Document:

vertexda.htm

                                                                                                                                              

    

     

    STOCK
PURCHASE AGREEMENT

     

    BY
AND AMONG

     

    DXP
ENTERPRISES, INC.,

     

    VERTEX
CORPORATE HOLDINGS, INC.,

     

    THE STOCKHOLDERS
OF

    VERTEX
CORPORATE HOLDINGS, INC.

     

    AND

     

    WATERMILL-VERTEX
ENTERPRISES, LLC,

    AS
REPRESENTATIVE

    OF
THE STOCKHOLDERS OF

    VERTEX
CORPORATE HOLDINGS, INC.

     

    Dated as
of August 28, 2008

     

    

     

    

    

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    Schedule
I - List of Stockholders of the Company

     

    Exhibits

     

    Exhibit
A                      Calculation
of Working Capital

    Exhibit
B                      Escrow
Agreement

    Exhibit
C                      Employment
Agreements

    Exhibit
D                      Form
of Release and Waiver

    Exhibit
E                      Form
of Non-Competition/Non-Solicitation Agreements

    

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    STOCK
PURCHASE AGREEMENT

     

    This
STOCK PURCHASE AGREEMENT (the “Agreement”), dated as
of August 28, 2008, is made by and among DXP Enterprises, Inc., a Texas corporation (“Purchaser”), Vertex
Corporate Holdings, Inc., a Delaware corporation (the “Company”), all of the
stockholders of the Company as listed on Schedule I hereto
(the “Stockholders”), and
Watermill-Vertex Enterprises, LLC, the representative on behalf of the
Stockholders (the “Representative”).

     

    WHEREAS,
the Company and its Subsidiaries are engaged in the business of sales, marketing
and distribution of industrial fasteners and other activities related
thereto;

     

    WHEREAS,
the Stockholders are the owners of all of the issued and outstanding shares of
capital stock of the Company (the “Shares”);

     

    WHEREAS,
the Stockholders desire to sell the Shares and Purchaser desires to purchase the
Shares and enter into the other transactions contemplated herein upon the terms
and subject to the conditions set forth herein (collectively, the “Transactions”);

     

    WHEREAS,
immediately prior to the execution and delivery hereof, the Company effected a
reorganization (the “Reorganization”)
pursuant to that certain Agreement and Plan of Merger, dated as of August 28,
2008, by and among the Company, HMK-Vertex Holdings I, Inc., a Delaware
corporation and prior indirect stockholder of the Company (“Holdings-I”),
HMK-Vertex Holdings II, Inc., a Delaware corporation and prior indirect
stockholder of the Company (“Holdings-II”), Vertex
Acquisition Corp., a Delaware corporation (“Holdings-III”) and
each of the other stockholders of each of the Company, Holdings-I, Holdings-II
and Holdings III (the “Merger Agreement”),
pursuant to which (i) Holdings-I, Holdings-II and Holdings-III were each merged
with and into the Company with the Company as the surviving corporation thereto
and (ii) all stockholders of Holdings-I, Holdings-II and Holdings-III (other
than Holdings-I and Holdings-II) became direct stockholders of the Company and
Stockholders hereunder; and

     

    WHEREAS,
the Company, Purchaser and the Stockholders desire to enter into certain other
arrangements for their mutual benefit;

     

    NOW,
THEREFORE, in consideration of the foregoing and the mutual representations,
warranties, covenants and agreements herein contained, and intending to be
legally bound hereby, the parties hereto agree as follows:

     

    ARTICLE
I - DEFINITIONS

     

    1.1 Certain Defined
Terms.

     

    As used
in this Agreement, the following terms shall have the following
meanings:

     

    “Action” means any
suit, arbitration, investigation, cause of action, claim, complaint, criminal
prosecution, governmental or administrative proceeding, or any other proceeding,
whether at law or at equity, before or by any Court or Governmental Authority,
before any arbitrator or other tribunal.

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    “Affiliate” means,
with respect to any Person, a Person that directly or indirectly, through one or
more intermediaries, controls, is controlled by, or is under common control
with, the first mentioned Person; and “control” (including
the terms “controlled
by” and “under
common control with”) means the possession, directly or indirectly, of
the power to direct or cause the direction of the management or policies of a
Person, whether through the ownership of stock or other securities, as trustee
or executor, by contract or otherwise.

     

    “Approval” means any
license, permit, consent, approval, authorization, order, declaration,
registration, filing, waiver, qualification or certification.

     

    “Business Day” means
any day other than a Saturday, Sunday or day on which banks are permitted to
close in the Commonwealth of Massachusetts or the State of Texas.

     

    “Certificate of
Incorporation” means, with respect to any corporation, those instruments
that at the time constitute its corporate charter as filed or recorded under the
general corporation law of the jurisdiction of its incorporation, including the
articles or certificate of incorporation or organization, and all amendments
thereto, as the same may have been restated, and all amendments thereto
(including any articles or certificates of merger or consolidation, certificate
of correction or certificates of designation or similar instruments which effect
any such amendment) which became effective after the most recent such
restatement.

     

    “Client” shall mean
any Person to whom the Company or its Subsidiaries provides
services.

     

    “Closing Date Company
Transaction Expenses” shall mean all Company Transaction Expenses unpaid
immediately prior to the Closing.

     

    “Closing Indebtedness”
means all Indebtedness of the Company and its Subsidiaries outstanding
immediately prior to the Closing.

     

    “Closing Working
Capital” shall mean the Working Capital immediately prior to the Closing,
excluding therefrom any amounts included in Closing Indebtedness or Closing Date
Company Transaction Expenses.

     

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

     

    “Company” shall have
the meaning ascribed thereto in the preamble to this Agreement, and, for the
avoidance of doubt, shall include the Company as comprised following the
consummation of the Reorganization, including upon giving effect of the merger
of Holdings-I, Holdings-II and Holdings-III as part thereof.

     

    “Company Intellectual
Property” means all Intellectual Property owned, used or filed by or
licensed to the Company or its Subsidiaries.

     

    
      
         

      

      
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      “Company Material Adverse
Effect” means (a) a material adverse effect on the business, assets,
properties, results of operations or condition (financial or otherwise) of the
Company and its Subsidiaries (taken as a whole), or (b) a material adverse
effect on the ability of the Company or any of the Stockholders to
consummate the Transactions; provided, however, that, in
determining whether there has been a Company Material Adverse Effect, any
adverse effect resulting from or attributable or relating to an Excluded Matter
shall be disregarded and no Excluded Matter shall be deemed, either individually
or in the aggregate, to constitute a Company Material Adverse
Effect.  “Excluded Matter” means any one or more of the
following:  (i) the effect of any change in the United States or
foreign economies or securities or financial markets; (ii) the effect of any
change that generally affects any industry in which the Company or its
Subsidiaries operates that does not disproportionately affect the Company or its
Subsidiaries; (iii) the effect of any action taken by Purchaser or its
Affiliates (provided such action was taken without the participation or written
consent of the Company or any Stockholder) with respect to the Transactions or
with respect to the Company or its Subsidiaries; (iv) the effect of any changes
after the date hereof in applicable Laws or accounting rules; (v) any effect
resulting from the public announcement of this Agreement, compliance with the
terms of this Agreement or the consummation of the Transactions; and (vi) the
indirect or consequential effect of any outbreak of hostilities, acts of war,
sabotage or terrorism or military actions or escalation or material worsening of
any such hostilities, acts of war, sabotage or terrorism or military actions
existing or underway as of the date hereof.

    

     

    “Company Personnel”
means any former or current director, officer or employee of the Company or of
its Subsidiaries.

     

    “Company Transaction
Expenses” means, except as otherwise expressly set forth in this
Agreement, the aggregate amount of all out-of-pocket fees and expenses, incurred
by or on behalf of, or paid or to be paid by, the Company or any of its
Subsidiaries in connection with the process of selling the Company or otherwise
relating to the negotiation, preparation or execution of this Agreement or any
documents or Related Documents contemplated hereby or the performance or
consummation of the Transactions, including (A) any fees and expenses associated
with obtaining necessary or appropriate waivers, consents or approvals of any
Governmental Authority or third parties on behalf of the Company or any of its
Subsidiaries, (B) any fees or expenses associated with obtaining the release and
termination of any Liens (other than Permitted Liens); (C) all brokers’ or
finders’ fees incurred by or on behalf of the Company or any of its
Subsidiaries; (D) fees and expenses of counsel, advisors, consultants,
investment bankers, accountants, and auditors and experts, and (E) all change in
control, sale, “stay-around,” retention, or similar bonuses or payments to
current or former directors, officers, employees and consultants paid as a
result of arrangements in effect as of the Closing in connection with the
Transactions (but shall not, with respect to clause (E), include any payments
related to arrangements separately created or agreed by Purchaser for
compensation by the Company or any of its Subsidiaries for services of such
persons following the Closing).

     

    “Contract” means any
contract, agreement, arrangement, plan, indenture, note, bond, mortgage, loan,
commitment, obligation, license, lease or other instrument, and all amendments,
modifications and supplements thereto.

     

    “Copyright” means any
registered copyright (i) licensed from any third party (other than “shrink-wrap”
software) or (ii) assigned, registered or applied for.

     

    
      
         

      

      
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    “Court” means any
court or arbitration tribunal of the United States, any domestic state, or any
foreign country, and any political subdivision thereof.

     

    “Deductible” means
$525,000.

     

    “Environmental Law”
means any Laws in any way relating to the protection of human health and safety,
the environment or natural resources in connection with the presence of, or any
Remedial Action taken in relation to, a Hazardous Material in the soil or any
body of water, including but not limited to, any ground water, surface water or
aquifer, including the Comprehensive Environmental Response, Compensation and
Liability Act (42 U.S.C. § 9601 et seq.), the Hazardous
Materials Transportation Act (49 U.S.C. App. § 1801 et seq.), the Resource
Conservation and Recovery Act (42 U.S.C. § 6901 et seq.), the Clean
Water Act (33 U.S.C. § 1251 et seq.), the Clean Air
Act (42 U.S.C. § 7401 et seq.) the Toxic
Substances Control Act (15 U.S.C. § 2601 et seq.), the Federal
Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. § 136 et seq.), and the
Occupational Safety and Health Act (29 U.S.C. § 651 et seq.), as each has
been amended and the regulations promulgated pursuant thereto.

     

    “Escrow Fund” means
Three Million Two Hundred Fifty Thousand Dollars and Zero Cents
($3,250,000).

     

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

     

    “GAAP” means U.S.
generally accepted accounting principles as recognized by the U.S. Financial
Accounting Standards Board consistently applied and maintained throughout the
periods indicated.

     

    “Governmental
Authority” means any government or governmental or regulatory agency,
authority, department, commission, board, bureau, Court or instrumentality of
the United States, any domestic state, or any foreign country, and any political
subdivision or agency thereof, and includes any authority having governmental or
quasi-governmental powers, including any administrative agency or
commission.

     

    “Hazardous Material”
means any substance, material or waste that is regulated, classified, or
otherwise characterized under or pursuant to any Environmental Law as
“hazardous,” “toxic,” “pollutant,” “contaminant,” or “radioactive,” or words of
similar meaning or effect, including petroleum, petroleum hydrocarbons, and its
by-products, asbestos, polychlorinated biphenyls, radon, mold and urea
formaldehyde insulation.

     

    
      
         

      

      
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      “Indebtedness” means,
without duplication, (i) the principal, accreted value, accrued and unpaid
interest, prepayment and redemption premiums or penalties (if any), unpaid fees
or expenses and other monetary obligations in respect of (A) indebtedness
of the Company and/or any of its Subsidiaries for money borrowed and
(B) indebtedness evidenced by notes, debentures, bonds or other similar
instruments for the payment of which the Company and/or any of its Subsidiaries
is responsible or liable; (ii) all obligations of the Company and/or any of
its Subsidiaries issued or assumed as the deferred purchase price of property,
all conditional sale obligations of the Company and/or any of its Subsidiaries
and all obligations of the Company and/or any of its Subsidiaries under any
title retention agreement (but excluding trade accounts payable and other
accrued current liabilities arising in the ordinary course of business (other
than the current liability portion of any indebtedness for borrowed money));
(iii) all obligations of the Company and/or any of its Subsidiaries under
leases required to be capitalized in accordance with GAAP; (iv) all
obligations of the Company and/or any of its Subsidiaries for the reimbursement
of any obligor on any letter of credit, banker’s acceptance or similar credit
transaction; (v) all obligations of the Company and/or any of its Subsidiaries
under interest rate or currency swap transactions (valued at the termination
value thereof); (vi) the liquidation value, accrued and unpaid dividends,
prepayment or redemption premiums, repurchase price and penalties (if any),
unpaid fees or expenses and other monetary obligations in respect of any
redeemable preferred stock, warrants or other equity interests of the Company
and/or any of its Subsidiaries; (vii) all obligations of the type referred
to in clauses (i) through (vi) of the Company and/or any of its
Subsidiaries for the payment of which the Company and/or any of its Subsidiaries
is responsible or liable, directly or indirectly, as obligor, guarantor, surety
or otherwise, including guarantees of such obligations; and (viii) all
obligations of the type referred to in clauses (i) through (vii) of other
Persons secured by (or for which the holder of such obligations has an existing
right, contingent or otherwise, to be secured by) any Lien (not including
Permitted Liens) on any property or asset of the Company and/or any of its
Subsidiaries (whether or not such obligation is assumed by the Company and/or
any of its Subsidiaries).

    

     

    “Intellectual
Property” means any (i) Patents, (ii) Marks, (iii) Copyrights, (iv) trade
secrets, confidential information or know-how, (v) software or computer
programs, or (vi) other intellectual property or proprietary
rights.

     

    “IRS” means the
Internal Revenue Service.

     

    “Knowledge of the
Company” and all permutations thereof, means (i) with respect to any fact
or matter pertaining to the Company and/or its Subsidiaries, the actual
knowledge of the following individuals plus such knowledge as a prudent person
with the title, position and/or responsibilities as such individuals have with
respect to the Company and/or its Subsidiaries, as the case may be, should
have:  Stephen J. Kotler and Robert Ackerman, and (ii) with respect to
any fact or matter pertaining to any Subsidiary of the Company, the actual
knowledge of the following individuals plus such knowledge as a prudent person
with the title, position and/or responsibilities as such individuals have with
respect to any Subsidiary of the Company should have: David M. Hirsch, Mark
Alperin, Mark Klosek, Dave Kujanek and Peter Burke.

     

    “Laws” means all laws
(including common law), statutes, codes, licensing requirements, ordinances and
Regulations of any Governmental Authority.

     

    “Liabilities” means
any damages, fines, losses, adverse claims, penalties, debts, obligations and
other liabilities (including amounts paid in settlement), whether direct or
indirect, known or unknown, asserted or unasserted, absolute or contingent,
accrued or unaccrued, matured or unmatured, determined or determinable,
liquidated or unliquidated, or due or to become due, and whether in contract,
tort, strict liability or otherwise, but excluding any incidental or
consequential damages.

     

    
      
         

      

      
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    “Lien” means any
mortgage, pledge, security interest, attachment, encumbrance, deed of trust,
claim, charge, option, right of first refusal, easement, servitude, proxy,
voting trust or agreement, transfer restriction or lien (statutory or
otherwise).

     

    “Mark” means any
trademark, trade name, trade dress, service mark or domain name.

     

    “Minimum Working
Capital” means the Working Capital in the amount of
$28,072,327.

     

    “Neutral Auditors”
means McGladrey & Pullen, LLP.

     

    “Net Closing
Indebtedness” means Closing Indebtedness, less the amount of cash held
by the Company and its Subsidiaries immediately prior to the Closing as
identified to Purchaser in the certificate delivered pursuant to Section
7.2(k)(i).

     

    “Order” means any
judgment, order, writ, injunction, assessment, ruling or decree of, or any
settlement under the jurisdiction of any Court or Governmental
Authority.

     

    “Patent” means any
United States or foreign patent, any application for a United States or foreign
patent, or any continuation, continuation-in-part, division, renewal, extension
(including any supplemental protection certificate), reexamination or reissue
thereof.

     

    “Permitted Liens”
means (i) statutory Liens for current Taxes, assessments and other governmental
charges which are not yet due and payable or are due but not delinquent or are
being contested in good faith by appropriate proceedings, provided an
appropriate reserve has been established therefor in accordance with GAAP, (ii)
statutory or common law Liens to secure landlords, sublandlords, licensors or
sublicensors under leases or rental agreements (provided such Liens
are not resulting from any breach, default or violation by the Company or any of
its Subsidiaries of any Contract or Law), (iii) deposits or pledges made in
connection with, or to secure payment of, workers’ compensation, unemployment
insurance, old age pension or other social security programs mandated under
applicable Laws, (iv) statutory or common law Liens in favor of carriers,
warehousemen, mechanics, workmen, repairmen and materialmen to secure claims for
labor, materials or supplies and other like Liens (provided such Liens
are not resulting from any breach, default or violation by the Company or any of
its Subsidiaries of any Contract or Law), (v) restrictions on transfer of
securities imposed generally by applicable state and federal securities Laws,
(vi) any other encumbrance affecting any asset which does not impede or
otherwise affect the ownership or operation of such asset (provided such Liens
are not resulting from any breach, default or violation by the Company or any of
its Subsidiaries of any Contract or Law), (vii) Liens resulting from a filing by
an equipment lessor as a precautionary filing for a lease, (viii) deposits to
secure the performance of bids, trade contracts, leases, statutory obligations,
surety and appeal bonds, performance bonds and other obligations of a like
nature incurred in the ordinary course of business, or (ix) vendors’ Liens to
secure payment (provided such Liens
are not resulting from any breach, default or violation by the Company or any of
its Subsidiaries of any Contract or Law).

     

    “Person” means an
individual, corporation, partnership, association, trust, unincorporated
organization, limited liability company, joint venture or other legal
entity.

     

    “Regulation” means any
rule or regulation of any Governmental Authority.

     

    
      
         

      

      
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    “Related Documents”
means the Escrow Agreement and any other agreement, instrument, document or
certificate contemplated by this Agreement to be executed by the parties
pursuant hereto in connection with the consummation of the
Transactions.

     

    “Release” means any
release, spill, emission, leaking, pumping, pouring, injection, deposit,
dumping, emptying, disposal, discharge, dispersal or leaching into the indoor or
outdoor environment, or into or out of any property or any other release as
defined by the Environmental Laws.

     

    “Remedial Action”
means all actions including any capital expenditures undertaken to (i) clean up,
remove, treat or in any other way address any Hazardous Material; (ii) prevent
the Release or threat of Release, or minimize the further Release of any
Hazardous Material so it does not migrate or endanger or threaten to endanger
public health or welfare or the indoor or outdoor environment; (iii) perform
pre-remedial studies and investigations or post-remedial monitoring and care; or
(iv) correct a condition of noncompliance with Environmental Laws.

     

    “Representative Fund”
means One Million Dollars and Zero Cents ($1,000,000.00).

     

    “Subsidiary” means,
with respect to any Person, any other Person of which such Person (either alone
or through or together with any other Subsidiary) (i) owns, directly or
indirectly, at least a majority of the stock, voting securities or other equity
interests in such entity or (ii) is entitled, directly or indirectly, to appoint
a majority of the board of directors, board of managers or comparable body of
such Person.  Each reference to a “Subsidiary” or “Subsidiaries”
herein shall be to those of the Company unless otherwise specifically noted in
the relevant text.

     

    “Tax Authority” shall
mean any Governmental Authority or any quasi-governmental or private body having
jurisdiction over the assessment, determination, collection or imposition of any
Tax.

     

    “Taxes” means (i) all
taxes and governmental impositions of any kind in the nature of (or similar to)
taxes, payable to any federal, state, local or foreign Governmental Authority or
other Governmental Authority, including, but not limited to, those on or
measured by or referred to as income, franchise, profits, gross receipts,
capital, ad valorem,
custom duties, alternative or add-on minimum taxes, estimated, environmental,
disability, registration, value added, sales, use, service, real or personal
property, capital stock, license, payroll, withholding, employment, social
security, workers’ compensation, unemployment compensation, utility, severance,
production, excise, stamp, occupation, premiums, windfall profits, transfer and
gains taxes, (ii) all interest, penalties, fines and additions to tax imposed
with respect to any item described in clause (i) and (ii) any transferee
liability in respect of any items described in clauses (i) or (ii) payable by
reason of Contract, assumption, transferee liability, operation of Law, Treasury
Regulation Section 1.1502-6(a) (or any predecessor or successor thereof of any
analogous or similar provision of Law) or otherwise.

     

    “Tax Return” shall
mean any report, return, documents, declaration or other information (and any
supporting schedules or attachments thereto) required to be supplied to any
Governmental Authority or jurisdiction with respect to Taxes (including any
returns or reports filed on
a consolidated, unitary, or combined basis), including any information return,
claim for refund, amended return or declaration of estimated Tax.

       

    

     

    
      
         

      

      
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    “Watermill Realty Promissory
Note” shall mean that certain demand promissory note dated as of the date
hereof issued by Watermill Realty, LLC to PFI, LLC that has been assigned by
PFI, LLC to the Representative, on behalf of the Stockholders, as of the date
hereof.

     

    “Working Capital”
shall mean the difference whether positive or negative between (a) the current
assets (excluding the Watermill Realty Promissory Note as indicated on Exhibit
A) of the Company and its Subsidiaries and (b) the current liabilities of
the Company and its Subsidiaries, all as calculated in accordance with Exhibit
A hereto and the principles set forth thereon.  For the
avoidance of doubt, any deficiency or excess of “cash” (as determined as part of
the determination of Closing Working Capital) from the amount of “cash” used to
determine Net Closing Indebtedness hereunder shall be included in the current
assets or current liabilities for Working Capital purposes, but the amount of
cash used to determine Net Closing Indebtedness shall otherwise be excluded for
such purposes.

     

    1.2 Additional Defined
Terms.

     

    The
following terms shall have the meanings set forth in the sections of this
Agreement indicated below:

     

    Definition                                   Section

     

    Agreement                                                                                                     Preamble

    2006
Financials                                                                                                   4.9

    2007
Financials                                                                                                   4.9

    2008
Financials                                                                                                   4.9

    Base
Purchase
Price                                                                                         2.2(a)

    Closing                                                                                                        2.3

    Closing
Date                                                                                                   2.3

    COBRA                                                                                           
          4.14(p)

    Company
Documents                                                                                       4.5

    Company
Plans                                                                                                4.14(c)

    Company
Third Party
Consents                                                                      4.6

    Confidential
Information                                                                                   6.5

    Continuing
Employee                                                                                        6.4

    Continued
Employee
Plans                                                                               6.4

    Defense                                                                                                            10.3(b)

    Disclosure
Schedule                                                                                    Article
IV

    Escrow
Agreement                                                                                             2.4

    Escrow
Agent                                                                                                     2.4

    ERISA
Affiliate                                                                                                4.14(c)

    Excess
Adjustment
Obligation                                                                       2.5(c)

    Fundamental
Representations                                                                       10.4(a)

    Historical
Financial
Statements                                                                        4.9

    Holdings-I                                                                                                      Recitals

    
      
         

      

      
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    Holdings-II                                                                                                      Recitals

    Holdings-III                                                                                                     Recitals

    Indemnification
Matter                                                                                       10.3

    Indemnification
Notice                                                                                      10.3(a)

    Indemnitee                                                                                                            10.3

    Indemnitor                                                                                                            10.3

    Latest
Balance
Sheet                                                                                            4.9

    Loss                                                                                
                                   10.1(a)

    Material
Contracts                                                                                            4.15(a)

    Merger
Agreement                                                                                          Recitals

    Multiemployer
Plan                                                                                           4.14(c)

    Objection
Notice                                                                                                2.5(b)

    PBGC                                                                                            
                      4.14(i)

    Products                                                                                         
                    4.25

    Purchaser                                                                                          
              Preamble

    Purchaser
Benefit
Plans                                                
                                    6.4

    Purchaser
Calculated Closing Working
Capital                                            2.5(a)

    Purchaser
Documents                                                                                        5.1

    Purchaser
Group                                                                                               10.1(a)

    Purchaser
Third Party
Consents                                                                      5.3

    Purchase
Price                                                                  
                                 2.2(a)

    Related
Persons                                                                                                 4.24

    Reorganization                                                                                                Recitals

    Representative                                                                                                Preamble

    Shares                                                                                         
                     Recitals

    Stockholder
Documents                                                                                     3.3

    Stockholder
Group                                                                                             10.2

    Stockholders                                                                                                   Preamble

    Straddle
Period                                                                               
                   10.6(c)

    Tax
Claim                                                                                            
            10.6(d)(i)

    Title IV
Plans                                                                                         
            4.14(c)

    Transactions                                                                                                    Recitals

    Transaction
Expenses                                                                            
           9.4(a)

    Working
Capital
Deficiency                                                                              2.5(c)

    

     

     

    
      
         

      

      
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      ARTICLE II
- SALE OF SHARES AND PURCHASE PRICE

       

      2.1 Purchase and Sale of the
Shares.  Subject to and in reliance upon the representations,
warranties, covenants and agreements herein set forth, and the terms and
conditions herein contained, at the Closing, each Stockholder shall sell and
deliver to Purchaser the Shares owned by such Stockholder (as set forth opposite
such Stockholder’s name on Schedule I hereto),
free and clear of all Liens and duly endorsed to Purchaser or accompanied by
duly executed stock powers in form satisfactory to Purchaser, and Purchaser
shall purchase such Shares from the Stockholders, for the Purchase
Price.

       

      2.2 Purchase Price;
Payment.
Subject to adjustment as provided in Section 2.5,
the aggregate purchase price to be paid by Purchaser for the Shares pursuant to
the terms of this Agreement shall equal $65,000,000.00 (the “Base Purchase Price”)
minus (i) an aggregate amount equal to the Net Closing Indebtedness and (ii) an
aggregate amount equal to the Closing Date Company Transaction Expenses (as so
adjusted, the “Purchase
Price”).

    (a) At the
Closing, Purchaser shall deposit or cause to be deposited (i) with the
Representative the Purchase Price (less an amount equal to the sum of the Escrow
Fund and the Representative Fund) for the benefit of the Stockholders, (ii) with
the Escrow Agent the Escrow Fund, and (iii) with the Representative, the
Representative Fund.  Allocation of the Purchase Price and any
distributions to the Representative from the Escrow Fund and the Representative
Fund among the Stockholders shall be made pro rata to the Stockholders
in the proportions set forth on Schedule I
hereto.

     

    2.3 The
Closing.  Subject to the terms and conditions hereof, the
closing of the Transactions (the “Closing”) will take
place on the date hereof at the offices of Mintz, Levin, Cohn, Ferris, Glovsky
and Popeo, P.C., One Financial Center, Boston, MA, at 10:00 a.m. (Eastern Time)
or remotely via the exchange of executed documents and other closing
deliverables, unless another time or date is agreed to in writing by the Company
and Purchaser.  The date on which the Closing actually occurs is
herein referred to as the “Closing
Date.”

     

    2.4 Escrow
Agent.  Wells Fargo Bank, N.A. shall act as escrow agent (in
such capacity, the “Escrow Agent”) in
respect of the Escrow Fund and the Representative Fund pursuant to an escrow
agreement to be executed by and among the Representative, Purchaser and the
Escrow Agent in substantially the form of Exhibit
B hereto (the “Escrow
Agreement”).  On the Closing Date, Purchaser shall, on behalf
of the Stockholders, pay to the Escrow Agent to  escrow account(s)
specified by the Escrow Agent an amount of the Purchase Price equal to (i) the
Escrow Fund and (ii) the Representative Fund, in each case accordance with the
terms of this Agreement and the Escrow Agreement.  The Escrow Agent
shall hold and distribute the Escrow Fund and the Representative Fund in
separate accounts and otherwise in accordance with the terms of this Agreement
and the Escrow Agreement.  The funds in the escrow accounts shall be
treated as being owned by the Stockholders for Tax purposes and all parties
hereto will file all Tax Returns consistent with such treatment.  Any
payment the Stockholders are obligated to make pursuant to Sections
10.1(a)(i)-(iii) shall be paid first, to
the extent there are sufficient funds in the escrow account initially holding
the Escrow Fund, by release of funds from such account by the Escrow Agent in
accordance with the provisions of the Escrow Agreement and shall accordingly
reduce the Escrow Fund and, second, to the extent the Escrow Fund is
insufficient to pay any remaining sums due, then the Stockholders shall be
required to pay all of such additional sums due and owing to the applicable
member of the Purchaser Group by wire transfer of immediately available funds on
the date that such funds would have been released from such escrow account if
sufficient funds were in such account.  Any payment the Stockholders
are obligated to make pursuant to Section 2.5(c) shall be paid first, to the
extent there are sufficient funds in the escrow account initially holding the
Representative Fund, by release of funds from such account by the Escrow Agent
in accordance with the provisions of the Escrow Agreement and shall accordingly
reduce the Representative Fund and, second, to the extent the Representative
Fund is insufficient to pay any remaining sums due, then the Stockholders shall
be required to pay all of such additional sums due and owing thereunder by wire
transfer of immediately available funds on the date for such payment under the
terms of Section
2.5(c).  On the Business Day immediately following the six (6) month
anniversary of the Closing Date, the Escrow Agent shall release a portion of the
funds held in the escrow account initially holding the Escrow Fund to the
Representative (for distribution to the Stockholders in accordance with their
respective pro rata
percentage ownership of the Shares) in accordance with the provisions of
the Escrow Agreement.

     

    
      
         

      

      
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    2.5 Working Capital
Adjustment.

     

    (a) Within
seventy (70) days after the Closing Date, Purchaser will, or will cause the
Company to, deliver to the Representative its itemized statement of the Closing
Working Capital (the “Purchaser Calculated Closing
Working Capital”).  The Stockholders and the Representative
shall, and shall cause their respective representatives and Affiliates to,
cooperate and assist in the preparation of the statement setting forth the
Purchaser Calculated Closing Working Capital.

     

    (b) If the
Representative disagrees with the Purchaser Calculated Closing Working Capital,
the Representative shall, within twenty (20) days after receipt of the Purchaser
Calculated Closing Working Capital, deliver a notice (an “Objection Notice”) to
Purchaser setting forth, in reasonable detail, the Representative’s dispute with
such calculation and the basis therefor.  If requested by the
Representative, Purchaser shall provide to the Representative copies of relevant
documentation used in its calculation; provided, however, that neither
Purchaser nor the Company shall be obligated to provide or deliver any
attorney-client privileged information, except that, in any such case, Purchaser
and the Company shall deliver documentation responsive to the request either in
redacted or reconfigured format with the privileged information
removed.  If the Representative does not deliver the Objection Notice
to Purchaser within twenty (20) days after receipt by the Representative of the
Purchaser Calculated Closing Working Capital, the Purchaser Calculated Closing
Working Capital will be conclusively presumed to be true and correct in all
respects and will be final and binding upon the parties.  If the
Representative delivers the Objection Notice to Purchaser within twenty (20)
days after receipt by the Representative of the Purchaser Calculated Closing
Working Capital, the Representative and Purchaser shall use their respective
commercially reasonable efforts to resolve any disagreements as to the
computation of the Closing Working Capital, but if they do not obtain a final
resolution within fifteen (15) days after Purchaser’s receipt of the Objection
Notice, then all amounts remaining in dispute shall be submitted to the Neutral
Auditors.  Purchaser and the Representative will direct the Neutral
Auditors to render a determination (it being understood that in making such
determination, the Neutral Auditors shall be functioning as an expert and not as
an arbitrator) within forty-five (45) days of its retention.  Each of
Purchaser and the Representative agrees to execute, if requested by the Neutral
Auditors, a reasonable engagement letter and cooperate with the Neutral Auditors
and promptly provide documents and information requested by the Neutral Auditors
during their engagement.  The Neutral Auditors will consider only
those items and amounts set forth in the Objection Notice which Purchaser and
the Representative are unable to resolve; provided that each of Purchaser and
the Representative shall be entitled to make a presentation to the Neutral
Auditors regarding the items and amounts that they are unable to resolve and
neither Purchaser nor the Representative will meet separately with the Neutral
Auditors.  In making its determination, the Neutral Auditors shall (i)
be bound by the terms and conditions of this Agreement, including without
limitation, the definition of Working Capital, Exhibit
A’s methodology for calculating Closing Working Capital and the terms of
this Section 2.5(b), and (ii) not assign any value with respect to

     

    
      
         

      

      
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    a
disputed amount that is greater than the highest value for such amount claimed
by either the Representative or Purchaser or that is less than the lowest value
for such amount claimed by either the Representative or
Purchaser.  The determination of the Neutral Auditors will be
conclusive and binding upon the Representative and Purchaser.  The
costs of the Neutral Auditors shall be borne by the party whose determination of
the Closing Working Capital (as set forth in the Purchaser Calculated Closing
Working Capital, for the Purchaser, or in the Objection Notice, for the
Representative) was farthest from the determination of the Closing Working
Capital by the Neutral Auditors, or equally by the Representative, on the one
hand, and the Purchaser, on the other hand, if the determination of the Closing
Working Capital by the Neutral Auditors is equidistant between the
determinations of the parties.

     

    (c) Within
three (3) days following the final determination of the Closing Working Capital
as provided in Section 2.5(b) above, either (A) Purchaser shall pay to the
Representative, for the benefit of the Stockholders, an amount equal to the the
excess, if any, of the Closing Working Capital over the Minimum Working Capital
by wire transfer of immediately available funds in such amount or (B) the
Representative, on behalf of the Stockholders, shall (i) assist Purchaser in
directing the Escrow Agent to distribute to Purchaser an amount from the escrow
account holding the Representative Fund equal to the amount by which the Minimum
Working Capital exceeds Closing Working Capital (the “Working Capital
Deficiency”) and (ii) if the Working Capital Deficiency shall be an
amount in excess (such excess, the “Excess Adjustment
Obligation”) of the amount to be distributed by the Escrow Agent pursuant
to clause (i) of this Section 2.5(c), then each of the Stockholders shall pay to
the Purchaser its pro
rata portion (which shall be determined by multiplying such Stockholder’s
percentage ownership of the Shares as shown on Schedule I hereto by
the amount of the Excess Adjustment Obligation) thereof by wire transfer to
Purchaser of immediately available funds.

     

    2.6 Authorization of
Transactions, this Agreement and Indemnity Matters.  The
execution of this Agreement shall constitute approval and ratification by the
Stockholders of: (i) the Transactions, (ii) the provisions of this Agreement
(including without limitation the indemnification provisions of Article X
hereof), (iii) the designation and appointment of the Representative pursuant to
Article VIII hereof and (iv) the creation and administration of the
Representative Fund.

     

    ARTICLE III
- REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS

     

    As an
inducement to Purchaser to enter into this Agreement and to consummate the
Transactions, each Stockholder hereby severally represents and warrants to
Purchaser:

     

    3.1 Title to
Shares.  Such Stockholder owns the Shares set forth opposite
his, her or its name on Schedule I
hereto beneficially and of record, free and clear of all Liens.  Such
Stockholder has the power and authority to sell, transfer, assign and deliver
the Shares owned by such Stockholder as provided in this
Agreement.  There is no restriction affecting the ability of such
Stockholder to transfer the legal and beneficial title and ownership of the
Shares owned by such Stockholder to Purchaser and, upon delivery thereof to
Purchaser pursuant to the terms of this Agreement and of payment of the Purchase
Price at the Closing, Purchaser will acquire record and beneficial title to the
Shares free and clear of all Liens.

     

    
      
         

      

      
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    Authority of
Stockholder.  Such Stockholder has the full legal right and
requisite power and all authority and approval required by law and legal
capacity to enter into and deliver this Agreement and each other Stockholder
Document to which he, she or it is a party and to perform his, her or its
obligations hereunder and thereunder.  The execution, delivery and
performance of this Agreement and the other Stockholder Documents and the
consummation of the transactions contemplated hereby and thereby have been duly
and validly authorized and approved by all necessary action on the part of such
Stockholder.

     

    3.2 Enforceability.  Such
Stockholder has duly and validly executed and delivered this Agreement and each
Related Document to which he, she or it is a party (the “Stockholder
Documents”), and this Agreement and each Stockholder Document to which
he, she or it is a party constitutes a  legal, valid and binding
obligation of such Stockholder enforceable against each Stockholder in
accordance with its terms.

     

    3.3 No
Violation.  Neither the execution and delivery of this
Agreement or any other Stockholder Document to which he, she or it is a party,
the consummation of the Transactions, nor the performance of this Agreement or
any other Stockholder Document in compliance with its terms and conditions by
such Stockholder will (a) conflict with or result in any violation or
default of any trust agreement, certificate of incorporation, by-law, judgment,
Law or Order applicable to such Stockholder or to the Shares owned by such
Stockholder, or any breach of any agreement to which such Stockholder is a party
or by which such Stockholder or the portion of the Shares owned by such
Stockholder are bound, or constitute a default thereunder, or result in the
creation of any Lien of any kind or nature on, or with respect to such Shares,
(b) result in any violation of, or be in conflict with, or constitute a
default under, any agreement, instrument, Law or Order, in each case applicable
to such Stockholder or by which his, her or its properties (including the
portion of the Shares owned by such Stockholder) are bound, or (c) conflict
with, result in any violation of or default under any loan or credit agreement,
note, bond, mortgage, indenture, lease, permit, concession, franchise, license
or other agreement or instrument applicable to such Stockholder. 

     

    3.4 Litigation.  There
is no Action pending or threatened against such Stockholder regarding this
Agreement or any other Stockholder Document to which such Stockholder is a party
or by which his, her or its properties are bound.

     

    3.5 Financial
Advisors.  No Person has acted, directly or indirectly, as a
broker, finder or financial advisor for such Stockholder in connection with the
transactions contemplated by this Agreement and no Person is or will be entitled
to any fee or commission or other payment in respect thereof.  Neither
such Stockholder nor any of its Affiliates have engaged or otherwise had a
business relationship (whether business, financial, accounting or otherwise)
with the Neutral Auditors.

     

    ARTICLE IV
- REPRESENTATIONS AND WARRANTIES OF THE COMPANY

     

    The
Company makes the following representations and warranties to Purchaser, except
as otherwise disclosed by the Company and its Subsidiaries in the disclosure
schedule, dated as of the date of this Agreement and delivered by the Company to
Purchaser simultaneously herewith (which disclosure schedule shall contain
specific references to the representations and warranties to which the
disclosures contained therein relate; provided, however, that any
item that is disclosed in a particular section or subsection of the disclosure
schedule shall be deemed to be disclosed
and incorporated into any other section or subsection of the disclosure schedule
where such disclosure would otherwise be appropriate and the matter disclosed is
readily apparent to apply to the subject matter of such other section or
subsection) (the “Disclosure
Schedule”):

     

    
      
         

      

      
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    4.1 Organization, Good Standing,
Qualification and Power.  Each of the Company and its
Subsidiaries (a) is a corporation or limited liability company (as the case may
be) duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or formation (as the case may be), (b) has all
requisite organizational power and authority to own, lease and operate its
properties and to carry on its business as it is now being conducted, as
required hereunder and by each of the Related Documents and to perform its
obligations hereunder and thereunder, and to consummate the Transactions, and
(c) is duly qualified and in good standing to do business in those jurisdictions
listed in Section 4.1 of the Disclosure Schedule and in all other jurisdictions
where the character of the properties owned, leased or operated by it or the
nature of its activities makes such qualification necessary.

     

    4.2 Subsidiaries.  Section
4.2 of the Disclosure Schedule, sets forth a true and complete list of all of
the Company’s direct and indirect Subsidiaries, together with the jurisdiction
of incorporation or formation of each Subsidiary and the amount and percentage
of each Subsidiary’s outstanding capital stock or other equity or similar
interest owned by the Company or another direct or indirect Subsidiary of the
Company.  Except as set forth in Section 4.2 of the Disclosure
Schedule, neither the Company nor any of its Subsidiaries owns any equity or
similar interest in, or any interest convertible into or exchangeable or
exercisable for, directly or indirectly, any equity or similar interest in, any
Person.  The outstanding shares of capital stock or equity interests
of each of the Company’s Subsidiaries are validly issued, fully paid and
non-assessable and were not issued in violation of any purchase or call option,
right of first refusal, subscription right, preemptive right or any similar
right.  All such shares or other equity interests represented as being
owned by the Company or any of its Subsidiaries are owned by them free and clear
of any and all Liens.  No shares of capital stock are held by any of
the Company’s Subsidiaries as treasury stock.  There is no existing
option, warrant, call, right or Contract to which any of the Company’s
Subsidiaries is a party requiring, and there are no convertible securities of
any of the Company’s Subsidiaries outstanding which upon conversion would
require, the issuance of any shares of capital stock or other equity interests
of any of the Company’s Subsidiaries or other securities convertible into shares
of capital stock or other equity interests of any of the Company’s
Subsidiaries.  Except as set forth on Section 4.2 of the Disclosure
Schedule, there are no material restrictions on the ability of the Company’s
Subsidiaries to make distributions of cash to their respective equity
holders.

     

    4.3 Organizational
Documents.  The Company has heretofore delivered to Purchaser a
complete and correct copy of each of its and each of its Subsidiary’s
Certificate of Incorporation and by-laws or other equivalent organizational
documents, each as amended or restated to the date hereof.  The
Stockholders have heretofore delivered to Purchaser a complete and correct copy
of their respective Certificate of Incorporation and by-laws or other equivalent
organizational documents, as applicable to each Stockholder.  Such
Certificates of Incorporation and by-laws or other equivalent organizational
documents of the Company and each of its Subsidiaries are in full force and
effect.

     

    
      
         

      

      
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    Capitalization.

    (a) The total
number of shares of capital stock and the par value of such stock that the
Company and its Subsidiaries have authority to issue is listed in Section 4.4(a)
of the Disclosure Schedule.

     

    (b) Section
4.4(b) of the Disclosure Schedule sets forth a table of all holders of all
issued and outstanding shares of the Company.  As of the date hereof
there are 11,000 shares of the Company’s common stock, par value $0.01 per
share, issued and outstanding.  There are no shares held by the
Company as treasury stock.

     

    (c) Except as
described above or in Section 4.4(c) of the Disclosure Schedule, there are no
outstanding securities, options (whether vested or unvested), warrants, calls,
rights, commitments or agreements to which the Company is a party or by which
any of them is bound obligating the Company or its Subsidiaries to issue,
deliver or sell, or cause to be issued, delivered or sold, additional shares of
capital stock or other securities of the Company or any of its
Subsidiaries.  There are no outstanding contractual obligations of the
Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire
any shares of capital stock (or options to acquire any such shares) or other
securities or equity interests of the Company or any of its
Subsidiaries.  There are no stock appreciation, phantom stock, profit
participation or similar rights of the Company or any of its
Subsidiaries.  All outstanding shares of capital stock of the Company
are duly authorized, validly issued, fully paid and nonassessable and not
subject to any preemptive or similar rights.

     

    (d) Except as
set forth in Section 4.4(d) of the Disclosure Schedule, there are no voting
trusts, proxies, stockholder agreements, or other agreements to which the
Company or any of its Subsidiaries or any of the Stockholders is a party or by
which any of them is bound with respect to the issuance, holding, acquisition,
voting or disposition of any shares of capital stock or other securities or
equity interests of the Company or any of its Subsidiaries.

     

    (e) None of
Holdings-I, Holdings-II and Holdings-III (i) ever engaged in any business
operations or activities or (ii) was a party to any Contract other than those
specified on Section 4.4(e) of the Disclosure Schedule.  Whether on or
prior to the consummation of the Reorganization, Holdings-I, Holdings-II and
Holdings-III did not have any Liabilities other than those expressly set forth
under the Contracts specified on Section 4.4(e) of the Disclosure Schedule, and
the Company did not become obligated on or succeed to any Liability in respect
of the Reorganization.

