agent has
  assigned an Appraised Forced Liquidation Value

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Less:       Ineligible Real Estate

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Real Estate that is not
  owned by such Borrower free and clear of all Liens and rights of any other
  Person, except the Liens in favor of Agent, on behalf of itself and Lenders
  and Permitted Encumbrances and of the type described in clauses (a), (d), (e) (g),
  (h), (i), (j) or (l) of the definition of such term;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Real Estate as to which
  Agent has not received a loan policy of title insurance in favor of Agent and
  in form and amount and issued by a title insurance company satisfactory to
  Agent, in its reasonable discretion, together with such endorsements thereto
  as Agent shall require, in its reasonable discretion (provided such
  endorsements are available in the jurisdiction where such Real Estate is
  located);

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Real Estate as to which
  Agent has not received an environmental report satisfactory to Agent, in its
  sole discretion;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Real Estate that is not
  subject to a first priority Lien in favor of Agent on behalf of itself and Lenders
  subject only to Permitted Encumbrances;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Real Estate that
  breaches any of the representations or warranties pertaining to Real Estate
  set forth in the Loan Documents; or

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Real Estate that is not
  covered by casualty insurance reasonably acceptable to Agent.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total Ineligible Real Estate

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total Eligible Real Estate (Real Estate
  less Total Ineligible Real Estate)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Advance Rate

  	
   

  	
   

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Real Estate Availability

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Borrowing Base

  	
   

  	
   

  	
   

  



 


1





















 


Exhibit 4.9(e)(v)


 


BORROWING
BASE CERTIFICATE


 


CAPITOL
DRILLING SUPPLIES, INC


 


Date:               ,
          


 


This Certificate is given
by Capitol Drilling Supplies, Inc. (“Borrower”) pursuant to subsection 4.9(e) of
that certain Amended and Restated Credit Agreement dated as of November 1,
2005 among Borrower, the other Credit Parties party thereto, the Lenders from
time to time party thereto and General Electric Capital Corporation, as agent
for the Lenders (as such agreement may have been amended, restated,
supplemented or otherwise modified from time to time the “Credit Agreement”).  Capitalized terms used herein without
definition shall have the meanings set forth in the Credit Agreement.


 


The undersigned is duly
authorized to execute and deliver this Certificate on behalf of Borrower.  By executing this Certificate such officer
hereby certifies to Agent and Lenders that:


 


(a)                                  Attached
hereto as Schedule 1 is a calculation of the proposed Borrowing
Base for Borrower as of the above date;


 


(b)                                 Based
on such schedule, the proposed Borrowing Base as of the above date is:


 


$                   



 


(c)                                  Agent
shall have the right to establish or modify or eliminate Reserves against
Eligible Accounts, Eligible Short-Term Rentals, Eligible Parts and Supplies and
Eligible Equipment from time to time in its reasonable credit judgment.  In addition, Agent reserves the right at any
time upon five (5) days’ prior written notice to adjust any of the
criteria set forth below and to establish new criteria in its reasonable credit
judgment, subject to the approval of Supermajority Revolving Lenders in the
case of adjustments which have the effect of making more credit available.  Borrower acknowledges that the exercise by
Agent of any right pursuant to this clause (c) shall have the effect of
adjusting the proposed Borrowing Base set forth above.


 


IN WITNESS WHEREOF,
Borrower has caused this Certificate to be executed by its                       
this           day of                        
,            .


 


	
   

  	
  CAPITOL DRILLING SUPPLIES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Its:

  	
   

  



 





















 


Schedule 1


to Exhibit 4.9(e)(v)


 


BORROWING
BASE CALCULATION


 


CAPITOL
DRILLING SUPPLIES, INC.


 


(“Borrower”)


 


	
  Accounts of the Borrower reflected as
  accounts receivable on the Borrower’s balance sheet (as of the date above),
  but solely to the extent of the unpaid portion of the obligations stated on
  the respective invoices issued to a customer of Borrower with respect to
  inventory sold and shipped or services performed in the ordinary course of
  business, net of any credits, rebates or offsets owed by Borrower to the
  respective customer.

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Less:       Ineligible
  Accounts:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accounts that do not arise from the sale of goods or
  the performance of services by Borrower in the ordinary course of its
  business;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accounts (i) upon which Borrower’s
  right to receive payment is not absolute or is contingent upon the
  fulfillment of any condition whatsoever or (ii) as to which Borrower is
  not able to bring suit or otherwise enforce its remedies against the Account
  Debtor through judicial process, or (iii) if the Account represents
  progress billing in excess of cost or percentage of completion of the
  applicable contract or is subject to the equitable lien of a surety bond
  issuer;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Any Account to the extent that any defense,
  counterclaim, setoff or dispute is asserted as to such Account;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accounts that are not true and correct
  statements of bona fide indebtedness incurred in the amount of such Account
  for merchandise sold to or services rendered and accepted by the applicable
  Account Debtor;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accounts with respect to which an invoice,
  reasonably acceptable to Agent in form and substance, has not been sent to
  the applicable Account Debtor (including, without limitation, accrued but
  unbilled Accounts of “Division 40”);

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accounts that (i) are not owned by
  Borrower or (ii) are subject to any right, claim, security interest or
  other interest of any other Person, other than Liens in favor of Agent, on
  behalf of itself and Lenders and Permitted Encumbrances of the type described
  in clauses (a), (g) or (l) of the definition of such term;

  	
   

  	
   

  	
   

  



 





















 


	
  Accounts that arise from a sale to any
  director, officer, other employee or Affiliate of any Credit Party, or to any
  entity that has any common officer or director with any Credit Party;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accounts that are the obligation of an
  Account Debtor that is the United States government or a political
  subdivision thereof, unless Agent, in its sole discretion, has agreed to the
  contrary in writing and Borrower, if necessary or desirable, has complied
  with respect to such obligation with the Federal Assignment of Claims Act of
  1940, or any applicable state, county or municipal law restricting the
  assignment thereof with respect to such obligation;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accounts that are the obligations of an
  Account Debtor located in a foreign country other than Canada unless payment
  thereof is assured by a letter of credit assigned and delivered to Agent,
  satisfactory to Agent as to form, amount and issuer;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accounts to the extent Borrower or any
  Subsidiary thereof is liable for goods sold or services rendered by the
  applicable Account Debtor to Borrower or any Subsidiary thereof but only to
  the extent of the potential offset;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accounts that arise with respect to goods
  that are delivered on a bill-and-hold, cash-on-delivery basis or placed on
  consignment, guaranteed sale or other terms by reason of which the payment by
  the Account Debtor is or may be conditional;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accounts that are in default; provided, that, without limiting the generality of the
  foregoing, an Account shall be deemed in default upon the occurrence of any
  of the following:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (i)            the Account is not paid within the
  earlier of: sixty (60) days following its due date or ninety (90) days
  following its original invoice date;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (ii)           the
  Account Debtor obligated upon such Account suspends business, makes a general
  assignment for the benefit of creditors or fails to pay its debts generally
  as they come due; or 

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (iii)          a
  petition is filed by or against any Account Debtor obligated upon such
  Account under any bankruptcy law or any other federal, state or foreign
  (including any provincial) receivership, insolvency relief or other law or
  laws for the relief of debtors;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accounts that are the obligations of an
  Account Debtor if 50% or more of the Dollar amount of all Accounts owing by
  that Account Debtor are ineligible under clause (i) of the immediately
  preceding criterion;

  	
   

  	
   

  	
   

  



 


2





















 


	
  Accounts as to which Agent’s Lien thereon,
  on behalf of itself and Lenders, is not a first priority perfected Lien;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accounts as to which any of the
  representations or warranties in the Loan Documents are untrue;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accounts that are evidenced by a judgment,
  Instrument or Chattel Paper;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accounts to the extent such Account exceeds
  any credit limit established by Agent, in its reasonable credit judgment,
  following five (5) days’ prior written notice of such limit by Agent to
  Borrower;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accounts to the extent that such Account,
  together with all other Accounts owing to such Account Debtor and its
  Affiliates as of any date of determination exceed 15% of all Eligible
  Accounts;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accounts that are payable in any currency
  other than Dollars or Canadian Dollars; or

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accounts that constitute a “retention”
  Account; or

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accounts that are otherwise unacceptable to
  Agent in its reasonable credit judgment.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total Ineligible Accounts

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total Eligible Accounts (Accounts less
  Total Ineligible Accounts)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Short-Term Rentals of the Borrower
  reflected on the Borrower’s balance sheet (as of the date above), but solely
  to the extent of the unpaid portion of the obligations stated on the
  respective invoices issued to a lessee obligated upon such Short-Term Rental
  with respect to tools or like property leased in the ordinary course of
  business, net of any credits, rebates or offsets owed by Borrower to such
  lessee.

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Less:       Ineligible
  Short-Term Rentals:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Short-Term Rentals not subject to a written
  lease agreement;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Short-Term Rentals not subject to a first
  priority perfected security interest of Agent on behalf of Lenders;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Any portion of such Short-Term Rental that
  has not been billed or is not due within thirty (30) days of the applicable
  date of determination;

  	
   

  	
   

  	
   

  



 


3





















 


	
  Short-Term Rentals upon which such Borrower
  is not able to bring suit or otherwise enforce its remedies against the
  relevant lessee through judicial process;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Short-Term Rentals that (i) are not
  owned by such Borrower, (ii) are subject to any right, claim, security
  interest or other interest of any other Person, other than Liens in favor of
  Agent, on behalf of itself and Lenders and Permitted Encumbrances of the type
  described in clauses (a), (g) or (l) of the definition of such term;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Short-Term Rentals that are the obligation
  of a lessee that is the United States government or a political subdivision
  thereof, unless Agent, in its sole discretion, has agreed to the contrary in
  writing and such Borrower, if necessary or desirable, has complied with
  respect to such obligation with the Federal Assignment of Claims Act of 1940,
  or any applicable state, county or municipal law restricting the assignment
  thereof with respect to such obligation;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Short-Term Rentals that are the obligation
  of a lessee located in a foreign country, other than Canada;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Short-Term Rentals in excess of $500,000 in
  the aggregate;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Short-Term Rentals that are in default or
  due under a lease in default; provided,
  that without limiting the generality of the foregoing, a Short-Term Rental
  shall be deemed in default upon the occurrence of any of the following:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (i)            the
  Short-Term Rental is not paid within the earlier of: 60 days following its
  due date or 90 days following its original invoice date;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (ii)           the
  lessee obligated upon such Short-Term Rental suspends business, makes a
  general assignment for the benefit of creditors or fails to pay its debts
  generally as they come due; or

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (iii)          a
  petition is filed by or against any lessee obligated upon such Short-Term
  Rental under any bankruptcy law or any other federal, state or foreign
  (including any provincial) receivership, insolvency relief or other law or
  laws for the relief of debtors;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Short-Term Rentals that are the obligation
  of a lessee if fifty percent (50%) or more of the Dollar amount of all
  Short-Term Rental owing by that lessee are ineligible under clause (i) of
  the immediately preceding criterion;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Short-Term Rentals as to which any of the
  representations or warranties in the Loan Documents are untrue;

  	
   

  	
   

  	
   

  



 


4





















 


	
  Short-Term Rentals to the extent such
  Short-Term Rental exceeds any credit limit established by Agent, in its
  reasonable credit judgment, following five (5) days’ prior written
  notice of such limit by Agent to Borrower Representative;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Short-Term Rentals that are payable in any
  currency other than Dollars or Canadian Dollars; or

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Short-Term Rentals that are otherwise
  unacceptable to Agent in its reasonable credit judgment.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total Ineligible Short-Term Rentals

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total Eligible Short-Term Rentals
  (Short-Term Rentals less Ineligible Short-Term Rentals)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total Eligible Accounts plus Total Eligible
  Short-Term Rentals

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Advance Rate (Total Eligible Accounts plus
  Total Eligible Short-Term Rentals)

  	
   

  	
  85

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Accounts and Short-Term Rentals
  Availability 

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Parts and Supplies owned by, and in the
  possession of the Borrower, and located in the United States of America,
  reflected on the Borrower’s balance sheet (as of the date above), valued at
  the lower of cost or market (including adequate reserves for obsolete, slow
  moving or excess quantities), on a first-in, first-out basis

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Less:       Ineligible
  Parts and Supplies:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Parts and Supplies that is not owned by
  Borrower free and clear of all Liens and rights of any other Person
  (including the rights of a purchaser that has made progress payments and the
  rights of a surety that has issued a bond to assure Borrower’s performance
  with respect to that Parts and Supplies), except the Liens in favor of Agent,
  on behalf of itself and Lenders and Permitted Encumbrances of the type
  described in clauses (a), (d), (e), (g) or (l) of the definition of such
  term;

  	
   

  	
   

  	
   

  



 


5





















 


	
  Parts and Supplies that (i) is not
  located on premises owned, leased or rented by Borrower and set forth in the
  various subschedules to Schedule III to the Security Agreement
  (excluding Parts and Supplies mounted on, affixed to or otherwise placed in a
  motor vehicle owned by such Borrower and such motor vehicle is located at the
  residence of the driver authorized to drive such motor vehicle, provided that such motor vehicle (A) is covered by a
  certificate of title on which the interest of Agent has been noted, free and
  clear of all Liens except those in favor of Agent and Lenders and Permitted
  Encumbrances of the type described in clauses (a), (d), (e), (g) or (l)
  of the definition of such term, and (B) is equipped with a global
  positioning tracking device (that is permanently affixed to such motor
  vehicle) that enables such Borrower to determine at all times the movement
  and location of such motor vehicle) or (ii) is stored at a leased
  location, unless Agent has given its prior consent thereto and unless (x) a
  reasonably satisfactory landlord waiver has been delivered to Agent within
  thirty (30) days after the Closing Date, or (y) Reserves equal to three
  months’ rent (based upon base rent and such Borrower’s pro rata share of
  operating costs, utilities and taxes payable by such Borrower under the
  lease, but excluding any supplemental rent or other costs, expenses or
  amounts or any indemnities payable thereunder, upon default or otherwise)
  have been established with respect thereto, (iii) is stored with a
  bailee or warehouseman unless a reasonably satisfactory, acknowledged bailee
  letter has been received by Agent and Reserves reasonably satisfactory to
  Agent have been established with respect thereto, or (iv) is located at
  an owned location subject to a mortgage in favor of a lender other than
  Agent, unless a reasonably satisfactory mortgagee waiver has been delivered
  to Agent, or (v) is located at any site if the aggregate book value of
  Parts and Supplies, together with Equipment of Borrower, at any such location
  is less than $100,000;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Parts and Supplies that is placed on
  consignment or is in transit, except for Parts and Supplies in transit
  between domestic locations of Credit Parties as to which Agent’s Liens have
  been perfected at origin and destination;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Parts and Supplies that is covered by (i) a
  negotiable document of title, unless such document has been delivered to
  Agent with all necessary endorsements, free and clear of all Liens except
  those in favor of Agent and Lenders or (ii) a certificate of title unless
  (x) Borrower sells goods of that kind and such Parts and Supplies is held for
  sale or lease or is on lease by Borrower as lessor or (y) the Lien of Agent
  has been noted on such certificate of title in accordance with applicable
  state law;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Parts and Supplies that is excess,
  obsolete, unsaleable, shopworn, seconds, damaged or unfit for sale;

  	
   

  	
   

  	
   

  



 


6





















 


	
  Parts and Supplies stored in, installed in
  or affixed to any property subject to any Lien having priority over the Lien
  of Agent for the benefit of Agent and the ratable benefit of Lenders
  (including Permitted Encumbrances) and the holder of such Lien has not
  entered into an intercreditor agreement in form and substance satisfactory to
  Agent as to such Lien;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Parts and Supplies that is not subject to a
  first priority lien in favor of Agent on behalf of itself and Lenders subject
  to Permitted Encumbrances of the type described in clauses (a), (d), (e), (g) or
  (l) of the definition of such term;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Parts and Supplies that breaches any of the
  representations or warranties pertaining to Parts and Supplies set forth in
  the Loan Documents;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Parts and Supplies that consists of
  Hazardous Materials or goods that can be transported or sold only with
  licenses that are not readily available;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Parts and Supplies that is not covered by
  casualty insurance reasonably acceptable to Agent; or