     

    4.4 Authorization; Binding
Obligation.  The execution and delivery by the Company of this
Agreement and each Related Document to which it is a party (the “Company Documents”),
the performance of its obligations hereunder and thereunder, and the
consummation by the Company of the transactions contemplated hereby and thereby,
have been duly and validly authorized by all necessary corporate action on the
part of the Company and no other corporate proceeding on the part of the Company
or any of its Subsidiaries is necessary to authorize this Agreement or any
Company Documents or to consummate the transactions contemplated hereby and
thereby.  This Agreement has been, and each other Company Document,
when executed and delivered by the Company (and assuming the due authorization,
execution and delivery by the other parties hereto and thereto), will be, duly
and validly executed and
delivered by the Company, and this Agreement constitutes, and each Company
Document, when executed and delivered, will constitute, a legal, valid and
binding obligation of the Company enforceable against the Company in accordance
with its terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium and similar laws affecting creditors’ rights and remedies generally,
and subject, as to enforceability, to general principles of equity, including
principles of commercial reasonableness, good faith and fair dealing (regardless
of whether enforcement is sought in a proceeding at law or in
equity).  None of the payments to be made in connection with the
Closing (including, without limitation, payment of the Purchase Price to the
Stockholders) shall be subject to withholding or reduction for
employment-related Taxes as required by applicable federal and state withholding
Laws; provided,
however, that
the provision shall not be construed to apply to any payments under any of the
employment agreements effective as of the Closing as referenced in Section
7.2(f) below.

     

    
      
         

      

      
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    4.5 Approvals.  Except
as set forth in Section 4.6 of the Disclosure Schedule (as set forth therein,
the “Company Third
Party Consents”), the execution and delivery of this Agreement and each
other Company Document do not, and the performance of this Agreement and the
other Company Documents will not, require the Company or any of its Subsidiaries
to obtain any Approval of any Person or Approval of, observe any waiting period
imposed by, or make any filing with or notification to, any Governmental
Authority.

     

    4.6 No
Violation.  Except as set forth in Section 4.7 of the
Disclosure Schedule, the execution and delivery by the Company of this Agreement
and the Company Documents do not, and the compliance with and performance of
this Agreement and the other Company Documents, will not, (a) conflict with or
violate the Certificate of Incorporation or by-laws or other equivalent
organizational documents of the Company or any of its Subsidiaries, (b) conflict
with or violate any Law or Order, in each case, applicable to the Company or any
of its Subsidiaries, or by which its or any of their respective properties is
bound or affected, or (c) result in any breach or violation of, or constitute a
default (or an event that with notice or lapse of time or both would become a
default) under, or impair the Company’s or any Subsidiary’s rights or alter the
rights or obligations of any third party under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or result in the
creation of a Lien on any of the properties or assets of the Company or any
Subsidiary pursuant to, any note, bond, mortgage, indenture, Contract, Approval
or other instrument or obligation to which the Company or any Subsidiary is a
party or by which the Company or any Subsidiary or its or any of their
respective properties is bound or affected.

     

    4.7 Required
Vote.  The Board of Directors of the Company has, at a meeting
duly called and held or by written consent, (a) approved this Agreement and
approved each Company Document, and (b) determined that the transactions
contemplated hereby and thereby are advisable, fair to and in the best interests
of the Company’s stockholders.

     

    4.8 Financial Statements; No
Undisclosed Liabilities.  The Company has previously delivered
to Purchaser the (i) audited balance sheet of PFI, LLC, a Rhode Island limited
liability company and Subsidiary of the Company (“PFI”), as of April 29, 2006,
and the related audited statements of income, cash flow and stockholders’ equity
for the period (beginning August 4, 2005) then ended, as certified by PFI’s
independent public accountants and accompanied by a copy of such auditor’s
report (the “2006
Financials”), (ii) audited consolidated balance sheet of the Company and
its Subsidiaries as of April 29, 2007, and the related audited statements of
income,
cash flow and stockholders’ equity for the twelve-month period then ended, as
certified by the Company’s independent public accountants and accompanied by a
copy of such auditor’s report (the “2007 Financials”),
and (iii) audited consolidated balance sheet of the Company and its Subsidiaries
as of May 3, 2008 (the “Latest Balance
Sheet”), and the related consolidated audited statements of income, cash
flows and stockholders’ equity for the twelve-month period then ended, as
certified by the Company’s independent public accountants and accompanied by a
copy of such auditor’s report (the “2008 Financials”, and
together with the 2006 Financials and the 2007 Financials, the “Historical Financial
Statements”).  The Historical Financial Statements were
prepared in accordance and consistent with the books and records of the Company
and its Subsidiaries and fairly present the financial condition of PFI or the
Company and its Subsidiaries, as applicable, as of the dates indicated and the
results of operations of PFI or the Company and its Subsidiaries, as applicable,
for the respective periods indicated, and have been prepared in accordance with
GAAP.  Neither the Company nor any of its Subsidiaries has any
Liability of a nature required to be disclosed on a balance sheet or in the
notes to financial statements prepared in accordance with GAAP, except for (A)
Liabilities adequately reflected or reserved against on the Latest Balance
Sheet, (B) Liabilities as described on Section 4.9 of the Disclosure Schedule
and (C) Liabilities incurred since May 3, 2008 in the ordinary course of
business.

     

    
      
         

      

      
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    4.9 Absence of Certain
Events.  Except as expressly contemplated by this Agreement or
as set forth on Section 4.10 of the Disclosure Schedule, since May 3, 2008
(i) the Company and its Subsidiaries have conducted their respective
businesses only in the ordinary course of business and (ii) there has not been
any event, change, occurrence or circumstance that, individually or in the
aggregate with any such events, changes, occurrences or circumstances, has had
or could reasonably be expected to have a Company Material Adverse
Effect.  Without limiting the generality of the foregoing, except as
set forth in Section 4.10 of the Disclosure Schedule, since May 3,
2008:

     

    (a) there has
not been any damage, destruction or loss, whether or not covered by insurance,
with respect to the property and assets of the Company or its Subsidiaries
having a replacement cost of more than $50,000 for any single loss or $150,000
for all such losses;

     

    (b) there has
not been any declaration, setting aside or payment of any dividend or other
distribution in respect of any shares of capital stock of the Company or any
repurchase, redemption or other acquisition by the Company or its Subsidiaries
of any outstanding shares of capital stock or other securities of, or other
ownership interest in, the Company or its Subsidiaries;

     

    (c) neither
the Company nor any of its Subsidiaries has awarded or paid any bonuses to
employees of the Company or its Subsidiaries, except to the extent accrued on
the Latest Balance Sheet, or entered into any employment, deferred compensation,
severance or similar agreement (nor amended any such agreement) or agreed to
increase the compensation payable or to become payable by it to any of the
Company’s or any of its Subsidiaries’ directors, officers, employees, agents or
representatives or agreed to increase the coverage or benefits available under
any severance pay, termination pay, vacation pay, company awards, salary
continuation for disability, sick leave, deferred compensation, bonus or other
incentive compensation, insurance, pension or other employee benefit plan,
payment or arrangement made to, for or with such directors, officers, employees,
agents or representatives; there has
not been any change by the Company or any of its Subsidiaries in accounting or
Tax reporting principles, methods or policies;

     

    (d) neither
the Company nor its Subsidiaries have made or rescinded any election relating to
Taxes or settled or compromised any claim relating to Taxes;

     

    (e) neither
the Company nor any of its Subsidiaries has entered into any transaction or
Contract other than in the ordinary course of business;

     

    (f) neither
the Company nor any of its Subsidiaries has failed to promptly pay and discharge
current Liabilities except where disputed in good faith by appropriate
proceedings;

     

    
      
         

      

      
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    (g) neither
the Company nor any of its Subsidiaries has made any loans, advances or capital
contributions to, or investments in, any Person or paid any fees or expenses to
any Stockholder or any director, officer, partner, stockholder or Affiliate of
any Stockholder other than expense account advances and payments in the ordinary
course of business (consistent with past practice in both type and
amount);

     

    (h) neither
the Company nor any of its Subsidiaries has (A) mortgaged, pledged or subjected
to any Lien any of its assets, or (B) acquired any assets or sold, assigned,
transferred, conveyed, leased or otherwise disposed of any assets of the Company
or any of its Subsidiaries, except, in the case of clause (B), for assets
acquired, sold, assigned, transferred, conveyed, leased or otherwise disposed of
in the ordinary course of business (which shall not include any acquisitions of
inventories in excess of $5,000,000 individually or in the
aggregate);

     

    (i) neither
the Company nor any of its Subsidiaries has discharged or satisfied any Lien, or
paid any Liability, except in the ordinary course of business;

     

    (j) neither
the Company nor its Subsidiaries has canceled or compromised any debt or claim
or amended, canceled, terminated, relinquished, waived or released any Contract
or right except in the ordinary course of business and which, in the aggregate,
would not be material to the Company and its Subsidiaries taken as a
whole;

     

    (k) neither
the Company nor any of its Subsidiaries has made or committed to make any
capital expenditures or capital additions or betterments in excess of $100,000
individually or $250,000 in the aggregate;

     

    (l) neither
Company nor any of its Subsidiaries has issued, created, incurred, assumed,
guaranteed, endorsed or otherwise become liable or responsible with respect to
(whether directly, contingently, or otherwise) any Indebtedness;

     

    (m) neither
the Company nor any of its Subsidiaries has granted any license or sublicense of
any rights under or with respect to any Intellectual Property owned by the
Company or any of its Subsidiaries;

     

    (n) neither
the Company nor any of its Subsidiaries has instituted or settled any Legal
Proceeding resulting in a loss of revenue in excess of $25,000 in the aggregate;
and none of
the Stockholders or the Company or any of its Subsidiaries has agreed,
committed, arranged or entered into any understanding to do anything set forth
in this Section 4.10.

     

    
      
         

      

      
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    4.10 Legal
Proceedings.  Except as set forth in Section 4.11 of the
Disclosure Schedule, there is no Action pending or, to the Knowledge of the
Company, threatened by or against the Company or any of its Subsidiaries or any
of their assets or properties, and neither the Company nor any of its
Subsidiaries has received any written claim, complaint or notice of any such
Action.  There is no Action pending or, to the Knowledge of the
Company, threatened against the Company or any of its Subsidiaries regarding
this Agreement or any Related Document.

     

    4.11 Compliance with
Laws.  The Company and each of its Subsidiaries is, in all
respects, in material compliance with all Laws and Orders applicable to it or
any of its assets or properties.  Neither the Company nor any
Subsidiary has received any notice to the effect that, or otherwise been advised
in writing that, it is not in compliance with any such Laws or
Orders.

     

    4.12 Title to
Properties.

     

    (a) Neither
the Company nor any of its Subsidiaries owns any real property. Section 4.13 of
the Disclosure Schedule identifies all lease agreements pursuant to which any
real property is leased to the Company or any of its
Subsidiaries.  The Company has valid leasehold interests in all such
real property free and clear of all Liens, other than Permitted
Liens.

     

    (b) The
Company and its Subsidiaries has good title to all of the items of tangible
personal property reflected on the 2008 Financials as owned by the Company and
its Subsidiaries, and all tangible personal property owned by the Company and
its Subsidiaries is owned free and clear of all Liens, other than Permitted
Liens.

     

    (c) Each
lease or agreement under which the Company or any of its Subsidiaries is a
lessee or lessor of any property, real or personal, is a valid and binding
agreement thereof, and no event has occurred and is continuing which, with or
without notice or lapse of time, would constitute a default or event of default
by the Company or any of its Subsidiaries (as the case may be) under any such
lease or agreement or, to the Knowledge of the Company, by any other party
thereto.

     

    4.13 Employee and Benefit
Matters.

     

    (a) Except as
set forth on Section 4.14(a) of the Disclosure Schedule or as provided by
applicable foreign or domestic Law, the employment of all persons employed by
the Company or its Subsidiaries is terminable at will without any penalty or
severance obligation on the part of the employer.  All sums due for
employee compensation and benefits and all vacation time owing to any employees
of the Company or any of its Subsidiaries as of the Latest Balance Sheet have
been duly and adequately accrued therein in accordance with GAAP.  All
employees of the Company or its Subsidiaries located in the United States are
either United States citizens or resident aliens specifically authorized to
engage in employment in the United States in accordance with all applicable
laws.  Section 4.14(a) of the Disclosure Schedule contains a complete
and accurate list of all officers of the Company and its
Subsidiaries.

     

    
      
         

      

      
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    Except
for Contracts or agreements set forth on Section 4.14(b) of the Disclosure
Schedule, neither the Company nor any of its Subsidiaries is a party to or
obligated in connection with its business, with respect to any (i) outstanding
Contracts with employees, former employees, agents, consultants, advisers,
salesmen, sales representatives, distributors, sales agents or dealers or (ii)
collective bargaining agreements or Contracts with any labor union or other
representative of Company Personnel, or any employee benefits provided for by
any such agreement.  The Company has made available to the Purchaser
or its representatives true and correct copies of all such
Contracts.

     

    (b) Section
4.14(c) of the Disclosure Schedule sets forth a correct and complete list
of:  (i) all “employee benefit plans” (as defined in Section 3(3) of
ERISA), and all other employee benefit plans, programs, agreements, policies,
arrangements or payroll practices, including bonus plans, employment, consulting
or other compensation agreements, collective bargaining agreements, incentive,
equity or equity-based compensation, or deferred compensation arrangements,
change in control, termination or severance plans or arrangements, stock
purchase, severance pay, sick leave, vacation pay, salary continuation for
disability, hospitalization, medical insurance, life insurance and scholarship
plans and programs maintained by the Company or any of its Subsidiaries or to
which the Company or any of the Subsidiaries contributed or is obligated to
contribute thereunder for Company Personnel (collectively, the “Company Plans”), and
(ii) all “employee pension plans”, as defined in Section 3(2) of ERISA,
subject to Title IV of ERISA or Section 412 of the Code, maintained by the
Company or any of its Affiliates and any trade or business (whether or not
incorporated) that is or has ever been under common control, or that is or has
ever been treated as a single employer, with any of them under Section 414(b),
(c), (m) or (o) of the Code (each, an “ERISA Affiliate”) or
to which the Company or any ERISA Affiliate contributed or has ever been
obligated to contribute thereunder (the “Title IV
Plans”).  Section 4.14(c) of the Disclosure Schedule sets forth
each Company Plan and Title IV Plan that is a “multiemployer plan” (as defined
in Section 3(37) of ERISA (a “Multiemployer
Plan”)), or is or has been subject to Sections 4063 or 4064 of
ERISA.

     

    (c) Correct
and complete copies of the following documents, with respect to each of the
Company Plans, have been made available or delivered to Purchaser by the
Company, to the extent applicable:  (i) any plans, all amendments
thereto and related trust documents, insurance contracts or other funding
arrangements, and amendments thereto; (ii) the most recent Forms 5500 and
all schedules thereto and the most recent actuarial report, if any;
(iii) the most recent IRS determination letter; (iv) summary plan
descriptions; (v) written communications to employees relating to the
Company Plans; and (vi) written descriptions of all non-written agreements
relating to the Company Plans.

     

    (d) The
Company Plans have been maintained in all material respects in accordance with
their terms and with all provisions of ERISA, the Code (including rules and
regulations thereunder) and other applicable federal and state Laws, and neither
the Company (or any of the Subsidiaries) nor any “party in interest” or
“disqualified person” with respect to the Company Plans has engaged in a
non-exempt “prohibited transaction” within the meaning of Section 4975 of the
Code or Section 406 of ERISA.  No fiduciary has any liability for
breach of fiduciary duty or any other failure to act or comply in connection
with the administration or investment of the assets of any Company Plan. 
The
Company Plans intended to qualify under Section 401(a) of the Code are so
qualified and any trusts intended to be exempt from federal income taxation
under Section 501 of the Code are so exempt, and nothing has occurred with
respect to the operation of the Company Plans that could cause the loss of such
qualification or exemption or the imposition of any liability, penalty or tax
under ERISA or the Code.

     

    
      
         

      

      
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    (e) Neither
the Company nor any ERISA Affiliate has incurred any liability due to the
termination or reorganization of a Multiemployer Plan.  Purchaser will
not have (i) any obligation to make any contribution to any Multiemployer
Plan or (ii) any withdrawal liability from any Multiemployer Plan under
Section 4201 of ERISA, which it would not have had but for the consummation of
the Transactions.

     

    (f) All
contributions (including all employer contributions and employee salary
reduction contributions) required to have been made under any of the Company
Plans (including workers compensation) or Title IV Plans or by Law (without
regard to any waivers granted under Section 412 of the Code), to any funds or
trusts established thereunder or in connection therewith have been made by the
due date thereof (including any valid extension), and sufficient accruals for
such contributions and other payments in accordance with GAAP were duly and
fully provided for on the Latest Balance Sheet.  No accumulated
funding deficiencies exist in any of the Company Plans or Title IV Plans subject
to Section 412 of the Code.

     

    (g) There is
no material “amount of unfunded benefit liabilities” (as defined in Section
4001(a)(18) of ERISA) in any of the Title IV Plans.  Each of the Title
IV Plans are fully funded in accordance with the actuarial assumptions used by
the Pension Benefit Guaranty Corporation (“PBGC”) to determine
the level of funding required in the event of the termination of a Title IV Plan
and the “benefit liabilities” (as defined in Section 4001(a)(16) of ERISA) of
such Title IV Plan using such PBGC assumptions do not exceed the assets of such
Title IV Plan.

     

    (h) Except as
set forth in Section 4.14(j) of the Disclosure Schedule, neither the Company nor
any ERISA Affiliate has terminated any Title IV Plan, or incurred any
outstanding liability under Section 4062 of ERISA to the PBGC or to a trustee
appointed under Section 4042 of ERISA.  All premiums due the PBGC with
respect to the Title IV Plans have been paid.

     

    (i) There has
been no “reportable event” (as defined in Section 4043 of ERISA) with respect to
the Title IV Plans that would require the giving of notice or any event
requiring disclosure under Section 4041(c)(3)(C) or 4063(a) of
ERISA.

     

    (j) No
Liability under any Company Plan or Title IV Plan has been funded nor has any
such obligation been satisfied with the purchase of a contract from an insurance
company that is not rated AA by Standard & Poor’s Corporation or the
equivalent by any other nationally recognized rating agency.

     

    (k) None of
the Company, any ERISA Affiliate nor any organization to which the Company or
any ERISA Affiliate is a successor or parent corporation within the meaning of
Section 4069(b) of ERISA has engaged in any transaction within the meaning of
Section 4069 or 4212(c) of ERISA.  There are
no pending actions, claims or lawsuits that have been asserted or instituted
against the Company Plans, the assets of any of the trusts under the Company
Plans or the sponsor or administrator of any of the Company Plans, or against
any fiduciary of the Company Plans with respect to the operation of any of the
Company Plans (other than routine benefit claims), nor, to the Knowledge of the
Company, are there any facts that could form the basis for any such claim or
lawsuit.

     

    
      
         

      

      
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    (l) There is
no violation of ERISA or the Code with respect to the filing of applicable
reports, documents and notices regarding the Company Plans with the Secretary of
Labor or the Secretary of the Treasury or the furnishing of such documents to
the participants in or beneficiaries of the Company Plans.  All
amendments and actions required to bring the Company Plans into conformity in
all material respects with all of the applicable provisions of the Code, ERISA
and other applicable Laws have been made or taken.  Any bonding
required with respect to the Company Plans in accordance with applicable
provisions of ERISA has been obtained and is in full force and
effect.

     

    (m) Except as
set forth on Section 4.14(r) of the Disclosure Schedule, none of the Company
Plans provides for post-employment life or health insurance, benefits or
coverage for any participant or any beneficiary of a participant, except as may
be required under the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended (“COBRA”) or similar
state Law, and at the expense of the participant or the participant’s
beneficiary.  Each of the Company and any ERISA Affiliate which
maintains a “group health plan” within the meaning Section 5000(b)(1) of the
Code has complied with the notice and continuation requirements of Section 4980B
of the Code, COBRA, Part 6 of Subtitle B of Title I of ERISA and the regulations
thereunder.

     

    (n) Neither
the execution and delivery of this Agreement nor the consummation of the
Transactions will (i) result in any payment becoming due to any Company
Personnel from the Company or any of its Subsidiaries, (ii) increase any
benefits otherwise payable under any Company Plan or Title IV Plan or (iii)
result in the acceleration of the time of payment or vesting of any such
benefits under any Company Plan or Title IV Plan.

     

    (o) Neither
the Company nor any of its Subsidiaries has a contract, plan or commitment,
whether legally binding or not, to create any additional Company Plan or to
modify any existing Company Plan.

     

    (p) No stock
or other security issued by the Company or any of its Subsidiaries forms or has
formed a material part of the assets of any Company Plan.

     

    (q) Any
individual who performs services for the Company or any of the Subsidiaries
(other than through a contract with an organization other than such individual)
and who is not treated as an employee of the Company or any of its Subsidiaries
for Tax purposes by the Company or any of its Subsidiaries is not an employee
for such purposes.

     

    (r) The
Company and each Subsidiary is in compliance with all applicable Laws relating
to wages, hours, labor (including work conditions, safety regulations and
employee representatives) and collective bargaining agreements.

     

    
      
         

      

      
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    Contracts and
Clients.

    (s) Section
4.15 of the Disclosure Schedule is a correct and complete list of each currently
effective Contract to which the Company or any of its Subsidiaries is a party as
of the date hereof and which constitutes (i) a Contract with any of the twenty
largest customers by revenue or ten largest suppliers by purchases of the
Company and its Subsidiaries, (ii) a Contract relating to Indebtedness, (iii) a
non-competition, non-solicitation or exclusive dealing arrangement or any other
agreement or obligation which purports to limit or restrict in any respect (A)
the ability of the Company or any of its Subsidiaries to solicit customers or
employees or (B) the manner in which, or the localities in which, all or any
portion of the business and operations of the Company or any of its Subsidiaries
or, following consummation of the Transactions, the business and operations of
Purchaser and its Affiliates, is or would be conducted, (iv) a Contract that is
terminable by the other party or parties upon a change in control of the Company
or any of its Subsidiaries, (v) a Contract granting a Lien (other than Permitted
Liens) upon any property or asset of the Company or any of its Subsidiaries,
(vi) a Contract which is a joint venture agreement, (vii) a Contract providing
for the acquisition or disposition after the date of this Agreement of any of
the Company’s or any Subsidiary’s assets, (viii) a Contract providing for the
indemnification by the Company or any of its Subsidiaries of any Person, other
than standard indemnification arrangements entered into with Clients in the
ordinary course of business, (ix) any Contract that contains a “most favored
nation” clause or other term providing preferential pricing or treatment to a
third party, or (x) any other Contract (other than purchase orders entered into
in the ordinary course of business) that involves future expenditures or
projected receipts by the Company or any of its Subsidiaries of more than
$50,000 in any one-year period (collectively, “Material
Contracts”).

     

    (t) Each
Material Contract is a valid and binding arrangement of the Company or a
Subsidiary (as applicable) and, to the Knowledge of the Company, of each of the
other parties thereto.  Each Material Contract is in full force and
effect, and none of the Company, its Subsidiaries nor, to the Knowledge of the
Company, any other party thereto is in default or breach under the terms of any
Material Contract.  No Material Contract requires prepayments,
additional payments or increased payments by the Company or any of its
Subsidiaries as a result of consummation of the Transactions.

     

    (u) Other
than the expiration of Material Contracts in accordance with their terms,
neither the Company nor any of its Subsidiaries has received any written or, to
the Knowledge of the Company, oral notice, that any Client (A) has ceased, or is
planning to cease to use the services of the Company or its Subsidiaries that
such Client currently uses or (B) has substantially reduced, or is planning to
substantially reduce such Client’s use of current services of the Company or its
Subsidiaries. To the Knowledge of the Company, no Client has otherwise
threatened to take any action described in the preceding sentence as a result of
the consummation of the Transactions or any of the documents or instruments
required hereby.

     

    4.14 Intellectual
Property.

     

    (a) Section
4.16(a) of the Disclosure Schedule sets forth a true and complete list of all
Company Intellectual Property, other than any item that is solely Intellectual
Property pursuant to clause (iv), (v) or (vi) of the definition of such
term.

     

    
      
         

      

      
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    Except as
set forth in Section 4.16(b) of the Disclosure Schedule, either the Company or a
Subsidiary owns or has valid licenses to use, on an exclusive basis (except for
software and research tools made publicly available), free and clear of all
Liens (other than Permitted Liens) or any other claims, all Company Intellectual
Property; provided, that, no
representation or warranty is made in this Section 4.16(b) with respect to
matters relating to infringement or conflicts with Intellectual Property, which
matters are the subject of Section 4.16(e).

     

    (b) Except as
set forth in Section 4.16(c) of the Disclosure Schedule, neither the Company nor
any Subsidiary pays or receives any royalty to or from anyone with respect to
any Company Intellectual Property, nor has the Company or any Subsidiary
licensed anyone to use any of the Company Intellectual Property.

     

    (c) Except as
set forth in Section 4.16(d) of the Disclosure Schedule, all rights of the
Company and its Subsidiaries in and to the Company Intellectual Property will be
unaffected by the Transactions.  Except as set forth in Section
4.16(d) of the Disclosure Schedule, neither the Company nor any Subsidiary has
given or received any written notice of any pending conflict with, or
infringement of the rights of others with respect to, any Intellectual Property
or with respect to any license of the Company Intellectual
Property.

     

    (d) Except as
set forth in Section 4.16(e) of the Disclosure Schedule, neither the Company nor
any Subsidiary is subject to any Order with respect to, nor has it entered into
or is it a party to any Contract which restricts or impairs the use of, any
Company Intellectual Property.  Except as set forth in Section 4.16(e)
of the Disclosure Schedule, to the Knowledge of the Company, no Company
Intellectual Property, and no services or products sold or contemplated for sale
by the Company or any Subsidiary, conflicts with or infringes upon any
Intellectual Property of any third party, none of the Company and its
Subsidiaries is infringing any Intellectual Property owned by any third party
and none of the activities presently being conducted or planned to be conducted
by the Company or any Subsidiary is infringing or will infringe the Intellectual
Property rights of any third party.

     

    (e) Except as
set forth in Section 4.16(f) of the Disclosure Schedule, neither the Company nor
any Subsidiary has entered into any consent, indemnification, forbearance to sue
or settlement agreement with respect to Intellectual Property and no claims have
been asserted in writing by any Person with respect to the validity or
enforceability of, or the Company’s or a Subsidiary’s (as the case may be)
ownership of or right to use, the Company Intellectual Property.

     

    (f) To the
Knowledge of the Company, all trade secrets, confidential information or
know-how of the Company and its Subsidiaries have been maintained in confidence
in accordance with the protection procedures customarily used by comparable
companies in the same industry as the Company and its Subsidiaries to protect
rights of like importance.  All Company Personnel who have contributed
to or participated in the conception or development of any Company Intellectual
Property have executed and delivered to the Company a confidentiality agreement
restricting such Person’s right to disclose proprietary information of the
Company or any Subsidiary.  To the Knowledge of the Company, no
Company Personnel have any claim against the Company or any Subsidiary in
connection with such Person’s involvement in the conception and development of
any Company Intellectual Property and no such claim has been asserted or
threatened in writing.  To the Knowledge of the Company,
none of the Company Personnel own any Intellectual Property for any device,
process, design or invention of any kind now used or needed by the Company or
any of its Subsidiaries in the furtherance of its respective business
operations, which Intellectual Property have not been assigned to the Company or
a Subsidiary, with such assignment duly filed in the United States Patent and
Trademark Office for recordation.

     

    
      
         

      

      
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    4.15 Taxes.

     

    (a) (i) All
Tax Returns required to be filed by or on behalf of each of the Company and its
Subsidiaries have been duly and timely filed with the appropriate Governmental
Authority in all jurisdictions in which such Tax Returns are required to be
filed (after giving effect to any valid extensions of time in which to make such
filings), and all such Tax Returns are true, complete and correct in all
respects; and (ii) all Taxes payable by or on behalf of each of the Company and
its Subsidiaries have been fully and timely paid.  With respect to any
period for which Tax Returns have not yet been filed or for which Taxes are not
yet due or owing, the Company and its Subsidiaries have made due and sufficient
accruals for such Taxes in the Historical Financial Statements and its books and
records.  All required estimated Tax payments sufficient to avoid any
underpayment penalties or interest have been made by or on behalf of the Company
and its Subsidiaries.

     

    (b) The
Company and each Subsidiary has complied with all applicable Laws and Orders
relating to the payment and withholding of Taxes and has duly and timely
withheld and paid over to the appropriate Governmental Authority all amounts
required to be so withheld and paid under all applicable Laws and
Orders.

     

    (c) Since
August 4, 2005, the Company and its Subsidiaries have been members of a
consolidated group of corporations for U.S. federal and Massachusetts state
income Tax purposes.  The only other members of such consolidated
group for U.S. federal and Massachusetts state income Tax purposes have been
Holdings-I, Holdings-II, Holdings-III and HMK Enterprises, Inc., and HMK
Enterprises, Inc. has been the common parent of such consolidated
group.  The only Contract relating to such consolidated group is set
forth in Section 4.17(c) of the Disclosure Schedule.  Except for the
foregoing-described consolidated group, neither the Company nor any of its
Subsidiaries has ever been a member of a consolidated, combined, affiliated or
unitary group of Persons for any U.S. federal or Massachusetts state income Tax
purposes.  From and after the Closing, none of the Company, its
Subsidiaries, Purchaser and its Affiliates will have or be subject to any
Liability based upon, arising out of or caused by the Company and its
Subsidiaries having ever been a member of any consolidated, combined, affiliated
or unitary group of Persons for any U.S. federal or Massachusetts state income
Tax purposes.  Purchaser has received complete copies of (i) all
federal, state, local and foreign income or franchise Tax Returns of the Company
and its Subsidiaries relating to the taxable periods since January 1, 2005;
provided, however, that with
respect to such Tax Returns for which the Company and its Subsidiaries comprised
a part of the foregoing-described consolidated group, such Tax Returns have been
conformed to show only those portions of such returns relating to the activities
of Holdings-I, Holdings-II, Holdings-III and the Company and its Subsidiaries,
and (ii) any audit report issued within the last three years relating to any
Taxes due from or with respect to the Holdings-I, Holdings-II, Holdings-III, the
Company or any Subsidiary.  All income and franchise Tax Returns filed
by, on behalf of or with respect to Holdings-I, Holdings-II, Holdings-III, the
Company or any Subsidiary have been examined by the
relevant Governmental Authority or the statute of limitations with respect to
such Tax Returns has expired.

     

    
      
         

      

      
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    (d) Section
4.17(d) of the Disclosure Schedule lists (i) all types of Taxes paid, and all
types of Tax Returns filed by, on behalf of or with respect to Company or any of
its Subsidiaries, and (ii) all of the jurisdictions that impose such Taxes or
with respect to which the Company or any of its Subsidiaries has a duty to file
such Tax Returns.  No claim has been made by any Tax Authority in a
jurisdiction where the Company or any of its Subsidiaries does not file Tax
Returns such that it is or may be subject to taxation by that
jurisdiction.

     

    (e) All
deficiencies asserted or assessments made as a result of any examinations by any
Tax Authority of the Tax Returns of, or including, the Company or any of its
Subsidiaries have been fully paid, and there are no other audits or
investigations by any Tax Authority in progress, nor has the Company or any of
its Subsidiaries received any notice from any Tax Authority that it intends to
conduct such an audit or investigation.  No issue has been raised by
any Tax Authority in any prior examination of, or including, the Company or any
of its Subsidiaries which, by application of the same or similar principles,
could reasonably be expected to result in a proposed deficiency for any
subsequent taxable period.

     

    (f) None of
the Company, any of its Subsidiaries or any other Person on their behalf has (i)
filed a consent pursuant to Section 341(f) of the Code or agreed to have Section
341(f)(2) of the Code apply to any disposition of a subsection (f) asset (as
such term is defined in Section 341(f)(4) of the Code) owned by the Company or
any of its Subsidiaries, (ii) agreed to or is required to make any adjustments
pursuant to Section 481(a) of the Code or any similar provision of Law or has
any knowledge that any Tax Authority has proposed any such adjustment, or has
any application pending with any Tax Authority requesting permission for any
changes in accounting methods that relate to the Company or any of its
Subsidiaries, (iii) executed or entered into a closing agreement pursuant to
Section 7121 of the Code or any similar provision of Law with respect to the
Company or any of its Subsidiaries, (iv) requested any extension of time within
which to file any Tax Return, which Tax Return has since not been filed, (v)
granted any extension for the assessment or collection of Taxes, which Taxes
have not since been paid, or (vi) granted to any Person any power of attorney
that is currently in force with respect to any Tax matter.(g)No property owned
by the Company or any of its Subsidiaries is (i) property required to be treated
as being owned by another Person pursuant to the provisions of Section 168(f)(8)
of the Internal Revenue Code of 1954, as amended and in effect immediately prior
to the enactment of the Tax Reform Act of 1986, (ii) “tax-exempt use property”
within the meaning of Section 168(h)(1) of the Code or (iii) “tax-exempt bond
financed property” within the meaning of Section 168(g) of the Code, (iv)
“limited use property” within the meaning of Rev. Proc. 76-30, (v) subject to
Section 168(g)(1)(A) of the Code, or (vi) subject to any provision of state,
local or foreign Law comparable to any of the provisions listed
above.

     

    (g) No
Stockholder is a foreign person within the meaning of Section 1445 of the
Code.

     

    (h) Neither
the Company nor any of its Subsidiaries is a party to any tax sharing,
allocation, indemnity or similar agreement or arrangement (whether or not
written) pursuant to which it will have any obligation to make any payments
after the Closing.

     

    
      
         

      

      
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    There is
no contract, agreement, plan or arrangement covering any person that,
individually or collectively, could give rise to the payment of any amount that
would not be deductible by Purchaser, the Company, its Subsidiaries or any of
their respective Affiliates by reason of Section 280G of the Code.

     

    (i) Neither
the Company nor any of its Subsidiaries is subject to any private letter ruling
of the IRS or comparable rulings of any Governmental Authority.

     

    (j) There are
no Liens as a result of any unpaid Taxes upon any of the assets of the Company
or any of its Subsidiaries.

     

    (k) Neither
the Company nor any of its Subsidiaries has constituted either a “distributing
corporation” or a “controlled corporation” (within the meaning of Section
355(a)(1)(A) of the Code) in a distribution of stock qualifying for tax-free
treatment under Section 355 of the Code (A) in the two years prior to the date
of this Agreement or (B) in a distribution which could otherwise constitute part
of a “plan” or “series of related transactions” (within the meaning of Section
355(e) of the Code) in conjunction with the transactions contemplated by this
Agreement.

     

    (l) There is
no taxable income of the Company or any of its Subsidiaries that will be
required under applicable Law to be reported by Purchaser or any of its
Affiliates, including the Company or any of its Subsidiaries, for a taxable
period beginning after the Closing Date which taxable income was realized (and
reflects economic income) arising prior to the Closing Date.

     

    (m) Neither
the Company nor any of its Subsidiaries has (i) engaged in any “intercompany
transactions” in respect of which gain was and continues to be deferred pursuant
to Treasury Regulations Section 1.1502-13 or any analogous or similar provision
of Law or (ii) has any “excess loss accounts” in respect of the stock of any
Subsidiary pursuant to Treasury Regulations Section 1.1502-19, or any analogous
or similar provision of Law.

     

    (n) The
Company and its Subsidiaries have disclosed on federal income Tax Returns in
which they are included all positions taken therein that could give rise to
substantial understatement of federal income Tax within the meaning of Section
6662 of the Code.

     

    (o) Neither
the Company nor any of its Subsidiaries has, or has ever had, a permanent
establishment in any country other than the United States, or has engaged in a
trade or business in any country other than the United States that subjected it
to Tax in such country.

     

    4.16 Insurance.  Set
forth on Section 4.18 of the Disclosure Schedule is a correct and complete list
of all insurance policies owned by the Company and its Subsidiaries or otherwise
pertaining to their business.  The present insurance policies are in
full force and effect.  Neither the Company nor any of its
Subsidiaries has received any written notice of cancellation or intent to cancel
or increase premiums with respect to present insurance policies nor, to the
Knowledge of the Company, is there any basis for any such
action.  Except as set forth on Section 4.18 of the Disclosure
Schedule, there are no pending claims with any insurance company or any
instances of a denial of coverage of the Company or any or its Subsidiaries by
any insurance company.

     

    
      
         

      

      
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    Brokers.  Except
as set forth on Section 4.19 of the Disclosure Schedule, none of the Company,
any of its Subsidiaries or the Representative has employed any broker or finder
or incurred any liability for any broker’s fees, commissions or finder’s fees in
connection with the Transactions.

     

    4.17 Environmental
Matters.  Except as set forth on Section 4.20 of the Disclosure
Schedule:

     

    (a) the
Company and it Subsidiaries are in compliance with all Environmental
Laws;

     

    (b) there are
no Actions pending or, to the Knowledge of the Company,  threatened
against the Company or any of its Subsidiaries which assert any claim or seek
any Remedial Action in connection with any Environmental Law;

     

    (c) neither
the Company nor any of its Subsidiaries is subject to any Action or Order
alleging or addressing a violation of, or Liability under, any Environmental Law
or with respect to any Remedial Action or Release or threatened Release of a
Hazardous Material;

     

    (d) neither
the Company nor any of its Subsidiaries has received any written notice to the
effect that it is or may be liable to any Person as a result of the Release or
threatened Release of a Hazardous Material; and

     

    (e) the
consummation of the Transactions do not require the consent of or filings with
any Governmental Authority with respect to environmental matters.

     

    (f) Notwithstanding
any other provisions in this Agreement, the representations and warranties
included in this Section 4.20 are the only representations and warranties made
by the Company with respect to matters arising under Environmental
Laws.

     

    4.18 Labor.

     

    (a) Except as
set forth on Section 4.21 of the Disclosure Schedule, neither the Company nor
any of its Subsidiaries is a party to any labor or collective bargaining
agreement and there are no labor or collective bargaining agreements which
pertain to employees of the Company or any of its Subsidiaries.  The
Company has delivered or otherwise made available to Purchaser true, correct and
complete copies of the labor or collective bargaining agreements listed on
Section 4.21 of the Disclosure Schedule, together with all amendments,
modifications or supplements thereto.

     

    (b) Except as
set forth on Section 4.21 of the Disclosure Schedule, no Company Personnel are
represented by any labor organization.  No labor organization or group
of Company Personnel has made a pending demand for recognition, and there are no
representation proceedings or petitions seeking a representation proceeding
presently pending or, to the Knowledge of the Company, threatened to be brought
or filed, with the National Labor Relations Board or other labor relations
tribunal.  There is no organizing activity involving the Company or
any of its Subsidiaries pending or, to the Knowledge of the Company, threatened
by any labor organization or group of Company Personnel.

     

    
      
         

      

      
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    There are
no (i) strikes, work stoppages, slowdowns, lockouts or arbitrations or
(ii) grievances or other labor disputes pending or, to the Knowledge of the
Company, threatened against or involving the Company or any of its
Subsidiaries.  There are no unfair labor practice charges, grievances
or complaints pending or, to the Knowledge of the Company, threatened by or on
behalf of any Company Personnel or group of Company Personnel.

     

    (c) There are
no complaints, charges or claims against the Company or any of its Subsidiaries
pending or, to Knowledge of the Company, threatened that could be brought or
filed, with any Governmental Authority based on, arising out of, in connection
with or otherwise relating to the employment or termination of employment of or
failure to employ, any individual.  Each of the Company and its
Subsidiaries is in compliance with all Laws and Orders relating to the
employment of labor, including all such Laws relating to wages, hours, WARN and
any similar state or local “mass layoff” or “plant closing” Law, collective
bargaining, discrimination, civil rights, safety and health, workers’
compensation and the collection and payment of withholding and/or social
security taxes and any similar tax.  There has been no “mass layoff”
or “plant closing” (as defined by WARN) with respect to the Company or any of
its Subsidiaries within the past six (6) months.

     

    4.19 Inventories.  The
inventories of the Company and its Subsidiaries are in good and marketable
condition, and are usable and of a quantity and quality saleable in the ordinary
course of business.  The inventories of the Company and its
Subsidiaries set forth in the Latest Balance Sheet were valued at the lower of
cost (on a FIFO/LIFO basis) or market and were properly stated therein in
accordance with GAAP.  Adequate reserves have been reflected in the
Latest Balance Sheet for obsolete, excess, damaged, slow-moving, or otherwise
unusable inventory, which reserves were calculated in a manner consistent with
past practice and in accordance with GAAP.  The inventories of the
Company and its Subsidiaries constitute sufficient quantities for the normal
operation of business in accordance with past practice.

     

    4.20 Accounts and Notes
Receivable and Payable.

     

    (a) All
accounts and notes receivable of the Company and its Subsidiaries have arisen
from bona fide transactions in the ordinary course of business consistent with
past practice and are payable on ordinary trade terms.  All accounts
and notes receivable of the Company and its Subsidiaries reflected on the Latest
Balance Sheet are good and collectible at the aggregate recorded amounts
thereof, net of any applicable reserves for returns or doubtful accounts
reflected thereon, which reserves are adequate and were calculated in a manner
consistent with past practice and in accordance with GAAP.  All
accounts and notes receivable arising after the date of the Latest Balance Sheet
are good and collectible at the aggregate recorded amounts thereof, net of any
applicable reserves for returns or doubtful accounts.  None of the
accounts or the notes receivable of the Company or any of the Subsidiaries (i)
are subject to any setoffs or counterclaims, (ii) represent obligations for
goods sold on consignment, on approval or on a sale-or-return basis or
(iii)subject to any other repurchase or return arrangement.

     

    (b) All
accounts payable of the Company and its Subsidiaries reflected in the Latest
Balance Sheet or arising after the date thereof are the result of bona fide
transactions in the ordinary course of business and have been paid or are not
yet due and payable.

     

    
      
         

      

      
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    Related Party
Transactions.  Except as set forth on Section 4.24 of the
Disclosure Schedule, no employee, officer, director, stockholder, partner or
member of the Company or any of its Subsidiaries, any member of his or her
immediate family or any of their respective Affiliates (“Related Persons”) (i)
owes any amount to the Company or any of its Subsidiaries, nor does the Company
or any of its Subsidiaries owe any amount to, or has the Company or any of its
Subsidiaries committed to make any loan or extend or guarantee credit to or for
the benefit of, any Related Person, (ii) is involved in any business arrangement
or other relationship with the Company or any of its Subsidiaries (whether
written or oral), (iii) owns any property or right, tangible or intangible, that
is used by the Company or any of its Subsidiaries, (iv) has any claim or cause
of action against the Company or any of its Subsidiaries or (v) owns any direct
or indirect interest of any kind in, or controls or is a director, officer,
employee or partner of, or consultant to, or lender to or borrower from or has
the right to participate in the profits of, any Person which is a competitor,
supplier, customer, landlord, tenant, creditor or debtor of the Company or any
of its Subsidiaries.

     

    4.21 Product Warranty; Product
Liability.

     

    (a) To the
Knowledge of the Company, each of the products produced or sold by the Company
or any of its Subsidiaries (“Products”) is, and at
all relevant times, has been, fit for the ordinary purposes for which it is
intended to be used and conforms to any promises or affirmations of fact made on
the container or label for such Product or in connection with its
sale.  Each of such Products contains adequate warnings, presented in
a reasonably prominent manner, in accordance with applicable Laws and current
industry practice with respect to its contents and use.  Neither the
Company nor any of its Subsidiaries has any liability for replacement or repair
of any Products or any other customer or product obligations not reserved
against on the Latest Balance Sheet.  Copies of all correspondence
relating to Products received or sent by or on behalf of the Company or any of
its Subsidiaries during the past three (3) years, from or to any Governmental
Authority have been previously delivered to Purchaser. Neither the Company nor
any of its Subsidiaries has sold any Products or delivered any services that
included a warranty for a period of longer than one year.

     

    (b) Neither
the Company nor any of its Subsidiaries has any Liability arising out of any
injury to individuals or property as a result of the ownership, possession, or
use of any product designed, manufactured, assembled, repaired, maintained,
delivered, sold or installed, or services rendered, by or on behalf of the
Company or any of its Subsidiaries.  Neither the Company nor any of
its Subsidiaries has committed any act or failed to commit any act, which would
result in, and there has been no occurrence which would give rise to or form the
basis of, any material product liability or material liability for breach of
warranty (whether covered by insurance or not) on the part of the Company or any
of its Subsidiaries with respect to products designed, manufactured, assembled,
repaired, maintained, delivered, sold or installed or services rendered by or on
behalf of the Company or any of its Subsidiaries.