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Parts and Supplies that is otherwise
  unacceptable to Agent in its reasonable credit judgment.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Notwithstanding anything to the contrary
  contained herein, until there has been a determination of Net Orderly
  Liquidation Value of Parts and Supplies, none of the Parts and Supplies shall
  be Eligible Parts and Supplies.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total Ineligible Parts and Supplies

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total Eligible Parts and Supplies (Parts
  and Supplies less Total Ineligible Parts and Supplies)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Advance Rate (up to 80% of the Appraised
  Net Orderly Liquidation Value of Eligible Parts and Supplies)

  	
   

  	
   

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Parts and Supplies Availability

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Equipment owned by, and in the possession
  of the Borrower, and located in the United States of America, reflected as
  equipment on the Borrower’s balance sheet (as of the date above), valued at
  the lower of cost or market (including adequate reserves for obsolete, slow
  moving or excess quantities), on a first-in, first-out basis

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Less:       Ineligible
  Equipment:

  	
   

  	
   

  	
   

  



 


7





















 


	
  Equipment that is not owned by Borrower
  free and clear of all Liens and rights of any other Person (including the
  rights of a purchaser that has made progress payments and the rights of a
  surety that has issued a bond to assure Borrower’s performance with respect
  to that Equipment), except the Liens in favor of Agent, on behalf of itself
  and Lenders and Permitted Encumbrances of the type described in clauses (a),
  (d), (e), (g) or (l) of the definition of such term;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Equipment that (i) is not located on
  premises owned, leased or rented by Borrower and set forth in the various
  subschedules to Schedule III to the Security Agreement (unless,
  at any time, such Equipment is being used at a construction or similar site
  or, if such Equipment is mounted on, affixed to or otherwise placed in a
  motor vehicle or such Equipment is a motor vehicle owned by such Borrower,
  such motor vehicle is located at the residence of the driver authorized to
  drive the motor vehicle, provided that
  such motor vehicle (A) is covered by a certificate of title on which the
  interest of Agent has been noted, free and clear of all Liens except those in
  favor of Agent and Lenders and Permitted Encumbrances of the type described
  in clauses (a), (d), (e), (g) or (l) of the definition of such term, and
  (B) is equipped with a global positioning tracking device (that is
  permanently affixed to such motor vehicle) that enables such Borrower to
  determine at all times the movement and location of such motor vehicle) or (ii) is
  stored at a leased location, unless Agent has given its prior consent thereto
  and unless (x) a reasonably satisfactory landlord’s waiver has been delivered
  to Agent within thirty (30) days after the Closing Date, or (y) Reserves
  equal to three months’ rent (based upon base rent and such Borrower’s pro
  rata share of operating costs, utilities and taxes payable by such Borrower
  under the lease, but excluding any supplemental rent or other costs, expenses
  or amounts or any indemnities payable thereunder, upon default or otherwise)
  have been established with respect thereto, (iii) is stored with a
  bailee or warehouseman unless a reasonably satisfactory, acknowledged bailee
  letter has been received by Agent and Reserves reasonably satisfactory to
  Agent have been established with respect thereto, or (iv) is located at
  an owned location subject to a mortgage in favor of a lender other than
  Agent, unless a reasonably satisfactory mortgagee waiver has been delivered
  to Agent, or (v) is located at any site if the aggregate book value of
  Equipment, together with Parts and Supplies of Borrower, at any such location
  is less than $100,000;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Equipment that is covered by a certificate
  of title unless the interest of Agent has been noted on such certificate of
  title, free and clear of all Liens except those in favor of Agent and Lenders
  and Permitted Encumbrances of the type described in clauses (a), (d), (e), (g) or
  (l) of the definition of such term;

  	
   

  	
   

  	
   

  



 


8





















 


	
  Equipment that is excess, obsolete,
  unsaleable, shopworn, seconds, damaged or unfit for sale;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Equipment that is not a vehicle or
  construction tool used by such Borrower in the ordinary course of its
  business;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Equipment that is not subject to a first
  priority lien in favor of Agent on behalf of itself and Lenders subject to
  Permitted Encumbrances of the type described in clauses (a), (d), (e) or
  (g) of the definition of such term;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Equipment that breaches any of the
  representations or warranties pertaining to Equipment set forth in the Loan
  Documents;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Equipment that is Parts and Supplies;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Equipment that consists of Hazardous
  Materials or goods that can be transported or sold only with licenses that
  are not readily available;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Equipment that is not covered by casualty
  insurance reasonably acceptable to Agent; or

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Equipment that is otherwise unacceptable to
  Agent in its reasonable credit judgment.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total Ineligible Equipment

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total Eligible Equipment (Equipment less
  Total Ineligible Equipment)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Advance Rate (up to 80% of the Appraised
  Net Orderly Liquidation Value of Eligible Equipment)

  	
   

  	
   

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Equipment Availability

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Borrowing Base (Accounts Availability plus
  Parts and Supplies Availability

  plus Equipment Availability)

  	
   

  	
   

  	
   

  



 


9





















 


EXHIBIT 4.9(l)


 


COMPLIANCE
AND PRICING CERTIFICATE


 


PENHALL
INTERNATIONAL CORP.,


 


PENHALL
COMPANY,


 


PENHALL
LEASING LLC,


 


CAPITOL
DRILLING SUPPLIES, INC.


 


AND


 


BOB MACK
COMPANY


 


Date:                ,
      


 


This Certificate is given
by PENHALL INTERNATIONAL CORP., PENHALL COMPANY, PENHALL LEASING, L.L.C.,
CAPITOL DRILLING SUPPLIES, INC. AND BOB MACK CO., INC. (each individually a “Borrower”
and together and jointly and severally, the “Borrowers”) pursuant to Section 4.9(l)
of that certain Amended and Restated Credit Agreement dated as of November 1,
2005 among Borrowers, the other Credit Parties party thereto, the Lenders from
time to time party thereto and General Electric Capital Corporation, as agent
for the Lenders (as such agreement may have been amended, restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”).  Capitalized terms used herein without
definition shall have the meanings set forth in the Credit Agreement.


 


The undersigned is duly
authorized to execute and deliver this Certificate on behalf of Borrowers.  By executing this Certificate such officer
hereby certifies to Agent and Lenders that:


 


(a)           the financial statements delivered with
this Certificate in accordance with Section 4.9(b) and/or Section 4.9(c) of
the Credit Agreement fairly present in all material respects the results of
operations and financial condition of Holdings and its Subsidiaries as of the
dates of such financial statements;


 


(b)           I have reviewed the terms of the Credit
Agreement and have made, or caused to be made under my supervision, a review in
reasonable detail of the transactions and conditions of the Credit Parties
during the accounting period covered by such financial statements;


 


(c)           such review has not disclosed the
existence during or at the end of such accounting period, and I have no
knowledge of the existence as of the date hereof, of any condition or event
that constitutes a Default or an Event of Default, except as set forth on Schedule 1
hereto, which includes a description of the nature and period of existence of
such Default or an Event of Default and what action Borrower has taken, is
taking and proposes to take with respect thereto;


 


(d)           except as set forth on Schedule 1
hereto, Borrowers are in compliance with the covenants contained in Sections
3.1, 3.3, 3.4, 3.5, 3.7 and 3.8 and Section 4 of the Credit
Agreement, as demonstrated on Schedule 1 hereto;


 





















 


(e)           based on the calculation of Monthly
Average Borrowing Availability as set forth on Schedule 1 hereto,
Applicable Margins shall be calculated using Level    [Include only
as of the end of Fiscal Quarters];


 


(f)            omitted;


 


(g)           except as set forth on Schedule 3
hereto, subsequent to the date of the most recent Certificate submitted by
Borrowers pursuant to Section 4.9(l) of the Credit Agreement, no
Credit Party has (i) changed its name as it appears in official filings in
the jurisdiction of its organization, (ii) changed its chief executive
office, principal place of business, corporate offices, warehouses or locations
at which Collateral is held or stored, or the location of its records
concerning Collateral, (iii) changed the type of entity that it is, (iv) changed
(or has had changed) its organization identification number, if any, issued by
its jurisdiction of organization, (v) changed its jurisdiction of
organization, (vi) changed the end of its Fiscal Year, or (vii) formed
any new Subsidiary or entered into any partnership or joint venture with any
other Person; and


 


(h)           except as set forth on Schedule 4
hereto, subsequent to the date of the most recent Certificate submitted by
Borrowers pursuant to Section 4.9(l) of the Credit Agreement, there
has been no event which would alter any of the disclosures set forth on Schedule 5.4(b) of
the Credit Agreement.


 


IN WITNESS WHEREOF,
Borrowers have caused this Certificate to be executed by its                          
this        day of                    ,          .


 


	
   

  	
  PENHALL INTERNATIONAL CORP.,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  PENHALL COMPANY,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  PENHALL LEASING, L.L.C.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					



 


2





















 


	
   

  	
  BOB MACK CO., INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  CAPITOL DRILLING SUPPLIES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					



 


3





















 


SCHEDULE 1


Exhibit 4.9(l)


 


ALL AMOUNTS IN EXHIBIT 4.9(l) ARE
WITHOUT DUPLICATION AND, UNLESS OTHERWISE INDICATED, ARE CALCULATED FOR
HOLDINGS AND ITS SUBSIDIARIES ON A CONSOLIDATED BASIS


 


INDEBTEDNESS

(Section 3.1)


 


	
  Intercompany Indebtedness among Borrowers
  and their Subsidiaries:

  	
   

  	
   

  	
   

  



 


	
  Actual in the aggregate

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Permitted in the aggregate

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  In Compliance

  	
   

  	
  Yes/No

  	
   

  



 


	
  Second Lien Debt incurred by Borrowers in
  an amount not to exceed $105,000,000 in aggregate principal amount at any
  time outstanding, less any repayments of principal thereunder:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Until the date 45 days following the
  Amendment Effective Date, $100,000,000 of Senior Unsecured Notes in principal
  amount, less repayments thereof

  



 


	
  Actual in the aggregate

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Permitted in the aggregate

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  In Compliance

  	
   

  	
  Yes/No

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Actual in the aggregate

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Permitted in the aggregate

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  In Compliance

  	
   

  	
  Yes/No

  	
   

  



 


	
  Indebtedness secured by purchase money
  Liens or incurred with respect to Capital Leases:

  



 


	
  Actual in the aggregate

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Permitted in the aggregate

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  In Compliance

  	
   

  	
  Yes/No

  	
   

  



 


	
  Unsecured
  Indebtedness:

  	
   

  	
   

  	
   

  	
   

  



 


	
  Actual in the aggregate

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Permitted in the aggregate

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  In Compliance

  	
   

  	
  Yes/No

  	
   

  



 


4





















 


INVESTMENTS

(Section 3.3)


 


Loans and advances to employees for moving, traveling and other similar
expenses in the ordinary course of business:


 


	
  Actual in the aggregate

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Permitted in the aggregate

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  In Compliance

  	
   

  	
  Yes/No

  	
   

  



 


Capital contributions to wholly owned Domestic Subsidiaries that are
Guarantors:


 


	
  Actual in the aggregate

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Permitted in the aggregate

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  In Compliance

  	
   

  	
  Yes/No

  	
   

  



 


5





















 


CONTINGENT
OBLIGATIONS 

(Section 3.4)


 


Other Contingent Obligations not otherwise permitted in Sections 3.4(a) through
(h):


 


	
  Actual in the aggregate

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Permitted in the aggregate

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  In Compliance

  	
   

  	
  Yes/No

  	
   

  



 


6





















 


DISPOSAL
OF ASSETS 

(Section 3.7)


 


Describe any
Asset Dispositions (excluding sales of Accounts and Stock of any of Holdings’
Subsidiaries) made during the period (list each transaction by market value of
assets sold or otherwise disposed of, and, in the case of a Permitted
Sale-Leaseback, the principal terms of the applicable lease):


 


	
   

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Permitted Asset Dispositions (other than
  Permitted Sale-Leasebacks) in a single transaction or series of related
  transactions (asset market value)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  In Compliance

  	
   

  	
  Yes/No

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Aggregate market value of Asset
  Dispositions (other than Permitted Sale-Leasebacks) in Fiscal Year

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Permitted aggregate market value of Asset
  Dispositions (other than Permitted Sale-Leasebacks) in Fiscal Year

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  In Compliance

  	
   

  	
  Yes/No

  	
   

  



 


7





















 


TRANSACTIONS
WITH AFFILIATES

(Section 3.8)


 


Directors fees paid in current Fiscal Year:


 


	
  Actual in the aggregate

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Permitted in the aggregate

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  In Compliance

  	
   

  	
  Yes/No

  	
   

  



 


8





















 


CAPITAL
EXPENDITURE LIMIT 

(Section 4.1)


 


	
  Capital Expenditures are defined as
  follows:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  All expenditures (by the expenditure of
  cash or the incurrence of Indebtedness) during the measuring period for any
  equipment, real estate, fixed assets, parts, tools, supplies or improvements
  or for replacements, substitutions or additions thereto that have a useful
  life of more than one year and that are required to be capitalized under GAAP

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Plus:       deposits
  made during the measuring period in connection with fixed assets, parts,
  tools and supplies; less deposits of a prior period included above

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Less:       Net
  Proceeds of Asset Dispositions (except Permitted Sale-Leasebacks) which
  Borrowers are permitted to reinvest under Section 1.5(c) of the
  Credit Agreement and are included in the expenditures above

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Capital Expenditures

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Permitted Capital Expenditures (including
  Carry Over Amount of $             from prior fiscal year)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  In Compliance

  	
   

  	
  Yes/No

  	
   

  



 


9





















 


LEASE
LIMITS

(Section 4.2)


 


	
  All rents (or substantially equivalent
  payments) paid during the measuring period for operating leases, synthetic
  leases and similar off-balance sheet financing with respect to equipment

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Permitted Lease Payments

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  In Compliance

  	
   

  	
  Yes/No

  	
   

  



 


10





















 


MINIMUM
INTEREST COVERAGE RATIO

(Section 4.5)


 


	
  Interest Coverage Ratio is defined as
  follows:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Interest expense (whether cash or non-cash)
  deducted in the determination of Consolidated Net Income, including interest
  expense with respect to any Funded Debt and interest expense that has been
  capitalized 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*

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Less:       Amortization
  of capitalized fees and expenses incurred with respect to the Related
  Transactions included in interest expense above

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Amortization of any original discount
  attributable to any Funded Debt or warrants included in interest expense
  above

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Interest paid in kind and included in interest
  expense above

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Interest Expense

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  EBITDA (calculated in Schedule 2 of
  this Exhibit)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Subtotal

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Interest Coverage Ratio (Subtotal from
  above, divided  by Interest Expense)

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Required Interest Coverage Ratio

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  In Compliance

  	
   

  	
  Yes/No

  	
   

  



 










*For purposes of determining
the Interest Coverage Ratio for any period ending prior to December 31,
2006, Interest Expense shall be determined on a pro forma basis as though the
Related Transactions had occurred on the first day of such period and (y) for
purposes of calculating the Interest Coverage Ratio for any period (A) the
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) 
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)


 


11





















 


MAXIMUM
LEVERAGE RATIO

(Section 4.6)


 


	
  Leverage Ratio is defined as follows:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Funded Debt as (exclusively the Senior
  Unsecured Notes) of the date of determination, including the average
  outstanding principal of the Revolving Credit Advances as of the end of each
  Fiscal Quarter included in the measuring period and the amount of Letter of
  Credit Obligations in respect of drawn and unreimbursed Letters of Credit as
  of the end of the last Fiscal Quarter in the measuring period*

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  EBITDA (calculated in Schedule 2 of
  this Exhibit)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Leverage Ratio (Funded Debt divided  by
  EBITDA)

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Required Leverage Ratio

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  In Compliance

  	
   

  	
  Yes/No

  	
   

  



 










*For purposes of calculating the Leverage Ratio for any period (A) 
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)  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).