     

    4.22 Certain
Payments.  None of the Company, any of its Subsidiaries, any
Stockholder or, to the Knowledge of the Company, any director, officer,
employee, or other Person associated with or acting on behalf of any of them,
has directly or indirectly (a) made any contribution, gift, bribe, rebate,
payoff, influence payment, kickback or other payment in violation of Law to any
Person, private or public, regardless of form, whether in money, property, or
services (i) to obtain favorable treatment in securing business for the Company
or 

      any of
its Subsidiaries, (ii) to pay for favorable treatment for business secured by
the Company or any of its Subsidiaries, or (iii) to obtain special concessions
or for special concessions already obtained, for or in respect of the Company or
any of its Subsidiaries, or (b) established or maintained any fund or asset with
respect to the Company or any of its Subsidiaries that has not be recorded in
the books and records of the Company and its Subsidiaries.

    

     

    
      
         

      

      
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    ARTICLE V
-  REPRESENTATIONS AND WARRANTIES OF PURCHASER

     

    Purchaser
hereby represents and warrants to the Company and the Representative, on behalf
of the Stockholders, as follows:

     

    5.1 Organization, Good Standing
and Qualification. Purchaser (a) is a corporation duly organized, validly
existing and in good standing under the laws of the State of Texas and (b) has
all requisite corporate power and authority to own, lease and operate its
properties and assets and to carry on its business as now being conducted, to
enter into this Agreement, as required hereunder and by each of the Related
Documents to be executed and delivered by Purchaser pursuant to the terms of
this Agreement (the “Purchaser Documents”)
and to perform its obligations hereunder and thereunder, and to consummate the
Transactions.

     

    5.2 Authorization; Binding
Agreement.  The execution and delivery by Purchaser of this
Agreement and each other Purchaser Document, the performance of its obligations
hereunder and thereunder, and the consummation by Purchaser of the transactions
contemplated hereby and thereby, have been duly and validly authorized by all
necessary corporate action on the part of Purchaser and no other corporate
proceeding on the part of Purchaser is necessary to authorize this Agreement or
any other Purchaser Document or to consummate the transactions so contemplated
hereby and thereby.  This Agreement has been, and each other Purchaser
Document, when executed and delivered by Purchaser (and assuming the due
authorization, execution and delivery by the other parties hereto and thereto),
will be, duly and validly executed and delivered by Purchaser, and this
Agreement constitutes, and each Purchaser Document, when executed and delivered,
will constitute, a legal, valid and binding obligation of Purchaser enforceable
against Purchaser in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium and similar laws affecting
creditors’ rights and remedies generally, and subject, as to enforceability, to
general principles of equity, including principles of commercial reasonableness,
good faith and fair dealing (regardless of whether enforcement is sought in a
proceeding at law or in equity).

     

    5.3 Consents and
Approvals.  Except as set forth in Section 5.3 of the
Disclosure Schedule (as set forth therein, the “Purchaser Third Party
Consents”), the execution and delivery by Purchaser of this Agreement and
the other Purchaser Documents do not, and the performance of this Agreement and
the other Purchaser Documents shall not, require Purchaser to obtain any
Approval of any Person or Approval of, observe any waiting period imposed by, or
make any filing with or notification to, any Governmental
Authority.

     

    5.4 No
Violation.  The execution, delivery, compliance with and
performance by Purchaser of this Agreement or any of the other Purchaser
Document do not and will not (a) violate or contravene the Certificate of
Incorporation or by-laws, each as amended to date, of Purchaser, (b) violate or
contravene any Law or Order to which Purchaser is subject, or (c)

    
      conflict
with or result in a breach of or constitute a default by Purchaser under any
Contract to which Purchaser is a party or by which Purchaser’s assets or
properties are subject or bound.

    

    
      
         

      

      
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    5.5 Financial
Capability.  Purchaser will have available to it at the Closing
sufficient funds to consummate the Transactions.

     

    5.6 Legal
Proceedings.  There are no Actions pending or, to the knowledge
of Purchaser, threatened by or against Purchaser, whether at law or in equity,
or before or by any Governmental Authority, which could adversely affect such
party’s ability to perform its obligations under this Agreement or the
consummation of the Transactions.

     

    5.7 Financial
Advisors.  No Stockholder will be obligated to pay any fee,
commission or other payment in respect of any Person having acted, directly or
indirectly, as a broker, finder or financial advisor for Purchaser in connection
with the transactions contemplated by this Agreement.  Neither
Purchaser nor any of its Affiliates have engaged or otherwise had a business
relationship (whether business, financial, accounting or otherwise) with the
Neutral Auditors.

     

    ARTICLE
VI - COVENANTS

     

    6.1 Further
Assurances.  Upon the terms and subject to the conditions set
forth in this Agreement, each party hereto shall use reasonable best efforts to
take, or cause to be taken, all actions, and do, or cause to be done, and to
assist and cooperate with the other party or parties in doing, all things
necessary, proper or advisable to consummate and make effective, in the most
expeditious manner practicable, the Transactions and transactions contemplated
by the Related Documents.  Each party hereto, at the reasonable
request of another party hereto, shall execute and deliver such other
instruments and do and perform such other acts and things as may be necessary or
desirable for effecting completely the consummation of this Agreement and the
Transactions.

     

    6.2 Books and
Records.  Following the Closing Date, Purchaser shall afford
the Representative and its representatives reasonable access, during normal
working hours, to the books and records of the Company (and shall permit such
Persons to examine and copy such books and records to the extent reasonably
requested); provided, however, that (a) any
such access shall be had or done in such a manner so as to not interfere with
the normal conduct of the business of the Company and its Subsidiaries, (b)
Purchaser shall not be required to provide access to any confidential record or
records, the disclosure of which would violate any Law or Order or applicable
confidentiality agreement of the Company and/or any of its Subsidiaries with any
Person, and (c) Purchaser shall not be required to permit access to any record
or records, the disclosure of which would cause Purchaser or any of its
Affiliates (including the Company and each of its Subsidiaries) to waive its
attorney-client privilege or attorney work product
privilege.  Purchaser shall not destroy any such books and records of
the Company or any of its Subsidiaries until the sixth anniversary of the
Closing.  Due to the fact that the Company and its Subsidiaries have
historically been part of a consolidated group with certain of its Stockholders
for Tax and accounting purposes, the Stockholders, if requested by Purchaser and
at Purchaser’s expense, shall reasonably cooperate and assist Purchaser in
having prepared such financial statements of the Company and its Subsidiaries to
the extent Purchaser may reasonably require by furnishing the necessary
information to Purchaser’s accountant in order to permit Purchaser to comply
with any financial statement requirements with respect to the Company and its
Subsidiaries applicable to
Purchaser under the Securities Exchange Act of 1934, as amended, the Securities
Act of 1933, as amended, and the rules and regulations thereunder, including,
without limitation, by causing its accountant to provide Purchaser with access
to such firm’s work papers in support of the Company and its
Subsidiaries.

     

    
      
         

      

      
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    6.3 Public
Announcements.  Upon the Closing hereunder, Purchaser shall
issue a press release, delivered on or prior to the date hereof, as mutually
agreed with the Representative, announcing the consummation of the Transactions
contemplated hereby; provided, however, that,
notwithstanding the requirement that such release be mutually agreed with the
Representative, Purchaser shall be entitled to issue any release or statement
without such agreement to the extent necessary to comply (with respect to
content and timing thereof) with any applicable Laws.

     

    6.4 Employee
Benefits.  In regards to the employee benefit plans of
Purchaser providing benefits to individuals who continue their employment with
the Company or its Subsidiaries that are ERISA Affiliates on and after the
Closing Date (each, a “Continuing Employee”
and such employee benefit plans, the “Purchaser Benefit
Plans”), except to the extent not permitted by the terms thereof,
Purchaser shall, for purposes of determining whether the Continuing Employee has
met the eligibility service requirements of a Purchaser Benefit Plan, upon each
applicable Continuing Employee’s commencement of participation in an applicable
Purchaser Benefit Plan, and for purposes of vesting and, to the extent
applicable, for purposes of benefit accrual, credit each Continuing Employee
with his or her years of service (or applicable portion thereof, as the case may
be) with the Company and its Subsidiaries that are ERISA Affiliates to the same
extent as such Continuing Employee was entitled to credit for such service under
any similar plan of the Company and its Subsidiaries (“Continued Employee
Plans”) prior to the Continuing Employee’s commencement of participation
in the Purchaser Benefit Plan, except that Continuing Employees shall receive no
such credit (i) to the extent that such credit would result in a duplication of
benefits or (ii) under any newly-established Purchaser Benefit Plan for which
similarly-situated employees of Purchaser do not receive credited
service.  Purchaser shall use reasonable efforts to cause any
applicable service or benefit plan provider providing the Purchaser Benefit
Plans that are “group health plans” (within the meaning of Section 5000(b)(1) of
the Code), to the extent it is lawful, to waive any pre-existing condition
exclusions or waiting periods for Continuing Employees and shall credit such
Continuing Employees (and their dependents) for any deductibles and
out-of-pocket expenses paid under the applicable Continued Employee Plans in the
year of initial participation in the applicable Purchaser Benefit Plans that are
group health plans (within the meaning of Section 5000(b)(1) of the Code),
except to the extent a Continuing Employee (or dependent) was excluded from
coverage under the applicable Continued Employee Plans.  Any Purchaser
Benefit Plan that by its terms, whether specifically or by interpretation,
excludes a Continuing Employee from participation in such Purchaser Benefit Plan
(other than any such plans with respect to which new participation has been
frozen for Purchaser employees generally) shall be amended to provide that
Continuing Employees shall participate in any such plan to the same extent as
similarly situated employees of Purchaser (except as my be prohibited by
applicable Law), and no Continuing Employee shall be denied credit for service
performed for the Company or its Subsidiaries that are ERISA Affiliates under
Purchaser Benefit Plans to the extent consistent with the other provisions of
this Section 6.7, if it is contrary to applicable Law.

     

     

    
      
         

      

      
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      6.5 Confidentiality. 
From and after the Closing Date, the Stockholders shall not and shall
cause their directors, officers, employees and Affiliates not to, directly or
indirectly, disclose, reveal, divulge or communicate to any Person, other than
authorized officers, directors and employees of Purchaser, or use or otherwise
exploit for its own benefit or for the benefit of anyone (other than Purchaser,
the Company or any of its Subsidiaries), any Confidential Information (as
defined below).  The Stockholders shall not have any obligation to
keep confidential (or cause its officers, directors or Affiliates to keep
confidential) any Confidential Information if and to the extent disclosure
thereof is specifically required by applicable Law; provided, however, that in the
event disclosure is required by applicable Law, the Stockholders shall, to the
extent reasonably possible, provide Purchaser with prompt notice of such
requirement prior to making any disclosure so that Purchaser may seek an
appropriate protective order.  For purposes of this Section 6.5,
“Confidential
Information” means any information with respect to the Company or any of
its Subsidiaries, including methods of operation, customer lists, products,
prices, fees, costs, technology, inventions, trade secrets, know-how, software,
marketing methods, plans, personnel, suppliers, competitors, markets or other
specialized information or proprietary matters.  “Confidential
Information” does not include, and there shall be no obligation hereunder
with respect to, information that (i) is generally available to the public on
the date of this Agreement or (ii) becomes generally available to the public
other than as a result of a disclosure not otherwise permissible
hereunder.

    

     

    (a) The
covenants and undertakings contained in this Section 6.5 relate to matters which
are of a special, unique and extraordinary character and a violation of any of
the terms of this will cause irreparable injury to Purchaser, the amount of
which will be impossible to estimate or determine and which cannot be adequately
compensated.  Accordingly, the remedy at law for any breach of this
Section 6.5 will be inadequate.  Therefore, Purchaser will be entitled
to a temporary and permanent injunction, restraining order or other equitable
relief from any Court of competent jurisdiction in the event of any breach of
this Section 6.5 without the necessity of proving actual damage or posting any
bond whatsoever.  The rights and remedies provided by this Section 6.5
are cumulative and in addition to any other rights and remedies which Purchaser
may have hereunder or at law or in equity. 

     

    ARTICLE VII
- CONDITIONS PRECEDENT TO THE CLOSING OF THE
TRANSACTION

     

    7.1 Conditions to Obligation of
Each Party to Effect the Transactions.  The respective
obligations of each party to effect the Transactions shall be subject to the
satisfaction of the following conditions:

     

    (a) Governmental
Approvals.  All Approvals of, or declarations or filings, with
any Governmental Authority required to be obtained or made in order to
consummate the Transactions, if any, shall have been obtained or
made.

     

    (b) No Injunctions or
Restraints; Illegality.  No temporary restraining order,
preliminary or permanent injunction or other Order (whether temporary,
preliminary or permanent) issued by any Court of competent jurisdiction or other
legal restraint or prohibition shall be in effect which prevents the
consummation of the Transactions, nor shall any proceeding brought by any
Governmental Authority seeking any of the foregoing be pending, and there shall
not
be any action taken, or any Law or Order enacted, entered, enforced or deemed
applicable to the Transactions, which makes the consummation of the Transactions
illegal.

     

    
      
         

      

      
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    7.2 Additional Conditions to
Obligations of Purchaser.  The obligations of Purchaser to
effect the Transactions shall be subject to the satisfaction of the following
additional conditions:

     

    (a) Representations and
Warranties.  Each of the representations and warranties of the
Company set forth in Article IV and the Stockholders set forth in Article III
shall be true and correct in all respects.

     

    (b) Agreements and
Covenants.  Each Stockholder and the Company shall have
performed or complied with each obligation, agreement and covenant to be
performed or complied with by it under this Agreement at Closing.

     

    (c) Consents.  Each
of the Company Third Party Consents listed on Section 7.2(c) of the Disclosure
Schedule shall have been received in a form satisfactory to Purchaser and copies
thereof shall have been delivered to Purchaser.

     

    (d) Closing
Certificates.  Each Stockholder and the Company (as executed by
each of (i) the President or Chief Executive Officer of the Company and (ii) the
chief financial officer of the Company) shall have delivered to Purchaser a
certificate, each in form and substance reasonably satisfactory to Purchaser,
dated as of the Closing Date, certifying that the conditions set forth in
Sections 7.2(a) and (b) have been satisfied.

     

    (e) Resignations.  Each
of the directors, managers and officers of the Company and its Subsidiaries set
forth in Section 7.2(e) of the Disclosure Schedule shall have submitted a letter
of resignation effective on and as of the Closing and such letters shall contain
releases from claims to fees and expenses in form and substance reasonably
satisfactory to Purchaser.

     

    (f) Employment
Agreements.  Each of the employment agreements of David Hirsch,
Mark Alperin, Mark Klosek and Dave Kujanek (to be effective upon the Closing and
set forth in Exhibit
C hereto) shall be (subject only to such condition of effectiveness) in
full force and effect.

     

    (g) Releases.  The
Company and its Subsidiaries shall have (a) terminated all Contracts with any of
the Stockholders or their respective Affiliates (other than (i) those Contracts
set forth in Section 7.2(g) of the Disclosure Schedule and (ii) Contracts
between the Company and its Subsidiaries, Contracts between the Company and its
Subsidiaries and their respective officers and employees and Contracts the
continuation of which Purchaser has approved in writing) and (b) delivered
releases (substantially in the form of Exhibit
D hereto) executed by such Stockholders and certain of their Affiliates
with whom the Company has terminated such Contracts (which must provided that no
further payments are due, or may become due, under or in respect of any such
terminated Contacts).  The Company shall also have delivered to
Purchaser releases (substantially in the form of Exhibit
D) from the Stockholders irrevocably and unconditionally releasing the
Company and its Subsidiaries from any and all Liabilities
to the Stockholders (other than pursuant to arrangements as specifically
contemplated by the terms and conditions hereof).

     

    
      
         

      

      
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    (h) Non-Competition/Non-Solicitation
Agreements.  Purchaser shall have received
non-competition/non-solicitation agreement substantially in the form of Exhibit
E hereto as executed and delivered by each of David Hirsch, Mark Alperin,
Tim King, Peter Burke, Mark Klosek and David Kujanek.

     

    (i) Escrow
Agreement.  The Representative and the Escrow Agent shall have
entered into and executed the Escrow Agreement.

     

    (j) Real
Property.  An amended and restated lease, in form and substance
reasonably satisfactory to Purchaser, shall have been executed and delivered
with respect to the leased property of PFI, LLC in Attleboro, Massachusetts, and
the owner of such property and Purchaser shall have entered into an option
contract, in form and substance reasonably satisfactory to Purchaser, for the
Purchaser’s purchase of such real property.  Purchaser shall have
received evidence of termination of the leases of the Company or a Subsidiary
for the leased properties in Taunton, Massachusetts and Pawtucket, Rhode
Island.

     

    (k) Approvals.  The
Company and its Subsidiaries shall have obtained the issuance, reissuance or
transfer of all Approvals required under any Law or Order for them to conduct
their respective operations and businesses following the Closing.

     

    (l) Deliveries.  Each
of the Stockholders and the Company, as applicable, shall have delivered to
Purchaser:

     

    (i) a
certificate of the Company, in form and substance reasonably satisfactory to
Purchaser, setting forth the balance of all Company Transaction Expenses,
Indebtedness and cash as of the time of Closing so that payment of the Closing
Date Company Transaction Expenses, Closing Indebtedness and Purchase Price can
be made contemporaneously with the Closing;

     

    (ii) payoff
letters or final invoices, in form and substance reasonably satisfactory to
Purchaser, in respect of Company Transaction Expenses from the third-party
service providers to whom payments shall be made contemporaneously with the
Closing in respect of such Company Transaction Expenses (which such payoff
letters or final invoices shall, at a minimum, provide that the payment of
amounts shown therein will represent payment in full for all fees and expenses
payable in connection with the Transactions);

     

    (iii) payoff
letters, in form and substance reasonably satisfactory to Purchaser, in respect
of Indebtedness of the Company and any of its Subsidiaries to be repaid as of
the Closing;

     

    (iv) payoff
letters, in form and substance reasonably satisfactory to Purchaser, in respect
of the warrants identified on Section 4.2 of the Disclosure Schedule to be
canceled as of the Closing; copies of
resolutions, certified by the Secretary of the Company and an authorized person
of each Stockholder, respectively, as to the authorization of the
Reorganization, this Agreement and the Transactions;

     

    
      
         

      

      
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    (v) stock
certificates from each of the Stockholders representing the applicable portion
of the Shares owned by such Stockholder, and duly endorsed in blank or
accompanied by stock transfer powers and with all requisite stock transfer tax
stamps attached and otherwise sufficient to transfer the Shares to Purchaser
free and clean of all Liens;

     

    (vi) with
respect to the Company and each Subsidiary of the Company, a certificate of good
standing dated not more than 10 Business Days prior to the Closing Date from the
Secretary of State of its jurisdiction of incorporation or organization and for
each state in which the Company or such Subsidiary (as applicable) is qualified
to do business as a foreign Person;

     

    (vii) all
instruments and documents necessary to release any and all Liens regarding the
properties and assets of the Company and any of its Subsidiaries, other than
Permitted Liens, including appropriate UCC financing statement amendments
(termination statements);.

     

    (viii) affidavits
of non-foreign status from each of the Stockholders that complies with Section
1445 of the Code; and

     

    (ix) such
other documents (e.g.,
estoppel certificates and lien searches) as Purchaser shall reasonably
request.

     

    (m) Investment Restriction and
Non-solicitation Letter.  Certain of the Stockholders shall
have executed and delivered to Purchaser an investment restriction and
non-solicitation letter.

     

    7.3 Additional Conditions to
Obligations of the Stockholders.  The obligations of the
Stockholders to effect the Transactions shall be subject to the satisfaction of
the following additional conditions:

     

    (a) Representations and
Warranties.  Each of the representations and warranties of
Purchaser set forth in Article V shall be true and correct in all
respects.

     

    (b) Agreements and
Covenants.  Purchaser shall have performed or complied with
each obligation, agreement and covenant to be performed or complied with by it
under this Agreement at Closing.

     

    (c) Consents.  Each
of the Purchaser Third Party Consents shall have been received in form and
substance reasonably satisfactory to the Company.

     

    (d) Delivery of Purchase
Price.  Purchaser shall have delivered the Purchase Price to
the Representative as specified in Section 2.2(b).

     

    
      
         

      

      
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    Delivery of Escrow
Fund/Repesentative Fund.  Purchaser shall have delivered the
Escrow Fund and the Representative Fund to the Escrow Agent as specified in
Section 2.2(b).

     

    (e) Purchaser Officer’s
Certificate.  Purchaser shall have delivered to the Company a
certificate (as executed by each of (i) the chief executive officer of Purchaser
and (ii) the chief financial officer of Purchaser), dated as of the Closing
Date, certifying that the conditions set forth in Sections 7.3(a) and (b) have
been satisfied.

     

    (f) Escrow
Agreement.  Purchaser and the Escrow Agent shall have entered
into and executed the Escrow Agreement.

     

    ARTICLE
VIII - REPRESENTATIVE

     

    8.1 Appointment of
Representative.  By executing this Agreement, each of the
Stockholders irrevocably appoints, authorizes and empowers the Representative to
be the exclusive proxy, representative, agent and attorney-in-fact of such
Stockholder, with full power of substitution to act in the name, place and
stead, to make all decisions and determinations and to act and execute, deliver
and receive all documents, instruments and consents on behalf of the
Stockholders at any time, in connection with, and that may be necessary or
appropriate to accomplish the intent and implement the provisions of, this
Agreement and the Related Documents, and to facilitate the consummation of the
transactions contemplated hereby and thereby, and in connection with the
activities to be performed by or on behalf of such Stockholders under this
Agreement and the Related Documents, and each other agreement, document,
instrument or certificate referred to herein or therein (including, without
limitation, in connection with any and all claims for remedies brought pursuant
to this Agreement or the Related Documents).  By executing this
Agreement, the Representative accepts such appointment, authority and
power.  Without limiting the generality of the foregoing, the
Representative shall have the power to take any of the following actions on
behalf of such Stockholders: (i) to give and receive notices, communications and
consents under this Agreement and the Related Documents; (ii) to receive and
distribute payments pursuant to this Agreement and the Related Documents,
including disbursement of the Representative Fund on behalf of the Stockholders;
(iii) to waive any provision of this Agreement and the Related Documents; (iv)
to assert any claim or institute any Action; (v) to investigate, defend, contest
or litigate any Action initiated by any Person against the Representative; (vi)
to receive process on behalf of any or all such Stockholders in any such Action;
(vii) to negotiate, enter into settlements and compromises of, resolve and
comply with Orders of Courts and awards of arbitrators or other third party
intermediaries with respect to any disputes arising under this Agreement and the
Related Documents; (viii) to agree to any offsets or other additions or
subtractions of amounts to be paid under this Agreement and the Related
Documents, whether from the Representative Fund or otherwise; and (ix) to make,
execute, acknowledge and deliver all such other agreements, guarantees, orders,
receipts, endorsements, notices, requests, instructions, certificates, stock
powers, letters and other writings, and, in general, to do any and all things
and to take any and all action that the Representative, in its sole and absolute
discretion, may consider necessary or proper or convenient in connection with or
to carry out the activities described in this Section 8.1 and the transactions
contemplated hereby.

     

    8.2 Resignation.  The
Representative may resign by providing thirty (30) days prior written notice to
each Stockholder and Purchaser.  Upon the resignation of the
Representative, a majority-in-interest
of the Stockholders shall appoint a replacement Representative to serve in
accordance with the terms of this Agreement; provided, however, that such
appointment shall be subject to such newly-appointed Representative notifying
Purchaser in writing of his, her or its appointment and appropriate contact
information for purposes of this Agreement, and Purchaser shall be entitled to
rely upon, without independent investigation, the identity of such
newly-appointed Representative as set forth in such written
notice.

     

    
      
         

      

      
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    ARTICLE
IX - EXPENSES

     

    9.1 Sales
Taxes.  For purposes hereof, all sales, transfer and similar
Taxes (but excluding any Taxes resulting from income received or required to be
recognized by any of the recipients of any portion of the Purchase Price), if
any, (i) incurred by Purchaser as a result of the consummation of the
Transactions shall be payable by Purchaser and (ii) incurred by the Company or
any Stockholder as a result of the consummation of the Transactions shall be
payable by the Stockholders.

     

    9.2 Expenses.

     

    (a) Except as
otherwise provided in this Agreement, all fees, costs and expenses incurred in
connection with this Agreement and the transactions contemplated hereby,
including, without limitation, legal, accounting and investment banking fees
(“Transaction
Expenses”), shall be paid by the party incurring such Transaction
Expenses, whether or not the Transactions are consummated.

     

    (b) All
Closing Date Company Transaction Expenses shall be paid as part of the Closing
pursuant to instructions provided by the Stockholders and the Company for the
payment thereof.

     

    (c) Notwithstanding
anything to the contrary set forth in this Agreement, all fees and expenses of
the Escrow Agent shall be paid as set forth in the Escrow
Agreement.

     

    ARTICLE X
-  POST-CLOSING INDEMNIFICATION; SURVIVAL

     

    10.1 Stockholders’
Indemnification.

     

    (a) Subject
to the limitations set forth in this Article X, the Stockholders, severally and
jointly, shall indemnify and hold harmless Purchaser, all of its Subsidiaries
and Affiliates, and their respective directors, officers, employees, agents and
representatives, and their respective successors and assigns (the “Purchaser Group”),
from and against, and pay to the applicable member of the Purchaser Group the
amount of, any and all losses, liabilities, claims, obligations, deficiencies,
demands, judgments, damages, interest, fines, penalties, suits, actions, causes
of action, assessments, awards, costs and expenses (including the costs of
investigation and defense and reasonable attorneys’ and other professionals’
fees), whether or not involving a third party claim (individually, a “Loss” and,
collectively, “Losses”), based upon,
attributable to, arising out of or caused by any of the following:

     

    (i) Misrepresentation.  Any
failure of any of the representations or warranties made by the Company or the
Stockholders in this Agreement or in any Company Document to be true and
correct.

     

    
      Nonperformance.  Any
breach, failure or refusal by or on the part of the Company or the Stockholders
to satisfy or perform any covenant, agreement or term of this Agreement or any
Company Document required to be satisfied or performed by
it.

    

    
      
         

      

      
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    (ii) Environmental
Law.  Any condition, act or omission by the Company or any of
its Subsidiaries or any predecessor thereof or related to the operations of the
Company or any of its Subsidiaries or any predecessor thereof at any real
property currently or formerly owned, operated or leased by the Company or any
of its Subsidiaries or predecessor thereof that creates any such Losses under or
pursuant to any Environmental Law (including any loss of use of property
(whether real or personalty) of the  Company or any of its
Subsidiaries), whether known or unknown, accrued or contingent, to the extent
existing on or prior to the Closing Date; provided, however, that any
claims for indemnity based on this clause (c) must be brought prior to the sixth
anniversary of the Closing Date; and provided, further, that from
and after the Closing neither the Purchaser nor any of its Affiliates
(including, without limitation, the Company and its Subsidiaries) shall
knowingly release, modify or waive the rights, benefits, or covenants, if any,
to which the Company or any of its Subsidiaries would be entitled pursuant to
(i) that certain Brownfields Covenant Not to Sue Agreement dated April 14, 2006
entitled In the Matter
of Preferred Real Estate Investments, Inc. Redevelopment of 34 Forest Street,
Attleboro, Massachusetts, or (ii) that certain Purchase and Sale
Agreement between Texas Instruments and Preferred Real Estate
Investments, Inc, in each case to the extent that such release,
modification or waiver shall create additional or increased liability of the
Stockholders pursuant to this Section 10.1(a)(iii).

     

    (iii) Expenses/Indebtedness.  Any
Company Transaction Expenses (other than those Closing Company Transaction
Expenses paid as part of the Closing), Indebtedness (other than the Closing
Indebtedness paid as part of the Closing) or other fees, commissions or like
payments, including, without limitation, those of any Person having acted or
claiming to have acted, directly or indirectly, as a broker, finder or financial
advisor for the Stockholders or the Company or any of its Subsidiaries in
connection with the transactions contemplated by this Agreement (other than
Closing Company Transaction Expenses).

     

    (iv) Reorganization.  Any
Liability, condition or circumstance based upon, relating to, arising from or in
connection with the creation, existence, assets, properties, conditions,
results, operations and/or cessation of any thereof of Holdings-I, Holdings-II
and/or Holdings-III, the occurrence of the Reorganization and the Merger
Agreement.

     

    (v) Hazelhurst
Lease.  Any Liability of the Company or any of its Subsidiaries
attributable to or arising from that certain Lease, dated as of July 1, 2002,
between Mustang Partners, LLC (and any applicable successor in interest thereto)
and PFI, LLC, as amended, supplemented or otherwise modified from time to time
(including as set forth in that certain Commercial Sublease, dated as of August
10, 2007, between PFI, LLC and Furniture Systems & Cubicles, Inc., the
“Hazelhurst
Sublease”) relating to the real property located at 10685 Hazelhurst in
Houston, Texas (the “Hazelhurst Lease”);
provided, however, that the
Stockholders’ obligations in respect of any such Liability shall be reduced, but
not below zero, to the extent of any proceeds received by the Company or any of
its Subsidiaries from and after the Closing Date pursuant to the 

      Hazelhurst
Sublease.  For the avoidance of doubt, it is the intention of the
parties that after taking into account (I) all payments of any kind or nature
required to be made by the Purchaser or any of its Subsidiaries (including the
Company and any of its Subsidiaries) based upon, attributable to, arising out of
or caused by the Hazelhurst Lease (including ordinary monthly lease payments)
from and after the Closing Date and (II) all payments of any kind or nature
received by the Purchaser or any of its Subsidiaries (including the Company and
any of its Subsidiaries) pursuant to the Hazelhurst Sublease (including ordinary
monthly sublease payments) from and after the Closing Date, the Liability of the
Purchaser and its Subsidiaries (including the Company and its Subsidiaries)
shall be capped at an aggregate amount equal to zero dollars and no cents ($0)
and the Stockholders shall be responsible for all Liability in excess
thereof.

    

     

    
      
         

      

      
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    (b) Subject
to the limitations set forth in this Article X, the Stockholders, severally and
not jointly, shall indemnify and hold harmless each member of the Purchaser
Group from and against, and pay to the applicable member of the Purchaser Group
the amount of, any and all Losses based upon, attributable to, arising out of or
caused by any of the following:

     

    (i) Misrepresentation.  Any
failure of any of the representations or warranties made by such Stockholder in
any Stockholder Document to be true and correct.

     

    (ii) Nonperformance.  Any
breach, failure or refusal by or on the part of such Stockholder to satisfy or
perform any covenant, agreement or term of any Stockholder Document required to
be satisfied or performed by such Stockholder.

     

    (c) For
purposes of calculating Losses hereunder, any materiality or Material Adverse
Effect qualifications in the representations, warranties, covenants and
agreements shall be disregarded.

     

    10.2 Purchaser’s
Indemnification.  Subject to the limitations set forth in this
Article X, from and after the Closing Date, Purchaser shall indemnify and hold
harmless the Stockholders and their respective directors, officers, employees,
agents and representatives, and their respective successors and assigns (the
“Stockholder
Group”), from and against, and pay to the applicable member of the
Stockholder Group the amount of, any and all Losses, based upon, attributable
to, arising out of or caused by any of the following:

     

    (a) Misrepresentation.  Any
failure of any of the representations or warranties made by Purchaser in this
Agreement or in any Purchaser Document to be true and correct.

     

    (b) Nonperformance.  Any
breach, failure or refusal by or on the part of Purchaser to satisfy or perform
any covenant, agreement or term of this Agreement or any Purchaser Document
required to be satisfied or performed by it.

     

    (c) Expenses.  Any
fees, commissions or like payments, including, without limitation, those of any
Person having acted or claiming to have acted, directly or indirectly, as a
broker, finder or financial advisor for Purchaser in connection with the
Transactions.

     

    10.3 Indemnification
Procedures.  With respect to each event, occurrence or matter
(an “Indemnification
Matter”) as to which the Stockholder Group or Purchaser Group, as the
case may be
(the “Indemnitee”) is
entitled to indemnification from Purchaser or the Stockholders, as the case may
be (the “Indemnitor”) under
Section 10.1 or Section 10.2:

     

    
      
         

      

      
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    (a) Within
ten (10) days after the Indemnitee receives written documents underlying the
Indemnification Matter or, if the Indemnification Matter does not involve a
third party action, suit, claim or demand, promptly after the Indemnitee first
has actual knowledge of the Indemnification Matter, the Indemnitee shall give
notice to the Indemnitor of the nature of the Indemnification Matter and the
amount demanded or claimed in connection therewith (“Indemnification
Notice”), together with copies of any such written documents; provided
that no failure to provide Indemnification Notice shall excuse the Indemnitor
from, or otherwise release, waive or affect, its obligations under this Article
X except to the extent such failure prejudices Indemnitor.

     

    (b) If a
third party action, suit, claim or demand is involved and the Indemnitor shall
have acknowledged in writing to the Indemnitee its unqualified obligation to
indemnify the Indemnitee as provided hereunder, then, upon receipt of the
Indemnification Notice, the Indemnitor may elect, at its expense and through
counsel of its choice that is not reasonably objected to by the Indemnitee, to
promptly assume and have sole control over the litigation, defense or settlement
(the “Defense”)
of the Indemnification Matter, except that (i) the Indemnitee may, at its option
and expense and through counsel of its choice, participate in (but not control)
the Defense; (ii) if the Indemnitee is a member of the Purchaser Group and there
is a legal conflict of interest between Indemnitor and Indemnitee or additional
defenses available to Indemnitee not available to Indemnitor as provided in an
opinion of Indemnitee’s counsel which Indemnitee shall provide to Indemnitor,
then the Indemnitee may, at its option and through counsel of its choice, and at
the Indemnitor’s expense, assume control of its own Defense, provided that the
Indemnitor shall be entitled to participate in the Defense at its expense and
through counsel of its choice; provided further, however, that the
Indemnitee shall only have the right to settle, adjust or compromise the defense
with Indemnitor’s written consent, which consent may not be unreasonably
withheld or delayed; (iii) the Indemnitor shall not consent to any judgment,
compromise or agree to any settlement or permit a default entry of judgment,
without the Indemnitee’s prior written consent, which shall not be unreasonably
withheld (provided that it
shall not be unreasonable to withhold consent unless such judgment, compromise
or settlement provide the Indemnitee an unqualified release from all Liability
in respect of the applicable Indemnification Matter); and (iv) if the Indemnitor
fails to notify the Indemnitee of its election as herein provided or contests
its obligation to indemnify the Indemnitee for an applicable Indemnification
Matter, does not promptly assume control over the Defense or, after doing so,
does not continue to prosecute the Defense diligently and in good faith, the
Indemnitee may, at its option and through a single counsel of its choice, but at
the Indemnitor’s expense, assume control over the Defense.  In any
event, the Indemnitor and the Indemnitee shall reasonably cooperate with each
other in connection with the Defense including by furnishing reasonable access
to documentary or other evidence as is reasonably requested by the
other.

     

    (c) All
amounts owed by an Indemnitor to an Indemnitee (if any) shall be paid in full
(in immediately available funds) within five (5) business days after a final
judgment (without further right of appeal) determining the amount owed is
rendered, or after a final settlement or agreement as to the amount owed is
executed; provided, however, that payment
with
respect to any Indemnification Matter arising pursuant to Sections
10.1(a)(i)-(iii) and (vi) shall be paid out of the Escrow Fund to the extent
such funds remain for payment thereof.

     

    
      
         

      

      
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    10.4 Limits on
Indemnification.  The Indemnitor’s liability under Section 10.1
and Section 10.2 shall be limited as follows:

     

    (a) Deductible.  No
amount shall be payable by an Indemnitor under Sections 10.1(a)(i) and
10.1(b)(i) unless and until the aggregate amount of Losses otherwise payable by
the Stockholders thereunder exceeds the Deductible.  No amount shall
be payable by an Indemnitor under Section 10.2(a) unless and until the aggregate
amount of Losses otherwise payable by Purchaser  thereunder exceeds
the Deductible.  At such time as the total amount payable by the
applicable Indemnitor(s) exceeds the Deductible, in the aggregate, the
Indemnitees shall be entitled to be indemnified against the amount of all Losses
in excess of the Deductible.  The foregoing provisions of this Section
10.4(a) shall not apply to Losses related to the failure to be true and correct
of any of the representations and warranties (i) with respect to the
Stockholders, set forth in Sections 3.1 (Title to Shares), 3.2 (Authority of
Stockholder), 3.3 (Enforceability) and 3.6 (Financial Advisors), (ii) with
respect to the Company, set forth in Sections 4.1 (Organization, Good Standing,
Qualification and Power), 4.2 (Subsidiaries), 4.4 (Capitalization), 4.5
(Authorization; Binding Obligation), 4.13(b) (Title to Properties), Section
4.14(e)-(k), (o) and (t) (Employee and Benefit Matters), 4.17 (Tax Liabilities),
and 4.19 (Brokers), and (iii) with respect to Purchaser, Sections 5.1
(Organization, Good Standing and Qualification), 5.3 (Authorization; Binding
Agreement) and 5.8 (Financial Advisors) (collectively, the “Fundamental
Representations”).

     

    (b) Cap.  Any
and all indemnification payments required to be made pursuant to Sections
10.1(a)(i) and 10.1(b)(i) shall be capped at an aggregate amount  of
Four Million Eight Hundred Seventy-Five Thousand Dollars and Zero Cents
($4,875,000.00) (the “Cap”) and any and all
indemnification payments required to be made pursuant to Section 10.2(a) shall
be capped at an aggregate amount equal to the Cap.  The foregoing
provisions of this Section 10.4(b) shall not apply to Losses related to the
failure to be true and correct of any of the Fundamental Representations. The
indemnification obligations of any Stockholder for Losses under this Article X
shall not exceed, and shall be capped at, the amount of the Purchase Price
received by such Stockholder.

     

    (c) Calculation of
Losses.  The amount of any Losses for which indemnification is
provided to an Indemnitee under this Article X shall be net of any (i) tax
benefit actually realized to such Indemnitee based on a calculation of the tax
liability of such Indemnitee with and without such Loss, and (ii) any insurance
proceeds actually received (in each case, net of any costs of collection or
increased premiums relating thereto, provided that the
Indemnitee uses commercially reasonable efforts to obtain such proceeds); provided, however, that clause
(ii) shall apply only if the effect of such provision does not constitute an
impermissible waiver of the insurer’s rights of subrogation against the
Indemnitee.  Purchaser, the Company and the Stockholders agree to
treat any indemnification payments received pursuant to this Agreement for all
income tax purposes as an adjustment to the Purchase Price.

     

    (d) Consequential and Punitive
Damages.  Notwithstanding anything to the contrary contained in
this Agreement, no Indemnitor shall be liable for consequential, special,
incidental or punitive damages to an Indemnitee.

     

    
      No Contribution or
Recourse.  The Stockholders shall have no right of contribution
or other recourse against the Company or its Subsidiaries or their respective
directors, officers, employees, Affiliates, agents, attorneys, representatives,
assigns or successors for any claim or demand asserted by any third party in
respect of which indemnification may be sought by a member of the Purchaser
Group under Section 10.1, it being acknowledged and agreed that the covenants
and agreements of the Company are solely for the benefit of the Purchaser
Group.

    

    
      
         

      

      
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    (e) Duplicate
Losses.  No member of the Purchaser Group shall be entitled to
indemnification of amounts pursuant to Section 10.1 to the extent such Losses
were included in the calculation of Closing Working Capital for purposes of
determining the adjustment (if any) pursuant to Section 2.5.

     

    10.5 Survival of Representations
and Warranties.  Except as set forth in this Agreement, any
Related Document, any Company Documents, Stockholder Documents or Purchaser
Document, no party hereto makes any representation or warranty to any other
party hereto.  All representations and warranties of the Stockholders,
the Company and Purchaser contained in this Agreement, any Related Document, any
Company Documents, Stockholder Documents or Purchaser Documents shall survive
the Closing through and including the first (1st)
anniversary of the Closing Date; provided, however, that the
Fundamental Representations of each thereof shall survive the Closing until 90
days following the expiration of the applicable statute of limitations with
respect to the particular matter that is the subject matter
thereof;  provided, further, however, that any
obligations hereunder shall not terminate with respect to any Losses as to which
the Indemnitee shall have given notice to the Indemnitor before the termination
of the applicable survival period therefor.

     

    10.6 Tax
Matters.

     

    (a) Tax
Indemnification.  The Stockholders hereby agree, jointly and
severally, to be liable for and to indemnify and hold the Purchaser Group
harmless from and against, and pay to the applicable member of the Purchaser
Group the amount of any and all Losses in respect of (i) all Taxes of the
Company and its Subsidiaries (or any predecessor thereof) (A) for any taxable
period ending on or before the Closing Date, and (B) for the portion of any
Straddle Period ending at the close of business on the Closing Date (determined
as provided in Section 10.6(c)); (ii) any and all Taxes imposed on any member of
a consolidated, combined or unitary group of which the Company or any of its
Subsidiaries (or any predecessor thereof) is or was a member on or prior to the
Closing Date, by reason of the liability of the Company or any Subsidiary (or
any predecessor thereof), pursuant to Treasury Regulation Section 1.1502-6(a)
(or any predecessor or successor thereof or any analogous or similar provision
under state, local or foreign Law); and (iii) the failure of any of the
representations and warranties contained in Section 4.17 to be true and
correct in all respects or the failure to perform any covenant contained in this
Agreement with respect to Taxes; provided that Purchaser has complied with
Section 10.6(b)(i).

     

    (b) Filing of Tax Returns;
Payment of Taxes.

     

    (i) Purchaser
shall cause to be timely filed all Tax Returns required to be filed by the
Company and its Subsidiaries for any taxable period ending after the Closing
Date and, subject to the rights to payment from the Stockholders under Section 10.6(b)(ii),
pay or cause to be paid all Taxes shown due thereon.  Purchaser shall
cause such Tax Returns to be filed on a basis consistent with past tax periods
of the Company and its Subsidiaries (other than the deconsolidation of the
Company and its Subsidiaries from a consolidated group including certain
Stockholders and their Affiliates for Tax Purposes) unless otherwise required by
applicable Laws.  HMK Enterprises, Inc. shall cause to be timely filed
all Tax Returns (including, without limitation, as part of its consolidated
combined Tax Return) required to be filed with respect to the Company and its
Subsidiaries for any taxable period ending on or before the Closing Date and pay
or cause to be paid all Taxes shown due thereon.

     

    
      
         

      

      
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    (ii) Not later
than ten days prior to the due date for the payment of Taxes on any Tax Returns
which Purchaser has the responsibility to cause to be filed pursuant to Section
10.6(b)(i), the Stockholders shall pay to Purchaser the amount of Taxes, as
reasonably determined by Purchaser, owed by the Stockholders pursuant to the
provisions of Section 10.6(a).  No payment pursuant to this
Section 10.6(b)(ii) shall excuse the Stockholders from its indemnification
obligations pursuant to Section 10.6(a) if the amount of Taxes as ultimately
determined (on audit or otherwise) for the periods covered by such Tax Returns
exceeds the amount of the Stockholders’ payment under this Section
10.6(b)(ii).  The Company and its Subsidiaries shall reasonably
cooperate with HMK Enterprises, Inc. so that it may prepare and file any Tax
Returns required to be filed by it under Section 10.6(b)(i).  HMK
Enterprises, Inc. shall provide Purchaser, on behalf of the Company and its
Subsidiaries, with a reasonable opportunity (not later than five (5) Business
Days prior to the filing due date therefor) to review the content of any Tax
Returns required to be filed by it under Section 10.6(b)(i) to the extent of any
elections or information provided therein for the Company and its
Subsidiaries.

     

    (c) Straddle Period Tax
Allocation.  The Company will, unless prohibited by applicable
Law, close the taxable period of the Company and its Subsidiaries as of the
close of business on the Closing Date.  If applicable Law does not
permit the Company or a Subsidiary to close its taxable year on the Closing Date
or in any case in which a Tax is assessed with respect to a taxable period which
includes the Closing Date (but does not begin or end on that day) (a “Straddle Period”),
the Taxes, if any, attributable to a Straddle Period shall be allocated (i) to
the Stockholders for the period up to and including the close of business on the
Closing Date, and (ii) to Purchaser for the period subsequent to the Closing
Date.  Any allocation of income or deductions required to determine
any Taxes attributable to a Straddle Period shall be made by means of a closing
of the books and records of the Company and its Subsidiaries as of the close of
the Closing Date, provided that
exemptions, allowances or deductions that are calculated on an annual basis
(including, but not limited to, depreciation and amortization deductions) shall
be allocated between the period ending on the Closing Date and the period after
the Closing Date in proportion to the number of days in each such
period.

     

    (d) Tax
Audits.

     

    (i) If notice
of any legal proceeding with respect to Taxes of the Company or any of its
Subsidiaries (a “Tax
Claim”) shall be received by any party for which another party may
reasonably be expected to be liable pursuant to Section 10.6(a), the notified
party shall notify such other party in writing of such Tax Claim; provided, however, that the
failure of the notified party to give the other party notice as provided herein
shall not relieve
such failing party of its obligations under this Section 10.6 except to the
extent that the other party is actually prejudiced thereby.

     

    (ii) Purchaser
shall have the right, at the expense of the Stockholders to the extent such Tax
Claim is subject to indemnification by the Stockholders pursuant to Section
10.6(a) hereof, to represent the interests of the Company and its Subsidiaries
in any Tax Claim; provided, that with
respect to a Tax Claim relating exclusively to taxable periods ending on or
before the Closing Date, Purchaser shall not settle such claim without the
consent of the Stockholders, which consent shall not be unreasonably
withheld.

    
      
         

      

      
        45

        
          

        

      

      
         

      

    

     

    (e) Disputes.  Any
dispute as to any matter covered by this Section 10.6 shall be resolved by an
independent accounting firm mutually acceptable to the Representative and the
Purchaser.  The fees and expenses of such accounting firm shall be
borne equally by the Stockholders, on the one hand, and the Purchaser on the
other.  If any dispute with respect to a Tax Return is not resolved
prior to the due date of such Tax Return, such Tax Return shall be filed in the
manner which the party responsible for preparing such Tax Return deems
correct.

     

    (f) Time
Limits.  Any claim for indemnity under this Section 10.6 may be
made at any time prior to ninety (90) days after the expiration of the
applicable Tax statute of limitations with respect to the relevant taxable
period (including all periods of extension, whether automatic or
permissive).

     

    (g) Refunds.  Any
Tax refunds that are received by the Company or any of its Subsidiaries
attributable or relating to Taxes of the Company or its Subsidiaries for Tax
periods or portions thereof ending on or before the Closing Date shall be for
the account of the Stockholders, and Purchaser shall pay over to the
Representative (for the benefit of the Stockholders pro rata) any such refund
within ten (10) Business Days after receipt thereof.

     

    (h) Exclusivity.  The
indemnification provided for in this Section 10.6 shall be the sole remedy for
any claim in respect of Taxes, including any claim arising out of or relating to
a breach of Section 4.17.  In the event of a conflict between the
provisions of this Section 10.6, on the one hand, and the provisions of Sections
10.1 through 10.5, on the other, the provisions of this Section 10.6 shall
control.

     

    10.7 Sole and Exclusive
Remedy.  Except for claims for intentional acts of fraud by the
Company or any Stockholder, from and after the Closing, the sole and exclusive
remedy for all Losses relating to this Agreement or the transactions
contemplated hereby shall be indemnification under this Article
X.  Notwithstanding the foregoing, this Section 10.7 shall not (i)
operate to interfere with or impede the operation under Section 2.5 or this
Article X for the resolution of certain disputes and payment of funds in respect
thereof or (ii) limit the rights of the parties to seek non-monetary equitable
remedies (including specific performance or injunctive relief) pursuant to
Section 6.5 hereof.

     

    ARTICLE
XI - MISCELLANEOUS

     

    11.1 Entire
Agreement.  This Agreement, together with its schedules and
exhibits, the Company Documents, Stockholder Documents, Purchaser Documents, the
Related Documents and all other ancillary agreements, documents and instruments
to be delivered in connection herewith, contain the entire understanding of the
parties with respect to the subject matter hereof and supersede all prior
agreements, either oral or written.  

     

    
      
         

      

      
        46

        
          

        

      

      
         

      

    

     

    11.2 Amendment and
Waiver.  This Agreement may be amended only by an instrument in
writing signed by duly authorized representatives of Purchaser and the
Representative.  Any party hereto may extend the time for the
performance of any of the obligations or other acts required hereunder or waive
compliance with any of the agreements or conditions contained
herein.  Any such extension or waiver shall be valid only if set forth
in an instrument in writing signed by the party or parties to be bound
thereby.  No action taken, including any investigation by or on behalf
of any party, shall be deemed to constitute a waiver by the party taking such
action of compliance with any representation, warranty, covenant or
agreement.

     

    11.3 Assignment.  No
party hereto shall assign or otherwise transfer this Agreement or any of its
rights hereunder, or delegate any of its obligations hereunder, without the
prior written consent of the other parties hereto; provided, however, that
Purchaser may assign this Agreement and any or all rights or obligations
hereunder (including, without limitation, the right to seek indemnification
hereunder) to any Person from which it has borrowed money or any Person to which
Purchaser or any of its Affiliates proposes to sell all or substantially all of
the assets relating to the business of the Company and/or the Subsidiaries
(provided that
Purchaser remains liable for its obligations hereunder).  Subject to
the foregoing, this Agreement and the rights and obligations set forth herein
shall inure to the benefit of, and be binding upon the parties hereto, and each
of their respective successors, heirs and permitted assigns.

     

    11.4 Waivers.  No
waiver by any party, whether express or implied, of its rights under any
provision of this Agreement shall constitute a waiver of the party’s rights
under such provisions at any other time or a waiver of the party’s rights under
any other provision of this Agreement.  No failure by any party to
take any action against any breach of this Agreement or default by another party
shall constitute a waiver of the former party’s right to enforce any provision
of this Agreement or to take action against such breach or default or any
subsequent breach or default by the other party.  To be effective any
waiver must be in writing and signed by the waiving party.

     

    11.5 Governing Law; Venue; Waiver
of Jury Trial.  This Agreement shall be governed by the laws of
the Commonwealth of Massachusetts, without giving effect to any choice of law or
conflict of law provision or rule that would cause application of the laws of
any jurisdiction other than the Commonwealth of Massachusetts.  Except
as otherwise provided under Sections 2.5 and 10.6(e), each of the parties to
this Agreement irrevocably submits to the non-exclusive jurisdiction of the
Courts of the Commonwealth of Massachusetts, for the purpose of any Action
arising out of or relating to this Agreement.  The parties hereby
irrevocably waive, to the fullest extent permitted by applicable law, any
objection which they may now or hereafter have to the laying of venue of any
such Action brought in such Court or any defense of inconvenient forum for the
maintenance of such Action.  Each of the parties to this Agreement
consents to service of process by delivery pursuant to Section 11.9 hereof and
agrees that a final judgment in any Action shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by Law.  Each of the parties hereto waives any right to trial
by jury with
respect to any action related to or arising out of this Agreement or Related
Document or any transaction contemplated hereby.

     

    
      
         

      

      
        47

        
          

        

      

      
         

      

    

    11.6 Interpretation.  The
schedules and exhibits attached hereto are an integral part of this
Agreement.  All schedules and exhibits attached to this Agreement are
incorporated herein by this reference and all references herein to this
“Agreement” shall mean this Agreement together with all such schedules and
exhibits.  When a reference is made in this Agreement to Sections,
subsections, schedules or exhibits, such reference shall be to a Section,
subsection, schedule or exhibit to this Agreement unless otherwise
indicated.  The words “include,” “includes” and “including” when used
herein shall be deemed in each case to be followed by the words “without
limitation.”  The word “herein” and similar references mean, except
where a specific Section or Article reference is expressly indicated, the entire
Agreement rather than any specific Section or Article.  The table of
contents and the headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement.  As used herein, all pronouns shall include the masculine,
feminine, neuter, singular and plural thereof whenever the context and facts
require such construction.  Certain sections of the Disclosure
Schedule contain disclosures which include more information than is required by
the Sections of the Agreement to which such sections relate and such additional
disclosure shall not be deemed to mean that such information is required by such
related Sections of the Agreement.  Headings have been inserted on the
sections of the Disclosure Schedule for convenience of reference only and shall
to no extent have the effect of amending or changing the express description of
the sections of the Disclosure Schedule as set forth in this
Agreement.  Nothing contained in this Agreement, express or implied,
is intended to confer upon any Person, other than the parties hereto, any
benefit, right or remedy, except that the provisions of Section 6.6 shall inure
to the benefit of the Persons referred to therein.

     

    11.7 Severability.  If
any term or other provision of this Agreement is invalid, illegal or incapable
of being enforced by any rule of Law, or public policy, all other conditions and
provisions of this Agreement shall nevertheless remain in full force and effect
so long as the economic or legal substance of the transactions contemplated
hereby is not affected in any manner adverse to any party.  Upon such
determination that any term or other provision is invalid, illegal, or incapable
of being enforced, the parties hereto shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner in order that the transactions contemplated
hereby are consummated as originally contemplated to the greatest extent
possible.

     

    11.8 Notices.  All
notices or other communications which are required or permitted hereunder shall
be in writing and sufficient if delivered personally or sent by
nationally-recognized overnight courier or by registered or certified mail,
postage prepaid, return receipt requested, addressed as follows:

     

    If to
Purchaser:         
           DXP
Enterprises, Inc.

                    7272 Pinemont
Drive

                    Houston, TX 77040

                    Attention: David R.
Little, Chief Executive Officer

     

    With copies to:         Looper Reed & McGraw

                    1300 Post Oak Blvd.,
Suite 2000

                    Houston, TX 77056

                    Attention:  Gary
A. Messersmith

     

    
    

     

    
      
        
        

      

      
        48

        
          

        

      

      
        
        

      

    

    If to the
Company:                Vertex
Corporate Holdings, Inc.

    c/o PFI,
LLC d/b/a Vertex Fasteners

    525
Pleasant Street

    Attleboro,
MA  02703

    Attention:  David
M. Hirsch, CEO

     

    With
copies
to:                     Roberts,
Carroll, Feldstein & Peirce

    10
Weybosset Street – 8th Floor

    Providence,
RI  02903

    Attention:  Edward
D. Feldstein, Esq.

     

    Mintz,
Levin, Cohn, Ferris, Glovsky and Popeo, P.C.

    One
Financial Center

    Boston,
MA  02111

    Attention:  Daniel
H. Follansbee, Esq.

     

    If to
Representative:            Watermill-Vertex
Enterprises, LLC

    c/o The
Watermill Group

    One
Cranberry Hill

    750
Marrett Road, Suite 401

    Lexington,
MA  02421

     

    With
copies
to:                     Mintz,
Levin, Cohn, Ferris, Glovsky and Popeo, P.C.

    One
Financial Center

    Boston,
MA 02111

    Attention:  Daniel
H. Follansbee, Esq.

     

    or to
such other address as the party to whom notice is to be given may have furnished
to the other party in writing in accordance herewith.  All such
notices or communications shall be deemed to be received (a) in the case of
personal delivery, on the date of such delivery, (b) in the case of
nationally-recognized overnight courier, on the next Business Day after the date
when sent, and (c) in the case of mailing, on the third Business Day following
the date on which the piece of mail containing such communication was
posted.

     

    11.9 Representation by
Counsel.  Each party hereto acknowledges that it has been
advised by legal and any other counsel retained by such party in its sole
discretion.  Each party acknowledges that such party has had a full
opportunity to review this Agreement and all related exhibits, schedules and
ancillary agreements and to negotiate any and all such documents in its sole
discretion, without any undue influence by any other party hereto or any third
party.

     

    
      
         

      

      
        49

        
          

        

      

      
         

      

    

    11.10 Construction.  The
parties have participated jointly in the negotiations and drafting of this
Agreement and in the event of any ambiguity or question of intent or
interpretation, no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any of the provisions of
this Agreement.

     

    Headings.  The
article and section headings contained in this Agreement are inserted for
convenience only and shall not affect in any way the meaning or interpretation
of this Agreement.

    11.11 Counterparts.  This
Agreement may be executed in two or more counterparts, any one of which need not
contain the signatures of all parties, but all of which counterparts when taken
together will constitute one and the same agreement.  Facsimile
signatures shall constitute original signatures for all purposes of this
Agreement.

     

    [Remainder
of Page Intentionally Left Blank]

     

    

     

    
      
         

      

      
        50

        
          

        

      

      
         

        
          NOW,
THEREFORE, the parties hereto have executed this Stock Purchase Agreement by
their duly authorized representatives as of the date first written
above.

           

          

        

      

    

    PURCHASER:

     

    DXP
ENTERPRISES, INC.

     

    By:  /s/ David R.
Little                                                        

    Name:  David
R. Little

    Title:  Chief
Executive Officer

     

    

     

    COMPANY:

     

    VERTEX
CORPORATE HOLDINGS, INC.

     

    By:  /s/ Steven E.
Karol                                                        

    Name:  Steven
E. Karol

    Title:

     

    

     

    
      
         

      

      
        51

        
          

        

      

      
         

        
          NOW,
THEREFORE, the parties hereto have executed this Stock Purchase Agreement by
their duly authorized representatives as of the date first written
above.

           

          

        

      

    

    REPRESENTATIVE:

     

    WATERMILL-VERTEX
ENTERPRISES, LLC

     

    By:  /s/ Steven E.
Karol                                                        

    Name:  Steven
E. Karol

    Title:

     

     

    STOCKHOLDERS:

     

    WATERMILL-VERTEX
PARTNERS, L.P.

     

    By:  /s/ Steven E.
Karol                                                        

    Name:  Steven
E. Karol

    Title:

     

    HMK
Enterprises, Inc.

     

    By:  /s/ Steven E.
Karol                                                        

    Name:  Steven
E. Karol

    Title:

     

      /s/ Steven E.
Karol                                                        

    Steven E.
Karol

     

    The SEK
Limited Partnership

    

    By:  /s/ Steven E.
Karol                                                        

    Name:  Steven
E. Karol

    Title:

     

    PALOMINO
PARTNERS, LLC

     

    By:  /s/ David M.
Hirsch                                                        

    Name:  David
M. Hirsch

    Title:  President

     

      /s/ Robert
Ackerman                                                        

    Robert
Ackerman

     

      /s/ Monte
Haymon                                                        

    Monte
Haymon

     

    
      
         

      

      
        52

        
          

        

      

      
         

        
          NOW,
THEREFORE, the parties hereto have executed this Stock Purchase Agreement by
their duly authorized representatives as of the date first written
above.

           

          

        

      

    

    

      /s/ Timothy
Eburne                                                        

    Timothy
Eburne

     

    

      /s/ Jane
Karol   Howard Cooper

    Jane
Karol and Howard Cooper, as Joint Tenants with Right of
Survivorship

     

    

      /s/ Lisa
Velardo                                                        

    Lisa
Velardo

     

    

      /s/ Benjamin P.
Procter                                                        

    Benjamin
P. Procter

     

    

      /s/ Peter
D’Entremont                                                        

    Peter
D'Entremont

     

    

      /s/ Brett
L’Esperance                                                        

    Brett
L'Esperane

     

    
      
         

      

      
        53creditagreement.htm

    

      CREDIT
AGREEMENT

      

      dated
as of August 28, 2008

      

      among

      

      DXP
ENTERPRISES, INC.

      

      The
Lenders From Time to Time Party Hereto

      

      and

      

      WELLS
FARGO BANK, NATIONAL ASSOCIATION,

       as Lead Arranger and Administrative
Agent

      

      and

      

      BANK
OF AMERICA, N.A.,

      as
Syndication Agent

      

      

      
        
          
            

             

             

             

          

           

        

        
           

          
            

          

        

        
           

        

      

      

      

      SCHEDULES
AND EXHIBITS:

      

      Exhibit A
-- Assignment and Assumption

      Exhibit B
-- Compliance Certificate

      Exhibit
C-1 -- Revolving Note

      Exhibit
C-2 -- Swingline Note

      Exhibit
C-3 -- Term Note

      

      Schedule
2.01 -- Commitments

      Schedule
3.12 -- Subsidiaries

      Schedule
6.01 -- Existing Indebtedness

      Schedule
6.02 -- Existing Liens

      Schedule
6.04 -- Existing Investments

      

      

      

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      CREDIT
AGREEMENT

       

      

      CREDIT
AGREEMENT (as amended, modified, restated, supplemented and in effect from time
to time, herein called this “Agreement”) dated as
of August 28, 2008 (the “Effective Date”),
among DXP ENTERPRISES, INC., a Texas corporation, the LENDERS party hereto, BANK
OF AMERICA, N.A., as Syndication Agent, and WELLS FARGO BANK, NATIONAL
ASSOCIATION, as Lead Arranger and Administrative Agent for the
Lenders.

       

      ARTICLE
I

       

      Definitions

       

      The
parties hereto agree as follows:

       

      SECTION
1.01. Defined
Terms.  As used in this Agreement, the following terms have the
meanings specified below:

       

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

       

      “Accounts” shall have
the meaning assigned to it in the Uniform Commercial Code enacted in the State
of Texas in force on the Effective Date.

       

      “Acquisition” means
any transaction, or any series of related transactions, consummated on or after
the date of this Agreement, by which the Borrower or any of its Subsidiaries (i)
acquires any going business or all or substantially all of the assets of any
firm, corporation or limited liability company, or division thereof, whether
through purchase of assets, merger or otherwise or (ii) directly or indirectly
acquires (in one transaction or as the most recent transaction in a series of
transactions) at least a majority (in number of votes) of the securities of a
corporation which have ordinary voting power for the election of directors
(other than securities having such power only by reason of the happening of a
contingency) or a majority (by percentage or voting power) of the outstanding
ownership interests of a partnership or limited liability company.

       

      “Additional
Collateral” shall have the meaning ascribed to such term in Section 5.03(b)
hereof.

       

      “Additional Collateral
Event” shall have the meaning ascribed to such term in Section 5.03(b)
hereof.

       

      “Adjusted LIBO Rate”
means, with respect to any Eurodollar Borrowing for any Interest Period, an
interest rate per annum (rounded upwards, if necessary, to the next 1/100 of 1%)
equal to (a) the LIBO Rate for such Interest Period multiplied by (b) the
Statutory Reserve Rate.

       

      “Administrative Agent”
means Wells Fargo Bank, National Association, in its capacity as administrative
agent for the Lenders hereunder, and its permitted successors in that
capacity.

       

      
        
           

        

        
          1

          
            

          

        

        
           

        

      

      “Administrative
Questionnaire” means an Administrative Questionnaire in a form supplied
by the Administrative Agent.

       

      “Affiliate” means,
with respect to a specified Person, another Person that directly, or indirectly
through one or more intermediaries, Controls or is Controlled by or is under
common Control with the Person specified.

       

      “Alternate Base Rate”
means, for any day, a rate per annum equal to the greater of (a) the Prime Rate
in effect on such day and (b) the Federal Funds Effective Rate in effect on such
day plus 1/2 of
1%.  Any change in the Alternate Base Rate due to a change in the
Prime Rate or the Federal Funds Effective Rate shall be effective from and
including the effective date of such change in the Prime Rate or the Federal
Funds Effective Rate, respectively.

       

      “Applicable
Percentage” means, with respect to any Revolving Lender, the percentage
of the total Revolving Commitments represented by such Lender’s Revolving
Commitment.  If the Revolving Commitments have terminated or expired,
the Applicable Percentages shall be determined based upon the Revolving
Commitments most recently in effect, giving effect to any
assignments.

       

      “Applicable Rate”
means, for any day with respect to any ABR Loan or Eurodollar Loan or with
respect to the commitment fees payable hereunder, as the case may be, the
applicable rate per annum set forth below under the caption “Revolving Loan ABR
Spread”, “Revolving Loan Eurodollar Spread”, “Term Loan ABR Spread”, “Term Loan
Eurodollar Spread” or “Commitment Fee Rate”, as the case may be, based upon the
Leverage Ratio as of the most recent determination date; but until September 30,
2008 the Revolving Loan Eurodollar Spread shall be 1.75%, the Revolving Loan ABR
Spread shall be 0.25%  and the Commitment Fee Rate shall be 0.25% and
until delivery of the Borrower’s consolidated financial statements as of
December 31, 2008, the Term Loan Eurodollar Spread shall be 2.50% and the Term
Loan ABR Spread shall be 1.00%:

       

      
        	
                Leverage
      Ratio

              	
                Revolving
      Loan ABR Spread

              	
                Revolving
      Loan Eurodollar Spread

              	
                Term
      Loan ABR Spread

              	
                Term
      Loan Eurodollar Spread

              	
                Commitment
      Fee Rate

              
	
                Category 1:

                greater
      than or equal to 3.00 to 1.00

              	
                0.50%

              	
                2.00%

              	
                1.00%

              	
                2.50%

              	
                0.30%

              
	
                Category 2:

                greater
      than or equal to 2.50 to 1.00 but less than 3.00 to 1.00

              	
                0.25%

              	
                1.75%

              	
                1.00%

              	
                2.50%

              	
                0.25%

              
	
                Category 3:

                greater
      than or equal to 2.25 to 1.00 but less than 2.50 to 1.00

              	
                0.00%

              	
                1.50%

              	
                0.75%

              	
                2.25%

              	
                0.25%

              
	
                Category 4:

                greater
      than or equal to 2.00 to 1.00 but less than 2.25 to 1.00

              	
                0.00%

              	
                1.50%

              	
                0.50%

              	
                2.00%

              	
                0.25%

              
	
                Category 5:

                greater
      than or equal to 1.50 to 1.00 but less than 2.00 to 1.00

              	
                0.00%

              	
                1.25%

              	
                0.50%

              	
                2.00%

              	
                0.20%

              
	
                Category 6:

                less
      than 1.50 to 1.00

              	
                0.00%

              	
                1.00%

              	
                0.50%

              	
                2.00%

              	
                0.15%

              

      

      

      For
purposes of the foregoing, (i) the Leverage Ratio shall be determined as of the
end of each fiscal quarter of the Borrower’s fiscal year based upon the
Borrower’s consolidated financial statements delivered pursuant to Sections 5.01(a) or
(b) and (ii)
each change in the Applicable Rate resulting from a change in the Leverage Ratio
shall be effective during the period commencing on and including the date of
delivery to the Administrative Agent of such consolidated financial statements
indicating such change and ending on the date immediately preceding the
effective date of the next such change; but the Leverage Ratio shall be deemed
to be in Category 1 at any time that an Event of Default has occurred which is
continuing or at the request of the Required Lenders if the Borrower fails to
timely deliver the consolidated financial statements required to be delivered by
it pursuant to Sections 5.01(a) or
(b), during the
period from the deadline for delivery thereof until such consolidated financial
statements are received.

       

      “Approved Fund” has
the meaning assigned to such term in Section
9.04(b).

       

      “Asset Coverage Ratio”
means, as of any day, the ratio of (a) the sum of (i) eighty-five percent (85%)
of Net Accounts Receivable of the Borrower and its Subsidiaries as of the
effective date of the most recent financial statement delivered by Borrower
pursuant to Sections
5.01(a) or (b) plus sixty percent
(60%) of Net Inventory of the Borrower and its Subsidiaries as of the effective
date of the most recent financial statement delivered by Borrower pursuant to
Sections
5.01(a) or (b) plus fifty percent
(50%) of the Net Book Value of furniture, fixtures and equipment of the Borrower
and its Subsidiaries as of the effective date of the most recent financial
statement delivered by Borrower pursuant to Sections 5.01(a) or
(b) to (b) the
aggregate outstanding amount of the Revolving Exposure as of the date of
calculation of the Asset Coverage Ratio.

       

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

      “Assignment and
Assumption” means an assignment and assumption entered into by a Lender
and an assignee (with the consent of any party whose consent is required by
Section 9.04),
and accepted by the Administrative Agent, in the form of Exhibit A or any
other substantially similar form approved by the Administrative
Agent.

       

      “Board” means the
Board of Governors of the Federal Reserve System of the United States of America
and any successor entity performing similar functions.

       

      “Borrower” means DXP
ENTERPRISES, INC., a Texas corporation.

       

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

       

      “Borrowing Request”
means a request by the Borrower for a Borrowing in accordance with Section
2.03.

       

      “Business Day” means
any day that is not a Saturday, Sunday or other day on which commercial banks in
Houston, Texas are authorized or required by law to remain closed; provided
that, when used in connection with a Eurodollar Loan, the term “Business Day”
shall also exclude any day on which banks are not open for dealings in dollar
deposits in the London interbank market.

       

      “Capital Expenditures”
means, for any period, (a) the additions to property, plant and equipment and
other capital expenditures of the Borrower and its consolidated Subsidiaries
that are (or would be) set forth in a consolidated statement of cash flows of
Borrower for such period prepared in accordance with GAAP and (b) Capital Lease
Obligations incurred by the Borrower and its consolidated Subsidiaries during
such period, but excluding expenditures for the restoration, repair or
replacement of any fixed or capital asset which was destroyed or damaged, in
whole or in part, to the extent financed by the proceeds of an insurance policy
maintained by such Person.

       

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

       

      “Ceiling Rate” means,
on any day, the maximum nonusurious rate of interest permitted for that day by
whichever of applicable federal or Texas (or any jurisdiction whose usury laws
are deemed to apply to the Notes or any other Loan Documents despite the
intention and desire of the parties to apply the usury laws of the State of
Texas) laws permits the higher interest rate, stated as a rate per
annum.  On each day, if any, that the Texas Finance Code establishes
the Ceiling Rate, the Ceiling Rate shall be the “weekly ceiling” (as defined in
the Texas Finance Code) for that day.  Administrative Agent may from
time to time, as to current and future balances, implement any other ceiling
under the Texas Finance Code by notice to the Borrower, if and to the extent
permitted by the Texas Finance Code.  Without notice to the Borrower
or any other Person, the Ceiling Rate shall automatically fluctuate upward and
downward as and in the
amount by which such maximum nonusurious rate of interest permitted by
applicable law fluctuates.

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

       

      “Change in Law” means
(a) the adoption of any law, rule or regulation after the date of this
Agreement, (b) any change in any law, rule or regulation or in the
interpretation or application thereof by any Governmental Authority after the
date of this Agreement or (c) compliance by any Lender or the Issuing Bank (or,
for purposes of Section 2.14(b), by
any lending office of such Lender or by such Lender’s or the Issuing Bank’s
holding company, if any) with any binding request, guideline or directive
(whether or not having the force of law) of any Governmental Authority made or
issued after the date of this Agreement.

       

      “Change of Control”
means a change resulting when any Unrelated Person or any Unrelated Persons
acting together which would constitute a Group together with any Affiliates or
Related Persons thereof (in each case also constituting Unrelated Persons) shall
at any time either (i) Beneficially Own more than 50% of the aggregate voting
power of all classes of Voting Stock of Borrower or (ii) succeed in having
sufficient of its or their nominees elected to the Board of Directors of
Borrower such that such nominees, when added to any existing directors remaining
on the Board of Directors of Borrower after such election who is an Affiliate or
Related Person of such Person or Group, shall constitute a majority of the Board
of Directors of Borrower.  As used herein (a) “Beneficially Own”
means “beneficially own” as defined in Rule 13d-3 of the Securities Exchange Act
of 1934, as amended, or any successor provision thereto; provided, however,
that, for purposes of this definition, a Person shall not be deemed to
Beneficially Own securities tendered pursuant to a tender or exchange offer made
by or on behalf of such Person or any of such Person’s Affiliates until such
tendered securities are accepted for purchase or exchange; (b) “David Little Group”
means David Little or his estate, any family member, relative (including spouses
and former spouses of relatives, descendants and their spouses and former
spouses) or heir of David Little, any entity controlled by any of such persons
or any trust for the benefit of any of such Persons; (c) “Group” means a
“group” for purposes of Section 13(d) of the Securities Exchange Act of 1934, as
amended; (d) “Unrelated Person”
means at any time any Person other than Borrower or any Subsidiary of Borrower
and other than any trust for any employee benefit plan of Borrower or any
Subsidiary of Borrower and other than any one or more Person(s) in the David
Little Group; (e) “Related Person” of
any Person shall mean any other Person owning (1) 5% or more of the outstanding
common stock of such Person or (2) 5% or more of the Voting Stock of such
Person; and (f) “Voting Stock” of any
Person shall mean capital stock of such Person which ordinarily has voting power
for the election of directors (or persons performing similar functions) of such
Person, whether at all times or only so long as no senior class of securities
has such voting power by reason of any contingency.

       

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

       

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

       

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

      “Collateral” means any
and all “Collateral”, as defined in any applicable Security
Document.

       

      “Commitment” means a
Revolving Commitment or the Term Loan Commitment, or any combination thereof (as
the context requires).

       

      “Communication” shall
have the meaning assigned to such term in Section 9.01(b)
hereof.

       

      “Contribution
Agreement” means that certain Contribution Agreement dated concurrently
herewith by and among Borrower and the current Subsidiaries of Borrower (other
than Foreign Subsidiaries), as the same may be amended, modified, supplemented
and restated--and joined in pursuant to a joinder agreement--from time to
time.

       

      “Control” means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person, whether through the ability
to exercise voting power, by contract or otherwise.  “Controlling” and
“Controlled” have meanings correlative thereto.

       

      “Default” means any
event or condition which constitutes an Event of Default or which upon notice,
lapse of time or both would, unless cured or waived, become an Event of
Default.

       

      “dollars” or “$” refers to lawful
money of the United States of America.

       

      “EBITDA” means,
without duplication, for any period the consolidated net income (excluding any
extraordinary gains or losses) of the Borrower and its Subsidiaries plus, to the extent
deducted in calculating consolidated net income, depreciation, amortization,
other non-cash items and non-recurring items, Interest Expense, and tax expense
for taxes based on income and minus, to the extent
added in calculating consolidated net income, any non-cash items and
non-recurring items; provided that, if the
Borrower or any of its Subsidiaries acquires the Equity Interests or assets of
any Person during such period under circumstances permitted under Section 6.15 hereof,
EBITDA shall be adjusted to give pro forma effect to such acquisition assuming
that such transaction had occurred on the first day of such period and provided further
that, if the Borrower or any of its Subsidiaries divests the Equity Interests or
assets of any Person during such period under circumstances permitted under this
Agreement, EBITDA shall be adjusted to give pro forma effect to such divestiture
assuming that such transaction had occurred on the first day of such
period.  Add-backs allowed pursuant to Article 11, Regulation S-X, of
the Securities Act of 1933 will also be included in the calculation of
EBITDA.

       

      “ECF Percentage” means
(i) until such time as the Leverage Ratio is less than 2.50 to 1.00 for a period
of four (4) consecutive fiscal quarters, 50% and (ii) at all times thereafter,
0%.

       

      “Environmental Laws”
means all laws, rules, regulations, codes, ordinances, orders, decrees,
judgments, injunctions, notices or binding agreements issued, promulgated or
entered into by any Governmental Authority, relating in any way to the
environment, preservation or reclamation of natural resources, the management,
release or threatened release of any Hazardous Material or to health and safety
matters.

       

      
        
           

        

        
          5

          
            

          

        

        
           

        

      

      “Environmental
Liability” means any liability, contingent or otherwise (including any
liability for damages, costs of environmental remediation, fines, penalties or
indemnities), of the Borrower or any other Loan Party directly or indirectly
resulting from or based upon (a) violation of any Environmental Law, (b) the
generation, use, handling, transportation, storage, treatment or disposal of any
Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or
threatened release of any Hazardous Materials into the environment or (e) any
contract, agreement or other consensual arrangement pursuant to which liability
is assumed or imposed with respect to any of the foregoing.

       

      “Equity Interests”
means shares of capital stock, partnership interests, membership interests in a
limited liability company, beneficial interests in a trust or other equity
ownership interests in a Person, or any warrants, options or other rights to
acquire such interests.

       

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

       

      “ERISA Affiliate”
means any Person that, together with the Borrower or any other Loan Party, is
treated as a single employer under Section 414(b) or (c) of the Code or, solely
for purposes of Section 302 of ERISA and Section 412 of the Code, Section 414(m)
of the Code.

       

      “ERISA Event” means
(a) the occurrence of a “reportable event”, as defined in Section 4043 of ERISA
or the regulations issued thereunder with respect to a Plan unless the 30 day
notice period requirement with respect to such event has been waived or the
requirements of subsection (1) of Section 4043(b) of ERISA (without regard to
subsection (2) of such Section) are met with respect to a contributing sponsor,
as defined in Section 4001(a)(13) of ERISA, of a Plan, and an event described in
paragraph (9), (10), (11), (12) or (13) of Section 4043(c) of ERISA is
reasonably expected to occur with respect to such Plan within the following 30
days; (b) for plan years beginning prior to 2008, the existence with respect to
any Plan of an “accumulated funding deficiency” (as defined in Section 412 of
the Code or Section 302 of ERISA), whether or not waived; (c) the filing of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by the Borrower or any other Loan Party or any of their
ERISA Affiliates of any liability under Title IV of ERISA with respect to the
termination of any Plan; (e) the receipt by the Borrower or any other Loan Party
or any of their ERISA Affiliates from the PBGC or a plan administrator of any
notice relating to an intention to terminate any Plan or Plans or to appoint a
trustee to administer any Plan; (f) the incurrence by the Borrower or any other
Loan Party or any of their ERISA Affiliates of any liability with respect to the
withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (g) the
receipt by the Borrower or any other Loan Party or any of their ERISA Affiliates
of any notice, or the receipt by any Multiemployer Plan from the Borrower or any
other Loan Party or any of their ERISA Affiliates of any notice, concerning the
imposition of Withdrawal Liability or a determination that a Multiemployer Plan
is, or is expected to be, insolvent or in reorganization, within the meaning of
Title IV of ERISA.

       

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

       

      
        
           

        

        
          6

          
            

          

        

        
           

        

      

      “Event of Default” has
the meaning assigned to such term in Article
VII.

       

      “Excess Cash Flow”
means, for any period, EBITDA for such period minus Interest
Expense for such period paid in cash, scheduled principal payments on
Indebtedness for such period, income tax expense for such period paid in cash,
and Capital Expenditures by Borrower for such period.

       

      “Excluded Assets”
means (i) leasehold estates, (ii) motor vehicles and (iii) real property owned
by Borrower or any of its Subsidiaries as of the date hereof.

       

      “Excluded Taxes”
means, with respect to the Administrative Agent, any Lender, the Issuing Bank or
any other recipient of any payment to be made by or on account of any obligation
of the Borrower hereunder, (a) income or franchise taxes (however denominated)
imposed on (or measured by) its net income by the United States of America, or
by the jurisdiction under the laws of which such recipient is organized or in
which its principal office is located or, in the case of any Lender, in which
its applicable lending office is located or as a result of any connection
between the recipient and the jurisdiction imposing such tax (other than any
such connection arising solely from such recipient’s having executed, delivered
or performed its obligations or received a payment under this Agreement or any
other Loan Document), (b) any branch profits taxes imposed by the United States
of America or any similar tax imposed by any other jurisdiction in which the
Borrower is located and (c) in the case of a Foreign Lender (other than an
assignee pursuant to a request by the Borrower under Section 2.18(b)), any
withholding tax that is imposed on amounts payable to such Foreign Lender at the
time such Foreign Lender becomes a party to this Agreement (or designates a new
lending office) or is attributable to such Foreign Lender’s failure to comply
with Section
2.16(e), except to the extent that such Foreign Lender (or its assignor,
if any) was entitled, at the time of designation of a new lending office (or
assignment), to receive additional amounts from the Borrower with respect to
such withholding tax pursuant to Section 2.16(a);
provided that with respect to an additional interest in a Loan acquired by a
Foreign Lender as an assignee, such Foreign Lender shall be entitled to receive
additional amounts from the Borrower pursuant to Section 2.16(a) with
respect to such additional interest only to the extent that the assignor was
entitled, at the time of such assignment, to receive additional amounts from the
Borrower pursuant to Section
2.16(a).

       

      “Federal Funds Effective
Rate” means, for any day, the weighted average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers, as published on the next succeeding Business Day by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day that
is a Business Day, the average (rounded upwards, if necessary, to the next 1/100
of 1%) of the quotations for such day for such transactions received by the
Administrative Agent from three Federal funds brokers of recognized standing
selected by the Administrative Agent.

       

      “Financial Officer”
means the chief financial officer, principal accounting officer, treasurer or
controller of the Borrower.

       

      
        
           

        

        
          7

          
            

          

        

        
           

        

      

      “Fixed Charge Coverage
Ratio” means, as of any day, the ratio of (a) EBITDA for the 12 months
ending on such date minus Capital
Expenditures for such period (excluding Acquisitions) minus tax expense
paid in cash for taxes based on income to (b) Fixed Charges for such 12-month
period, determined in each case on a consolidated basis for Borrower and its
Subsidiaries.

       

      “Fixed Charges” means
(without duplication), for any period, the aggregate of Interest Expense,
scheduled principal payments in respect of long term debt, and the current
portion of Capital Lease Obligations for such period.

       

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

       

      “Foreign Subsidiaries”
means Subsidiaries of the Borrower which are organized under the laws of a
jurisdiction other than the United States of America, any State of the United
States or any political subdivision thereof.

      

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

       

      “Governmental
Authority” means the government of the United States of America, any
other nation or any political subdivision thereof, whether state or local, and
any agency, authority, instrumentality, regulatory body, court, central bank or
other entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.

       

      “Guarantee” of or by
any Person (the “guarantor”) means any obligation, contingent or otherwise, of
the guarantor guaranteeing or having the economic effect of guaranteeing any
Indebtedness or other obligation of any other Person (the “primary obligor”) in
any manner, whether directly or indirectly, and including any obligation of the
guarantor, direct or indirect, (a) to purchase or pay (or advance or supply
funds for the purchase or payment of) such Indebtedness or other obligation or
to purchase (or to advance or supply funds for the purchase of) any security for
the payment thereof, (b) to purchase or lease property, securities or services
for the purpose of assuring the owner of such Indebtedness or other obligation
of the payment thereof, (c) to maintain working capital, equity capital or any
other financial statement condition or liquidity of the primary obligor so as to
enable the primary obligor to pay such Indebtedness or other obligation or (d)
as an account party in respect of any letter of credit or letter of guaranty
issued to support such Indebtedness or obligation; provided, that the term
Guarantee shall not include endorsements for collection or deposit in the
ordinary course of business.

       

      “Guaranty” means that
certain Guaranty dated as of September 10, 2007 executed by each Subsidiary of
Borrower (other than Foreign Subsidiaries) in favor of the Administrative Agent
(as joined in pursuant to the Joinder Agreement) and any and all other
guaranties now or hereafter executed in favor of the Administrative Agent
relating to the Obligations hereunder and the other Loan Documents (including,
without limitation, by way of a joinder), as any of them may from time to time
be amended, modified, restated or supplemented.

       

      
        
           

        

        
          8

          
            

          

        

        
           

        

      

      “Hazardous
Materials”  means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.

       

      “Indebtedness” of any
Person means, without duplication, (a) all obligations of such Person for
borrowed money, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person
under conditional sale or other title retention agreements relating to property
acquired by such Person, (d) all obligations of such Person in respect of the
deferred purchase price of property or services (excluding earn-out payments and
excluding current Accounts payable incurred in the ordinary course of business),
(e) all Indebtedness of others secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien on property owned or acquired by such Person, whether or not the
Indebtedness secured thereby has been assumed, (f) all Guarantees by such Person
of Indebtedness of others, (g) all Capital Lease Obligations of such Person, (h)
all obligations, contingent or otherwise, of such Person as an account party in
respect of letters of credit and letters of guaranty and (i) all obligations,
contingent or otherwise, of such Person in respect of bankers’
acceptances.  The Indebtedness of any Person shall include the
Indebtedness of any other entity (including any partnership in which such Person
is a general partner) to the extent such Person is liable therefor as a result
of such Person’s ownership interest in or other relationship with such entity,
except to the extent the terms of such Indebtedness provide that such Person is
not liable therefor.

       

      “Indemnified Taxes”
means Taxes other than Excluded Taxes.

       

      “Interest Election
Request” means a request by the Borrower to convert or continue a
Revolving Borrowing or Term Loan Borrowing in accordance with Section
2.06.

       

      “Interest Expense”
means, for any period, total interest expense accruing on Indebtedness of the
Borrower and its Subsidiaries, on a consolidated basis, during such period
(including interest expense attributable to Capitalized Lease Obligations and
amounts attributable to interest incurred under Swap Agreements), determined in
accordance with GAAP.  For purposes of the foregoing, interest expense
shall be determined after giving effect to any net payments made or received by
the Borrower or any of its Subsidiaries with respect to interest rate Swap
Agreements.

       

      “Interest Payment
Date” means (a) with respect to any ABR Loan (other than a Swingline
Loan), the last day of each calendar month, (b) with respect to any Eurodollar
Loan, the last day of the Interest Period applicable to the Borrowing of which
such Loan is a part and, in the case of a Eurodollar Borrowing with an Interest
Period of more than three months’ duration, each day prior to the last day of
such Interest Period that occurs at intervals of three months’ duration after
the first day of such Interest Period, and (c) with respect to any Swingline
Loan, the day that such Loan is required to be repaid.

       

      
        
           

        

        
          9

          
            

          

        

        
           

        

      

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

      

       

      “Inventory” shall have
the meaning assigned to it in the Uniform Commercial Code enacted in the State
of Texas in force on the Effective Date.

       

      “Issuing Bank” means
Wells Fargo Bank, National Association, in its capacity as the issuer of Letters
of Credit hereunder, and its successors in such capacity as provided in Section
2.04(i).  The Issuing Bank may, in its discretion, arrange for
one or more Letters of Credit to be issued by Affiliates of the Issuing Bank, in
which case the term “Issuing Bank” shall include any such Affiliate with respect
to Letters of Credit issued by such Affiliate.

       

      “Joinder Agreement”
means that certain Joinder Agreement dated concurrently herewith executed by
Target and the Subsidiaries of Target as of the date hereof in favor of the
Administrative Agent.

       

      “LC Disbursement”
means a payment made by the Issuing Bank pursuant to a Letter of
Credit.

       

      “LC Exposure” means,
at any time, the sum of (a) the aggregate undrawn amount of all outstanding
Letters of Credit at such time plus (b) the
aggregate amount of all LC Disbursements that have not yet been reimbursed by or
on behalf of the Borrower at such time.  The LC Exposure of any
Revolving Lender at any time shall be its Applicable Percentage of the total LC
Exposure at such time.

       

      “Lenders” means the
Persons listed on Schedule 2.01 and any
other Person that shall have become a party hereto pursuant to an Assignment and
Assumption, other than any such Person that ceases to be a party hereto pursuant
to an Assignment and Assumption. Unless the context otherwise requires, the term
“Lenders” includes the Swingline Lender.

       

      “Letter of Credit”
means any letter of credit issued pursuant to this Agreement.

       

      “Leverage Ratio”
means, as of any day, the ratio of (a) Indebtedness as of such date to (b)
EBITDA for the 12 months then ended, determined in each case on a consolidated
basis for Borrower and its Subsidiaries.

       

      
        
           

        

        
          10

          
            

          

        

        
           

        

      

      
        “LIBO Rate” means,
with respect to any Eurodollar Borrowing for any Interest Period, the rate
appearing on Page 3750 of the Dow Jones Market Service (or on any successor or
substitute page of such Service, or any successor to or substitute for such
Service, providing rate quotations comparable to those currently provided on
such page of such Service, as determined by the Administrative Agent from
time to time for purposes of providing quotations of interest rates applicable
to dollar deposits in the London interbank market) at approximately 11:00 a.m.,
London time, two Business Days prior to the commencement of such Interest
Period, as the rate for dollar deposits with a maturity comparable to such
Interest Period.  In the event that such rate is not available at such
time for any reason, then the “LIBO Rate” with respect to such Eurodollar
Borrowing for such Interest Period shall be the rate (rounded upwards, if
necessary, to the next 1/100 of 1%) at which dollar deposits of $5,000,000 and
for a maturity comparable to such Interest Period are offered by the principal
London office of the Administrative Agent in immediately available funds in the
London interbank market at approximately 11:00 a.m., London time, two Business
Days prior to the commencement of such Interest Period.

      

       

      “Lien” means, with
respect to any asset, (a) any mortgage, deed of trust, lien, pledge,
hypothecation, encumbrance, charge or security interest in, on or of such asset,
(b) the interest of a vendor or a lessor under any conditional sale agreement,
capital lease or title retention agreement (or any financing lease having
substantially the same economic effect as any of the foregoing) relating to such
asset and (c) in the case of securities, any purchase option, call or similar
right of a third party with respect to such securities.