 


12





















 


CONDITIONS
OR EVENTS WHICH CONSTITUTE A DEFAULT OR

EVENT OF DEFAULT


 


If any condition or event exists that constitutes
a Default or Event of Default, specify nature and period of existence and what
action Credit Parties have taken, is taking or proposes to take with respect
thereto; if no condition or event exists, state “None.”


 


13










 













SCHEDULE 2


Exhibit 4.9(l)


CALCULATION OF EBITDA


 


	
  Consolidated Net Income is defined as follows:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Consolidated net income during the measuring period
  excluding:

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  the income (or deficit) of any Person accrued prior
  to the date it became a Subsidiary of, or was merged or consolidated into,
  Holdings or any of its Subsidiaries

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  the income (or deficit) of any Person (other than a
  Subsidiary) in which Holdings has an ownership interest, except to the extent
  any such income has actually been received by Borrowers or any of their
  Subsidiaries in the form of cash dividends or distributions

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  the undistributed earnings of any Subsidiary of
  Holdings 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

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  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

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  any net gain attributable to the write-up of any
  asset

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  any net gain from the collection of the proceeds of
  life insurance policies

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  any net gain arising from the acquisition of any securities,
  or the extinguishment of any Indebtedness, of Holdings or any of its
  Subsidiaries

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  in the case of a successor to Holdings 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

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  any deferred credit representing the excess of
  equity in any Subsidiary of Holdings at the date of acquisition of such
  Subsidiary over the cost to Holdings of the
  investment in such Subsidiary

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Consolidated Net Income

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  EBITDA is defined as follows:

  	
   

  	
   

  	
   

  



 





















 


	
  Consolidated Net Income (from above)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Less:                    (in each
  case to the extent included in the calculation of Consolidated Net Income,
  but without duplication):

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  income tax credits

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  interest income

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  gain from extraordinary items (net of loss from
  extraordinary items)

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  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)

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  any other non-cash gains

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  expenditures pursuant to the last sentence of Section 4.10
  of the Credit Agreement applicable to, but not included on, the Pro Forma,
  including expenditures made in connection with Related Transactions and
  payment of liabilities on the Amendment Effective Date

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Plus:                      (in each case to the extent
  deducted in the calculation of Consolidated Net Income, but without
  duplication):

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  any provision for income taxes

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Interest Expense (calculated in Section 4.5 of Exhibit 4.9(l))

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  depreciation and amortization

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  amortized debt discount (but in the case of
  amortization and expenses of Related Transactions, only to the extent
  included in the Projections)

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  any deduction as the result of any grant to any
  members of the management of Holdings or any of
  its Subsidiaries of any Stock

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  any write-off of deferred financing fees in
  connection with the Related Transactions

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  expenses of the Related Transactions, provided that such expenses were included in the Pro
  Forma, or disclosed in any notes thereto

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  EBITDA*

  	
   

  	
  $

  	
   

  



 


 


2





















 










*For calculations including Fiscal
Quarters ended March 31, 2005, June 30, 2005 and September 30, 2005,
EBITDA for the Fiscal Quarters ending on such applicable dates shall be
$2,100,000, $9,400,000 and $12,400,000, respectively (in each case, subject to
adjustment as otherwise provided in this Agreement), for all purposes of the
Credit Agreement.


 


3





















 


SCHEDULE 4


Exhibit 4.9(l)


 


ORGANIZATION/LOCATION CHANGES


 


If any Credit Party has (i) changed its name
as it appears in official filings in the state of its organization, (ii) changed
its chief executive office, principal place of business, corporate offices,
warehouses or locations at which Collateral is held or stored, or the location
of its records concerning Collateral, (iii) changed the type of entity
that it is, (iv) changed (or has had changed) its organization
identification number, if any, issued by its jurisdiction or organization, (v) changed
its jurisdiction of organization, (vi) changed the end of its Fiscal Year,
or (vii) formed any new Subsidiary or entered into any partnership or
joint venture with any Person, such change shall be specified below; if no such
change has been made, state “None.”


 





















 


SCHEDULE 5


Exhibit 4.9(l)


CAPITALIZATION CHANGES


 


If with respect to any Credit Party there has been
a change in authorized Stock, issued and outstanding Stock or the identity of
the holders of any Stock, or if with respect to any Credit Party there has been
a change pertaining to preemptive rights or any other outstanding rights,
options, warrants, conversion rights or similar agreements or understandings
for the purchase or acquisition of any Stock, such change shall be set forth
below; if no such change has occurred, state “None.”


 





















 


EXHIBIT 1.1(a)(i)

to

AMENDED AND RESTATED CREDIT AGREEMENT


 


FORM OF REVOLVING NOTE

(Multi-Borrower)


New York, New York


$     ,     ,                    
   ,        


 


FOR VALUE RECEIVED, each
of the undersigned (each individually a “Borrower” and collectively, the
“Borrowers”), jointly and severally, HEREBY PROMISES TO PAY to the order
of                                         
(“Lender”), at the offices of GENERAL ELECTRIC CAPITAL CORPORATION, a
Delaware corporation, as Agent for Lenders (“Agent”), at its address at
299 Park Avenue, New York, New York 10171, or at such other place as Agent may
designate from time to time in writing, in lawful money of the United States of
America and in immediately available funds, the amount of                                         
DOLLARS AND               
CENTS ($     ,     ,     )
or, if less, the aggregate unpaid amount of all Revolving Credit Advances made
to the undersigned under the “Credit Agreement” (as hereinafter defined).  All capitalized terms used but not otherwise
defined herein have the meanings given to them in the Credit Agreement or in Annex
A thereto.


 


This Revolving Note is
one of the Revolving Notes issued pursuant to that certain Amended and Restated
Credit Agreement dated as of November 1, 2005 by and among Borrowers, the
other Persons named therein as Credit Parties, Agent, Lender and the other
Persons signatory thereto from time to time as Lenders (including all annexes,
exhibits and schedules thereto, and as from time to time amended, restated,
supplemented or otherwise modified, the “Credit Agreement”), and is
entitled to the benefit and security of the Credit Agreement, the Security
Agreement and all of the other Loan Documents referred to therein.  Reference is hereby made to the Credit
Agreement for a statement of all of the terms and conditions under which the
Loans evidenced hereby are made and are to be repaid.  The date and amount of each Revolving Credit
Advance made by Lenders to Borrowers, the rates of interest applicable thereto
and each payment made on account of the principal thereof, shall be recorded by
Agent on its books; provided that
the failure of Agent to make any such recordation shall not affect the
obligations of Borrowers to make a payment when due of any amount owing under
the Credit Agreement or this Revolving Note in respect of the Revolving Credit
Advances made by Lender to Borrowers.


 


The principal amount of
the indebtedness evidenced hereby shall be payable in the amounts and on the
dates specified in the Credit Agreement, the terms of which are hereby
incorporated herein by reference. 
Interest thereon shall be paid until such principal amount is paid in
full at such interest rates and at such times, and pursuant to such
calculations, as are specified in the Credit Agreement. The terms of the Credit
Agreement are hereby incorporated herein by reference.


 


If any payment on this
Revolving Note becomes due and payable on a day other than a Business Day, the
payment thereof shall be extended to the next succeeding Business Day and, with
respect to payments of principal, interest thereon shall be payable at the then
applicable rate during such extension.


 


Upon and after the
occurrence of any Event of Default, this Revolving Note may, as provided in the
Credit Agreement, and without presentment, demand, protest, notice of intent to
accelerate, notice of acceleration or other legal requirement of any kind (all
of which are hereby expressly waived by Borrowers), be declared, and
immediately shall become, due and payable.


 





















 


Time is of the essence of
this Revolving Note.


 


Except as provided in the
Credit Agreement, this Revolving Note may not be assigned by Lender to any
Person.


 


THIS REVOLVING NOTE SHALL BE
GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF
THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES.