       

      “Loan Documents”
means, collectively, this Agreement, the Notes, the Guaranty, the Security
Documents, the Notice of Entire Agreement, the Contribution Agreement, any
subordination agreement relating to Subordinated Debt, all instruments,
certificates and agreements now or hereafter executed or delivered to the
Administrative Agent or any Lender pursuant to any of the foregoing or in
connection with the obligations under this Agreement and the other Loan
Documents or any commitment regarding such obligations, and all amendments,
modifications, renewals, extensions, increases and rearrangements of, and
substitutions for, any of the foregoing.

       

      “Loan Parties” means
the Borrower and each of its Subsidiaries (other than Foreign
Subsidiaries).

       

      “Loans” means the
loans made by the Lenders to the Borrower pursuant to this
Agreement.

       

      “Material Adverse
Effect” means a material adverse effect on (a) the business, assets,
operations or condition, financial or otherwise, of the Borrower and its
Subsidiaries taken as a whole, (b) the ability of any Loan Party to perform any
of its obligations under any Loan Document or (c) the rights of or benefits
available to the Lenders under any Loan Document.

       

      “Material
Indebtedness” means Indebtedness (other than the Loans and Letters of
Credit), or obligations in respect of one or more Swap Agreements, of any one or
more of the Borrower and any other Loan Party in an aggregate principal amount
exceeding $1,000,000.  For purposes of determining Material
Indebtedness, the “principal amount” of the obligations in respect of any Swap
Agreement at any time shall be the maximum aggregate amount (giving effect to
any netting agreements) that would be required to be paid if such Swap Agreement
were terminated at such time.

       

      
        
           

        

        
          11

          
            

          

        

        
           

        

      

      “Maximum Accordion
Amount” means $190,000,000 plus the lesser of
(a) $10,000,000 or (b)  the amount of any principal payments made on
the Term Loans after the date hereof.

       

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

       

      “Mortgage” means a
mortgage, deed of trust, assignment of leases and rents, leasehold mortgage or
other security document granting a Lien on any Mortgaged Property  to
secure the Obligations.  Each Mortgage shall be satisfactory in form
and substance to the Administrative Agent.

       

      “Mortgaged Property”
means each parcel of real property and improvements thereto with respect to
which a Mortgage is granted pursuant hereto.  The Mortgaged Property
shall not include any Excluded Assets.

       

      “Multiemployer Plan”
means a multiemployer plan as defined in Section 4001(a)(3) of
ERISA.

       

      “Net Accounts
Receivable” means the book value of Accounts minus allowances for
doubtful Accounts, determined in accordance with GAAP.

       

      “Net Inventory” means
the book value of Inventory minus the LIFO
allowance, determined in accordance with GAAP.

       

      “Net Book Value” means
cost minus
accumulated depreciation.

       

      “Net Proceeds” means,
with respect to any Prepayment Event (a) the cash proceeds received in respect
of such event including (i) any cash received in respect of any non cash
proceeds, but only as and when received, (ii) in the case of a casualty,
insurance proceeds, and (iii) in the case of a condemnation or similar event,
condemnation awards and similar payments, net of (b) the sum of (i) all
reasonable fees and out of pocket expenses (including reasonable broker’s fees
or commissions, legal fees, survey costs, title insurance premiums, recording
charges and transfer or similar taxes) paid by the Borrower or any of its
Subsidiaries to third parties (other than Affiliates) in connection with such
event, (ii) in the case of a sale, transfer or other disposition of an asset
(including pursuant to a sale and leaseback transaction or a casualty or a
condemnation or similar proceeding), the amount of all payments required to be
made by the Borrower and its Subsidiaries as a result of such event to repay
Indebtedness (other than Loans) secured by such asset or otherwise subject to
mandatory prepayment as a result of such event, and (iii) the amount of all
taxes paid (or reasonably estimated to be payable) by the Borrower and its
Subsidiaries, and the amount of any reserves established by the Borrower and its
Subsidiaries to fund contingent liabilities reasonably estimated to be payable,
in each case during the year that such event occurred or the next succeeding
year and that are directly attributable to such event (as determined reasonably
and in good faith by a Financial Officer of the Borrower).

       

      “Non-Consenting
Lender” shall have the meaning assigned to such term in Section 2.18(c)
hereof.

       

      “Notes” shall have the
meaning assigned to such term in Section 2.02(a)
hereof.

       

      
        
           

        

        
          12

          
            

          

        

        
           

        

      

      “Notice” shall have
the meaning assigned to such term in Section 9.01(b)
hereof.

       

      “Notice of Entire
Agreement” means a notice of entire agreement executed by Borrower, each
other Loan Party and the Administrative Agent, as the same may from time to time
be amended, modified, supplemented or restated.

       

      “Obligations” means,
as at any date of determination thereof, the sum of the
following:  (i) the aggregate principal amount of Loans outstanding
hereunder, plus
(ii) the aggregate amount of the LC Exposure, plus (iii) all other
liabilities, obligations and indebtedness under any Loan Document of Borrower or
any other Loan Party.

       

      “Other Taxes” means
any and all present or future stamp or documentary taxes or any other excise or
property taxes, charges or similar levies arising from any payment made under
any Loan Document or from the execution, delivery or enforcement of, or
otherwise with respect to, any Loan Document.

       

      “Participant” has the
meaning set forth in Section
9.04(c).

       

      “PBGC” means the
Pension Benefit Guaranty Corporation referred to and defined in ERISA and any
successor entity performing similar functions.

       

      “Permitted
Encumbrances” means:

       

      (a) Liens
imposed by law for taxes that are not yet due or are being contested in
compliance with Section
5.05;

       

      (b) landlord’s,
carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and other like
Liens imposed by law, arising in the ordinary course of business and securing
obligations that are not overdue by more than 30 days or are being contested in
compliance with Section
5.05;

       

      (c) pledges
and deposits made in the ordinary course of business in compliance with workers’
compensation, unemployment insurance and other social security laws or
regulations;

       

      (d) deposits
to secure the performance of bids, trade contracts, leases, statutory
obligations, surety and appeal bonds, performance bonds and other obligations of
a like nature, in each case in the ordinary course of business;

       

      (e) judgment
liens in respect of judgments that do not constitute an Event of Default under
clause (k) of
Article VII;
and

       

      (f) easements,
zoning restrictions, rights-of-way and similar encumbrances on real property
imposed by law or arising in the ordinary course of business that do not secure
any monetary obligations and do not materially detract from the value of the
affected property or interfere with the ordinary conduct of business of the
Borrower or other Loan Party; 

      provided that the
term “Permitted Encumbrances” shall not include any Lien securing
Indebtedness.

      
        
           

        

        
          13

          
            

          

        

        
           

        

      

          “Permitted
Investments” means:

       

      (g) direct
obligations of, or obligations the principal of and interest on which are
unconditionally guaranteed by, the United States of America (or by any agency
thereof to the extent such obligations are backed by the full faith and credit
of the United States of America), in each case maturing within one year from the
date of acquisition thereof;

       

      (h) investments
in commercial paper maturing within 270 days from the date of acquisition
thereof and having, at such date of acquisition, the highest credit rating
obtainable from S&P or from Moody’s;

       

      (i) investments
in certificates of deposit, banker’s acceptances and time deposits maturing
within 180 days from the date of acquisition thereof issued or guaranteed by or
placed with, and money market deposit accounts issued or offered by, any
domestic office of any commercial bank organized under the laws of the United
States of America or any State thereof which has a combined capital and surplus
and undivided profits of not less than $500,000,000;

       

      (j) fully
collateralized repurchase agreements with a term of not more than 30 days for
securities described in clause (a) above and
entered into with a financial institution satisfying the criteria described in
clause (c)
above; and

       

      (k) money
market funds that (i) comply with the criteria set forth in Securities and
Exchange Commission Rule 2a-7 under the Investment Company Act of 1940, (ii) are
rated AAA by S&P and Aaa by Moody’s and (iii) have portfolio assets of at
least $5,000,000,000.

       

      “Person” means any
natural person, corporation, limited liability company, trust, joint venture,
association, company, partnership, Governmental Authority or other
entity.

       

      “Plan” means any
employee pension benefit plan (other than a Multiemployer Plan) subject to the
provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of
ERISA, and in respect of which the Borrower or other Loan Party or any of their
ERISA Affiliates is (or, if such plan were terminated, would under Section 4069
of ERISA be deemed to be) an “employer” as defined in Section 3(5) of
ERISA.

       

      “Platform” shall have
the meaning assigned to such term in Section 9.01(b)
hereof.

       

      “Prepayment Event”
means:

       

      (a)           any
sale, transfer or other disposition (including pursuant to a sale and leaseback
transaction) of any property or asset of the Borrower or any of its
Subsidiaries, other than dispositions permitted under Section 6.05 (other
than clause (c)
of Section
6.05); or

       

      (b)           any
casualty or other insured damage to, or any taking under power of eminent domain
or by condemnation or similar proceeding of, any property or asset of the
Borrower or any of its Subsidiaries, but only to the extent that the Net
Proceeds therefrom have not been applied to repair, restore or replace such
property or asset within 365 days after such event.

       

      
        
           

        

        
          14

          
            

          

        

        
           

        

      

      “Prime Rate” means, on
any day, the prime rate of Wells Fargo Bank, National Association in effect for
that day at the principal offices of Wells Fargo Bank, National Association in
San Francisco, California.  The Prime Rate is a reference rate and
does not necessarily represent the lowest or best rate or a favored rate, and
Administrative Agent and each Lender disclaims any statement, representation or
warranty to the contrary.  Administrative Agent, any Lender or Wells
Fargo Bank, National Association may make commercial loans or other loans at
rates of interest at, above or below the Prime Rate.

       

      “Prior Agreement”
shall have the meaning assigned to such term in Section 9.15
hereof.

       

      “Purchase Agreement”
shall have the meaning ascribed to such term in Section 4.01(j)
hereof.

       

      “Register” has the
meaning set forth in Section
9.04(b).

       

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

       

      “Required Lenders”
means two or more Lenders having Revolving Exposures, Term Loans and unused
Commitments representing greater than 50% of the sum of the total Revolving
Exposures, outstanding Term Loans and unused Commitments at such
time.

       

      “Restricted Payment”
means (i) any payment or prepayment of any Subordinated Debt or (ii) any
dividend or other distribution (whether in cash, securities or other property)
with respect to any Equity Interests in the Borrower or other Loan Party, or any
payment (whether in cash, securities or other property), including any sinking
fund or similar deposit, on account of the purchase, redemption, retirement,
acquisition, cancellation or termination of any Equity Interests in the Borrower
or other Loan Party or any option, warrant or other right to acquire any such
Equity Interests in the Borrower or other Loan Party.

       

      “Revolving Availability
Period” means the period from and including the Effective Date to but
excluding the earlier of the Revolving Maturity Date and the date of termination
of the Revolving Commitments.

       

      “Revolving Commitment”
means, with respect to each Lender, the commitment, if any, of such Lender to
make Revolving Loans and to acquire participations in Letters of Credit and
Swingline Loans hereunder, expressed as an amount representing the maximum
aggregate amount of such Lender’s Revolving Exposure hereunder, as such
commitment may be (a) reduced from time to time pursuant to Section 2.07 and (b)
reduced or increased from time to time pursuant to assignments by or to such
Lender pursuant to Section
9.04.  The initial amount of each Lender’s Revolving Commitment
is set forth on Schedule 2.01, or in
the Assignment and Assumption pursuant to which such Lender shall have assumed
its Revolving Commitment, as applicable.  The initial aggregate amount
of the Lenders’ Revolving Commitments is $150,000,000.

       

      
        
           

        

        
          15

          
            

          

        

        
           

        

      

      “Revolving Exposure”
means, with respect to any Lender at any time, the sum of the outstanding
principal amount of such Lender’s Revolving Loans and its LC Exposure and
Swingline Exposure at such time.

       

      “Revolving Lender”
means a Lender with a Revolving Commitment or, if the Revolving Commitments have
terminated or expired, a Lender with Revolving Exposure.

       

      “Revolving Loan” means
a Loan made pursuant to clause (b) of Section
2.01.

       

      “Revolving Maturity
Date” means August 11, 2013.

       

      “S&P” means
Standard & Poor’s Ratings Group.

       

      “Security Agreements”
means, collectively, (i) the Security Agreements dated as of September 10, 2007
executed between Borrower and each of its Subsidiaries (other than Foreign
Subsidiaries), respectively, and Administrative Agent (as joined in pursuant to
the Joinder Agreement) and (ii) any and all security agreements hereafter
executed in favor of Administrative Agent and securing all or any part of the
Obligations (including, without limitation, by way of a joinder), as any of them
may from time to time be amended, modified, restated or
supplemented.

       

      “Security Documents”
means, collectively, the Mortgages, the Security Agreements and any and all
other agreements, deeds of trust, mortgages, chattel mortgages, security
agreements, pledges, guaranties, assignments of production or proceeds of
production, assignments of income, assignments of contract rights, assignments
of partnership interest, assignments of royalty interests, assignments of
performance, completion or surety bonds, standby agreements, subordination
agreements, undertakings and other instruments and financing statements now or
hereafter executed and delivered as security for the Obligations, as any of them
may from time to time be amended, modified, restated or
supplemented.

       

      “Statutory Reserve
Rate” means a fraction (expressed as a decimal), the numerator of which
is the number one and the denominator of which is the number one minus the aggregate
of the maximum reserve percentages (including any marginal, special, emergency
or supplemental reserves) expressed as a decimal established by the Board to
which the Administrative Agent is subject for Eurocurrency funding (currently
referred to as “Eurocurrency Liabilities” in Regulation D of the
Board).  Such reserve percentages shall include those imposed pursuant
to such Regulation D.  Eurodollar Loans shall be deemed to constitute
Eurocurrency fundings and to be subject to such reserve requirements without
benefit of or credit for proration, exemptions or offsets that may be available
from time to time to any Lender under such Regulation D or any comparable
regulation.  The Statutory Reserve Rate shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage.

       

      “Subordinated Debt”
means all Indebtedness of a Person which has been subordinated on terms and
conditions satisfactory to the Required Lenders, in their sole discretion, to
all of the Obligations, whether now existing or hereafter
incurred.  Indebtedness shall not be considered as “Subordinated Debt”
unless and until the Administrative Agent shall have received copies of the
documentation evidencing or relating to such Indebtedness together with a
subordination agreement, in form and substance satisfactory to the Required
Lenders, duly executed by the holder or
holders of such Indebtedness and evidencing the terms and conditions of the
required subordination.

       

      
        
           

        

        
          16

          
            

          

        

        
           

        

      

             
“Subordinated Debt
Documents” means any indenture or note under which any Subordinated Debt
is issued and all other instruments, agreements and other documents evidencing
or governing any Subordinated Debt or providing for any Guarantee or other right
in respect thereof.

       

      “Subsidiary” means,
with respect to any Person (the “parent”) at any date, any corporation, limited
liability company, partnership, association or other entity the accounts of
which would be consolidated with those of the parent in the parent’s
consolidated financial statements if such financial statements were prepared in
accordance with GAAP as of such date, as well as any other corporation, limited
liability company, partnership, association or other entity (a) of which
securities or other ownership interests representing more than 50% of the equity
or more than 50% of the ordinary voting power or, in the case of a partnership,
more than 50% of the general partnership interests are, as of such date, owned,
Controlled or held, or (b) that is, as of such date, otherwise Controlled, by
the parent or one or more Subsidiaries of the parent or by the parent and one or
more Subsidiaries of the parent.  Notwithstanding the foregoing,
Global Pump Service and Supply, LLC, a Texas limited liability company, shall
not be considered a Subsidiary of Borrower unless Borrower (or a Subsidiary of
Borrower) becomes the owner of all of the Equity Interests in and to such
entity.

       

      “Swap Agreement” means
any agreement with respect to any swap, forward, future or derivative
transaction or option or similar agreement involving, or settled by reference
to, one or more rates, currencies, commodities, equity or debt instruments or
securities, or economic, financial or pricing indices or measures of economic,
financial or pricing risk or value or any similar transaction or any combination
of these transactions; provided that no phantom stock or similar plan providing
for payments only on account of services provided by current or former
directors, officers, employees or consultants of the Borrower or its
Subsidiaries shall be a Swap Agreement.

       

      “Swingline Exposure”
means, at any time, the aggregate principal amount of all Swingline Loans
outstanding at such time.  The Swingline Exposure of any Lender at any
time shall be its Applicable Percentage of the total Swingline Exposure at such
time.  The initial maximum amount of Swingline Exposure is
$10,000,000.

       

      “Swingline Lender”
means Wells Fargo Bank, National Association, in its capacity as lender of
Swingline Loans hereunder.

       

      “Swingline Loan” means
a Loan made pursuant to Section
2.19.

       

      “Target” means Vertex
Corporate Holdings, Inc., a Delaware corporation.

       

      “Taxes” means any and
all present or future taxes, levies, imposts, duties, deductions, charges or
withholdings imposed by any Governmental Authority.

       

      
        
           

        

        
          17

          
            

          

        

        
           

        

      

      “Term Loan Commitment”
means, with respect to each Lender, the commitment, if any, of such Lender to
make a Term Loan hereunder on the Effective Date, expressed as an amount
representing the maximum principal amount of the Term Loan to be made by such
Lender hereunder, as such commitment may be (a) reduced from time to time
pursuant to Section
2.07 and (b) reduced or increased from time to time pursuant to
assignments by or to such Lender pursuant to Section
9.04.  The initial amount of each Lender’s Term Loan Commitment
is set forth on Schedule 2.01, or in
the Assignment and Assumption pursuant to which such Lender shall have assumed
its Term Loan Commitment, as applicable.  The initial aggregate amount
of the Lenders’ Term Loan Commitments is $50,000,000.

       

      “Term Loan Lender”
means a Lender with a  Term Loan Commitment or an outstanding Term
Loan.

       

      “Term Loan Maturity
Date” means August 11, 2013.

       

      “Term Loans” means
Loans made pursuant to clause (a) of Section
2.01.

       

      “Transactions” means
(a) the execution, delivery and performance by each Loan Party of the Loan
Documents to which it is to be a party, the borrowing of Loans, the use of the
proceeds thereof and the issuance of Letters of Credit hereunder and (b) the
execution, delivery and performance by each Loan Party of each other document
and instrument required to satisfy the conditions precedent to the initial Loan
hereunder.

       

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

       

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

       

      SECTION
1.02. Classification of Loans and
Borrowings.  For purposes of this Agreement, Loans may be
classified and referred to by Class (e.g., a “Revolving Loan”) or by Type (e.g.,
a “Eurodollar Loan”) or by Class and Type (e.g., a “Eurodollar Revolving
Loan”).  Borrowings also may be classified and referred to by Class
(e.g., a “Revolving Borrowing”) or by Type (e.g., a “Eurodollar Borrowing”) or
by Class and Type (e.g., a “Eurodollar Revolving Borrowing”).

       

      SECTION
1.03. Terms
Generally.  The definitions of terms herein shall apply equally
to the singular and plural forms of the terms defined.  Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms.  The words “include”, “includes” and
“including” shall be deemed to be followed by the phrase “without
limitation”.  The word “will” shall be construed to have the same
meaning and effect as the word “shall”.  Unless the context requires
otherwise (a) any definition of or reference to any agreement, instrument or
other document herein shall be construed as referring to such agreement,
instrument or other document as from time to time amended, supplemented or
otherwise modified (subject to any restrictions on such amendments, supplements
or modifications set forth herein), (b) any reference herein to any Person shall
be construed to include
such Person’s successors and assigns, (c) the words “herein”, “hereof” and
“hereunder”, and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all
references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement and (e) the words “asset” and “property” shall be construed to
have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities, Accounts and
contract rights.

       

       

      
        
           

        

        
          18

          
            

          

        

        
           

        

      

            
SECTION 1.04. Accounting Terms;
GAAP.  Except as otherwise expressly provided herein, all terms
of an accounting or financial nature shall be construed in accordance with GAAP,
as in effect from time to time; provided that, if the Borrower notifies the
Administrative Agent that the Borrower requests an amendment to any provision
hereof to eliminate the effect of any change occurring after the date hereof in
GAAP or in the application thereof on the operation of such provision (or if the
Administrative Agent notifies the Borrower that the Required Lenders request an
amendment to any provision hereof for such purpose), regardless of whether any
such notice is given before or after such change in GAAP or in the application
thereof, then such provision shall be interpreted on the basis of GAAP as in
effect and applied immediately before such change shall have become effective
until  such notice shall have been withdrawn or such
provision  amended in accordance herewith.

       

      ARTICLE
II

       

      The
Credits

       

      SECTION
2.01. Commitments.  Subject
to the terms and conditions set forth herein, each Lender agrees (a) to make a
Term Loan to the Borrower on the Effective Date in a principal amount not
exceeding its Term Loan Commitment, and (b) to make Revolving Loans to the
Borrower from time to time during the Revolving Availability Period in an
aggregate principal amount that will not result in such Lender’s Revolving
Exposure exceeding such Lender’s Revolving Commitment.  Within the
foregoing limits and subject to the terms and conditions set forth herein, the
Borrower may borrow, prepay and reborrow Revolving Loans.  Amounts
repaid in respect of Term Loans may not be reborrowed.

       

      SECTION
2.02. Loans and
Borrowings.

       

      (a) Each Loan
(other than a Swingline Loan) shall be made as part of a Borrowing consisting of
Loans of the same Class and Type made by the Lenders ratably in accordance with
their respective Commitments of the applicable Class.  The failure of
any Lender to make any Loan required to be made by it shall not relieve any
other Lender of its obligations hereunder; provided that the Commitments of the
Lenders are several and no Lender shall be responsible for any other Lender’s
failure to make Loans as required.  The Loans made by each Lender
shall be evidenced by a single Note of Borrower (each, together with all
renewals, extensions, modifications and replacements thereof and substitutions
therefor, a “Note,” collectively,
the “Notes”) in
substantially the forms of Exhibit C-1
(Revolving Loans) Exhibit C-2
(Swingline Loans), and Exhibit C-3 (Term
Loans), respectively, payable to the order of such Lender in a principal amount
equal to the applicable Commitment of such Lender with respect to Revolving
Loans and Term Loans, and in the principal amount of $10,000,000 with respect to
Swingline Loans and otherwise duly completed.  Each Lender is hereby
authorized by Borrower to endorse on the
schedule (or a continuation thereof) that may be attached to each Note of such
Lender, to the extent applicable, the date, amount, type of and the applicable
period of interest for each Loan made by such Lender to Borrower hereunder, and
the amount of each payment or prepayment of principal of such Loan received by
such Lender, provided, that any failure by such Lender to make any such
endorsement shall not affect the obligations of Borrower under such Note or
hereunder in respect of such Loan.

      
        
           

        

        
          19

          
            

          

        

        
           

        

      

      (b) Subject
to Section
2.13, each Revolving Borrowing and Term Loan Borrowing shall be comprised
entirely of ABR Loans or Eurodollar Loans as the Borrower may request in
accordance herewith.  Each Swingline Loan shall be an ABR
Loan.  Each Lender at its option may make any Eurodollar Loan by
causing any domestic or foreign branch or Affiliate of such Lender to make such
Loan; provided that any exercise of such option shall not affect the obligation
of the Borrower to repay such Loan in accordance with the terms of this
Agreement.

       

      (c) At the
commencement of each Interest Period for any Eurodollar Borrowing, such
Borrowing shall be in an aggregate amount equal to $500,000 or an amount that is
an integral multiple of $100,000 in excess thereof.  At the time that
each ABR Revolving Borrowing is made, such Borrowing shall be in an aggregate
amount $500,000 or an amount that is an integral multiple of $100,000 in excess
thereof; provided that an ABR Revolving Borrowing may be in an aggregate amount
that is equal to the entire unused balance of the total Revolving Commitments or
that is required to finance the reimbursement of an LC Disbursement as
contemplated by Section
2.04(e).  Except as may be permitted under Section 2.19(d)
hereof, each Swingline Loan shall be in an amount that is an integral multiple
of $25,000.  Borrowings of more than one Type and Class may be
outstanding at the same time; provided that there shall not at any time be more
than a total of eight (8) Eurodollar Borrowings outstanding.

       

      (d) Notwithstanding
any other provision of this Agreement, the Borrower shall not be entitled to
request, or to elect to convert or continue, any Borrowing if the Interest
Period requested with respect thereto would end after the Revolving Maturity
Date or Term Loan Maturity Date, as applicable.

       

      SECTION
2.03. Requests for
Borrowings.  To request a Revolving Borrowing or Term Loan
Borrowing, the Borrower shall notify the Administrative Agent of such request by
telephone (a) in the case of a Eurodollar Borrowing, not later than 11:00 a.m.,
Houston, Texas time, three Business Days before the date of the proposed
Borrowing and (b) in the case of an ABR Borrowing, not later than 11:00 a.m.,
Houston, Texas time, one Business Day before the date of the proposed Borrowing;
provided that any such notice of an ABR Revolving Borrowing to finance the
reimbursement of an LC Disbursement as contemplated by Section 2.04(e) may
be given not later than 10:00 a.m., Houston, Texas time, on the date of the
proposed Borrowing.  Each such telephonic Borrowing Request shall be
irrevocable and shall be confirmed promptly by hand delivery or telecopy to the
Administrative Agent of a written Borrowing Request in a form approved by the
Administrative Agent and signed by the Borrower.  Each such telephonic
and written Borrowing Request shall specify the following information in
compliance with Section 2.02: whether
the requested Borrowing is to be a Revolving Borrowing or Term Loan
Borrowing;

       

      (i) the
aggregate amount of the requested Borrowing;

       

      
        
           

        

        
          20

          
            

          

        

        
           

        

      

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

       

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

       

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

       

      (iv) the
location and number of the Borrower’s account to which funds are to be
disbursed, which shall comply with the requirements of Section
2.05(a).

       

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

       

      SECTION
2.04. Letters of
Credit.

       

      (a) General.  Subject
to the terms and conditions set forth herein, the Borrower may request the
issuance of Letters of Credit for its own account, in a form reasonably
acceptable to the Administrative Agent and the Issuing Bank, at any time and
from time to time during the Revolving Availability Period.  In the
event of any inconsistency between the terms and conditions of this Agreement
and the terms and conditions of any form of letter of credit application or
other agreement submitted by the Borrower to, or entered into by the Borrower
with, the Issuing Bank relating to any Letter of Credit, the terms and
conditions of this Agreement shall control.

       

      (b) Notice of Issuance,
Amendment, Renewal, Extension; Certain Conditions.  To request
the issuance of a Letter of Credit (or the amendment, renewal or extension of an
outstanding Letter of Credit), the Borrower shall hand deliver or telecopy (or
transmit by electronic communication, if arrangements for doing so have been
approved by the Issuing Bank) to the Issuing Bank and the Administrative Agent
(at least five Business Days in advance of the requested date of issuance,
amendment, renewal or extension) a notice requesting the issuance of a Letter of
Credit, or identifying the Letter of Credit to be amended, renewed or extended,
and specifying the date of issuance, amendment, renewal or extension (which
shall be a Business Day), the date on which such Letter of Credit is to expire
(which shall comply with paragraph (c) of this Section), the amount of such
Letter of Credit, the name and address of the beneficiary thereof and such other
information as shall be necessary to prepare, amend, renew or extend such Letter
of Credit.  If requested by the Issuing Bank, the Borrower also shall
submit a letter of credit application on the Issuing Bank’s standard form in
connection with any request for a Letter of Credit.  A Letter of
Credit shall be issued, amended, renewed or extended only if (and upon issuance,
amendment, renewal or extension of each Letter of Credit the Borrower shall be
deemed to represent and warrant that), after giving effect to such issuance,
amendment, renewal
or extension the total Revolving Exposures shall not exceed the total Revolving
Commitments.

       

      
        
           

        

        
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(c) Expiration
Date.  Each Letter of Credit shall expire at or prior to the
close of business on the date that is five Business Days prior to the Revolving
Maturity Date.

       

      (d) Participations.  By
the issuance of a Letter of Credit (or an amendment to a Letter of Credit
increasing the amount thereof) and without any further action on the part of the
Issuing Bank or the Lenders, the Issuing Bank hereby grants to each Revolving
Lender, and each Revolving Lender hereby acquires from the Issuing Bank, a
participation in such Letter of Credit equal to such Lender’s Applicable
Percentage of the aggregate amount available to be drawn under such Letter of
Credit.  In consideration and in furtherance of the foregoing, each
Revolving Lender hereby absolutely and unconditionally agrees to pay to the
Administrative Agent, for the account of the Issuing Bank, such Lender’s
Applicable Percentage of each LC Disbursement made by the Issuing Bank and not
reimbursed by the Borrower on the date due as provided in paragraph (e) of this
Section, or of any reimbursement payment required to be refunded to the Borrower
for any reason.  Each Lender acknowledges and agrees that its
obligation to acquire participations pursuant to this paragraph in respect of
Letters of Credit is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including any amendment, renewal or extension of any
Letter of Credit or the occurrence and continuance of a Default or reduction or
termination of the Commitments, and that each such payment shall be made without
any offset, abatement, withholding or reduction whatsoever.

       

      (e) Reimbursement.  If
the Issuing Bank shall make any LC Disbursement in respect of a Letter of
Credit, the Borrower shall reimburse such LC Disbursement by paying to the
Administrative Agent an amount equal to such LC Disbursement not later than 2:00
p.m., Houston, Texas time, on the date that such LC Disbursement is made, if the
Borrower shall have received notice of such LC Disbursement prior to 10:00 a.m.,
Houston, Texas time, on such date, or, if such notice has not been received by
the Borrower prior to such time on such date, then not later than 2:00 p.m.,
Houston, Texas time, on (i) the Business Day that the Borrower receives such
notice, if such notice is received prior to 10:00 a.m., Houston, Texas time, on
the day of receipt, or (ii) the Business Day immediately following the day that
the Borrower receives such notice, if such notice is not received prior to such
time on the day of receipt; provided that the Borrower may, subject to the
conditions to borrowing set forth herein, request in accordance with this
Agreement that such payment be financed with an ABR Revolving Borrowing or
Swingline Loan in an equivalent amount and, to the extent so financed, the
Borrower’s obligation to make such payment shall be discharged and replaced by
the resulting ABR Revolving Borrowing or Swingline Loan.  If the
Borrower fails to make such payment when due, the Administrative Agent shall
notify each Revolving Lender of the applicable LC Disbursement, the payment then
due from the Borrower in respect thereof and such Lender’s Applicable Percentage
thereof.  Promptly following receipt of such notice, each Revolving
Lender shall pay to the Administrative Agent its Applicable Percentage of the
payment then due from the Borrower, in the same manner as provided in Section 2.05 with
respect to Loans made by such Lender (and Section 2.05 shall
apply, mutatis mutandis, to the payment obligations of the Revolving Lenders),
and the Administrative Agent shall promptly pay to the Issuing Bank the amounts
so received by it from the Revolving Lenders.  Promptly following
receipt by the Administrative Agent of any payment from the Borrower pursuant to
this paragraph, the Administrative Agent shall
distribute such payment to the Issuing Bank or, to the extent that Revolving
Lenders have made payments pursuant to this paragraph to reimburse the Issuing
Bank, then to such Lenders and the Issuing Bank as their interests may
appear.  Any payment made by a Revolving Lender pursuant to this
paragraph to reimburse the Issuing Bank for any LC Disbursement (other than the
funding of ABR Revolving Loans or Swingline Loan as contemplated above) shall
not constitute a Loan and shall not relieve the Borrower of its obligation to
reimburse such LC Disbursement.

       

      
        
           

        

        
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      (f) Obligations
Absolute.  The Borrower’s obligation to reimburse LC
Disbursements as provided in paragraph (e) of this Section shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement under any and all circumstances whatsoever and
irrespective of (i) any lack of validity or enforceability of any Letter of
Credit or this Agreement, or any term or provision therein, (ii) any draft or
other document presented under a Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein being untrue or
inaccurate in any respect, (iii) payment by the Issuing Bank under a Letter of
Credit against presentation of a draft or other document that does not comply
with the terms of such Letter of Credit, or (iv) any other event or circumstance
whatsoever, whether or not similar to any of the foregoing, that might, but for
the provisions of this Section, constitute a legal or equitable discharge of, or
provide a right of setoff against, the Borrower’s obligations
hereunder.  Neither the Administrative Agent, the Lenders nor the
Issuing Bank, nor any of their Related Parties, shall have any liability or
responsibility by reason of or in connection with the issuance or transfer of
any Letter of Credit or any payment or failure to make any payment thereunder
(irrespective of any of the circumstances referred to in the preceding
sentence), or any error, omission, interruption, loss or delay in transmission
or delivery of any draft, notice or other communication under or relating to any
Letter of Credit (including any document required to make a drawing thereunder),
any error in interpretation of technical terms or any consequence arising from
causes beyond the control of the Issuing Bank; provided that the foregoing shall
not be construed to excuse the Issuing Bank from liability to the Borrower to
the extent of any direct damages (as opposed to consequential damages, claims in
respect of which are hereby waived by the Borrower to the extent permitted by
applicable law) suffered by the Borrower that are caused by the Issuing Bank’s
failure to exercise care when determining whether drafts and other documents
presented under a Letter of Credit comply with the terms thereof.  The
parties hereto expressly agree that, in the absence of gross negligence or
willful misconduct on the part of the Issuing Bank (as finally determined by a
court of competent jurisdiction), the Issuing Bank shall be deemed to have
exercised care in each such determination.  In furtherance of the
foregoing and without limiting the generality thereof, the parties agree that,
with respect to documents presented which appear on their face to be in
substantial compliance with the terms of a Letter of Credit, the Issuing Bank
may, in its sole discretion, either accept and make payment upon such documents
without responsibility for further investigation, regardless of any notice or
information to the contrary, or refuse to accept and make payment upon such
documents if such documents are not in strict compliance with the terms of such
Letter of Credit.

       

      
        
           

        

        
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      Disbursement
Procedures.  The Issuing Bank shall, promptly following its
receipt thereof, examine all documents purporting to represent a demand for
payment under a Letter of Credit.  The Issuing Bank shall promptly
notify the Administrative Agent and the Borrower by telephone (confirmed by
telecopy) of such demand for payment and whether the Issuing Bank has made or
will make an LC Disbursement thereunder; provided that any failure to give or
delay in giving such notice shall not relieve the Borrower of its obligation to
reimburse the Issuing Bank and the Revolving Lenders with respect to any such LC
Disbursement.

       

      (g) Interim
Interest.  If the Issuing Bank shall make any LC Disbursement,
then, unless the Borrower shall reimburse such LC Disbursement in full on the
date such LC Disbursement is made, the unpaid amount thereof shall bear
interest, for each day from and including the date such LC Disbursement is made
to but excluding the date that the Borrower reimburses such LC Disbursement, at
the rate per annum then applicable to ABR Revolving Loans; provided that, if the
Borrower fails to reimburse such LC Disbursement when due pursuant to paragraph
(e) of this Section, then Section 2.12(c) shall
apply.  Interest accrued pursuant to this paragraph shall be for the
account of the Issuing Bank, except that interest accrued on and after the date
of payment by any Revolving Lender pursuant to paragraph (e) of this Section to
reimburse the Issuing Bank shall be for the account of such Lender to the extent
of such payment.

       

      (h) Replacement of the Issuing
Bank.  The Issuing Bank may be replaced at any time by written
agreement among the Borrower, the Administrative Agent, the replaced Issuing
Bank and the successor Issuing Bank.  The Administrative Agent shall
notify the Lenders of any such replacement of the Issuing Bank.  At
the time any such replacement shall become effective, the Borrower shall pay all
unpaid fees accrued for the account of the replaced Issuing Bank pursuant to
Section
2.11(b).  From and after the effective date of any such
replacement, (i) the successor Issuing Bank shall have all the rights and
obligations of the Issuing Bank under this Agreement with respect to Letters of
Credit to be issued thereafter and (ii) references herein to the term “Issuing
Bank” shall be deemed to refer to such successor or to any previous Issuing
Bank, or to such successor and all previous Issuing Banks, as the context shall
require.  After the replacement of an Issuing Bank hereunder, the
replaced Issuing Bank shall remain a party hereto and shall continue to have all
the rights and obligations of an Issuing Bank under this Agreement with respect
to Letters of Credit issued by it prior to such replacement, but shall not be
required to issue additional Letters of Credit.

       

      (i) Cash
Collateralization.  If any Event of Default shall occur and be
continuing, on the Business Day that the Borrower receives notice from the
Administrative Agent or the Required Lenders demanding the deposit of cash
collateral pursuant to this paragraph, the Borrower shall deposit in an account
with the Administrative Agent, in the name of the Administrative Agent and for
the benefit of the Lenders, an amount in cash equal to the LC Exposure as of
such date plus
any accrued and unpaid interest thereon; provided that the obligation to deposit
such cash collateral shall become effective immediately, and such deposit shall
become immediately due and payable, without demand or other notice of any kind,
upon the occurrence of any Event of Default with respect to the Borrower
described in clauses
(h) or (i) of Article
VII.  The Borrower also shall deposit cash collateral pursuant
to this paragraph as and to the extent required by Section
2.10(b).  

      
        
           

        

        
          24

          
            

          

        

        
           

        

      

      Each such
deposit shall be held by the Administrative Agent as collateral for the payment
and performance of the obligations of the Borrower under this
Agreement.  The Administrative Agent shall have exclusive dominion and
control, including the exclusive right of withdrawal, over such
account.  Other than any interest earned on the investment of such
deposits, which investments shall be made at the option and sole discretion of
the Administrative Agent and at the Borrower’s risk and expense, such deposits
shall not bear interest.  Interest or profits, if any, on such
investments shall accumulate in such account.  Moneys in such account
shall be applied by the Administrative Agent to reimburse the Issuing Bank for
LC Disbursements for which it has not been reimbursed and, to the extent not so
applied, shall be held for the satisfaction of the reimbursement obligations of
the Borrower for the LC Exposure at such time or, if the maturity of the Loans
has been accelerated (but subject to the consent of the Required Lenders), be
applied to satisfy other obligations of the Borrower under this
Agreement.  If the Borrower is required to provide an amount of cash
collateral hereunder as a result of the occurrence of an Event of Default, such
amount (to the extent not applied as aforesaid) shall be returned to the
Borrower within three Business Days after all Events of Default have been cured
or waived.  If the Borrower is required to provide an amount of cash
collateral hereunder pursuant to Section 2.10(b), such
amount (to the extent not applied as aforesaid) shall be returned to the
Borrower as and to the extent that, after giving effect to such return, the
Borrower would remain in compliance with Section 2.10(b) and
no Default shall have occurred and be continuing.

       

      SECTION
2.05. Funding of
Borrowings.

       

      (a) Each
Lender shall make each Loan to be made by it hereunder on the proposed date
thereof by wire transfer of immediately available funds by 12:00 noon, Houston,
Texas time, to the account of the Administrative Agent most recently designated
by it for such purpose by notice to the Lenders; provided that Swingline Loans
shall be made as provided in Section
2.19.  The Administrative Agent will make such Loans available
to the Borrower by promptly crediting the amounts so received, in like funds, to
an account of the Borrower maintained with the Administrative Agent in Houston,
Texas and designated by the Borrower in the applicable Borrowing Request;
provided that ABR Revolving Loans made to finance the reimbursement of an LC
Disbursement as provided in Section 2.04(e) shall
be remitted by the Administrative Agent to the Issuing Bank.

       

      (b) Unless
the Administrative Agent shall have received notice from a Lender prior to the
proposed date of any Borrowing that such Lender will not make available to the
Administrative Agent such Lender’s share of such Borrowing, the Administrative
Agent may assume that such Lender has made such share available on such date in
accordance with paragraph (a) of this Section and may, in reliance upon such
assumption, make available to the Borrower a corresponding amount.  If
a Lender has not in fact made its share of the applicable Borrowing available to
the Administrative Agent, then the applicable Lender and the Borrower severally
agree to pay to the Administrative Agent forthwith on demand such corresponding
amount with interest thereon, for each day from and including the date such
amount is made available to the Borrower to but excluding the date of payment to
the Administrative Agent, at (i) in the case of such Lender, the greater of the
Federal Funds Effective Rate and a rate determined by the Administrative Agent
in accordance with banking industry rules on interbank compensation or (ii) in
the case of the Borrower, the interest rate applicable to ABR
Loans.  If such Lender pays such amount to the Administrative Agent,
then such amount shall constitute such Lender’s Loan included in such
Borrowing.

       

      
        
           

        

        
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      Interest
Elections.

       

      (c) Each
Revolving Borrowing and Term Loan Borrowing initially shall be of the Type
specified in the applicable Borrowing Request and, in the case of a Eurodollar
Borrowing, shall have an initial Interest Period as specified in such Borrowing
Request.  Thereafter, the Borrower may elect to convert such Borrowing
to a different Type or to continue such Borrowing and, in the case of a
Eurodollar Borrowing, may elect Interest Periods therefor, all as provided in
this Section.  The Borrower may elect different options with respect
to different portions of the affected Borrowing, in which case each such portion
shall be allocated ratably among the Lenders holding the Loans comprising such
Borrowing, and the Loans comprising each such portion shall be considered a
separate Borrowing.  This Section shall not apply to Swingline
Borrowings, which may not be converted or continued.

       

      (d) To make
an election pursuant to this Section, the Borrower shall notify the
Administrative Agent of such election by telephone by the time that a Borrowing
Request would be required under Section 2.03 if the
Borrower were requesting a Revolving Borrowing of the Type resulting from such
election to be made on the effective date of such election.  Each such
telephonic Interest Election Request shall be irrevocable and shall be confirmed
promptly by hand delivery or telecopy to the Administrative Agent of a written
Interest Election Request in a form approved by the Administrative Agent and
signed by the Borrower.

       

      (e) Each
telephonic and written Interest Election Request shall specify the following
information:

       

      (i) the
Borrowing to which such Interest Election Request applies and, if different
options are being elected with respect to different portions thereof, the
portions thereof to be allocated to each resulting Borrowing (in which case the
information to be specified pursuant to clauses (iii) and
(iv) below
shall be specified for each resulting Borrowing);

       

      (ii) the
effective date of the election made pursuant to such Interest Election Request,
which shall be a Business Day;

       

      (iii) whether
the resulting Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing;
and

       

      (iv) if the
resulting Borrowing is a Eurodollar Borrowing, the Interest Period to be
applicable thereto after giving effect to such election, which shall be a period
contemplated by the definition of the term “Interest Period”.

       

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

       

      (f) Promptly
following receipt of an Interest Election Request, the Administrative Agent
shall advise each Lender of the details thereof and of such Lender’s portion of
each resulting Borrowing.  If the
Borrower fails to deliver a timely Interest Election Request with respect to a
Eurodollar Borrowing prior to the end of the Interest Period applicable thereto,
then, unless such Borrowing is repaid as provided herein, at the end of such
Interest Period such Borrowing shall be converted to an ABR
Borrowing.  Notwithstanding any contrary provision hereof, if an Event
of Default has occurred and is continuing and the Administrative Agent, at the
request of the Required Lenders, so notifies the Borrower, then, so long as an
Event of Default is continuing (i) no outstanding Borrowing may be converted to
or continued as a Eurodollar Borrowing and (ii) unless repaid, each Eurodollar
Borrowing shall be converted to an ABR Borrowing at the end of the Interest
Period applicable thereto.

      
        
           

        

        
          26

          
            

          

        

        
           

        

      

       

      (g) A
Borrowing of any Class may not be converted to or continued as a Eurodollar
Borrowing if after giving effect thereto the sum of the aggregate principal
amount of outstanding Eurodollar Borrowings of such Class with Interest Periods
ending on or prior to such scheduled repayment date plus the aggregate principal
amount of outstanding ABR Borrowings of such Class would be less than the
aggregate principal amount of Loans of such Class required to be repaid on a
scheduled repayment date.

       

      SECTION
2.06. Termination, Reduction and
Increase of Commitments.

       

      (a) Unless
previously terminated, (i) the Term Loan Commitments shall terminate at 5:00
p.m., Houston, Texas time, on the Effective Date and (ii) the Revolving
Commitments shall terminate on the Revolving Maturity Date.

       

      (b) The
Borrower may at any time terminate, or from time to time reduce, the Commitments
of any Class; provided that (i) each reduction of the Commitments of any Class
shall be in an amount that is an integral multiple of $1,000,000 and (ii) the
Borrower shall not terminate or reduce the Revolving Commitments if, after
giving effect to any concurrent prepayment of the Revolving Loans in accordance
with Section
2.10, the sum of the Revolving Exposures would exceed the total Revolving
Commitments.

       

      (c) The
Borrower shall notify the Administrative Agent of any election to terminate or
reduce the Commitments under paragraph (b) of this Section, at least three
Business Days prior to the effective date of such termination or reduction,
specifying such election and the effective date thereof.  Promptly
following receipt of any notice, the Administrative Agent shall advise the
Lenders of the contents thereof.  Each notice delivered by the
Borrower pursuant to this Section shall be irrevocable; provided that a notice
of termination of the Commitments delivered by the Borrower may state that such
notice is conditioned upon the effectiveness of other credit facilities, in
which case such notice may be revoked by the Borrower (by notice to the
Administrative Agent on or prior to the specified effective date) if such
condition is not satisfied.  Any termination or reduction of the
Commitments of any Class shall be permanent.  Each reduction of the
Commitments of any Class shall be made ratably among the Lenders in accordance
with their respective Commitments of such Class.

       

      (d) At any
time prior to the expiration of the Revolving Availability Period, and so long
as no Event of Default shall have occurred which is continuing, the Borrower may
elect to increase the aggregate of the Revolving Commitments to an amount not
exceeding the Maximum Accordion Amount minus any reductions
in the Revolving Commitments pursuant to Section2.07(b) hereof,
provided that (i) no Lender shall be required to increase its Revolving
Commitment unless it shall have expressly agreed to such increase in writing
(but otherwise, no notice to or consent by any Lender shall be required,
notwithstanding anything to the contrary set forth in Section 9.02 hereof),
(ii) the addition of new Lenders shall be subject to the terms and provisions of
Section 9.04
hereof as if such new Lenders were acquiring an interest in the Loans by
assignment from an existing Lenders (to the extent applicable, i.e. required
approvals, minimum amounts and the like), (iii) the Borrower shall execute and
deliver such additional or replacement Notes and such other documentation
(including evidence of proper authorization) as may be reasonably requested by
the Administrative Agent, any new Lender or any Lender which is increasing its
Revolving Commitment, (iv) no Lender shall have any right to decrease its
Revolving Commitment as a result of such increase of the aggregate amount of the
Revolving Commitments, (v) the Administrative Agent shall have no obligation to
arrange, find or locate any Lender or new bank or financial institution to
participate in any unsubscribed portion of such increase in the aggregate
committed amount of the Revolving Commitments, and (vi) such option to increase
the Revolving Commitments may only be exercised once.  The Borrower
shall be required to pay (or to reimburse each applicable Lender for) any
breakage costs incurred by any Lender in connection with the need to reallocate
existing Loans among the Lenders following any increase in the Revolving
Commitments pursuant to this provision.  Except as may otherwise be
agreed by the Borrower and any applicable Lender, the Borrower shall not be
required to pay any upfront or other fees or expenses to any existing Lenders,
new Lenders or the Administrative Agent with respect to any such increase in
Revolving Commitments.

       

      SECTION
2.07. Repayment of Loans; Evidence
of Debt.

       

      (a) The
Borrower hereby unconditionally promises to pay (i) to the Administrative Agent
for the account of each Revolving Lender the then unpaid principal amount of
each Revolving Loan of such Revolving Lender on the Revolving Maturity Date and
(ii) to the Administrative Agent for the account of each Term Loan Lender the
then unpaid principal amount of each Term Loan of such Term Loan Lender as
provided in Section
2.09 and (iii)  to the Swingline Lender the then unpaid
principal amount of each Swingline Loan on the earlier of the Revolving Maturity
Date and the first date after such Swingline Loan is made that is the 15th or
last day of a calendar month and is at least two Business Days after such
Swingline Loan is made; provided that on each date that a Revolving Borrowing is
made, the Borrower shall repay all Swingline Loans then outstanding; provided
further, that no payment of any Swingline Loan under the foregoing provisions
shall be required so long as the aggregate unpaid principal balance of all
Swingline Loans is less than $5,000,000.

       

      
        
           

        

        
          27

          
            

          

        

        
           

        

      

      
        (b) Each
Lender shall maintain in accordance with its usual practice an account or
accounts evidencing the indebtedness of the Borrower to such Lender resulting
from each Loan made by such Lender, including the amounts of principal and
interest payable and paid to such Lender from time to time
hereunder.

         

        (c) The
Administrative Agent shall maintain accounts in which it shall record (i) the
amount of each Loan made hereunder, the Class and Type thereof and the Interest
Period applicable thereto, (ii) the amount of any principal or interest due and
payable or to become due and payable from the Borrower to each Lender hereunder
and (iii) the amount of any sum

        received by the Administrative Agent hereunder for the account of
the Lenders and each Lender’s share thereof.

      

       

      (d) The
entries made in the accounts maintained pursuant to paragraphs (b) or (c) of
this Section shall be prima facie evidence of the existence and amounts of the
obligations recorded therein; provided that the failure of any Lender or the
Administrative Agent to maintain such accounts or any error therein shall not in
any manner affect the obligation of the Borrower to repay the Loans in
accordance with the terms of this Agreement.

       

      SECTION
2.08. Amortization of Term
Loans.

       

      (a) On
December 31, 2008 and on each March 31, June 30, September 31 and December 31
thereafter, the Borrower shall repay Term Loan Borrowings in the aggregate
principal amount of $2,500,000.

       

      (b) To the
extent not previously paid, all Term Loans shall be due and payable on the Term
Loan Maturity Date.

       

      (c) Repayments
of Term Loan Borrowings shall be accompanied by accrued interest on the amount
repaid.

       

      SECTION
2.09. Prepayment of
Loans.

       

      (a) The
Borrower shall have the right at any time and from time to time to voluntarily
prepay any Borrowing in whole or in part, subject to the requirements of this
Section.  Each prepayment of a Term Loan shall be in an amount equal
to the lesser of (i) the entire unpaid principal balance of the Term Loans or
(ii) $500,000 or an amount that is an integral multiple of $100,000 in excess
thereof.  Each voluntary prepayment of a Term Loan shall require at
least three (3) Business Days’ advance written notice to the Administrative
Agent.  Each prepayment of the Revolving Loans shall be in an amount
equal to $500,000 or an amount that is an integral multiple of $100,000 in
excess thereof.  Accrued and unpaid interest as of the date of
prepayment shall be paid concurrently with any such prepayment.

       

      (b) In the
event and on such occasion that the sum of the Revolving Exposures exceeds the
total Revolving Commitments, the Borrower shall prepay Revolving Borrowings or
Swingline Borrowings (or, if no such Borrowings are outstanding, deposit cash
collateral in an account with the Administrative Agent pursuant to Section 2.04(j)) in
an aggregate amount equal to such excess.

       

      
        
           

        

        
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        (c) In the
event and on each occasion that any Net Proceeds are received by or on behalf of
the Borrower or any of its Subsidiaries in respect of any Prepayment Event, the
Borrower shall, within three Business Days after such Net Proceeds are received,
prepay Term Loan Borrowings in an aggregate amount equal to such Net Proceeds;
provided that, in the case of any event described in clause (a) of the
definition of the term Prepayment Event which is not a Significant Transaction,
if the Borrower shall deliver to the Administrative Agent a certificate of a
Financial Officer to the effect that the Borrower and its Subsidiaries intend to
apply the Net Proceeds from such event, within 180 days after receipt of such
Net Proceeds, to acquire real property, equipment or other tangible assets to be
used in the business of the Borrower and its Subsidiaries, and certifying
that no Default has occurred and is continuing, then no prepayment shall be
required pursuant to this paragraph in respect of such event except to the
extent of any Net Proceeds therefrom that have not been so applied by the end of
such 180 day period, at which time a prepayment shall be required in an amount
equal to the Net Proceeds that have not been so applied.  A “Significant
Transaction” is any sale, transfer or other disposition, in one
transaction or a series of related transactions, of any Equity Interest issued
by any Subsidiary of Borrower.  To the extent such prepayment would
result in the payment of breakage costs hereunder, such prepayment shall be
deferred until the last day of the applicable Interest Period or such breakage
costs shall be waived, at the election of the Required Lenders.

      

       

      (d) Following
the end of each fiscal year of the Borrower, commencing with the fiscal year
ending December 31, 2009, the Borrower shall prepay Term Loan Borrowings in an
aggregate amount equal to (x) the ECF Percentage times Excess Cash
Flow for such fiscal year minus (y) prepayments
of the Term Loans (other than prepayments made under the terms of this Section 2.10(d)) made
by the Borrower since (i) the date hereof with respect to the payment due in
2010, and (ii) since the last mandatory prepayment under this Section 2.10(d) with
respect to subsequent payments due hereunder.  Each prepayment
pursuant to this paragraph shall be made on or before the date on which
financial statements are delivered pursuant to Section 5.01 with
respect to the fiscal year for which Excess Cash Flow is being calculated (and
in any event by the next April 15th
occurring after the end of such fiscal year).

       

      (e) Any
prepayment of a Term Loan Borrowing shall be applied to reduce all of the
subsequent scheduled repayments of the Term Loan Borrowings in inverse order of
their maturity.

       

      (f) Prior to
any optional or mandatory prepayment of Borrowings hereunder, the Borrower shall
select the Borrowing or Borrowings to be prepaid and shall specify such
selection in the notice of such prepayment pursuant to this
Section.

       

      (g) The
Borrower shall notify the Administrative Agent (and, in the case of prepayment
of a Swingline Loan, the Swingline Lender) by telephone (confirmed by telecopy)
of any prepayment hereunder (i) in the case of prepayment of a Eurodollar
Revolving Borrowing, not later than 11:00 a.m., Houston, Texas time, three
Business Days before the date of prepayment or (ii) in the case of prepayment of
an ABR Revolving Borrowing, not later than 11:00 a.m., Houston, Texas time, one
Business Day before the date of prepayment or (iii) in the case of prepayment of
a Swingline Loan, not later than 12:00 noon, Houston, Texas time, on the date of
prepayment.  Each such notice shall be irrevocable and shall specify
the prepayment date, the principal amount of each Borrowing or portion thereof
to be prepaid and, in the case of a mandatory prepayment, a reasonably detailed
calculation of the amount of such prepayment; provided that, if a notice of
optional prepayment is given in connection with a conditional notice of
termination of the Revolving Commitments as contemplated by Section 2.07, then
such notice of prepayment may be revoked if such notice of termination is
revoked in accordance with Section
2.07.  Promptly following receipt of any such notice (other
than a notice relating solely to Swingline Loans), the Administrative Agent
shall advise the Lenders of the contents thereof.

       

      
        
           

        

        
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      Fees.

       

      (h) The
Borrower agrees to pay to the Administrative Agent for the account of each
Lender a commitment fee, which shall accrue at the Applicable Rate on the
average daily unused amount of the Revolving Commitment of such Lender during
the period from and including the date hereof to but excluding the date on which
such Revolving Commitment terminates.  Accrued commitment fees shall
be payable in arrears on the last day of March, June, September and December of
each year and on the date on which the Revolving Commitments terminate,
commencing on the first such date to occur after the date hereof.  All
commitment fees shall be computed on the basis of a year of 360 days and shall
be payable for the actual number of days elapsed (including the first day but
excluding the last day).  For purposes of computing such commitment
fees, a Revolving Commitment of a Lender shall be deemed to be used to the
extent of the outstanding Revolving Loans and LC Exposure of such Lender (and
the Swingline Exposure of such Lender shall be disregarded for such
purpose).

       

      (i) The
Borrower agrees to pay (i) to the Administrative Agent for the account of each
Revolving Lender a participation fee with respect to its participations in
Letters of Credit, which shall accrue at the same Applicable Rate used to
determine the interest rate applicable to Eurodollar Revolving Loans on the
average daily amount of such Lender’s LC Exposure (excluding any portion thereof
attributable to unreimbursed LC Disbursements) during the period from and
including the Effective Date to but excluding the later of the date on which
such Lender’s Revolving Commitment terminates and the date on which such Lender
ceases to have any LC Exposure and (ii) to the Issuing Bank a fronting fee,
which shall accrue at the rate of 0.125% per annum on the average daily amount
of the LC Exposure (excluding any portion thereof attributable to unreimbursed
LC Disbursements) during the period from and including the Effective Date to but
excluding the later of the date of termination of the Revolving Commitments and
the date on which there ceases to be any LC Exposure (provided, however, that in
no event shall such fronting fee for any single Letter of Credit be less than
$500), as well as the Issuing Bank’s standard fees with respect to the
amendment, renewal or extension of any Letter of Credit or processing of
drawings thereunder.  Participation fees accrued through and including
the last day of March, June, September and December of each year shall be
payable on the third Business Day following such last day, commencing on the
first such date to occur after the Effective Date; provided that all such fees
shall be payable on the date on which the Revolving Commitments terminate and
any such fees accruing after the date on which the Revolving Commitments
terminate shall be payable on demand.  Fronting fees with respect to
any Letter of Credit shall be payable in advance upon issuance of such Letter of
Credit.  Any other fees payable to the Issuing Bank pursuant to this
paragraph shall be payable within 10 days after demand.  All
participation fees and fronting fees shall be computed on the basis of a year of
360 days and shall be payable for the actual number of days elapsed (including
the first day but excluding the last day).

       

      (j) The
Borrower agrees to pay to the Administrative Agent, for its own account, fees
payable in the amounts and at the times separately agreed upon between the
Borrower and the Administrative Agent.

       

      
        
           

        

        
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        (k) All fees
payable hereunder shall be paid on the dates due, in immediately available
funds, to the Administrative Agent (or to the Issuing Bank, in the case of fees
payable to it) for distribution, in the case of commitment fees and
participation fees, to the Lenders entitled thereto.  Fees paid shall
not be refundable under any circumstances.

      

       

      SECTION
2.10. Interest.

       

      (a) The Loans
comprising each ABR Borrowing (including each Swingline Loan) shall bear
interest at the lesser of (i) the Alternate Base Rate plus the Applicable
Rate or (ii) the Ceiling Rate.

       

      (b) The Loans
comprising each Eurodollar Borrowing shall bear interest at the lesser of (i)
the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing
plus the
Applicable Rate or (ii) the Ceiling Rate.

       

      (c) Notwithstanding
the foregoing, if any principal of or interest on any Loan or any fee or other
amount payable by the Borrower hereunder is not paid when due, whether at stated
maturity, upon acceleration or otherwise, such overdue amount shall bear
interest, after as well as before judgment, at a rate per annum equal to the
lesser of (i) the Ceiling Rate or (ii) in the case of overdue principal of any
Loan, 2% plus
the rate otherwise applicable to such Loan as provided in the preceding
paragraphs of this Section or in the case of any other amount, 2% plus the rate
applicable to ABR Revolving Loans as provided in paragraph (a) of this
Section.

       

      (d) Accrued
interest on each Loan shall be payable in arrears on each Interest Payment Date
for such Loan and, in the case of Revolving Loans, upon termination of the
Revolving Commitments; provided that (i) interest accrued pursuant to paragraph
(c) of this Section shall be payable on demand, (ii) in the event of any
repayment or prepayment of any Loan (other than a prepayment of an ABR Revolving
Loan prior to the end of the Revolving Availability Period), accrued interest on
the principal amount repaid or prepaid shall be payable on the date of such
repayment or prepayment and (iii) in the event of any conversion of any
Eurodollar Loan prior to the end of the current Interest Period therefor,
accrued interest on such Loan shall be payable on the effective date of such
conversion.

       

      (e) All
interest hereunder shall be computed on the basis of a year of 360 days, except
that interest computed by reference to the Alternate Base Rate at times when the
Alternate Base Rate is based on the Prime Rate shall be computed on the basis of
a year of 365 days (or 366 days in a leap year), and in each case shall be
payable for the actual number of days elapsed (including the first day but
excluding the last day).  The applicable Alternate Base Rate or
Adjusted LIBO Rate shall be determined by the Administrative Agent, and such
determination shall be conclusive absent manifest error.

       

      SECTION
2.11. Alternate Rate of
Interest.  If prior to the commencement of any Interest Period
for a Eurodollar Borrowing:

       

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

       

      
        
           

        

        
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        (b) the
Administrative Agent is advised by the Required Lenders that the Adjusted LIBO
Rate for such Interest Period will not adequately and fairly reflect the cost to
such Lenders (or
Lender) of making or maintaining their Loans (or its Loan) included in such
Borrowing for such Interest Period; then the Administrative Agent
shall give notice thereof to the Borrower and the Lenders by telephone or
telecopy as promptly as practicable thereafter and, until the Administrative
Agent notifies the Borrower and the Lenders that the circumstances giving rise
to such notice no longer exist, (i) any Interest Election Request that requests
the conversion of any Borrowing to, or continuation of any Borrowing as, a
Eurodollar Borrowing shall be ineffective and (ii) if any Borrowing Request
requests a Eurodollar Borrowing, such Borrowing shall be made as an ABR
Borrowing; provided that if the circumstances giving rise to such notice affect
only one Type of Borrowings, then the other Type of Borrowings shall be
permitted.

      

       

      SECTION
2.12. Increased
Costs.

       

      (a) If any
Change in Law shall:

       

      (i) impose,
modify or deem applicable any reserve, special deposit or similar requirement
against assets of, deposits with or for the account of, or credit extended by,
any Lender (except any such reserve requirement reflected in the Adjusted LIBO
Rate) or the Issuing Bank; or

       

      (ii) impose on
any Lender or the Issuing Bank or the London interbank market any other
condition affecting this Agreement or Eurodollar Loans made by such Lender or
any Letter of Credit or participation therein;

       

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

       

      (b) If any
Lender or the Issuing Bank determines that any Change in Law regarding capital
requirements has or would have the effect of reducing the rate of return on such
Lender’s or the Issuing Bank’s capital or on the capital of such Lender’s or the
Issuing Bank’s holding company, if any, as a consequence of this Agreement or
the Loans made by, or participations in Letters of Credit held by, such Lender,
or the Letters of Credit issued by the Issuing Bank, to a level below that which
such Lender or the Issuing Bank or such Lender’s or the Issuing Bank’s holding
company could have achieved but for such Change in Law (taking into
consideration such Lender’s or the Issuing Bank’s policies and the policies of
such Lender’s or the Issuing Bank’s holding company with respect to capital
adequacy), then from time to time the Borrower will pay to such Lender or the
Issuing Bank, as the case may be, such additional amount or amounts as will
compensate such Lender or the Issuing Bank or such Lender’s or the Issuing
Bank’s holding company for any such reduction suffered.

       

      
        
           

        

        
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      A
certificate of a Lender or the Issuing Bank setting forth the amount or amounts
necessary to compensate such Lender or the Issuing Bank or its holding company,
as the case may be, as specified in paragraphs (a) or (b) of this Section shall
be delivered to the Borrower, demonstrating in reasonable detail the calculation
of the amounts, and shall be conclusive absent manifest error.  The
Borrower shall pay such Lender or the Issuing Bank, as the case may be, the
amount shown as due on any such certificate within 10 days after receipt
thereof.

       

      (c) Failure
or delay on the part of any Lender or the Issuing Bank to demand compensation
pursuant to this Section shall not constitute a waiver of such Lender’s or the
Issuing Bank’s right to demand such compensation; provided that the Borrower
shall not be required to compensate a Lender or the Issuing Bank pursuant to
this Section for any increased costs or reductions incurred more than 180 days
prior to the date that such Lender or the Issuing Bank, as the case may be,
notifies the Borrower of the Change in Law giving rise to such increased costs
or reductions and of such Lender’s or the Issuing Bank’s intention to claim
compensation therefor; provided further that, if the Change in Law giving rise
to such increased costs or reductions is retroactive and if such Lender or the
Issuing Bank, as the case may be, notifies the Borrower of such Change of Law
within 180 days after the adoption, enactment or similar act with respect to
such Change of Law, then the 180-day period referred to above shall be extended
to include the period from the effective date of such Change of Law to the date
of such notice.

       

      SECTION
2.13. Break Funding
Payments.  In the event of (a) the payment of any principal of
any Eurodollar Loan other than on the last day of an Interest Period applicable
thereto (including as a result of an Event of Default), (b) the conversion of
any Eurodollar Loan other than on the last day of the Interest Period applicable
thereto, (c) the failure to borrow, convert, continue or prepay any Revolving
Loan or Term Loan on the date specified in any notice delivered pursuant hereto,
or (d) the assignment of any Eurodollar Loan other than on the last day of the
Interest Period applicable thereto as a result of a request by the Borrower
pursuant to Section
2.18, then, in any such event, the Borrower shall compensate each Lender
for the loss, cost and expense attributable to such event.  Such loss,
cost or expense to any Lender shall be deemed to include an amount determined by
such Lender to be the excess, if any, of (i) the amount of interest which would
have accrued on the principal amount of such Loan had such event not occurred,
at the Adjusted LIBO Rate that would have been applicable to such Loan, for the
period from the date of such event to the last day of the then current Interest
Period therefor (or, in the case of a failure to borrow, convert or continue,
for the period that would have been the Interest Period for such Loan), over
(ii) the amount of interest which would accrue on such principal amount for such
period at the interest rate which such Lender would bid were it to bid, at the
commencement of such period, for dollar deposits of a comparable amount and
period from other banks in the Eurodollar market.  A certificate of
any Lender setting forth any amount or amounts that such Lender is entitled to
receive pursuant to this Section, demonstrating in reasonable detail the
calculation of the amounts, shall be delivered to the Borrower and shall be
conclusive absent manifest error.  The Borrower shall pay such Lender
the amount shown as due on any such certificate within 10 days after receipt
thereof.

       

      SECTION
2.14. Taxes.

       

      
        
           

        

        
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      Any and
all payments by or on account of any obligation of the Borrower hereunder or
under any other Loan Document shall be made free and clear of and without
deduction for any Indemnified Taxes or Other Taxes; provided that if the
Borrower shall be required to deduct any Indemnified Taxes or Other Taxes from
such payments, then (i) the sum payable shall be increased as necessary so that
after making all required deductions or withholdings (including deductions
applicable to additional sums payable under this Section) the Administrative
Agent, Lender or Issuing Bank (as the case may be) receives an amount equal to
the sum it would have received had no such deductions been made, (ii) the
Borrower shall make such deductions or withholdings and (iii) the Borrower shall
pay the full amount deducted or withheld to the relevant Governmental Authority
in accordance with applicable law.

       

      (a) In
addition, the Borrower shall pay any Other Taxes to the relevant Governmental
Authority in accordance with applicable law.

       

      (b) The
Borrower shall indemnify the Administrative Agent, each Lender and the Issuing
Bank, within 30 days after written demand therefor, for the full amount of any
Indemnified Taxes or Other Taxes paid by the Administrative Agent, such Lender
or the Issuing Bank, as the case may be, on or with respect to any payment by or
on account of any obligation of the Borrower hereunder or under any other Loan
Document (including Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this Section) and any penalties, interest
and reasonable expenses arising therefrom or with respect thereto, whether or
not such Indemnified Taxes or Other Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority.  A certificate as to
the amount of such payment or liability delivered to the Borrower by a Lender or
the Issuing Bank, or by the Administrative Agent on its own behalf or on behalf
of a Lender or the Issuing Bank, demonstrating in reasonable detail the
calculation of the amounts, shall be conclusive absent manifest
error.  However, neither the Administrative Agent, any Lender or the
Issuing Bank shall be entitled to receive any payment with respect to
Indemnified Taxes or Other Taxes that are incurred or accrued more than 180 days
prior to the date the Administrative Agent, such Lender or the Issuing Bank
gives notice and demand thereof to the Borrower.

       

      (c) As soon
as reasonably practicable after any payment of Indemnified Taxes or Other Taxes
by the Borrower to a Governmental Authority, the Borrower shall deliver to the
Administrative Agent the original or a certified copy of a receipt issued by
such Governmental Authority evidencing such payment, a copy of the return
reporting such payment or other evidence of such payment reasonably satisfactory
to the Administrative Agent.

       

      (d) Any
Foreign Lender that is entitled to an exemption from or reduction of withholding
tax under the law of the jurisdiction in which the Borrower is located, or any
treaty to which such jurisdiction is a party, with respect to payments under
this Agreement or any other Loan Document shall deliver to the Borrower (with a
copy to the Administrative Agent), at the time or times prescribed by applicable
law, such properly completed and executed documentation prescribed by applicable
law or reasonably requested by the Borrower as will permit such payments to be
made without withholding or at a reduced rate.  In addition, any
Lender, if requested by the Borrower or the Administrative Agent, shall deliver
such properly completed and executed documentation prescribed by applicable law
or reasonably requested by the Borrower or the Administrative Agent as will
enable the Borrower or the Administrative Agent to
determine whether or not such Lender is subject to backup withholding or
information reporting requirements.  Each Lender shall promptly (i)
notify the Borrower and the Administrative Agent of any change in circumstances
which would modify or render invalid any such claimed exemption or reduction,
and (ii) take such steps as may be reasonably necessary (including the
designation of a new lending office to the extent such designation is consistent
with such Lender’s internal policies and legal and regulatory restrictions and
so long as such action would not be disadvantageous to such Lender) to avoid any
requirement of the applicable laws of any such jurisdiction that Borrower make
any deduction or withholding for taxes from amounts payable to such
Lender.  Without limiting the generality of the foregoing, any Foreign
Lender shall deliver to the Borrower and the Administrative Agent (in such
number of copies as shall be requested by the recipient) on or prior to the date
on which such Foreign Lender becomes a Lender under this Agreement (and from
time to time thereafter upon the request of the Borrower or the Administrative
Agent, but only if such Foreign Lender is legally entitled to do so), whichever
of the following is applicable:

       

      
        
           

        

        
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      (i)           duly
completed copies of Internal Revenue Service Form W-8BEN claiming eligibility
for benefits of an income tax treaty to which the United States is a
party,

       

      (ii)           duly
completed copies of Internal Revenue Service Form W-8ECI;

       

      (iii)           in
the case of a Foreign Lender claiming the benefits of the exemption for
portfolio interest under Section 881(c) of the Code, (x) a certificate to the
effect that such Foreign Lender is not (A) a “bank” within the meaning of
Section 881(c)(3)(A) of the Code, (B) a “10 percent shareholder” of the Borrower
within the meaning of Section 881(c)(3)(B) of the Code, or (C) a “controlled
foreign corporation” described in Section 881(c)(3)(C) of the Code and (y) duly
completed copies of  Internal Revenue Service Form W-8BEN,
or

       

      (iv)           any
other form prescribed by applicable law as a basis for claiming exemption from
or a reduction in United States Federal withholding tax duly completed together
with such supplementary documentation as may be prescribed by applicable law to
permit the Borrower to determine the withholding or deduction required to be
made.

       

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

      
         

        Each
Lender shall use its best efforts (consistent with its internal policies and
legal and regulatory restrictions) to select a jurisdiction for its lending
office or change the jurisdiction of its lending office, as the case may be, so
as to avoid the imposition of any Indemnified Taxes or Other Taxes or to
eliminate or reduce the payment of any additional sums under this Section, so
long as such action would not be disadvantageous to such Lender.

         

      

      
        
           

        

        
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      SECTION
2.15. Payments Generally; Pro Rata
Treatment; Sharing of Set-offs.

       

      (a) The
Borrower shall make each payment required to be made by it hereunder or under
any other Loan Document (whether of principal, interest, fees or reimbursement
of LC Disbursements, or of amounts payable under Sections 2.14, 2.15 or 2.16, or otherwise)
at or prior to the time expressly required hereunder or under such other Loan
Document for such payment (or, if no such time is expressly required, prior to
2:00 p.m., Houston, Texas time), on the date when due, in immediately available
funds, without set off, deduction or counterclaim.  Any amounts
received after such time on any date may, in the discretion of the
Administrative Agent, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon.  All such
payments shall be made to the Administrative Agent at its offices at 1700
Lincoln Ave.,  MAC C7300-034, Denver, Colorado 80203, except payments
to be made directly to the Issuing Bank or Swingline Lender as expressly
provided herein and except that payments pursuant to Sections 2.14, 2.15, 2.16 and 9.03 shall be made
directly to the Persons entitled thereto and payments pursuant to other Loan
Documents shall be made to the Persons specified therein.  The
Administrative Agent shall distribute any such payments received by it for the
account of any other Person to the appropriate recipient promptly following
receipt thereof.  If any payment under any Loan Document shall be due
on a day that is not a Business Day, the date for payment shall be extended to
the next succeeding Business Day, and, in the case of any payment accruing
interest, interest thereon shall be payable for the period of such
extension.  All payments under each Loan Document shall be made in
dollars.

       

      (b) If at any
time insufficient funds are received by and available to the Administrative
Agent to pay fully all amounts of principal, unreimbursed LC Disbursements,
interest and fees then due hereunder, such funds shall be applied (i) first,
towards payment of interest and fees then due hereunder, ratably among the
parties entitled thereto in accordance with the amounts of interest and fees
then due to such parties, and (ii) second, towards payment of principal and
unreimbursed LC Disbursements then due hereunder, ratably among the parties
entitled thereto in accordance with the amounts of principal and unreimbursed LC
Disbursements then due to such parties.

       

      (c) If any
Lender shall, by exercising any right of set off or counterclaim or otherwise,
obtain payment in respect of any principal of or interest on any of its
Revolving Loans, Term Loans or participations in LC Disbursements or Swingline
Loans, resulting in such Lender receiving payment of a greater proportion of the
aggregate amount of its Revolving Loans, Term Loans and participations in LC
Disbursements and Swingline Loans and accrued interest thereon than the
proportion received by any other Lender, then the Lender receiving such greater
proportion shall purchase (for cash at face value) participations in the
Revolving Loans, Term Loans, LC Disbursements and Swingline Loans of other
Lenders to the extent necessary so that the benefit of all such payments shall
be shared by the Lenders ratably in accordance with the aggregate amount of
principal of and accrued interest on their respective Revolving Loans, Term
Loans and participations in LC Disbursements and Swingline Loans; provided that
(i) if any such participations are purchased and all or any portion of the
payment giving rise thereto is recovered,  such participations shall
be rescinded and the purchase price restored to the extent of such recovery,
without interest, and (ii) the provisions of this paragraph shall not be
construed to apply to any payment made by the Borrower pursuant to and in
accordance with the express terms of this Agreement or any payment obtained by a
Lender as consideration for the assignment of or sale of a participation in any
of its Loans or participations in LC Disbursements to any assignee or
participant, other than to the Borrower or any other Loan Party or Affiliate
thereof (as to which the provisions of this paragraph shall
apply).  Each Lender agrees that it will not exercise any right of
set-off or counterclaim or otherwise obtain payment in respect of any Obligation
owed to it other than principal of and interest accruing on the Loans and
participations in the LC Disbursements and Swingline Loans, unless all of the
outstanding principal of and accrued interest on the Loans and LC Disbursements
have been paid in full. The Borrower consents to the foregoing and agrees, to
the extent it may effectively do so under applicable law, that any Lender
acquiring a participation pursuant to the foregoing arrangements may exercise
against the Borrower rights of set-off and counterclaim with respect to such
participation as fully as if such Lender were a direct creditor of the Borrower
in the amount of such participation.

       

      
        
           

        

        
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      (d) Unless
the Administrative Agent shall have received notice from the Borrower prior to
the date on which any payment is due to the Administrative Agent for the account
of the Lenders or the Issuing Bank hereunder that the Borrower will not make
such payment, the Administrative Agent may assume that the Borrower has made
such payment on such date in accordance herewith and may, in reliance upon such
assumption, distribute to the Lenders or the Issuing Bank, as the case may be,
the amount due.  If the Borrower has not in fact made such payment
when due, then each of the Lenders or the Issuing Bank, as the case may be,
severally agrees to repay to the Administrative Agent forthwith on demand the
amount so distributed to such Lender or Issuing Bank with interest thereon, for
each day from and including the date such amount is distributed to it to but
excluding the date of payment to the Administrative Agent, at the greater of the
Federal Funds Effective Rate and a rate determined by the Administrative Agent
in accordance with banking industry rules on interbank
compensation.

       

      (e) If any
Lender shall fail to make any payment required to be made by it pursuant to this
Agreement, then the Administrative Agent may, in its discretion (notwithstanding
any contrary provision hereof), apply any amounts thereafter received by the
Administrative Agent for the account of such Lender to satisfy such Lender’s
obligations hereunder until all such unsatisfied obligations are fully
paid.

       

      SECTION
2.16. Mitigation Obligations;
Replacement of Lenders.

       

      (a) If any
Lender requests compensation under Section 2.14, if the
Administrative Agent delivers a notice contemplated by Section 2.13 (other
than such a notice applicable to all Lenders), or if the Borrower is required to
pay any additional amount to any Lender or any Governmental Authority for the
account of any Lender pursuant to Section 2.16, then
such Lender shall use reasonable efforts to designate a different lending office
for funding or booking its Loans hereunder or to assign its rights and
obligations hereunder to another of its offices, branches or Affiliates, if, in
the judgment of such Lender, such designation or assignment (i) would
eliminate or reduce amounts payable pursuant to Sections 2.14 or
2.16 or would
cause Eurodollar Borrowings to be available, as the case may be, in the future
and (ii) would not subject such Lender to any unreimbursed cost or expense and
would not otherwise be disadvantageous to such Lender.  The Borrower
hereby agrees to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment.

         

        (b) If any
Lender requests compensation under Section 2.14, if
Eurodollar Borrowings become unavailable from less than all of the Lenders under
Section 2.13 or
if the Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.16, or if
any Lender defaults in its obligation to fund Loans hereunder, then the Borrower
may, at its sole expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in Section 9.04), all
its interests, rights and obligations under this Agreement to an assignee that
shall assume such obligations (which assignee may be another Lender, if a Lender
accepts such assignment); provided that (i) the Borrower shall have received the
prior written consent of the Administrative Agent (and, if a Revolving
Commitment is being assigned, the Issuing Bank and Swingline Lender), which
consent shall not unreasonably be withheld, (ii) such assignor Lender shall have
received payment of an amount equal to the outstanding principal of its Loans
and participations in LC Disbursements and Swingline Loans, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder and (iii) in
the case of any such assignment resulting from a claim for compensation under
Section 2.14,
the unavailability of Eurodollar Borrowings under Section 2.13 or
payments required to be made pursuant to Section 2.16, such
assignment will result in a reduction in such compensation or payments of the
availability of Eurodollar Borrowings from the applicable assignee.  A
Lender shall not be required to make any such assignment and delegation if,
prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the Borrower to require such  assignment and
delegation cease to apply.

      

       

      
        
           

        

        
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      (c) If any
Lender (a “Non-Consenting
Lender”) refuses to consent to an amendment to or waiver of any Credit
Document or provision thereof, which amendment or waiver requires unanimous
consent of all the Lenders, or all the Lenders making Loans of a particular
Class or Type, in order to be effective, then the Administrative Agent may or
the Borrower may (but neither shall be obligated to), upon notice to the
Non-Consenting Lender (and the Administrative Agent, if applicable), require the
Non-Consenting Lender to assign and delegate, without recourse (in accordance
with and subject to the restrictions contained in Section 9.04) all of
its interests, rights, duties and obligations under this Agreement and the
Credit Documents to an assignee that shall assume such obligations (which
assignee may be a Lender, if a Lender accepts such assignment); provided
that:

       

      (i) if it is
an assignment at the request of the Borrower, the Borrower shall have received
the prior written consent of the Administrative Agent (and if a Revolving
Commitment is being assigned, the Issuing Lender and the Swingline Lender),
which consents shall not unreasonably be withheld,

       

      (ii) if it is
an assignment at the request of the Administrative Agent and there is no Event
of Default, the Borrower shall have consented to such assignment (and if
aRevolving
Commitment is being assigned, the Issuing Lender and the Swingline Lender) which
consents shall not be unreasonably withheld,

       

      (iii) the
interests, rights, duties and obligations of all Non-Consenting Lenders are
similarly assigned, and

       

      (iv) the
Non-Consenting Lender shall have received payment of an amount equal to the
outstanding principal of (and participation interests in) its Obligations,
accrued interest thereon, accrued fees and all other amounts payable to it
hereunder and under the other Credit Documents.

       

      SECTION
2.17. Swingline
Loans.

       

      (a) Subject
to the terms and conditions set forth herein, the Swingline Lender agrees to
make Swingline  Loans to the Borrower from time to time during the
Revolving Availability Period, in an aggregate principal amount at any time
outstanding that will not result in (i) the aggregate principal amount of
outstanding Swingline Loans exceeding $10,000,000 or (ii) the sum of the total
Revolving Exposures exceeding the total Revolving Commitments; provided that the
Swingline Lender shall not be required to make a Swingline Loan to refinance an
outstanding Swingline Loan and provided further that the Swingline Lender shall
not, without the consent of the Required Lenders, make any Swingline Loan if any
Event of Default exists of which the Swingline Lender has actual
knowledge.  Within the foregoing limits and subject to the terms and
conditions set forth herein, the Borrower may borrow, prepay and reborrow
Swingline Loans.

       

      (b) To
request a Swingline Loan, the Borrower shall notify the Administrative Agent of
such request by telephone (confirmed by telecopy), not later than 12:00 noon,
Houston, Texas time, on the day of a proposed Swingline Loan.  Each
such notice shall be irrevocable and shall specify the requested date (which
shall be a Business Day) and amount of the requested Swingline
Loan.  The Administrative Agent will promptly advise the Swingline
Lender of any such notice received from the Borrower.  The Swingline
Lender shall make each Swingline Loan available to the Borrower by means of a
credit to the general deposit account of the Borrower with the Swingline Lender
(or, in the case of a Swingline Loan made to finance the reimbursement of an LC
Disbursement as provided in Section 2.04(e), by
remittance to the Issuing Bank) by 3:00 p.m., Houston, Texas time, on the
requested date of such Swingline Loan.

       

      
        
          
          

        

        
          38

          
            

          

        

        
          
          

        

      

      (c) The
Swingline Lender may by written notice given to the Administrative Agent not
later than 12:00 noon, Houston, Texas time, on any Business Day require the
Revolving Lenders to acquire participations on such Business Day in all or a
portion of the Swingline Loans outstanding.  Such notice shall specify
the aggregate amount of Swingline Loans in which Revolving Lenders will
participate.  The Administrative Agent will give notice thereof to
each Revolving Lender by 1:00 p.m., Houston, Texas time on such Business Day,
specifying in such notice such Lender’s Applicable Percentage of such Swingline
Loan or Loans.  Each Revolving Lender hereby absolutely and
unconditionally agrees, upon receipt of notice as provided above, to pay to the
Administrative Agent, for the account of the Swingline Lender, such Lender’s
Applicable Percentage of such Swingline Loan or Loans.  Each Revolving
Lender acknowledges and agrees that its obligation to acquire participations in
Swingline Loans pursuant to thisparagraph
is absolute and unconditional, subject to Swingline Lender’s compliance with the
provisions of Section
2.19(a) hereof, and shall not be affected by any circumstance whatsoever,
including the occurrence and continuance of a Default or reduction or
termination of the Commitments, and that each such payment shall be made without
any offset, abatement, withholding or reduction whatsoever.  Each
Revolving Lender shall comply with its obligation under this paragraph by wire
transfer of immediately available funds, in the same manner as provided in Section 2.05 with
respect to Loans made by such Lender (and Section 2.05 shall
apply, mutatis mutandis, to the payment obligations of the Revolving Lenders),
and the Administrative Agent shall promptly pay to the Swingline Lender the
amounts so received by it from the Revolving Lenders.  The
Administrative Agent shall notify the Borrower in writing of any participations
in any Swingline Loan acquired pursuant to this paragraph, and thereafter
payments in respect of such Swingline Loan shall be made to the Administrative
Agent and not to the Swingline Lender.  Any amounts received by the
Swingline Lender from the Borrower (or other party on behalf of the Borrower) in
respect of a Swingline Loan after receipt by the Swingline Lender of the
proceeds of a sale of participations therein shall be promptly remitted to the
Administrative Agent; any such amounts received by the Administrative Agent
shall be remitted by the Administrative Agent to the Swingline
Lender  and to the Revolving Lenders that shall have made their
payments pursuant to this paragraph, as their interests may appear, such
remittance to be made on the day of receipt if such payment is received by 2:00
p.m., Houston, Texas time and prior to 10:00 a.m. of the following Business Day
if such payment is received after 2:00 p.m., Houston, Texas time.  The
purchase of participations in a Swingline Loan pursuant to this paragraph shall
not relieve the Borrower of any default in the payment thereof.

       

      (d) Notwithstanding
the foregoing procedures for requesting a Swingline Loan, the Borrower and the
Swingline Lender may agree to implement an alternate arrangement with respect to
Swingline Loans pursuant to a direct borrowing agreement between the Borrower
and the Swingline Lender.  The Swingline Lender will give notice to
the Administrative Agent of each Swingline Loan made by the Borrower within one
(1) Business Day after making such Swingline Loan.

       

      SECTION
2.18. Defaulting
Lender.

       

      (a) Notwithstanding
anything to the contrary contained herein, in the event any Lender (x) has
refused (which refusal constitutes a breach by such Lender of its obligations
under this Agreement) to make available its portion of any Loan or (y) notifies
either the Administrative Agent or the Borrower that such Lender does not intend
to make available its portion of any Loan (if the actual refusal would
constitute a breach by such Lender of its obligations under this Agreement)
(each, a “Lender
Default”), all rights and obligations hereunder of such Lender (a “Defaulting Lender”)
as to which a Lender Default is in effect and of the other parties hereto shall
be modified to the extent of the express provisions of this Section while such
Lender Default remains in effect.

       

      
        
          
          

        

        
          39

          
            

          

        

        
          
          

        

      

      (b) Advances
shall be incurred pro rata from Lenders which are not Defaulting Lenders (the
“Non-Defaulting
Lenders”) based on their respective Commitments and no Commitment of any
Lender or any pro rata share of any Loans required to be advanced by any Lender
shall be increased as a result of such Lender Default.  Amounts
received in respect of principal of any type of Loans shall be applied to reduce
the applicable Loans of each Lender prorata
based on the aggregate of the outstanding Loans of that type of all Lenders at
the time of such application; provided, that, such amount shall not be applied
to any Loans of a Defaulting Lender at any time when, and to the extent that,
the aggregate amount of Loans of any Non-Defaulting Lender exceeds such
Non-Defaulting Lender’s Commitment of all Loans then outstanding.

       

      (c) A
Defaulting Lender shall not be entitled to give instructions to the
Administrative Agent or to approve, disapprove, consent to or vote on any
matters relating to this Agreement and the other Loan Documents.  All
amendments, waivers and other modifications of this Agreement and the other Loan
Documents may be made without regard to a Defaulting Lender and, for purposes of
the definition of “Required Lenders,” a Defaulting Lender shall be deemed not to
be a Lender and not to have Loans outstanding.

       

      (d) Other
than as expressly set forth in this Section, the rights and obligations of a
Defaulting Lender (including the obligation to indemnify the Administrative
Agent) and the other parties hereto shall remain unchanged.  Nothing
in this Section shall be deemed to release any Defaulting Lender from its
obligations under this Agreement and the other Loan Documents, shall alter such
obligations, shall operate as a waiver of any default by such Defaulting Lender
hereunder, or shall prejudice any rights which the Borrower, the Administrative
Agent or any Lender may have against any Defaulting Lender as a result of any
default by such Defaulting Lender hereunder.

       

      (e) In the
event a Defaulting Lender retroactively cures to the satisfaction of the
Administrative Agent the breach which caused a Lender to become a Defaulting
Lender, such Defaulting Lender shall no longer be a Defaulting Lender and shall
be treated as a Lender under this Agreement and the other Loan
Documents.

       

      ARTICLE
III

       

      Representations and
Warranties

       

      The
Borrower represents and warrants to the Lenders that:

       

      SECTION
3.01. Organization;
Powers.  Each of the Borrower and the other applicable Loan
Parties is (a) organized, validly existing and in good standing under the laws
of the jurisdiction of its organization, (b) has all requisite power and
authority to carry on its business as now conducted and is (c) qualified to do
business in, and is in good standing in, every jurisdiction where such
qualification is required by applicable law, except in the case of clause (a) (other
than with respect to the Borrower) and clause (c), where the
failure to do so would not reasonably be expected to result in a Material
Adverse Effect,.