 


This Note
replaces and supersedes the Revolving Note, dated May 22, 2003, by the
Borrowers to the order of General Electric Capital Corporation (the “Original
Note”) and all amounts of principal outstanding and interest accrued and
unpaid as of the date hereof under the Original Note remain outstanding and
unpaid under and are payable in accordance with the terms of this Note.


 


 


	
   

  	
  PENHALL INTERNATIONAL CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  PENHALL COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  PENHALL LEASING, L.L.C.

  
	
   

  	
   

  
	
   

  	
  BY: PENHALL COMPANY, its sole member

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  BOB MACK CO., INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					



 


2





















 


	
   

  	
  CAPITOL DRILLING SUPPLIES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					



 


3





















 


EXHIBIT 1.1(a)(ii)

to

AMENDED AND RESTATED CREDIT AGREEMENT


 


FORM OF NOTICE OF REVOLVING CREDIT ADVANCE


 


                     ,
          


 


General Electric Capital
Corporation,

for itself, as Lender, and as Agent

for Lenders


299 Park Avenue

New York, New York 10171


 


Attention:                                         Penhall
Company

Account Manager


 


Ladies and Gentlemen:


 


The undersigned, Penhall
Company (“Borrower Representative”) refers to the Amended and Restated
Credit Agreement, dated as of November 1, 2005 (including all annexes,
exhibits and schedules thereto, and as from time to time amended, restated,
supplemented or otherwise modified, the “Credit Agreement,” the terms
defined therein being used herein as therein defined), by and among the
undersigned, the other persons named therein as Borrowers, the other Credit
Parties signatory thereto, General Electric Capital Corporation, for itself, as
Lender, and as Agent for Lenders,  and
Lenders, and hereby gives you notice, irrevocably, pursuant to Section 1.1(a) of
the Credit Agreement, that the undersigned hereby requests a Revolving Credit
Advance under the Credit Agreement, and in that connection sets forth below the
information relating to such Revolving Credit Advance as required by Section 1.1(a) of
the Credit Agreement:


 


(i)                                     The
date of the requested Revolving Credit Advance is                      ,
          .


 


(ii)                                  The
aggregate amount of the requested Revolving Credit Advance is $                    .


 


(iii)                               The
requested Revolving Credit Advance is [an Index Rate Loan] [a LIBOR Loan
with a LIBOR Period of                 ].


 


(iv)                              The
requested Revolving Credit Advance is to be sent to:


 


[Name of Bank]

[City of Bank]

Beneficiary:

Account No.:  [number]

ABA No.:  [number]

Attn:  [name]


 


(v)                                 The
Borrower as to the Revolving Credit Advance is                                        .


 





















 


The undersigned hereby
certifies that all of the statements contained in Section 7.2 of
the Credit Agreement are true and correct in all material respects on the date
hereof, and will be true in all material respects on the date of the requested
Revolving Credit Advance, before and after giving effect thereto and to the
application of the proceeds therefrom.


 


	
   

  	
  PENHALL COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					



 


2





















 


EXHIBIT 1.1(c)

to

AMENDED AND RESTATED CREDIT AGREEMENT


 


FORM OF SWING LINE NOTE

(Multi-Borrower)


 


New York, New York


 


$     ,     ,                    
   ,        


 


FOR VALUE RECEIVED, each
of the undersigned (each individually a “Borrower” and collectively, the
“Borrowers”), jointly and severally, HEREBY PROMISES TO PAY to the order
of GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation (“Swing Line
Lender”) at the offices of GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware
corporation, as Agent (in such capacity, the “Agent”) at Agent’s address
at 299 Park Avenue, New York New York 
10171, or at such other place as Agent may designate from time to time
in writing, in lawful money of the United States of America and in immediately
available funds, the amount of                                    
DOLLARS AND NO CENTS ($     ,     ,     )
or, if less, the aggregate unpaid amount of all Swing Line Advances made to the
undersigned under the “Credit Agreement” (as hereinafter defined).  All capitalized terms used but not otherwise
defined herein have the meanings given to them in the Credit Agreement or in Annex
A thereto.


 


This Swing Line Note is
issued pursuant to that certain Amended and Restated Credit Agreement dated as
of November 1, 2005 by and among Borrowers, the other Persons named
therein as Credit Parties, Agent, Swing Line Lender and the other Persons
signatory thereto from time to time as Lenders (including all annexes, exhibits
and schedules thereto and as from time to time amended, restated, supplemented
or otherwise modified, the “Credit Agreement”), and is entitled to the
benefit and security of the Credit Agreement, the Security Agreement and all of
the other Loan Documents.  Reference is
hereby made to the Credit Agreement for a statement of all of the terms and
conditions under which the Loans evidenced hereby are made and are to be
repaid.  The date and amount of each
Swing Line Advance made by Swing Line Lender to Borrowers, the rate of interest
applicable thereto and each payment made on account of the principal thereof,
shall be recorded by Agent on its books; provided that
the failure of Agent to make any such recordation shall not affect the
obligations of Borrowers to make a payment when due of any amount owing  under the Credit Agreement or this Swing Line
Note in respect of the Swing Line Advances made by Swing Line Lender to
Borrowers.


 


The principal amount of
the indebtedness evidenced hereby shall be payable in the amounts and on the
dates specified in the Credit Agreement, the terms of which are hereby
incorporated herein by reference. 
Interest thereon shall be paid until such principal amount is paid in
full at such interest rates and at such times, and pursuant to such
calculations, as are specified in the Credit Agreement.  The terms of the Credit Agreement are hereby
incorporated herein by reference.


 


If any payment on this
Swing Line Note becomes due and payable on a day other than a Business Day, the
payment thereof shall be extended to the next succeeding Business Day and, with
respect to payments of principal, interest thereon shall be payable at the then
applicable rate during such extension.


 


Upon and after the
occurrence of any Event of Default, this Swing Line Note may, as provided in
the Credit Agreement, and without presentment, demand, protest, notice of
intent to 


 





















 


accelerate, notice
of acceleration or other legal requirement of any kind (all of which are hereby
expressly waived by Borrowers), be declared, and immediately shall become, due
and payable.


 


Time is of the essence of
this Swing Line Note.


 


Except as provided in the
Credit Agreement, this Swing Line Note may not be assigned by Lender to any
Person.


 


THIS SWING LINE NOTE SHALL BE
GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF
THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES.


 


This Note replaces and supersedes
the Swing Line Note, dated May 22, 2003, by the Borrowers to the order of
General Electric Capital Corporation (the “Original Note”) and all
amounts of principal outstanding and interest accrued and unpaid as of the date
hereof under the Original Note remain outstanding and unpaid under and are
payable in accordance with the terms of this Note.


 


	
   

  	
  PENHALL INTERNATIONAL CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PENHALL COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PENHALL LEASING, L.L.C.

  
	
   

  	
   

  
	
   

  	
  BY: 

  	
  PENHALL COMPANY, its sole member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BOB MACK CO., INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					



 


2





















 


	
   

  	
  CAPITOL DRILLING SUPPLIES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
						



 


3





















 


EXHIBIT 1.2(e)

to

AMENDED AND RESTATED CREDIT AGREEMENT


 


FORM OF NOTICE OF CONVERSION/CONTINUATION


 


Reference is made to that
certain Amended and Restated Credit Agreement dated as of November 1, 2005
by and among the undersigned (“Borrower Representative”), the other
Persons named therein as Borrowers, the other Persons named therein as Credit
Parties, General Electric Capital Corporation (“Agent”) and the Lenders
from time to time signatory thereto (including all annexes, exhibits or
schedules thereto, and as from time to time amended, restated, supplemented or
otherwise modified, the “Credit Agreement”).  Capitalized terms used herein without
definition are so used as defined in the Credit Agreement.


 


Borrower Representative
hereby gives irrevocable notice, pursuant to Section 1.2(e) of
the Credit Agreement, of its request to:


 


(a)                                  on
[  date  ] convert $[                ]of
the aggregate outstanding principal amount of the [             ]
Loan, bearing interest at the [                ]
Rate, into a(n) [                ]
Loan [and, in the case of a LIBOR Loan, having a LIBOR Period of [             ]
month(s)];


 


[(b)                             on [  date  ]
continue $[                ]of
the aggregate outstanding principal amount of the [                ]
Loan, bearing interest at the LIBOR Rate, as a LIBOR Loan having a LIBOR Period
of [          ] month(s)].


 


Borrower Representative
certifies that the conversion and/or continuation of the Loans requested above
is for the separate account(s) of the following Borrowers[s] in the following
[respective] amount[s]:  [Name:  $                             ]
and [Name:  $                             ].


 


Borrower Representative
hereby (i) certifies that all of the statements contained in Section 7.2
of the Credit Agreement are true and correct in all material respects on the
date hereof, and will be true in all material respects on the date of the
requested conversion/continuation, before and after giving effect thereto and (ii) reaffirms
the cross-guaranty provisions set forth in Section 10 of the Credit
Agreement and the guaranty and continuance of Agent’s Liens, on behalf of
itself and Lenders, pursuant to the Collateral Documents.


 


	
   

  	
  PENHALL COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
						



 





















 


EXHIBIT 3.1(C)

to

AMENDED AND RESTATED CREDIT AGREEMENT


 


FORM OF INTERCOMPANY NOTE


 


[PENHALL COMPANY/PENHALL INTERNATIONAL CORP./PENHALL INVESTMENTS,
INC./PENHALL LEASING, L.L.C./BOB MACK CO., INC./CAPITOL DRILLING SUPPLIES,
INC.], [a/an California/Arizona/Indiana corporation/limited liability company]
(“Maker”) hereby promises to pay to the order of [PENHALL
COMPANY/PENHALL INVESTMENTS, INC./PENHALL LEASING, L.L.C./BOB MACK CO.,
INC./CAPITOL DRILLING SUPPLIES, INC.], [a California/Arizona/Indiana
corporation/limited liability company] (“Payee”) upon demand in lawful
money of the United States of America and in immediately available funds, the
amount of [         ], together  with interest thereon at the [rate to be
determined by Maker and Payee].


 


This Note shall be governed by the laws of the State of New York.


 


This Note is being pledged to Agent under the Amended and Restated
Credit Agreement dated as of [         ],
2005 by and among the Maker, the other Persons named therein as Borrowers, the
other Persons named therein as Credit Parties, General Electric Capital
Corporation (“Agent”) and the Lenders from time to time signatory thereto
(including all annexes, exhibits or schedules thereto, and as from time to time
amended, restated, supplemented or otherwise modified, the “Credit Agreement”)
and such Agent shall be entitled to exercise any and all rights of the Payee
upon and during the continuation of any Event of Default under the Credit
Agreement.


 


IN WITNESS WHEREOF, the Maker has executed this Note on this [   ] day of [  
], [    ].


 


[PENHALL COMPANY/PENHALL INTERNATIONAL CORP./PENHALL INVESTMENTS,
INC./PENHALL LEASING, L.L.C./BOB MACK CO., INC./CAPITOL DRILLING SUPPLIES,
INC.]


 


 


	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 





















 


GRID


 





















 


EXHIBIT 8.1

to

AMENDED AND RESTATED CREDIT AGREEMENT


 


ASSIGNMENT AGREEMENT


 


This Assignment Agreement
(this “Agreement”) is made as of                      
   ,         by and between                                                                          
(“Assignor Lender”) and                                                 
(“Assignee Lender”) and acknowledged and consented to by GENERAL
ELECTRIC CAPITAL CORPORATION, as agent (“Agent”).  All capitalized terms used in this Agreement
and not otherwise defined herein will have the respective meanings set forth in
the Credit Agreement as hereinafter defined.


 


RECITALS:


 


WHEREAS, PENHALL COMPANY,
a California corporation, PENHALL LEASING LLC, a California limited liability
company, BOB MACK COMPANY, a California corporation, PENHALL INTERNATIONAL
CORP., an Arizona corporation, CAPITOL DRILLING SUPPLIES, INC., an Indiana
corporation, and PENHALL INVESTMENTS, INC., a California  corporation (“Credit Parties”), Agent,
Assignor Lender and other Persons signatory thereto as Lenders have entered
into that certain Amended and Restated Credit Agreement dated as of November 1,
2005 (as amended, restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”) pursuant to which Assignor Lender has
agreed to make certain Loans to, and incur certain Letter of Credit Obligations
for, Borrowers;


 


WHEREAS, Assignor Lender
desires to assign to Assignee Lender [all/a portion]
of its interest in the Loans (as described below), the Letter of Credit
Obligations and the Collateral and to delegate to Assignee Lender [all/a portion] of its Commitments and other duties with
respect to such Loans, Letter of Credit Obligations and Collateral;


 


WHEREAS, Assignee Lender
desires to become a Lender under the Credit Agreement and to accept such
assignment and delegation from Assignor Lender; and


 


WHEREAS, Assignee Lender
desires to appoint Agent to serve as agent for Assignee Lender under the Credit
Agreement.


 


NOW, THEREFORE, in
consideration of the premises and the agreements, provisions, and covenants
herein contained, Assignor Lender and Assignee Lender agree as follows:


 


1.                                       ASSIGNMENT,
DELEGATION, AND ACCEPTANCE


 


1.1                                 Assignment.  Assignor Lender hereby transfers and assigns
to Assignee Lender, without recourse and without representations or warranties
of any kind (except as set forth in Section 3.2), [all/such percentage] of Assignor Lender’s right, title, and
interest in the Revolving Loan, Loan Documents and the Collateral as will
result in Assignee Lender having as of the Effective Date (as hereinafter
defined) a Pro Rata Share thereof, as follows:


 


	
  Assignee Lender’s Loans

  	
   

  	
  Principal Amount

  	
   

  	
  Pro Rata Share

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Revolving Loan

  	
   

  	
  $

  	
   

  	
   

  	
   

  	
  %

  
							



 





















 


1.2                                 Delegation.  Assignor Lender hereby irrevocably assigns
and delegates to Assignee Lender [all/a portion]
of its Commitments and its other duties and obligations as a Lender under the
Loan Documents equivalent to the Pro Rata
Shares set forth above.


 


1.3                                 Acceptance
by Assignee Lender.  By its execution
of this Agreement, Assignee Lender irrevocably purchases, assumes and accepts
such assignment and delegation and agrees to be a Lender with respect to the
delegated interest under the Loan Documents and to be bound by the terms and
conditions thereof.  By its execution of
this Agreement, Assignor Lender agrees, to the extent provided herein, to
relinquish its rights and be released from its obligations and duties under the
Credit Agreement.


 


1.4                                 Effective
Date.  Such assignment and delegation
by Assignor Lender and acceptance by Assignee Lender will be effective and
Assignee Lender will become a Lender under the Loan Documents as of [the date of this Agreement][            
   ,       ] (“Effective
Date”) and upon payment of the Assigned Amount and the Assignment Fee (as
each term is defined below).  [Interest and Fees accrued prior to the Effective Date are for the
account of Assignor Lender, and Interest and Fees accrued from and after the
Effective Date are for the account of Assignee Lender.]


 


2.                                       INITIAL
PAYMENT AND DELIVERY OF NOTES


 


2.1                                 Payment
of the Assigned Amount.  Assignee
Lender will pay to Assignor Lender, in immediately available funds, not later
than 12:00 noon New York time on the
Effective Date, an amount equal to its Pro Rata Share of the then outstanding
principal amount of the Loans as set forth above in Section 1.1  [together with accrued interest, fees and other amounts as set forth on
Schedule 2.1] (the “Assigned Amount”).


 


2.2                                 Payment
of Assignment Fee.  [Assignor Lender
and/or Assignee Lender] will pay to Agent, for its own account in immediately
available funds, not later than 12:00 noon New York time
on the Effective Date, the assignment fee in the amount of $3,500 (the “Assignment
Fee”) as required pursuant to Section 8.1(a) of the Credit
Agreement.