       

      
        
          
          

        

        
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      SECTION
3.02. Authorization;
Enforceability.  The Transactions to be entered into by each
Loan Party are within such Loan Party’s powers and have been duly authorized by
all necessary action.  This Agreement has been duly executed and
delivered by the Borrower and constitutes, and each other Loan Document to which
any Loan Party is to be a party, when executed and delivered by such Loan Party,
will constitute, a legal, valid and binding obligation of the Borrower or such
Loan Party (as the case may be), enforceable in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium or
other lawsaffecting
creditors’ rights generally and subject to general principles of equity,
regardless of whether considered in a proceeding in equity or at
law.

       

      SECTION
3.03. Governmental Approvals; No
Conflicts.  The Transactions (a) do not require any material
consent or approval of, registration or filing with, or any other action by, any
Governmental Authority, except such as have been obtained or made and are in
full force and effect and except filings necessary to perfect Liens created
under the Loan Documents, (b) will not violate any applicable law or regulation
or any order of any Governmental Authority, (c) will not violate the charter,
by-laws or other organizational documents of the Borrower or any other
applicable Loan Party, (d) will not violate or result in a default under any
material indenture, agreement or other instrument binding upon the Borrower or
any other Loan Party or their assets, or give rise to a right thereunder to
require any payment to be made by the Borrower or any other Loan Party, and (e)
will not result in the creation or imposition of any Lien on any asset of the
Borrower or any other Loan Party, except Liens created under the Loan Documents,
except such consents, approvals, registrations, filings or other actions the
failure to obtain or make, or, in the case of clauses (b) and (d) above, to the
extent such violations could not reasonably be expected to have a Material
Adverse Effect.

       

      SECTION
3.04. Financial
Condition.

       

      (a) The
Borrower has heretofore furnished to the Lenders Borrower’s consolidated balance
sheet and statements of income, stockholders equity and cash flows (1) as of and
for the fiscal year ended December 31, 2007 and (2) as of and for the fiscal
quarter and the portion of the fiscal year ended March 31, 2008, certified by
its chief financial officer.  Such financial statements present
fairly, in all material respects, the financial position and results of
operations and cash flows of the Borrower and its consolidated Subsidiaries as
of such dates and for such periods in accordance with GAAP, subject to year-end
audit adjustments and the absence of footnotes in the case of the statements
referred to in clause
(2) above. Since December 31, 2007, there has been no material adverse
change in the business, assets, operations or condition, financial or otherwise,
of the Borrower and its Subsidiaries, taken as a whole.  Except as set
forth on Schedule
6.01, after giving effect to the Transactions, none of the Borrower or
its Subsidiaries has, as of the Effective Date, any material contingent
liabilities or unrealized losses.

       

      (b) The
Borrower has heretofore furnished to the Lenders the audited consolidated
balance sheet and statements of income, stockholders equity and cash flows of
Target, as of and for the fiscal years ended May 3, 2008.  Such
financial statements present fairly, in all material respects, the financial
position and results of operations and cash flows of Target and its consolidated
Subsidiaries as of such dates and for such periods in accordance with GAAP,
subject to year-end audit adjustments and the absence of footnotes in the case
of the statements referred to in clause (2) above.
Since May 3, 2008, there has been no material adverse change in the business,
assets, operations or condition, financial or otherwise, of Target and its
Subsidiaries, taken as a whole.

       

      
        
          
          

        

        
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      SECTION
3.05. Properties.

       

      (a) The
Borrower and each other Loan Party has good title to, or valid leasehold
interests in, all its real and personal property material to its business
(including the MortgagedProperties),
except for Liens permitted under this Agreement and minor defects in title that
do not interfere with its ability to conduct its business as currently conducted
or to utilize such properties for their intended purposes.

       

      (b) The
Borrower and each other Loan Party owns, or is licensed to use, all trademarks,
tradenames, copyrights, patents and other intellectual property material to its
business, and the use thereof by the Borrower and each other Loan Party does not
infringe upon the rights of any other Person, except for any such infringements
that could not reasonably be expected to result in a Material Adverse
Effect.

       

      SECTION
3.06. Litigation and Environmental
Matters.

       

      (a) There are
no actions, suits or proceedings by or before any arbitrator or Governmental
Authority pending against or, to the knowledge of the Borrower, threatened
against or affecting the Borrower or any other Loan Party (i) that could
reasonably be expected to result in a Material Adverse Effect or (ii) that
involve any of the Loan Documents or the Transactions.

       

      (b) Except
with respect to any matters that could not reasonably be expected to result in a
Material Adverse Effect, neither the Borrower nor any other Loan Party (i) has
failed to comply with any Environmental Law or to obtain, maintain or comply
with any permit, license or other approval required under any Environmental Law,
(ii) has become subject to any Environmental Liability, (iii) has received
written notice of any claim with respect to any Environmental Liability or (iv)
knows of any basis for any Environmental Liability.

       

      SECTION
3.07. Compliance with Laws and
Agreements.  The Borrower and each other Loan Party is in
compliance with all laws, regulations and orders of any Governmental Authority
applicable to it or its property and all indentures, agreements and other
instruments binding upon it or its property, except where the failure to do so
could not reasonably be expected to result in a Material Adverse
Effect.  No Default has occurred and is continuing.

       

      SECTION
3.08. Investment Company
Status.  Neither the Borrower nor any other Loan Party is an
“investment company” as defined in, or subject to regulation under, the
Investment Company Act of 1940.

       

      SECTION
3.09. Taxes.  The
Borrower and each other Loan Party has timely filed or caused to be filed all
Tax returns and reports required to have been filed and has paid or caused to be
paid all Taxes required to have been paid by it, except (a) Taxes that are being
contested in good faith by appropriate proceedings and for which the Borrower or
such other Loan Party, as applicable, has set aside on its books adequate
reserves or (b) to the extent that the failure to do so could not reasonably be
expected to result in a Material Adverse Effect.

       

      
        
          
          

        

        
          42

          
            

          

        

        
          
          

        

      

      SECTION
3.10. ERISA.  No
ERISA Event has occurred or is reasonably expected to occur that, when taken
together with all other such ERISA Events for which liability is reasonably
expected to occur, could reasonably be expected to result in a Material Adverse
Effect.  The present value of all accumulated benefit obligations
under each Plan (based on the assumptions used for purposes of Statement of
Financial Accounting Standards No. 87) did not,as of the
date of the most recent financial statements reflecting such amounts, exceed the
fair market value of the assets of such Plan, and the present value of all
accumulated benefit obligations of all underfunded Plans (based on the
assumptions used for purposes of Statement of Financial Accounting Standards No.
87) did not, as of the date of the most recent financial statements reflecting
such amounts, exceed the fair market value of the assets of all such underfunded
Plans, in each of such cases so as to cause a Material Adverse
Effect.

       

      SECTION
3.11. Disclosure.  The
Borrower has disclosed to the Lenders all agreements, instruments and corporate
or other restrictions to which the Borrower or any other Loan Party is subject,
and all other matters known to any of them, that could reasonably be expected to
result in a Material Adverse Effect.  None of the reports, financial
statements, certificates or other information furnished by or on behalf of any
Loan Party to the Administrative Agent or any Lender in connection with the
negotiation of this Agreement or any other Loan Document or delivered hereunder
or thereunder (as modified or supplemented by other information so furnished)
contains any material misstatement of fact or omits to state any material fact
necessary to make the statements therein, taken as a whole, in the light of the
circumstances under which they were made, not materially misleading; provided,
however, that with respect to projected financial information, the Borrower
represents only that such information was prepared in good faith based upon
assumptions believed to be reasonable at the time, it being recognized by the
Lenders that projections are not to be viewed as facts and that the actual
results during the period or periods covered by such projections may vary from
such projections and that such variations may be material.

       

      SECTION
3.12. Subsidiaries.  As
of the date hereof, after giving effect to the closing of the Purchase
Agreement, the Borrower has no Subsidiaries other than as set forth on Schedule 3.12
hereto.  As of the date hereof, the Borrower owns all of the Equity
Interests in and to each Subsidiary (other than Foreign Subsidiaries) listed on
Schedule 3.12
hereto.  Foreign Subsidiaries of the Borrower as of the date hereof
are identified as such on Schedule 3.12 hereto
and the identities of the holders of the Equity Interests in and to each Foreign
Subsidiary as of the date hereof are also set forth on Schedule 3.12
hereto.

       

      SECTION
3.13. Insurance.  As
of the Effective Date, all premiums due in respect of all insurance maintained
by the Borrower and each other Loan Party have been paid.

       

      SECTION
3.14. Labor
Matters.  As of the Effective Date, there are no strikes,
lockouts or slowdowns against the Borrower or any other Loan Party pending or,
to the knowledge of the Borrower, threatened.  The hours worked by and
payments made to employees of the Borrower and the other Loan Parties have not
been in violation, in any material manner, of the Fair Labor Standards Act or
any other applicable Federal, state, local or foreign law dealing with such
matters.  All payments due from the Borrower or any other Loan Party,
or for which any claim may be made against the Borrower or any other Loan Party,
on account of wages and employee health and welfare insurance and other
benefits, have been paid or accrued as a liability on the books of the Borrower
or such other Loan Party.  The consummation of the Transactions will
not give rise to any right of termination or right of renegotiation on the part
of any union under any collective bargaining agreement to which the Borrower or
any other Loan Party is bound.

       

      
        
           

        

        
          43

          
            

          

        

        
           

        

      

      Solvency.  Immediately
after the consummation of the Transactions to occur on the Effective Date and
immediately following the making of each Loan made on the Effective Date and
after giving effect to the application of the proceeds of such Loans and to the
rights of reimbursement, contribution and subrogation that the Loan Parties may
have under the Contribution Agreement or otherwise, (a) the fair value of the
assets of each Loan Party, at a fair valuation, will exceed its debts and
liabilities, subordinated, contingent or otherwise; (b) the present fair
saleable value of the property of each Loan Party will be greater than the
amount that will be required to pay the probable liability of its debts and
other liabilities, subordinated, contingent or otherwise, as such debts and
other liabilities become absolute and matured; (c) each Loan Party will be able
to pay its debts and liabilities, subordinated, contingent or otherwise, as such
debts and liabilities become absolute and matured; and (d) each Loan Party will
not have unreasonably small capital with which to conduct the business in which
it is engaged as such business is now conducted and is proposed to be conducted
following the Effective Date.

       

      SECTION
3.15. Material Property Subject to
Security Documents.  The Collateral constitutes all of the real
and material personal property (other than Excluded Assets) owned by Borrower or
any of its Subsidiaries (other than Foreign Subsidiaries); provided, however
that the Collateral shall not include more than 66-2/3% of the issued and
outstanding Equity Interests in and to any Foreign Subsidiary which is owned
directly by Borrower or any of its Subsidiaries (other than Foreign
Subsidiaries).

       

      SECTION
3.16. Property of Foreign
Subsidiaries.  The aggregate value (based on the greater of
book or market value) of the total assets owned by Foreign Subsidiaries of
Borrower as of the Effective Date is no greater than 5% of the aggregate value
(based on the greater of book or market value) of the total assets owned by
Borrower and all of its Subsidiaries.

       

      ARTICLE
IV

       

      Conditions

       

      SECTION
4.01. Effective
Date.  The obligations of the Lenders to make Loans and of the
Issuing Bank to issue Letters of Credit hereunder shall not become effective
until the date on which each of the following conditions is satisfied (or waived
in accordance with Section
9.02):

       

      (a) The
Administrative Agent (or its counsel) shall have received from each party hereto
either (i) counterparts of this Agreement signed on behalf of such party or (ii)
written evidence satisfactory to the Administrative Agent (which may include
telecopy transmission of a signed signature page of this Agreement) that such
party has signed counterparts of this Agreement.

       

      (b) The
Administrative Agent (or its counsel) shall have received from Borrower an
original of each Note signed on behalf of Borrower.

       

      
        
          
          

        

        
          44

          
            

          

        

        
          
          

        

      

      (c) The
Administrative Agent (or its counsel) shall have received from Borrower and from
each other party to the Loan Documents (other than the Notes) either (i)
counterparts of each applicable Loan Document signed on behalf of such party or
(ii) written evidence satisfactory to the Administrative Agent (which may
include telecopy transmission of a signedsignature
page of the applicable Loan Document) that such party has signed counterparts of
such Loan Document.

       

      (d) The
Administrative Agent shall have received written opinions (addressed to the
Administrative Agent and the Lenders and dated the Effective Date) of Fulbright
& Jaworski L.L.P. and Edwards Angell Palmer & Dodge LLP, counsel for the
Borrower, Target and the Subsidiaries of Target, in form and substance
satisfactory to the Administrative Agent and its counsel, covering such matters
relating to such Loan Parties, the Loan Documents or the Transactions as the
Required Lenders shall reasonably request.

       

      (e) The
Administrative Agent shall have received such documents and certificates as the
Administrative Agent or its counsel may reasonably request relating to the
organization, existence and good standing of Borrower, Target and the
Subsidiaries of Target, the authorization of the Transactions and any other
legal matters relating to the Loan Parties, the Loan Documents or the
Transactions, all in form and substance satisfactory to the Administrative Agent
and its counsel.

       

      (f) The
Administrative Agent shall have received a certificate, dated the Effective Date
and signed by an appropriate officer or other responsible party acceptable to
Administrative Agent on behalf of Borrower, confirming compliance with the
conditions set forth in paragraphs (a) and (b) of Section
4.02.

       

      (g) The
Administrative Agent shall have received all fees and other amounts due and
payable on or prior to the Effective Date, including, to the extent invoiced,
reimbursement or payment of all reasonable out of pocket expenses (including
reasonable fees, charges and disbursements of counsel) required to be reimbursed
or paid by any Loan Party hereunder or under any other Loan
Document.

       

      (h) The
Administrative Agent shall have received each of the following:

       

      (i) stock
certificates representing all of the outstanding shares of capital stock of each
Subsidiary of Borrower as of the Effective Date (other than Foreign
Subsidiaries) and stock powers, endorsed in blank, with respect to such stock
certificates;

       

      (ii) all
documents and instruments, including Uniform Commercial Code financing
statements, required by law or reasonably requested by the Administrative Agent
to be filed, registered or recorded to create or perfect the Liens intended to
be created under the Security Documents;

       

      (iii) to the
extent required by Administrative Agent, agreements whereby each landlord in
respect of any space leased by the Borrower or any of its Subsidiaries which is
affiliated with the Borrower or with Target, has subordinated any Lien such
landlord may claim in any property of the Borrower or any of its Subsidiaries;
and

       

      
        
          
          

        

        
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      (iv) the
results of a search of the Uniform Commercial Code (or equivalent) filings made
with respect to Target and the Subsidiaries of Target in such jurisdictions as
the Administrative Agent may require and copies of the financing statements (or
similar documents) disclosed by such search and evidence reasonably satisfactory
to theAdministrative
Agent that the Liens indicated by such financing statements (or similar
documents) are permitted by Section 6.02 or have
been released.

       

      (i) The
Administrative Agent shall have received evidence that the insurance required by
Section 5.07
and the Security Documents is in effect.

       

      (j) Borrower
shall have delivered to the Administrative Agent a copy of the fully executed
purchase agreement (the “Purchase Agreement”),
relating to the acquisition by Borrower of all of the Equity Interests in and to
Target.  The acquisition contemplated by the Purchase Agreement shall
have been, or substantially simultaneously with the initial advance hereunder
shall be, consummated in accordance with the Purchase Agreement and applicable
law, without any amendment to or waiver of any terms or conditions of the
Purchase Agreement not approved by the Administrative Agent (such approval not
to be unreasonably withheld or delayed).  The Administrative Agent
shall have received copies of the material documents evidencing the closing of
the transactions contemplated by the Purchase Agreement and all material due
diligence materials relating to such transactions, which documents shall be in
form and substance satisfactory to the Administrative Agent.

       

      (k) The
Administrative Agent shall have received evidence reasonably satisfactory to the
Administrative Agent that the Borrower and each other Loan Party shall have been
released from all liabilities and obligations in respect of Indebtedness (other
than the Obligations and other than liabilities and obligations expressly
permitted under Section 6.01 hereof,
or as to which the proceeds of the initial Loans hereunder will be used to
payoff such Obligations in full).

       

      The
Administrative Agent shall notify the Borrower and the Lenders of the Effective
Date, and such notice shall be conclusive and binding.

       

      SECTION
4.02. Each Credit
Event.  The obligation of each Lender to make a Loan on the
occasion of any Borrowing, and of the Issuing Bank to issue, amend, renew or
extend any Letter of Credit, is subject to receipt of the request therefor in
accordance herewith and to the satisfaction of the following
conditions:

       

      (a) The
representations and warranties of each Loan Party set forth in the Loan
Documents shall be true and correct in all material respects on and as of the
date of such Borrowing or the date of issuance, amendment, renewal or extension
of such Letter of Credit, as applicable, except to the extent that such
representations and warranties specifically refer to an earlier date, in which
case they shall be true and correct in all material respects as of such earlier
date.

       

      (b) At the
time of and immediately after giving effect to such Borrowing or the issuance,
amendment, renewal or extension of such Letter of Credit, as applicable, no
Default shall have occurred and be continuing and there shall have occurred no
event which would be reasonably likely to have a Material Adverse
Effect.

       

      
        
           

        

        
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      Each
Borrowing and each issuance, amendment, renewal or extension of a Letter of
Credit shall be deemed to constitute a representation and warranty by the
Borrower on the date thereof as to the matters specified in paragraphs (a) and
(b) of this Section.

       

      ARTICLE
V

       

      Affirmative
Covenants

       

      Until the
Commitments have expired or been terminated and the principal of and interest on
each Loan and all fees payable hereunder shall have been paid in full and all
Letters of Credit shall have expired or terminated (or the obligations
thereunder shall have otherwise been collateralized in a manner and to an extent
satisfactory to the Issuing Lender in its sole discretion) and all LC
Disbursements shall have been reimbursed, the Borrower covenants and agrees with
the Lenders that:

       

      SECTION
5.01. Financial Statements and
Other Information.  The Borrower will furnish to the
Administrative Agent and each Lender:

       

      (a) within 90
days after the end of each fiscal year of the Borrower, its audited consolidated
balance sheet and related statements of operations, shareholders’ equity and
cash flows as of the end of and for such year, setting forth in each case in
comparative form the figures for the previous fiscal year, all reported on by
Hein & Associates or other independent public accountants of recognized
national standing (without a “going concern” or like qualification or exception
and without any qualification or exception as to the scope of such audit) to the
effect that such consolidated financial statements present fairly in all
material respects the financial condition and results of operations of the
Borrower and its consolidated Subsidiaries on a consolidated basis in accordance
with GAAP consistently applied;

       

      (b) within 45
days after the end of each fiscal quarter (other than the last fiscal quarter)
of each fiscal year of the Borrower, its consolidated balance sheet and related
statements of operations and cash flows as of the end of and for such fiscal
quarter and the then elapsed portion of the fiscal year, setting forth in each
case in comparative form the figures for the corresponding period or periods of
(or, in the case of the balance sheet, as of the end of) the previous fiscal
year, all certified by one of its Financial Officers as presenting fairly in all
material respects the financial condition and results of operations of the
Borrower and its consolidated Subsidiaries on a consolidated basis in accordance
with GAAP consistently applied, subject to normal year-end audit adjustments and
the absence of footnotes;

       

      (c) concurrently
with any delivery of financial statements under clauses (a) or (b) above, a
certificate of a Financial Officer of the Borrower, in the form of Exhibit B hereto, (i)
certifying as to whether a Default has occurred and, if a Default has occurred,
specifying the details thereof and any action taken or proposed to be taken with
respect thereto and (ii) setting forth reasonably detailed calculations
demonstrating compliance with Sections 5.13, 6.13 and 6.14;

       

      (d) at any
such times as the Leverage Ratio is greater than 2.50 to 1.00, then within 20
days after the end of each calendar month, a certificate of a Financial Officer
of the Borrower setting forth reasonably detailed calculations demonstrating
compliance with Sections
5.13(c);within 45
days after the end of each fiscal quarter of each fiscal year of the Borrower, a
listing and aging of the Accounts receivable and Accounts payable of each Loan
Party, prepared in reasonable detail and containing such information as
Administrative Agent may reasonably request;

       

      
        
          
          

        

        
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      (e) on or
before each January 31 of each fiscal year, a detailed consolidated budget for
such fiscal year (including a projected consolidated balance sheet and related
statements of projected operations as of the end of and for such fiscal year and
setting forth the assumptions used for purposes of preparing such budget and,
promptly when available, any significant revisions of such budget;
and

       

      (f) promptly
following any request therefor, such other information regarding the operations,
business affairs and financial condition of the Borrower or any other Loan
Party, or compliance with the terms of any Loan Document, as the Administrative
Agent may reasonably request.

       

      SECTION
5.02. Notices of Material
Events.  The Borrower will furnish to the Administrative Agent
prompt written notice of the following:

       

      (a) the
occurrence of any Default;

       

      (b) the
Borrower becoming aware of the filing or commencement of any action, suit or
proceeding by or before any arbitrator or Governmental Authority against or
affecting the Borrower or any other Loan Party or any Affiliate thereof that, if
adversely determined, could reasonably be expected to result in a Material
Adverse Effect;

       

      (c) any
casualty or other insured damage to any material portion of the Collateral or
the commencement of any action or proceeding for the taking of any Collateral or
any part thereof or interest therein under power of eminent domain or by
condemnation or similar proceeding;

       

      (d) any other
development that results in, or would reasonably be expected to result in, a
Material Adverse Effect.

       

      Each
notice delivered under this Section shall be accompanied by a statement of a
Financial Officer or other executive officer of the Borrower setting forth the
details of the event or development requiring such notice and any action taken
or proposed to be taken with respect thereto.

       

      SECTION
5.03. Information Regarding
Borrower.

       

      (a) The
Borrower will furnish to the Administrative Agent prompt written notice of any
change (i) in any Loan Party’s jurisdiction of organization or corporate name,
(ii) in the location of any Loan Party’s chief executive office, its principal
place of business, any office in which it maintains books or records relating to
Collateral owned by it, (iii) in any Loan Party’s identity or corporate
structure or (iv) in any Loan Party’s Federal Taxpayer Identification
Number.  The Borrower agrees not to effect or permit any change
referred to in the preceding sentence unless all filings have been or will,
promptly after giving effect to such change, be,made
under the Uniform Commercial Code or otherwise that are required in order for
the Administrative Agent to continue at all times following such change to have
a valid, legal and perfected security interest in all the
Collateral.  The Borrower also agrees promptly to notify the
Administrative Agent if any material portion of the Collateral is damaged or
destroyed.

       

      
        
          
          

        

        
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      (b) After the
Effective Date (and after giving effect to the closing of the Purchase
Agreement), Borrower will notify the Administrative Agent in writing promptly
upon Borrower’s or any of its Subsidiaries’ (other than Foreign Subsidiaries)
acquisition or ownership of any estate (fee simple or leasehold) of real
property, wherever located (other than Excluded Assets) or of any personal
property (other than Excluded Assets) not already covered by the Security
Documents (such acquisition or ownership being herein called an “Additional Collateral
Event” and the property so acquired or owned being herein called “Additional
Collateral”).  As soon as practicable and in any event within
thirty (30) days (or such longer period as the Administrative Agent shall agree)
after an Additional Collateral Event, Borrower shall (a) execute and deliver or
cause to be executed and delivered Security Documents, in form and substance
reasonably satisfactory to Administrative Agent, in favor of Administrative
Agent and duly executed by Borrower or the applicable Subsidiary, covering and
affecting and granting a first-priority Lien upon the applicable Additional
Collateral, and such other documents (including, without limitation, surveys,
environmental assessments, certificates, legal opinions, all in form and
substance reasonably satisfactory to Administrative Agent) as may be reasonably
required by Administrative Agent in connection with the execution and delivery
of such Security Documents; (b) with respect to any Additional Collateral which
is real property, to the extent required by Administrative Agent, deliver to
Administrative Agent evidence reasonably satisfactory to the Administrative
Agent that none of the Mortgaged Property lies in an area requiring special
notices of flood hazard issues or the purchase of flood hazard insurance and
such surveys, abstracts and appraisals as may be required pursuant to the
applicable Mortgage or as the Administrative Agent may reasonably request and
cause a title insurance underwriter satisfactory to Administrative Agent to
issue to Administrative Agent a mortgage policy of title insurance, in form and
substance reasonably satisfactory to Administrative Agent, insuring the
first-priority Lien of the applicable Mortgage in such amount as is reasonably
satisfactory to Administrative Agent, and (c) deliver or cause to be delivered
by Subsidiaries of Borrower such other documents or certificates consistent with
the terms of this Agreement and relating to the transactions contemplated hereby
as Administrative Agent may reasonably request.

       

      SECTION
5.04. Existence; Conduct of
Business.  The Borrower will, and will cause each other Loan
Party to, do or cause to be done all things necessary to preserve, renew and
keep in full force and effect its legal existence and the rights, licenses,
permits, privileges, franchises, patents, copyrights, trademarks and trade names
material to the conduct of its business; provided that the foregoing shall not
prohibit any merger, consolidation, liquidation or dissolution permitted under
Section
6.03.

       

      SECTION
5.05. Payment of
Obligations.  The Borrower will, and will cause each other Loan
Party to, pay its Indebtedness and other obligations, including liabilities for
Taxes, before the same shall become delinquent or in default, except where (a)
the validity or amount thereof is being contested in good faith by appropriate
proceedings, (b) the Borrower or such other Loan Party has set aside on its
books adequate reserves with respect thereto in accordance with GAAP, (c) such
contest effectively suspends collection of the contested obligation and the
enforcementof any
Lien securing such obligation and (d) the failure to make payment pending such
contest would not reasonably be expected to result in a Material Adverse
Effect.

       

      SECTION
5.06. Maintenance of
Properties.  The Borrower will, and will cause each other Loan
Party to, keep and maintain all property material to the conduct of its business
in good working order and condition, ordinary wear and tear  and
casualty and condemnation (so long as prompt efforts are being pursued for
repair and restoration) excepted.

       

      
        
          
          

        

        
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      SECTION
5.07. Insurance.  The
Borrower will, and will cause each other Loan Party to, maintain, with
financially sound and reputable insurance companies (a) insurance in such
amounts (with no greater risk retention) and against such risks as are
customarily maintained by companies of established repute engaged in the same or
similar businesses operating in the same or similar locations and (b) all
insurance required to be maintained pursuant to the Security
Documents.  The Borrower will furnish to the Lenders, upon request of
the Administrative Agent, information in reasonable detail as to the insurance
so maintained.

       

      SECTION
5.08. Intentionally Left
Blank.

       

      SECTION
5.09. Books and Records;
Inspection and Audit Rights.  The Borrower will, and will cause
each other Loan Party to, keep proper books of record and account in which full,
true and correct entries in all material respects in accordance with GAAP are
made of all dealings and transactions in relation to its business and
activities.  The Borrower will, and will cause each other Loan Party
to, permit any representatives designated by the Administrative Agent, upon
reasonable prior notice and during normal business hours, to visit and inspect
its properties, to examine and make extracts from its books and records, and to
discuss its affairs, finances and condition with its officers and independent
accountants, all at such reasonable times and as often as reasonably
requested.

       

      SECTION
5.10. Compliance with
Laws.  The Borrower will, and will cause each other Loan Party
to, comply with all laws, rules, regulations and orders of any Governmental
Authority applicable to it or its property, except where the failure to do so
would not reasonably be expected to result in a Material Adverse
Effect.

       

      SECTION
5.11. Use of Proceeds and Letters
of Credit.  The Letters of Credit and the proceeds of the Loans
will be used only to pay a portion of the purchase price payable under the
Purchase Agreement and for general working capital purposes, which may include
refinancing existing Indebtedness.  No part of the proceeds of any
Loan will be used, whether directly or indirectly, for any purpose that entails
a violation of any of the Regulations of the Board, including Regulations U and
X.

       

      SECTION
5.12. Further
Assurances.  The Borrower will, and will cause each other Loan
Party to, execute any and all further documents, financing statements,
agreements and instruments, and take all such further actions (including the
filing and recording of financing statements, fixture filings, mortgages, deeds
of trust and other documents), which may be required under any applicable law,
or which the Administrative Agent or the Required Lenders may reasonably
request, to effectuate the transactions contemplated by the Loan Documents or to
grant, preserve, protect or perfect the Liens created or intended to be created
by the SecurityDocuments
or the validity or priority of any such Lien, all at the expense of the Loan
Parties.  The Borrower also agrees to provide to the Administrative
Agent, from time to time upon reasonable request by the Administrative Agent,
evidence reasonably satisfactory to the Administrative Agent as to the
perfection and priority of the Liens created or intended to be created by the
Security Documents.

       

      SECTION
5.13. Financial
Covenants.  The Borrower will have (in each case, in accordance
with GAAP):

       

      (a) Fixed Charge Coverage
Ratio – a Fixed Charge Coverage Ratio of not less than (i) as of the last
day of each fiscal quarter during the period from and after the date hereof
through and including September 30, 2009, 1.25 to 1.00, (ii) as of the last day
of each fiscal quarter during the period from and after December 31, 2009
through and including September 30, 2010, 1.50 to 1.00 and (ii) as of the last
day of each fiscal quarter thereafter, 1.75 to 1.00.

       

      
        
          
          

        

        
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      (b) Leverage Ratio – a
Leverage Ratio of not greater than (i) as of the last day of each fiscal quarter
during the period from and after the date hereof through and including September
30, 2009, 3.50 to 1.00, (ii) as of the last day of each fiscal quarter during
the period from and after December 31, 2009 through and including September 30,
2010, 3.00 to 1.00 and (ii) as of the last day of each fiscal quarter
thereafter, 2.75 to 1.00.

       

      (c) Asset Coverage Ratio
– an Asset Coverage Ratio of not less than 1.00 to 1.00 at all
times.

       

      ARTICLE
VI

       

      Negative
Covenants

       

      Until the
Commitments have expired or terminated and the principal of and interest on each
Loan and all fees payable hereunder have been paid in full and all Letters of
Credit have expired or terminated (or the obligations thereunder shall have
otherwise been collateralized in a manner and to an extent satisfactory to the
Issuing Lender in its sole discretion) and all LC Disbursements shall have been
reimbursed, the Borrower covenants and agrees with the Lenders
that:

       

      SECTION
6.01. Indebtedness; Certain Equity
Securities.

       

      (a) The
Borrower will not, and will not permit any other Loan Party to, create, incur,
assume or permit to exist any Indebtedness, except:

       

      (i) Indebtedness
created under the Loan Documents;

       

      (ii) Indebtedness
existing on the date hereof and set forth in Schedule
6.01;

       

      (iii) Indebtedness
of any Subsidiary of Borrower (other than a Foreign Subsidiary) to the Borrower
or any other  Subsidiary of Borrower (other than a Foreign Subsidiary)
and Indebtedness of Borrower to any of its Subsidiaries (other than a Foreign
Subsidiary) and Indebtedness of any Foreign Subsidiary of Borrower to any other
Foreign Subsidiary of Borrower;

       

      
        
           

        

        
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      Indebtedness
of any Foreign Subsidiary of Borrower to the Borrower or any
other  Subsidiary of Borrower (other than a Foreign Subsidiary) in an
aggregate amount not to exceed $5,000,000 in the aggregate at any one time
outstanding and Indebtedness of Borrower to any of its Foreign Subsidiaries not
to exceed $1,000,000 in the aggregate at any one time outstanding;

       

      (iv) Guarantees
of Indebtedness permitted under this Section
6.01;

       

      (v) purchase
money Indebtedness or Capital Lease Obligations in an aggregate amount not
exceeding, at any one time outstanding, $5,000,000;

       

      (vi) “mark to
market” exposure resulting from any Swap Agreement entered into in compliance
with Section
6.07;

       

      (vii) Indebtedness
under performance, stay, customs, appeal and surety bonds or with respect to
workers’ compensation or other like employee benefit claims, in each case
incurred in the ordinary course of business;

       

      (viii) Indebtedness
in respect of customary netting services, overdraft protections and similar
customary arrangements, in each case incurred in the ordinary course of business
in connection with deposit accounts;

       

      (ix) Indebtedness
of the type described in clause (e) of the
definition of “Indebtedness” secured by the Liens permitted under Section
6.02;

       

      (x) other
Indebtedness in an aggregate principal amount not exceeding, at any one time
outstanding, an amount equal to fifteen percent (15%) of the net worth of the
Borrower (on a consolidated basis) disclosed by the most recently delivered
financial statements of the Borrower; and

       

      (xi) extensions,
renewals and replacements of any of the foregoing that do not increase the
outstanding principal amount thereof.

       

      (b) The
Borrower will not, nor will it permit any other Loan Party to, issue any
preferred stock or other preferred Equity Interests after the Effective
Date.

       

      SECTION
6.02. Liens.  The
Borrower will not, and will not permit any other Loan Party to, create, incur,
assume or permit to exist any Lien on any property or asset now owned or
hereafter acquired by it, or assign or sell any income or revenues (including
Accounts receivable) or rights in respect of any thereof, except:

       

      (i) Liens
created under the Loan Documents;

       

      (ii) any Lien
on any property or asset of the Borrower or any other Loan Party existing on the
date hereof and set forth in Schedule
6.02;

       

      
        
          
          

        

        
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      (iii) Liens
created pursuant to Capital Lease Obligations or purchase money Indebtedness
permitted pursuant to this Agreement; provided that such Liens are only
inrespect
of the property or assets subject to, and secure only, the respective Capital
Lease Obligations or purchase money Indebtedness;

       

      (iv) leases,
subleases, licenses and sublicenses granted in the ordinary course of business
and not interfering in any material respect with the business of any Loan Party,
and any interest of a lessor, sublessor, licensor or sublicensor under any lease
or license entered into in the ordinary course of business;

       

      (v) customary
Liens (x) of a collection bank arising under Section 4-210 of the Uniform
Commercial Code on items in the course of collection and (y) in favor of a
banking institution arising as a matter of law encumbering deposits (including
the right of set-off) and which are within the general parameters customary in
the banking industry;

       

      (vi) Liens on
cash earnest money deposits or cash advances in favor of the seller of any
property to be acquired in connection with an Acquisition permitted under Section 6.15, which
advances shall be applied against the purchase price for such
Acquisition;

       

      (vii) Liens
arising out of any conditional sale, title retention, consignment or similar
arrangements for the sale of goods entered into in the ordinary course of
business;

       

      (viii) Liens not
otherwise permitted by this Section securing obligations in an outstanding
principal amount not in excess of $5,000,000; and

       

      (ix) Permitted
Encumbrances.

       

      SECTION
6.03. Fundamental
Changes.

       

      (a) The
Borrower will not, nor will it permit any other Loan Party to, merge into or
consolidate with any other Person, or permit any other Person to merge into or
consolidate with it, or liquidate or dissolve, except that (i) any Subsidiary of
the Borrower may merge into the Borrower in a transaction in which the Borrower
is the surviving Person, (ii) any Subsidiary of the Borrower may merge into any
other Subsidiary in a transaction in which the surviving entity is a Subsidiary
of Borrower and a Loan Party, (iii) any Subsidiary of the Borrower may liquidate
or dissolve if the Borrower determines in good faith that such liquidation or
dissolution is in the best interests of the Borrower and is not materially
disadvantageous to the Lenders and if such Subsidiary is not a Foreign
Subsidiary, its assets are transferred to the Borrower or a Subsidiary (other
than a Foreign Subsidiary) of the Borrower and (iv) the Borrower or any
Subsidiary of Borrower may give effect to a merger or consolidation the purpose
of which is to effect an investment, disposition or Acquisition permitted under
Article VI so
long as the surviving entity is a Subsidiary of Borrower and a Loan
Party.

       

      (b) The
Borrower will not, and will not permit any other Loan Party to, engage to any
material extent in any business other than businesses of the type conducted by
the Borrower and the other Loan Parties on the date of execution of this
Agreement and businesses reasonably related thereto.

       

      
        
           

        

        
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      Investments, Loans, Advances
and Guarantees.  The Borrower will not, and will not permit any
other Loan Party to, purchase, hold or acquire (including pursuant to any merger
with any Person that was not a wholly owned Subsidiary of Borrower or that is a
Foreign Subsidiary prior to such merger) any Equity Interests in or evidences of
indebtedness or other securities (including any option, warrant or other right
to acquire any of the foregoing) of, make or permit to exist any loans or
advances to, Guarantee any obligations of, or make or permit to exist any
investment or any other interest in, any other Person, or purchase or otherwise
acquire (in one transaction or a series of transactions) any assets of any other
Person constituting a business unit, except:

       

      (c) investments
existing on the date hereof and set forth on Schedule
6.04;

       

      (d) Permitted
Investments and Acquisitions permitted under Section 6.15
hereof;

       

      (e) loans or
advances made by any Subsidiary of Borrower (other than Foreign Subsidiary) to
or in the Borrower or any other Subsidiary of Borrower (other than a Foreign
Subsidiary) or loans or advances or investments made by Borrower to or in any of
its Subsidiaries (other than a Foreign Subsidiary);

       

      (f) loans or
advances by the Borrower or any of its Subsidiaries to their respective
employees in the ordinary course of business, not to exceed $250,000 in the
aggregate at any one time outstanding;

       

      (g) Accounts
receivable owned by the Borrower or any of its Subsidiaries, if created in the
ordinary course of business and payable or dischargeable in accordance with
customary trade terms;

       

      (h) Guarantees
by the Borrower or any of its Subsidiaries (other than a Foreign Subsidiary)
constituting Indebtedness permitted by Section 6.01;
provided that a Subsidiary of Borrower shall not Guarantee any Subordinated
Debt;

       

      (i) pledges
and deposits permitted under Section
6.02;

       

      (j) Investments
made as a result of the receipt of non-cash consideration from a sale, transfer
or other disposition permitted under Section
6.05;

       

      (k) Restricted
Payments permitted under Section
6.08;

       

      (l) additional
Investments so long as the aggregate amount invested, loaned or advanced does
not exceed $5,000,000; and

       

      
        
          
          

        

        
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      (m) investments
received in connection with the bankruptcy or reorganization of, or settlement
of delinquent Accounts and disputes with, customers and suppliers, in each case
in the ordinary course of business.

       

      SECTION
6.04. Asset
Sales.  The Borrower will not, and will not permit any other
Loan Party to, sell, transfer, lease or otherwise dispose of any asset,
including any Equity Interestowned by
it, nor will the Borrower permit any of its Subsidiaries to issue any additional
Equity Interest in such Subsidiary, except:

       

      (a) sales of
inventory, used or surplus equipment and Permitted Investments in the ordinary
course of business and sales of real property owned by the Borrower or any of
its Subsidiaries as of the date hereof;

       

      (b) sales,
transfers and dispositions to the Borrower or to any of its Subsidiaries (other
than a Foreign Subsidiary); provided that any such sales, transfers or
dispositions involving a Subsidiary of Borrower that is not a Loan Party shall
be made in compliance with Section
6.09;

       

      (c) dispositions
of property as a result of condemnation, eminent domain or similar
proceedings;

       

      (d) to the
extent constituting dispositions, investments expressly permitted by Section
6.04;

       

      (e) leases,
subleases, licenses or sublicenses in the ordinary course of business and which
do not interfere in any material respect with the business of any Loan
Party;

       

      (f) dispositions
of Accounts Receivable in connection with the collection or compromise thereof
in the ordinary course of business;

       

      (g) Restricted
Payments permitted by Section 6.08;
and

       

      (h) other
sales by the Borrower or any of its Subsidiaries which do not exceed, in the
aggregate, $1,000,000 in any fiscal year;

       

      provided
that all sales, transfers, leases and other dispositions permitted hereby (other
than those permitted by clause (b) above)
shall be made for fair value and for at least 75% cash
consideration.

       

      SECTION
6.05. Sale and Leaseback
Transactions.  The Borrower will not, and will not permit any
other Loan Party to, enter into any arrangement, directly or indirectly, whereby
it shall sell or transfer any property, real or personal, used or useful in its
business, whether now owned or hereinafter acquired, and thereafter rent or
lease such property or other property that it intends to use for substantially
the same purpose or purposes as the property sold or transferred.

       

      
        
          
          

        

        
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      SECTION
6.06. Swap
Agreements.  The Borrower will not, and will not permit any
other Loan Party to, enter into any Swap Agreement, other than Swap Agreements
entered into in the ordinary course of business to hedge or mitigate risks to
which the Borrower or any other Loan Party is exposed in the conduct of its
business or the management of its liabilities and not for speculative
purposes.

       

      SECTION
6.07. Restricted
Payments.  The Borrower will not, nor will it permit any other
Loan Party to, declare or make, or agree to pay or make, directly or indirectly,
any Restricted Payment, or incur any obligation (contingent or otherwise) to do
so, except (i) theBorrower
may declare and pay dividends with respect to its Equity Interests payable
solely in additional shares of its common stock, and (ii) Subsidiaries of
Borrower may declare and pay dividends ratably with respect to their Equity
Interests and (iii) the Borrower may declare and pay preferred dividends up to a
maximum aggregate amount of $90,000 per annum.

       

      SECTION
6.08. Transactions with
Affiliates.  The Borrower will not, nor will it permit any
other Loan Party to, sell, lease or otherwise transfer any property or assets
to, or purchase, lease or otherwise acquire any property or assets from, or
otherwise engage in any other transactions with, any of its Affiliates, except
(a) transactions in the ordinary course of business that are at prices and on
terms and conditions not less favorable to the Borrower or such other Loan Party
than could be obtained on an arm’s-length basis from unrelated third parties,
(b) transactions between or among the Borrower and any Loan Party not involving
any other Affiliate, (c) payments of customary fees to directors of the Borrower
and reimbursement of the reasonable out-of-pocket expenses incurred by directors
in such capacity, (d) customary employment and severance arrangements with
officers and employees in the ordinary course of business and (e) any
transactions permitted by Article
VI.

       

      SECTION
6.09. Restrictive
Agreements.  The Borrower will not, nor will it permit
any  other Loan Party to, directly or indirectly, enter into, incur or
permit to exist any agreement or other arrangement that prohibits, restricts or
imposes any condition upon (a) the ability of the Borrower or any other Loan
Party to create, incur or permit to exist any Lien upon any of its property or
assets, or (b) the ability of any Subsidiary of Borrower to pay dividends or
other distributions with respect to any shares of its capital stock or
membership interests or to make or repay loans or advances to the Borrower or
any other Subsidiary of Borrower or to Guarantee Indebtedness of the Borrower or
any of its Subsidiaries; provided that the foregoing shall not apply to
restrictions and conditions imposed by law or by any Loan Document and provided
further that (x) clauses (a) and (b) above shall not
apply to customary restrictions and conditions contained in agreements relating
to the sale of a Person or asset pending such sale solely to the extent such
sale is permitted under Section 6.05, and (y)
clause (a)
above shall not apply to customary provisions in leases, sublease, licenses or
sublicenses and other contracts restricting the assignment thereof and negative
pledges and restrictions on Liens in favor of any holder of Indebtedness
permitted under Section 6.01(v), but
solely to the extent such negative pledge or restriction relates to the property
financed by such Indebtedness.

       

      SECTION
6.10. Amendment of Material
Documents.  The Borrower will not, nor will it permit any other
Loan Party to, amend, modify or waive any of its rights under (a) any
Subordinated Debt Document or (b) its organizational documents (in any manner
adverse to the Lenders).

       

      
        
          
          

        

        
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      SECTION
6.11. Additional
Subsidiaries.  The Borrower will not, and will not permit any
other Loan Party to, form or acquire any Subsidiary after the Effective Date
except that Borrower or any of its Subsidiaries may form, create or acquire a
wholly-owned Subsidiary so long as (a) immediately thereafter and giving effect
thereto, no event will occur and be continuing which constitutes a Default; (b)
such domestic Subsidiary (and, where applicable, Borrower) shall execute and
deliver a Guaranty (or, at the option of Administrative Agent, a joinder to the
Guaranty) and such Security Documents as the Administrative Agent may reasonably
require to effectuate the provisions of this Agreement regarding Collateral to
be covered by the SecurityDocuments
(provided that no Foreign Subsidiary shall be required to execute and deliver
such a Guaranty or such Security Documents), and (c) Administrative Agent is
given at least thirty (30) days’ (or such lesser period of time as may be agreed
to by the Administrative Agent) prior notice of such formation, creation or
acquisition.    No Foreign Subsidiary may form, create or
acquire a Subsidiary which is not a Foreign Subsidiary.