 


2.3                                 Execution
and Delivery of Notes.  Following
payment of the Assigned Amount and the Assignment Fee, Assignor Lender will
deliver to Agent the Notes previously delivered to Assignor Lender for
redelivery to Borrowers and Agent will obtain from Borrowers for delivery to [Assignor Lender and] Assignee Lender, new executed Notes
evidencing Assignee Lender’s [and Assignor Lender’s
respective] Pro Rata Share[s] in the Loans after giving effect to
the assignment described in Section 1.  Each new Note will be issued in the aggregate
maximum principal amount of the [applicable]
Commitment [of the Lender to whom such Note is issued]
OR  [the
Assignee Lender].


 


3.                                       REPRESENTATIONS,
WARRANTIES AND COVENANTS


 


3.1                                 Assignee
Lender’s Representations, Warranties and Covenants.  Assignee Lender hereby represents, warrants,
and covenants the following to Assignor Lender and Agent:


 


(a)                                  This
Agreement is a legal, valid, and binding agreement of Assignee Lender,
enforceable according to its terms;


 


(b)                                 The
execution and performance by Assignee Lender of its duties and obligations
under this Agreement and the Loan Documents will not require any registration
with, notice to, or consent or approval by any Governmental Authority;


 


2





















 


(c)                                  Assignee
Lender is familiar with transactions of the kind and scope reflected in the
Loan Documents and in this Agreement;


 


(d)                                 Assignee
Lender has made its own independent investigation and appraisal of the
financial condition and affairs of each Credit Party, has conducted its own
evaluation of the Loans and Letter of Credit Obligations, the Loan Documents
and each Credit Party’s creditworthiness, has made its decision to become a
Lender to Borrowers under the Credit Agreement independently and without
reliance upon Assignor Lender or Agent, and will continue to do so;


 


(e)                                  Assignee
Lender is entering into this Agreement in the ordinary course of its business,
and is acquiring its interest in the Loans and Letter of Credit Obligations for
its own account and not with a view to or for sale in connection with any
subsequent distribution; provided, however, that at all times the distribution of Assignee
Lender’s property shall, subject to the terms of the Credit Agreement, be and
remain within its control;


 


(f)                                    No
future assignment or participation granted by Assignee Lender pursuant to Section 8.1
of the Credit Agreement will require Assignor Lender, Agent, or Borrower to
file any registration statement with the Securities and Exchange Commission or
to apply to qualify under the blue sky laws of any state;


 


(g)                                 Assignee
Lender has no loans to, written or oral agreements with, or equity or other
ownership interest in any Credit Party;


 


(h)                                 Assignee
Lender will not enter into any written or oral agreement with, or acquire any
equity or other ownership interest in, any Credit Party without the prior
written consent of Agent; and


 


(i)                                     As
of the Effective Date, Assignee Lender is entitled to receive payments of
principal and interest in respect of the Obligations without deduction for or
on account of any taxes imposed by the United States of America or any
political subdivision thereof and Assignee Lender will indemnify Agent from and
against all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, or expenses that result from Assignee Lender’s failure
to fulfill its obligations under the terms of Section 1.11(c) of
the Credit Agreement [or from any other inaccuracy in the foregoing].


 


3.2                                 Assignor
Lender’s Representations, Warranties and Covenants.  Assignor Lender hereby represents, warrants
and covenants the following to Assignee Lender:


 


(a)                                  Assignor
Lender is the legal and beneficial owner of the Assigned Amount;


 


(b)                                 This
Agreement is a legal, valid and binding agreement of Assignor Lender,
enforceable according to its terms;


 


(c)                                  The
execution and performance by Assignor Lender of its duties and obligations
under this Agreement and the Loan Documents will not require any registration
with, notice to or consent or approval by any Governmental Authority;


 


(d)                                 Assignor
Lender has full power and authority, and has taken all action necessary to
execute and deliver this Agreement and to fulfill the obligations hereunder and
to consummate the transactions contemplated hereby;


 


3





















 


(e)                                  Assignor
Lender is the legal and beneficial owner of the interests being assigned
hereby, free and clear of any adverse claim, lien, encumbrance, security
interest, restriction on transfer, purchase option, call or similar right of a
third party; and


 


(f)                                    This
Assignment by Assignor Lender to Assignee Lender complies, in all material
respects, with the terms of the Loan Documents.


 


4.                                       LIMITATIONS
OF LIABILITY


 


Neither Assignor Lender
(except as provided in Section 3.2) nor Agent makes any
representations or warranties of any kind, nor assumes any responsibility or
liability whatsoever, with regard to (a) the Loan Documents or any other
document or instrument furnished pursuant thereto or the Revolving Loans,
Letter of Credit Obligations or other Obligations, (b) the creation,
validity, genuineness, enforceability, sufficiency, value or collectibility of
any of them, (c) the amount, value or existence of the Collateral,  (d) the perfection or priority of any
Lien upon the Collateral, or (e) the financial condition of any Credit
Party or other obligor or the performance or observance by any Credit Party of
its obligations under any of the Loan Documents.  Neither Assignor Lender nor Agent has or will
have any duty, either initially or on a continuing basis, to make any
investigation, evaluation, appraisal of, or any responsibility or liability
with respect to the accuracy or completeness of, any information provided to
Assignee Lender which has been provided to Assignor Lender or Agent by any
Credit Party.  Nothing in this Agreement
or in the Loan Documents shall impose upon the Assignor Lender or Agent any
fiduciary relationship in respect of the Assignee Lender.


 


5.                                       FAILURE
TO ENFORCE


 


No failure or delay on
the part of Agent or Assignor Lender in the exercise of any power, right, or
privilege hereunder or under any Loan Document will impair such power, right,
or privilege or be construed to be a waiver of any default or acquiescence
therein.  No single or partial exercise
of any such power, right, or privilege will preclude further exercise thereof
or of any other right, power, or privilege. 
All rights and remedies existing under this Agreement are cumulative
with, and not exclusive of, any rights or remedies otherwise available.


 


6.                                       NOTICES


 


Unless otherwise
specifically provided herein, any notice or other communication required or
permitted to be given will be in writing and addressed to the respective party
as set forth below its signature hereunder, or to such other address as the
party may designate in writing to the other.


 


7.                                       AMENDMENTS
AND WAIVERS


 


No amendment,
modification, termination, or waiver of any provision of this Agreement will be
effective without the written concurrence of Assignor Lender, Agent and
Assignee Lender.


 


8.                                       SEVERABILITY


 


Whenever possible, each
provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law. 
In the event any provision of this Agreement is or is held to be
invalid, illegal, or unenforceable under applicable law, such provision will be
ineffective only to the extent of such invalidity, illegality, or
unenforceability, without invalidating the remainder of such provision or the
remaining provisions of the Agreement. 
In addition, in the event any provision of or obligation under this
Agreement is or is held to be invalid, illegal, or unenforceable in any
jurisdiction, 


 


4





















 


the validity,
legality, and enforceability of the remaining provisions or obligations in any
other jurisdictions will not in any way be affected or impaired thereby.


 


9.                                       SECTION TITLES


 


Section and Subsection titles
in this Agreement are included for convenience of reference only, do not
constitute a part of this Agreement for any other purpose, and have no
substantive effect.


 


10.                                 SUCCESSORS
AND ASSIGNS


 


This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns.


 


11.                                 APPLICABLE
LAW


 


THIS AGREEMENT WILL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND PERFORMED IN THAT STATE.


 


12.                                 COUNTERPARTS


 


This Agreement and any
amendments, waivers, consents, or supplements may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which, when so executed and delivered, will be deemed an original and all of
which shall together constitute one and the same instrument.


 


[Signature page follows]


 


5





















 


IN WITNESS WHEREOF, this
Agreement has been duly executed as of the date first written above.


 


	
  ASSIGNEE LENDER:

  	
  ASSIGNOR LENDER:

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
  Notice Address:

  	
  Notice Address:

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  



 


 


	
  ACKNOWLEDGED AND CONSENTED TO:

  
	
   

  
	
  GENERAL ELECTRIC CAPITAL

  
	
  CORPORATION

  
	
   

  
	
  By:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  



 


6





















 


SCHEDULE 2.1


 


Assignor Lender’s Loans


 


	
  Principal Amount

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Revolving Loan

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Subtotal

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accrued Interest

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Unused Line Fee

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Other + or -$

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  $

  	
   

  



 


All determined as of the Effective Date.