       

      SECTION
6.12. Capital
Expenditures.  The Borrower will not, and will not permit any
other Loan Party to, permit the aggregate amount of all Capital Expenditures for
Borrower and the other Loan Parties during any fiscal year of the Borrower to
exceed $10,000,000 plus, for fiscal
years beginning on January 1, 2008 and later, any unused availability for
Capital Expenditures from the immediately preceding fiscal year (but not from
any earlier year).

       

      SECTION
6.13. Lease
Expense.  The Borrower will not, and will not permit any other
Loan Party to, enter into any lease agreement (other than capital leases giving
rise to Capital Lease Obligations) if, after giving effect to such new lease
agreement, consolidated annual rental expense of the Borrower and its
Subsidiaries attributable to leases (other than capital leases giving rise to
Capital Lease Obligations) would exceed $20,000,000.

       

      SECTION
6.14. Acquisitions.  The
Borrower will not, and will not permit any other Loan Party to, enter into
Acquisition other than  an Acquisition (which may be way of a merger
with and into the Borrower or another Loan Party so long as the Borrower or the
applicable Loan Party is the surviving entity), so long as:

       

      (a) any
Acquisition of Equity Interests shall require the acquisition of all (but not
less than all) of the Equity Interests in and to the applicable
Person;

       

      (b) no
Default or Event of Default shall have occurred and be continuing or, on a pro
forma basis, would reasonably be expected to result from such
Acquisition;

       

      (c) the
Borrower can demonstrate, on a pro forma basis, after giving effect to such
Acquisition that (x) there is at least ten percent (10%) availability for Loan
Borrowings hereunder and (y) if the
Leverage Ratio is equal to or greater than 2.00 to 1.00, that the consideration
payable in connection with the applicable Acquisition will not exceed
$15,000,000 and
that the aggregate consideration payable in connection with all Acquisitions
(including the applicable Acquisition) in the applicable fiscal year will not
exceed $30,000,000; and

       

      (d) the
Borrower shall have delivered (or caused to be delivered) to the Administrative
Agent such other documents as may be reasonably requested by the Administrative
Agent in connection with such Acquisition.

       

      SECTION
6.15. Property of Foreign
Subsidiaries.  Permit the aggregate value (based on the greater
of book or market value) of the total assets owned by Foreign Subsidiaries of
Borrower  to exceed 5% of the aggregate value (based on the greater of
book or market value) of the total assets owned by Borrower and all of its
Subsidiaries.

       

      
        
           

        

        
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      Events of
Default

       

      If any of
the following events (“Events of Default”)
shall occur:

       

      (a) the
Borrower shall fail to pay any principal of any Loan or any reimbursement
obligation in respect of any LC Disbursement when and as the same shall become
due and payable, whether at the due date thereof or at a date fixed for
prepayment thereof or otherwise;

       

      (b) the
Borrower shall fail to pay any interest on any Loan or any fee or any other
amount (other than an amount referred to in clause (a) of this
Article) payable under this Agreement or any other Loan Document, when and as
the same shall become due and payable, and such failure shall continue
unremedied for a period of three Business Days;

       

      (c) any
representation or warranty made or deemed made by or on behalf of the Borrower
or any other Loan Party in or in connection with any Loan Document or any
amendment or modification thereof or waiver thereunder, or in any report,
certificate, financial statement or other document furnished pursuant to or in
connection with any Loan Document or any amendment or modification thereof or
waiver thereunder, shall prove to have been incorrect in any material respect
when made or deemed made;

       

      (d) the
Borrower shall fail to observe or perform any covenant, condition or agreement
contained in Sections
5.02 (other than clause (c) thereof),
5.03(b), 5.07, 5.11, 5.12, 5.13(a) or 5.13(b) or in Article
VI;

       

      (e) any Loan
Party shall fail to observe or perform any covenant, condition or agreement
contained in any Loan Document (other than those specified in clauses (a), (b) or (d) of this Article),
and such failure shall continue unremedied for a period of 30 days after the
earlier of (i) the Borrower becoming aware of such failure and (ii) notice
thereof from the Administrative Agent to the Borrower (which notice will be
given at the request of the Required Lenders);

       

      (f) any Loan
Party shall fail to observe or perform any covenant, condition or agreement
contained in Section
5.13(c), and such failure shall continue unremedied for a period of 5
Business Days after the earlier of (i) the Borrower becoming aware of such
failure and (ii) notice thereof from the Administrative Agent to the Borrower
(which notice will be given at the request of the Required
Lenders);

       

      (g) any event
or condition occurs that results in any Material Indebtedness becoming due prior
to its scheduled maturity or that enables or permits (with or without the giving
of notice, the lapse of time or both) the holder or holders of any Material
Indebtedness or any trustee or agent on its or their behalf to cause any
Material Indebtedness to become due, or to require the prepayment, repurchase,
redemption or defeasance thereof, prior to its scheduled maturity;

       

      (h) an
involuntary proceeding shall be commenced or an involuntary petition shall be
filed seeking (i) liquidation, reorganization or other relief in respect of the
Borrower or any other Loan Party or their debts, or of a substantial part of
their assets, under any  Federal, state orforeign
bankruptcy, insolvency, receivership or similar law now or hereafter in effect
or (ii) the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Borrower or any other Loan Party or for
a substantial part of their assets, and, in any such case, such proceeding or
petition shall continue undismissed for 60 days or an order or decree approving
or ordering any of the foregoing shall be entered;

       

      
        
          
          

        

        
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      (i) the
Borrower or any other Loan Party shall (i) voluntarily commence any proceeding
or file any petition seeking liquidation, reorganization or other relief under
any Federal, state or foreign bankruptcy, insolvency, receivership or similar
law now or hereafter in effect, (ii) consent to the institution of, or fail to
contest in a timely and appropriate manner, any proceeding or petition described
in clause (h)
of this Article, (iii) apply for or consent to the appointment of a receiver,
trustee, custodian, sequestrator, conservator or similar official for the
Borrower or any other Loan Party or for a substantial part of its assets, (iv)
file an answer admitting the material allegations of a petition filed against it
in any such proceeding, (v) make a general assignment for the benefit of
creditors or (vi) take any action for the purpose of effecting any of the
foregoing;

       

      (j) the
Borrower or any other Loan Party shall become unable, admit in writing its
inability or fail generally to pay its debts as they become due;

       

      (k) one or
more judgments for the payment of money in an aggregate amount in excess of
$1,000,000 (exclusive of amounts covered by insurance) shall be rendered against
the Borrower or any other Loan Party and the same shall remain undischarged for
a period of 30 consecutive days during which execution shall not be effectively
stayed, or any action shall be legally taken by a judgment creditor to attach or
levy upon any assets of the Borrower or any other Loan Party to enforce any such
judgment;

       

      (l) an ERISA
Event shall have occurred that, in the opinion of the Required Lenders, when
taken together with all other ERISA Events that have occurred, could reasonably
be expected to result in a Material Adverse Effect;

       

      (m) any Lien
purported to be created under any Security Document shall cease to be a valid
and perfected Lien on any Collateral, with the priority required by the
applicable Security Document, except as a result of the sale or other
disposition of the applicable Collateral in a transaction permitted under the
Loan Documents, and the same shall not be fully cured within 30 days after
notice thereof to the Borrower by the Administrative Agent, or any Lien
purported to be created under any Security Document shall be asserted by any
Loan Party not to be a valid and perfected Lien on any Collateral, with the
priority required by the applicable Security Document, except as a result of the
sale or other disposition of the applicable Collateral in a transaction
permitted under the Loan Documents;

       

      (n) a Change
of Control shall occur;

       

      then, and
in every such event (other than an event with respect to the Borrower described
in clauses (h)
or (i) of this
Article), and at any time thereafter during the continuance of such event, the
Administrative Agent may, and at the request of the Required Lenders shall, by
notice to the Borrower, take either or both of the following actions, at the
same or different times:  (i)

       

      terminate
the Commitments, and thereupon the Commitments shall terminate immediately, and
(ii) declare the Loans then outstanding to be due and payable in whole (or in
part, in which case any principal not so declared to be due and payable may
thereafter be declared to be due and payable), and thereupon the principal of
the Loans so declared to be due and payable, together with accrued interest
thereon and all fees and other obligations of the Borrower accrued hereunder,
shall become  due and payable immediately, without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
the Borrower; and in case of any event with respect to the Borrower described in
clauses (h) or
(i) of this
Article, the Commitments shall automatically terminate and the principal of the
Loans then outstanding, together with accrued interest thereon and all fees and
other obligations of the Borrower accrued hereunder, shall automatically become
due and payable, without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by the Borrower.

       

      
        
          
          

        

        
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      ARTICLE
VII

       

      The Administrative
Agent

       

      Each of
the Lenders and the Issuing Bank hereby irrevocably appoints the Administrative
Agent as its agent and authorizes the Administrative Agent to take such actions
on its behalf and to exercise such powers as are delegated to the Administrative
Agent by the terms of the Loan Documents, together with such actions and powers
as are reasonably incidental thereto.

       

      The bank
serving as the Administrative Agent hereunder shall have the same rights and
powers in its capacity as a Lender as any other Lender and may exercise the same
as though it were not the Administrative Agent, and such bank and its Affiliates
may accept deposits from, lend money to and generally engage in any kind of
business with the Borrower or any of its Subsidiaries or other Affiliate thereof
as if it were not the Administrative Agent hereunder.

       

      The
Administrative Agent shall not have any duties or obligations except those
expressly set forth in the Loan Documents.  Without limiting the
generality of the foregoing, (a) the Administrative Agent shall not be subject
to any fiduciary or other implied duties, regardless of whether a Default has
occurred and is continuing, (b) the Administrative Agent shall not have any duty
to take any discretionary action or exercise any discretionary powers, except
discretionary rights and powers expressly contemplated by the Loan Documents
that the Administrative Agent is required to exercise in writing by the Required
Lenders (or such other number or percentage of the Lenders as shall be necessary
under the circumstances as provided in Section 9.02), and
(c) except as expressly set forth in the Loan Documents, the Administrative
Agent shall not have any duty to disclose, and shall not be liable for the
failure to disclose, any information relating to the Borrower or any of its
Subsidiaries that is communicated to or obtained by the bank serving as
Administrative Agent or any of its Affiliates in any capacity.  The
Administrative Agent shall not be liable for any action taken or not taken by it
with the consent or at the request of the Required Lenders (or such other number
or percentage of the Lenders as shall be necessary under the circumstances as
provided in Section
9.02) or in the absence of its own gross negligence or willful
misconduct, BUT REGARDLESS OF THE PRESENCE OF ORDINARY
NEGLIGENCE.  The Administrative Agent shall not be deemed to have
knowledge of any Default unless and until written notice thereof is given to the
Administrative Agent by the Borrower or a Lender, and the Administrative Agent
shall not be responsible for or have any duty to ascertain or inquire into (i)
any statement, warranty or

       

      representation
made in or in connection with any Loan Document, (ii) the contents of any
certificate, report or other document delivered thereunder or in connection
therewith, (iii) the performance or observance of any of the covenants,
agreements or other terms or conditions set forth in any Loan Document, (iv) the
validity, enforceability, effectiveness or genuineness of any Loan Document or
any other agreement, instrument or document, or (v) the satisfaction of any
condition set forth in Article IV or
elsewhere in any Loan Document, other than to confirm receipt of items expressly
required to be delivered to the Administrative Agent.

       

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

       

      
        
          
          

        

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

       

      Subject
to the appointment and acceptance of a successor Administrative Agent as
provided in this paragraph, the Administrative Agent may (and, in the event (i)
neither the Administrative Agent nor any Affiliate of the Administrative Agent,
as a Lender, has any Revolving Exposure, outstanding Term Loan or unused
Commitment and (ii) the Required Lenders so request, the Administrative Agent
shall) resign at any time by notifying the Lenders, the Issuing Bank and the
Borrower.  Upon any such resignation, the Required Lenders shall have
the right, in consultation with the Borrower (and, so long as no Event of
Default has occurred which is continuing, subject to the consent of Borrower,
not to be unreasonably withheld), to appoint a successor.  If no
successor shall have been so appointed by the Required Lenders and shall have
accepted such appointment within 60 days after the retiring Administrative Agent
gives notice of its resignation, then the retiring Administrative Agent may, on
behalf of the Lenders and the Issuing Bank, in consultation with the Borrower,
appoint a successor Administrative Agent which shall be a bank with an office in
Houston, Texas, or an Affiliate of any such bank.  Upon the acceptance
of its appointment as Administrative Agent hereunder by a successor, such
successor shall succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder.  The fees payable by the Borrower to a successor
Administrative Agent shall be the same as those payable to its predecessor
unless otherwise agreed between the Borrower and such
successor.  After the Administrative Agent’s resignation hereunder,
the provisions of this Article and Section 9.03 shall
continue in effect for

       

      the
benefit of such retiring Administrative Agent, its sub agents and their
respective Related Parties in respect of any actions taken or omitted to be
taken by any of them while it was acting as Administrative Agent.

       

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

       

      
        
          
          

        

        
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      ARTICLE
VIII

       

      Miscellaneous

       

      SECTION
8.01. Notices.

       

      (a) Except in
the case of notices and other communications expressly permitted to be given by
telephone (and subject to paragraph (b) below), all notices and other
communications provided for herein shall be in writing and shall be delivered by
hand or overnight courier service, mailed by certified or registered mail or
sent by telecopy, as follows:

       

      (i) if to the
Borrower, to it at 7272 Pinemont, Houston, Texas 77040, Attention: Mac McConnell
(Telecopy No. 713-996-6570);

       

      (ii) if to the
Administrative Agent, to Wells Fargo Bank, National Association, 1700 Lincoln
Ave., MAC C7300-034, Denver, Colorado 80203, Telecopy No.: 303-863-5533, with a
copy to: Wells Fargo Bank, National Association, North Houston Commercial
Banking, 21 Waterway Ave., Suite 600, The Woodlands, TX  77380,
Attention:  Thomas F. Caver, Telecopy
No.:  281-362-6611;

       

      (iii) if to the
Issuing Bank, to Wells Fargo Bank, National Association, 1700 Lincoln Ave., MAC
C7300-034, Denver, Colorado 80203, Telecopy No.: 303-863-5533, with a copy to:
Wells Fargo Bank, National Association, North Houston Commercial Banking, 21
Waterway Ave., Suite 600, The Woodlands, TX  77380,
Attention:  Thomas F. Caver, Telecopy
No.:  281-362-6611;

       

      (iv) if to the
Swingline Lender, to Wells Fargo Bank, National Association, 1700 Lincoln Ave.,
MAC C7300-034, Denver, Colorado 80203, Telecopy No.: 303-863-5533, with a copy
to: Wells Fargo Bank, National Association, North Houston Commercial Banking, 21
Waterway Ave., Suite 600, The Woodlands, TX  77380,
Attention:  Thomas F. Caver, Telecopy No.:  281-362-6611;
and

       

      (v) if to any
other Lender, to it at its address (or telecopy number) set forth in its
Administrative Questionnaire.  The Borrower and the Lenders agree that
the Administrative Agent may make any material delivered by the Borrower to the
Administrative Agent, as well as any amendments, waivers, consents, and other
written information,
documents, instruments and other materials relating to the Borrower, any of its
Subsidiaries, or any other materials or matters relating to this Agreement, the
Notes or any of the transactions contemplated hereby (collectively, the "Communications")
available to the Lenders by posting such notices on an electronic delivery
system (which may be provided by the Administrative Agent, an Affiliate of the
Administrative Agent, or any Person that is not an Affiliate of the
Administrative Agent), such as IntraLinks, or a substantially similar electronic
system (the "Platform").  The
Borrower acknowledges that (i) the distribution of material through an
electronic medium is not necessarily secure and that there are confidentiality
and other risks associated with such distribution, (ii) the Platform is provided
"as is" and "as available" and (iii) neither the Administrative Agent nor any of
its Affiliates warrants the accuracy, completeness, timeliness, sufficiency, or
sequencing of the Communications posted on the Platform.  The
Administrative Agent and its Affiliates expressly disclaim with respect to the
Platform any liability for errors in transmission, incorrect or incomplete
downloading, delays in posting or delivery, or problems accessing the
Communications posted on the Platform and any liability for any losses, costs,
expenses or liabilities that may be suffered or incurred in connection with the
Platform.  No warranty of any kind, express, implied or statutory,
including, without limitation, any warranty of merchantability, fitness for a
particular purpose, non-infringement of third party rights or freedom from
viruses or other code defects, is made by the Administrative Agent or any of its
Affiliates in connection with the Platform.  Each Lender agrees that
notice to it (as provided in the next sentence) (a "Notice") specifying
that any Communication has been posted to the Platform shall for purposes of
this Agreement constitute effective delivery to such Lender of such information,
documents or other materials comprising such Communication.  Each
Lender agrees (i) to notify, on or before the date such Lender becomes a party
to this Agreement, the Administrative Agent in writing of such Lender's e-mail
address to which a Notice may be sent (and from time to time thereafter to
ensure that the Administrative Agent has on record an effective e-mail address
for such Lender) and (ii) that any Notice may be sent to such e-mail
address.

       

      
        
           

        

        
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      (b) Any party
hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto.  All
notices and other communications given to any party hereto in accordance with
the provisions of this Agreement shall be deemed to have been given on the date
of receipt.

       

      SECTION
8.02. Waivers;
Amendments.

       

      (a) No
failure or delay by the Administrative Agent, the Issuing Bank or any Lender in
exercising any right or power hereunder or under any other Loan Document shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such right or power, or any abandonment or discontinuance of steps to enforce
such a right or power, preclude any other or further exercise thereof or the
exercise of any other right or power.  The rights and remedies of the
Administrative Agent, the Issuing Bank and the Lenders hereunder and under the
other Loan Documents are cumulative and are not exclusive of any rights or
remedies that they would otherwise have.  No waiver of any provision
of any Loan Document or consent to any departure by any Loan Party therefrom
shall in any event be effective unless the same shall be permitted
byparagraph
(b) of this Section, and then such waiver or consent shall be effective only in
the specific instance and for the purpose for which given.  Without
limiting the generality of the foregoing, the making of a Loan or issuance of a
Letter of Credit shall not be construed as a waiver of any Default, regardless
of whether the Administrative Agent, any Lender or the Issuing Bank may have had
notice or knowledge of such Default at the time.

       

      (b) Neither
this Agreement nor any other Loan Document nor any provision hereof or thereof
may be waived, amended or modified except, in the case of this Agreement,
pursuant to an agreement or agreements in writing entered into by the Borrower
and the Required Lenders or, in the case of any other Loan Document, pursuant to
an agreement or agreements in writing entered into by the Administrative Agent
and the Loan Party or Loan Parties that are parties thereto, in each case with
the consent of the Required Lenders; provided that no such agreement shall (i)
increase  the Commitment of any Lender without the written consent of
such Lender, (ii) reduce the principal amount of any Loan or LC Disbursement or
reduce the rate of interest thereon, or reduce any fees payable hereunder,
without the written consent of each Lender affected thereby, (iii) postpone the
scheduled date of payment of the principal amount of any Loan or LC
Disbursement, or any interest thereon, or any fees payable hereunder, or reduce
the amount of, waive or excuse any such payment, or postpone the scheduled date
of expiration of any Commitment, without the written consent of each Lender
affected thereby, (iv) change Section 2.17(b) or
(c) in a manner
that would alter the pro rata sharing of payments required thereby, without the
written consent of each Lender affected thereby, (v) change any of the
provisions of this Section or the definition of “Required Lenders” or any other
provision of any Loan Document specifying the number or percentage of Lenders
(or Lenders of any Class) required to waive, amend or modify any rights
thereunder or make any determination or grant any consent thereunder, without
the written consent of each Lender (or each Lender of such Class, as the case
may be), (vi) other than in connection with a transaction permitted by Article VI, release
any Subsidiary of Borrower from liability under the Guaranty or limit the
liability of any Subsidiary of Borrower in respect of the Guaranty, without the
written consent of each Lender, (vii) other than in connection with a
transaction permitted by Article VI, release
all or substantially all of the Collateral from the Liens of the Security
Documents, without the written consent of each Lender or (vii) change any
provisions of any Loan Document in a manner that by its terms adversely affects
the rights in respect of payments due to Lenders holding Loans of any Class
differently than those holding Loans of any other Class, without the written
consent of Lenders holding a majority in interest of the outstanding Loans and
unused Commitments of each affected Class; provided further that (A) no such
agreement shall amend, modify or otherwise affect the rights or duties of the
Administrative Agent or the Issuing Bank or the Swingline Lender without the
prior written consent of the Administrative Agent or the Issuing Bank or the
Swingline Lender, as the case may be, and (B) any waiver, amendment or
modification of this Agreement that by its terms affects the rights or duties
under this Agreement of the Revolving Lenders (but not the Term Loan Lenders) or
the Term Loan Lenders (but not the Revolving Lenders) may be effected by an
agreement or agreements in writing entered into by the Borrower and, except as
otherwise provided in this Section 9.02(b), a
majority in interest of the affected Class of Lenders.

       

      
        
          
          

        

        
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      SECTION
8.03. Expenses; Indemnity; Damage
Waiver.

       

      The
Borrower shall pay (i) all reasonable out of pocket expenses incurred by the
Administrative Agent and its Affiliates, including the reasonable fees, charges
and disbursements of counsel for the Administrative Agent, in connection with
the syndication of the credit facilities provided for herein, the preparation
and administration of the Loan Documents or any amendments, modifications or
waivers of the provisions thereof (whether or not the transactions contemplated
hereby or thereby shall be consummated), (ii) all reasonable out of-pocket
expenses incurred by the Issuing Bank in connection with the issuance,
amendment, renewal or extension of any Letter of Credit or any demand for
payment thereunder and (iii) all out-of-pocket expenses incurred by the
Administrative Agent, the Issuing Bank or any Lender, including the fees,
charges and disbursements of any counsel for the Administrative Agent, the
Issuing Bank or any Lender, in connection with the enforcement or protection of
its rights in connection with the Loan Documents, including its rights under
this Section, or in connection with the Loans made or Letters of Credit issued
hereunder, including all such out-of pocket expenses incurred
during  any workout, restructuring or negotiations in respect of such
Loans or Letters of Credit.

       

      (a) The
Borrower shall indemnify the Administrative Agent, the Issuing Bank and each
Lender, and each Related Party of any of the foregoing Persons (each such Person
being called an “Indemnitee”) against, and hold each Indemnitee harmless from,
any and all losses, claims, damages, liabilities and related expenses, including
the fees, charges and disbursements of any counsel for any Indemnitee, incurred
by or asserted against any Indemnitee arising out of, in connection with, or as
a result of (i) the execution or delivery of any Loan Document or any other
agreement or instrument contemplated hereby, the performance by the parties to
the Loan Documents of their respective obligations thereunder or the
consummation of the Transactions or any other transactions contemplated hereby,
(ii) any Loan or Letter of Credit or the use of the proceeds therefrom
(including any refusal by the Issuing Bank to honor a demand for payment under a
Letter of Credit if the documents presented in connection with such demand do
not strictly comply with the terms of such Letter of Credit), (iii) any actual
or alleged presence or release of Hazardous Materials on or from any Mortgaged
Property or any other property currently or formerly owned or operated by the
Borrower or any of its Subsidiaries, or any Environmental Liability related in
any way to the Borrower or any of its Subsidiaries, or (iv) any actual or
prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory and
regardless of whether any Indemnitee is a party thereto; provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses resulted from the gross
negligence, bad faith or willful misconduct of, or a breach of the Loan
Documents by, such Indemnitee, BUT THE PRESENCE OF ORDINARY NEGLIGENCE SHALL NOT
AFFECT THE AVAILABILITY OF SUCH INDEMNITY.

       

      (b) To the
extent that the Borrower fails to pay any amount required to be paid by it to
the Administrative Agent or the Issuing Bank or the Swingline Lender under
paragraphs (a) or (b) of this Section, each Lender severally agrees to pay to
the Administrative Agent or the Issuing Bank or the Swingline Lender, as the
case may be, such Lender’s pro rata share (determined as of the time that the
applicable unreimbursed expense or indemnity payment is sought) of such unpaid
amount; provided that the unreimbursed expense or indemnified loss, claim,
damage, liability or related expense, as the case may be, was incurred by or
asserted against the Administrative Agent or the Issuing Bank in its capacity as
such.  For purposeshereof, a
Lender’s “pro rata share” shall be determined based upon (without duplication)
its share of the sum of the total Revolving Exposures, outstanding Term Loans
and unused Commitments at the time.

       

      
        
          
          

        

        
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      (c) To the
extent permitted by applicable law, neither the Borrower nor any other Loan
Party shall assert, and each hereby waives, any claim against any Indemnitee, on
any theory of liability, for special, indirect, consequential or punitive
damages (as opposed to direct or actual damages) arising out of, in connection
with, or as a result of, this Agreement or any agreement or instrument
contemplated hereby, the Transactions, any Loan or Letter of Credit or the use
of the proceeds thereof.

       

      (d) All
amounts due under this Section shall be payable not later than three Business
Days after written demand therefor.

       

      SECTION
8.04. Successors and
Assigns.

       

      (a) The
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns permitted hereby
(including any Affiliate of the Issuing Bank that issues any Letter of Credit),
except that (i) the Borrower may not assign or otherwise transfer any of its
rights or obligations hereunder without the prior written consent of each Lender
(and any attempted assignment or transfer by the Borrower without such consent
shall be null and void) and (ii) no Lender may assign or otherwise transfer its
rights or obligations hereunder except in accordance with this
Section.  Nothing in this Agreement, expressed or implied, shall be
construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby (including any Affiliate of
the Issuing Bank that issues any Letter of Credit), Participants (to the extent
provided in paragraph (c) of this Section) and, to the extent expressly
contemplated hereby, the Related Parties of each of the Administrative Agent,
the Issuing Bank and the Lenders) any legal or equitable right, remedy or claim
under or by reason of this Agreement.

       

      (b) (i)           Subject
to the conditions set forth in paragraph (b)(ii) below, any Lender may assign to
one or more assignees all or a portion of its rights and obligations under this
Agreement (including all or a portion of its Commitment and the Loans at the
time owing to it) with the prior written consent (such consent not to be
unreasonably withheld) of:

       

      (A)           the
Borrower, provided that no consent of the Borrower shall be required for an
assignment to a Lender, an Affiliate of a Lender, an Approved Fund or, if an
Event of Default has occurred and is continuing, any other assignee;
and

      

      (B)           the
Administrative Agent, provided that no consent of the Administrative Agent shall
be required for an assignment of (x) any Revolving Commitment to an assignee
that is a Lender, an Affiliate of a Lender or an Approved Fund with a Revolving
Commitment immediately prior to giving effect to such assignment and (y) all or
any portion of a Term Loan to a Lender, an Affiliate of a Lender or an Approved
Fund; and

      
        
           

        

        
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      (C)           the
Issuing Bank and the Swingline Lender, provided that no consent of the Issuing
Bank or the Swingline Lender shall be required for an assignment of all or any
portion of a Term Loan.

      

      (ii)           Assignments
shall be subject to the following additional conditions:

      

      (A)           except
in the case of an assignment to a Lender or an Affiliate of a Lender or an
assignment of the entire remaining amount of the assigning Lender’s Commitment
or Loans of any Class, the amount of the Commitment or Loans of the assigning
Lender subject to each such assignment (determined as of the date the Assignment
and Assumption with respect to such assignment is delivered to the
Administrative Agent) shall not be less than $5,000,000 in respect of a
Revolving Commitment or $5,000,000 in respect of a Term Loan Commitment and Term
Loans (in the aggregate), and shall not result in the assigning Lender holding a
Revolving Commitment of less than $5,000,000 or a Term Loan Commitment and Term
Loans (in the aggregate) of less than $5,000,000, unless each of the Borrower
and the Administrative Agent otherwise consent, provided that no such consent of
the Borrower shall be required if an Event of Default has occurred and is
continuing;

      

      (B)           each
partial assignment shall be made as an assignment of a proportionate part of all
the assigning Lender’s rights and obligations under this Agreement, provided
that this clause shall not be construed to prohibit the assignment of a
proportionate part of all the assigning Lender’s rights and obligations in
respect of one Class of Commitments or Loans;

      

      (C)           the
parties to each assignment shall execute and deliver to the Administrative Agent
an Assignment and Assumption, together with a processing and recordation fee of
$3,500; and

      

      (D)           the
assignee, if it shall not be a Lender, shall deliver to the Administrative Agent
an Administrative Questionnaire.

      

      For the
purposes of this Section, the term “Approved Fund” has the following
meaning:

       

      “Approved Fund” means
any Person (other than a natural person) that is engaged in making, purchasing,
holding or investing in bank loans and similar extensions of credit in the
ordinary course of its business and that is administered or managed by (a) a
Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an
entity that administers or manages a Lender.

      

      (iii)           Subject
to acceptance and recording thereof pursuant to paragraph (b)(iv) of this
Section, from and after the effective date specified in each Assignment and
Assumption the assignee thereunder shall be a party hereto and, to the extent of
the interest assigned by such Assignment and Assumption, have the rights and
obligations of a Lender under this Agreement, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment and
Assumption, be released from its obligations under this Agreement (and, in the
case of
an Assignment and Assumption covering all of the assigning Lender’s rights and
obligations under this Agreement, such Lender shall cease to be a party hereto
but shall continue to be entitled to the benefits of Sections 2.14, 2.15, 2.16 and 9.03).  Any
assignment or transfer  by a Lender of rights or obligations under
this Agreement that does not comply with this Section shall be treated for
purposes of this Agreement as a sale by such Lender of a participation in such
rights and obligations in accordance with paragraph (c) of this
Section.

      
        
           

        

        
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      (iv)           The
Administrative Agent, acting for this purpose as an agent of the Borrower, shall
maintain at one of its offices a copy of each Assignment and Assumption
delivered to it and a register for the recordation of the names and addresses of
the Lenders, and the Commitment of, and principal amount of the Loans and LC
Disbursements owing to, each Lender pursuant to the terms hereof from time to
time (the “Register”).  The
entries in the Register shall be conclusive, and the Borrower, the
Administrative Agent, the Issuing Bank, the Swingline Lender and the Lenders may
treat each Person whose name is recorded in the Register pursuant to the terms
hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding
notice to the contrary.  The Register shall be available for
inspection by the Borrower, the Issuing Bank, the Swingline Lender and any
Lender, at any reasonable time and from time to time upon reasonable prior
notice.

      

      (v)           Upon
its receipt of a duly completed Assignment and Assumption executed by an
assigning Lender and an assignee, the assignee’s completed Administrative
Questionnaire (unless the assignee shall already be a Lender hereunder), the
processing and recordation fee referred to in paragraph (b) of this Section and
any written consent to such assignment required by paragraph (b) of this
Section, the Administrative Agent shall accept such Assignment and Assumption
and record the information contained therein in the Register; provided that if
either the assigning Lender or the assignee shall have failed to make any
payment required to be made by it pursuant to this Agreement, the Administrative
Agent shall have no obligation to accept such Assignment and Assumption and
record the information therein in the Register unless and until such payment
shall have been made in full, together with all accrued interest
thereon.  No assignment shall be effective for purposes of this
Agreement unless it has been recorded in the Register as provided in this
paragraph.

      

      (c) (i)  Any
Lender may, without the consent of the Borrower, the Administrative Agent or the
Issuing Bank or the Swingline Lender, sell participations to one or more banks
or other entities (a “Participant”) in all
or a portion of such Lender’s rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans owing to it);
provided that (A) such Lender’s obligations under this Agreement shall remain
unchanged, (B) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations and (C) the Borrower, the
Administrative Agent, the Issuing Bank, the Swingline Lender and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender’s rights and obligations under this
Agreement.  Any agreement or instrument pursuant to which a Lender
sells such a participation shall provide that such Lender shall retain the sole
right to enforce this Agreement and to approve any amendment, modification or
waiver of any provision of this Agreement; provided that such agreement or
instrument may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, modification or waiver described in the
first proviso to Section 9.02(b) that
affects
such Participant.  Subject to paragraph (c)(ii) of this Section, the
Borrower agrees that each Participant shall be entitled to the benefits of Sections 2.14, 2.15 and 2.16 to the same
extent as if it were a Lender and had acquired its interest by assignment
pursuant to paragraph (b) of this Section.  To the extent permitted by
law, each Participant also shall be entitled to the benefits of Section 9.08 as
though it were a Lender, provided such Participant agrees to be subject to Section 2.17(c) as
though it were a Lender.

       

      
        
           

        

        
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      (ii)           A
Participant shall not be entitled to receive any greater payment under Sections 2.14, 2.15 or 2.16 than the
applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation to
such Participant is made with the Borrower’s prior written consent.  A
Participant that would be a Foreign Lender if it were a Lender shall not be
entitled to the benefits of Section 2.16 unless
the Borrower is notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Borrower, to comply with Section 2.16(e) as
though it were a Lender.

      

      (d) Any
Lender may at any time pledge or assign a security interest in all or any
portion of its rights under this Agreement to secure obligations of such Lender,
including without limitation any pledge or assignment to secure obligations to a
Federal Reserve Bank, and this Section shall not apply to any such pledge or
assignment of a security interest; provided that no such pledge or assignment of
a security interest shall release a Lender from any of its obligations hereunder
or substitute any such pledgee or assignee for such Lender as a party
hereto.

       

      SECTION
8.05. Survival.  All
covenants, agreements, representations and warranties made by the Loan Parties
in the Loan Documents and in the certificates or other
instruments  delivered in connection with or pursuant to this
Agreement or any other Loan Document shall be considered to have been relied
upon by the other parties hereto and shall survive the execution and delivery of
the Loan Documents and the making of any Loans and issuance of any Letters of
Credit, regardless of any investigation made by any such other party or on its
behalf and notwithstanding that the Administrative Agent, the Issuing Bank, the
Swingline Lender or any Lender may have had notice or knowledge of any Default
or incorrect representation or warranty at the time any credit is extended
hereunder, and shall continue in full force and effect as long as the principal
of or any accrued interest on any Loan or any fee or any other amount payable
under this Agreement is outstanding and unpaid or any Letter of Credit is
outstanding and so long as the Commitments have not expired or
terminated.  The provisions of Sections 2.14, 2.15, 2.16 and 9.03 and Article VIII shall
survive and remain in full force and effect regardless of the consummation of
the transactions contemplated hereby, the repayment of the Loans, the expiration
or termination of the Letters of Credit and the Commitments or the termination
of this Agreement or any provision hereof.

       

      SECTION
8.06. Counterparts; Integration;
Effectiveness.  This Agreement may be executed in counterparts
(and by different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract.  This Agreement, the other Loan Documents and any
separate letter agreements with respect to fees payable to the Administrative
Agent constitute the entire contract among the parties relating to the subject
matter hereof and supersede any and all previous agreements and understandings,
oral or written, relating to the subject matter hereof.  Except as
provided in Section
4.01, this Agreement shall become effective when it shall have been
executed by the Administrative
Agent and when the Administrative Agent shall have received counterparts hereof
which, when taken together, bear the signatures of each of the other parties
hereto, and thereafter shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns.  Delivery
of an executed counterpart of a signature page of this Agreement by telecopy
shall be effective as delivery of a manually executed counterpart of this
Agreement.

       

      
        
           

        

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

       

      SECTION
8.08. Right of
Setoff.  If an Event of Default shall have occurred and be
continuing, each Lender and each of its Affiliates is hereby authorized at any
time and from time to time, to the fullest extent permitted by law, to set off
and apply any and all deposits (general or special, time or demand, provisional
or final) at any time held and other obligations at any time owing by such
Lender or Affiliate to or for the credit or the account of the Borrower against
any of and all the obligations of the Borrower now or hereafter existing under
this Agreement held by such Lender, irrespective of whether or not such Lender
shall have made any demand under this Agreement and although such obligations
may be unmatured.  The rights of each Lender under this Section are in
addition to other rights and remedies (including other rights of setoff) which
such Lender may have.  Each Lender agrees to use reasonable efforts to
promptly notify Borrower and Administrative Agent after any such set-off and
application, provided that failure to give (or delay in giving) any such notice
shall not affect the validity of such set-off and application or impose any
liability on such Lender.

       

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

       

      (a) This
Agreement shall be construed in accordance with and governed by the law of the
State of Texas.

       

      (b) Each
party hereto hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of each court of the State of Texas
sitting in Harris County and of the United States District Court of the Southern
District of Texas (Houston Division), and any appellate court from any thereof,
in any action or proceeding arising out of or relating to any Loan Document, or
for recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in such Texas State or, to
the extent permitted by law, in such Federal court.  Each of the
parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law.  Nothing in this
Agreement or any other Loan Document shall affect any right that the
Administrative Agent, the Issuing Bank, the Swingline Lender or any Lender may
otherwise have to bring any action or proceeding relating to this Agreement or
any other Loan Document against the Borrower or its properties in the courts of
any jurisdiction.

       

      Each
party hereto hereby irrevocably and unconditionally waives, to the fullest
extent it may legally and effectively do so, any objection which it may now or
hereafter have to the laying of venue of any suit, action or proceeding arising
out of or relating to this Agreement or any other Loan Document in any court
referred to in paragraph (b) of this Section.  Each of the parties
hereto hereby irrevocably waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such action or proceeding
in any such court.

      
        
           

        

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

       

      SECTION
8.10. WAIVER OF JURY
TRIAL.  EACH
PARTY HERETO HEREBY AGREES NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF
RIGHT BY JURY, AND WAIVES ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT
ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH REGARD TO THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT, OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING IN
CONNECTION THEREWITH.  THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN
KNOWINGLY AND VOLUNTARILY BY EACH PARTY HERETO, AND IS INTENDED TO ENCOMPASS
INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY
JURY WOULD OTHERWISE ACCRUE.  EACH PARTY HERETO IS HEREBY AUTHORIZED
TO FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF
THIS WAIVER BY ANY OTHER PARTY HERETO.

       

      SECTION
8.11. Headings.  Article
and Section headings and the Table of Contents used herein are for convenience
of reference only, are not part of this Agreement and shall not affect the
construction of, or be taken into consideration in interpreting, this
Agreement.

       

      SECTION
8.12. Interest Rate
Limitation.  Borrower and the Lenders intend to strictly comply
with all applicable federal and Texas laws, including applicable usury laws (or
the usury laws of any  jurisdiction whose usury laws are deemed to
apply to the Notes or any other Loan Documents despite the intention and desire
of the parties to apply the usury laws of the State of
Texas).  Accordingly, the provisions of this Section shall govern and
control over every other provision of this Agreement or any other Loan Document
which conflicts or is inconsistent with this Section, even if such provision
declares that it controls.  As used in this Section, the term
“interest” includes the aggregate of all charges, fees, benefits or other
compensation which constitute interest under applicable law, provided that, to
the maximum extent permitted by applicable law, (a) any non-principal payment
shall be characterized as an expense or as compensation for something other than
the use, forbearance or detention of money and not as interest, and (b) all
interest at any time contracted for, reserved, charged or received shall be
amortized, prorated, allocated and spread, using the actuarial method, during
the full term of the Notes.  In no event shall Borrower or any other
Person be obligated to pay, or any Lender have any right or privilege to
reserve, receive or retain, (a) any interest in excess of the maximum amount of
nonusurious interest permitted under the laws of the State of Texas or the
applicable laws (if any) of the United States or of any other jurisdiction, or
(b) total interest in excess of theamount
which such Lender could lawfully have contracted for, reserved, received,
retained or charged had the interest been calculated for the full term of the
Notes at the Ceiling Rate.  The daily interest rates to be used in
calculating interest at the Ceiling Rate shall be determined by dividing the
applicable Ceiling Rate per annum by the number of days in the calendar year for
which such calculation is being made.  None of the terms and
provisions contained in this Agreement or in any other Loan Document (including,
without limitation, Article VII hereof)
which directly or indirectly relate to interest shall ever be construed without
reference to this Section, or be construed to create a contract to pay for the
use, forbearance or detention of money at any interest rate in excess of the
Ceiling Rate.  If the term of any Note is shortened by reason of
acceleration or maturity as a result of any Default or by any other cause, or by
reason of any required or permitted prepayment, and if for that (or any other)
reason any Lender at any time, including but not limited to, the stated
maturity, is owed or receives (and/or has received) interest in excess of
interest calculated at the Ceiling Rate, then and in any such event all of any
such excess interest shall be canceled automatically as of the date of such
acceleration, prepayment or other event which produces the excess, and, if such
excess interest has been paid to such Lender, it shall be credited pro tanto
against the then-outstanding principal balance of Borrower’s obligations to such
Lender, effective as of the date or dates when the event occurs which causes it
to be excess interest, until such excess is exhausted or all of such principal
has been fully paid and satisfied, whichever occurs first, and any remaining
balance of such excess shall be promptly refunded to its payor.

       

      
        SECTION
8.13. Syndication
Agent.  The entity named as Syndication Agent hereunder, in
such capacity, shall have no rights, powers, duties, obligations or liabilities
under this Agreement or any of the other Loan Documents, but to the extent that
for any reason any Person makes a claim against such entity, in its capacity as
Syndication Agent and not as a Lender, the indemnification provisions in Article VIII and in
Section 9.03
shall apply.

         

         

      

      
        
          
          

        

        
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      SECTION
8.14. USA Patriot
Act.  Each Lender that is subject to the requirements of the
USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001))
(the “Act”) hereby notifies the Borrower that pursuant to the requirements of
the Act, it is required to obtain, verify and record information that identifies
the Borrower, which information includes the name and address of the Borrower
and other information that will allow such Lender to identify the Borrower in
accordance with the Act.

       

      SECTION
8.15. Amendment and Restatement;
Renewal Notes.  This Agreement amends and restates in its
entirety that certain Credit Agreement (the “Prior Agreement”)
dated as of September 10, 2007 executed by and among the Borrower, Wells Fargo
Bank, National Association, as Administrative Agent, and certain lenders therein
described.  This Agreement does not constitute and shall not be
construed to evidence a novation of or a payment and readvance of any of the
Obligations (as defined in the Prior Agreement), it being the intention of the
parties hereto that this Agreement is an amendment and restatement (but not an
extinguishment) of the Prior Agreement.  From and after the date
hereof, except as the context otherwise provides, (a) all references to the
Prior Agreement (or to any amendment, supplement, modification or amendment and
restatement thereof) in the Loan Documents (other than this Agreement) and the
use of the words “thereunder”, “thereof”, or words of similar import when
referring to the Prior Agreement shall be deemed to refer to this Agreement, (b)
all references to any Article, Section (or subsection) of the Prior Agreement in
any Loan Document (other thanthis
Agreement) shall be amended to become mutatis mutandis, references to the
corresponding provisions of this Agreement and (c) all references to this
Agreement herein (including for purposes of indemnification and reimbursement of
fees) shall be deemed to be references to this Agreement as the same may be
further amended, restated, amended and restated, supplemented or otherwise
modified from time to time pursuant to the terms of this
Agreement.  The Borrower reaffirms the Liens granted pursuant to the
Security Documents to the Administrative Agent for the benefit of the Lenders,
which Liens shall continue in full force and effect during the term of this
Agreement and any renewals or extensions thereof.  The Notes have been
given in renewal, extension and modification of the promissory notes delivered
in connection with the Prior Agreement.

       

      IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.

       

      

      DXP
ENTERPRISES,
INC.,                                                                WELLS
FARGO BANK, NATIONAL

      a Texas
corporation                                                                           ASSOCIATION,
individually and as Lead Arranger

      By:  /s/ Mac
McConnell                                                                   
and Administrative Agent and as Issuing Bank and

      Name: Mac
McConnell                                                      Swingline
Lender

      Title:  Senior
Vice
President,                                                             By:  /s/ Thomas F. Caver,
III                                                                

      Chief
Financial Officer and
Secretary                                              Name:  Thomas
F. Caver, III

      Tax Id.
No.
76-0509661                                                                       Title:  Vice
President

      

      BANK OF
AMERICA,
N.A.,                                                            WACHOVIA
BANK, NATIONAL ASSOCIATION

      individually
and as Syndication
Agent                                          By:  /s/ J. Anthony
Ross

      By:  /s/ Gary L.
Mingle                                  
                    Name:  J. Anthony
Ross

      Name:  Gary
L.
Mingle                                                                       Title:  Senior
Vice President

      Title:  Senior
Vice President

      

      COMPASS
BANK                                              
           
                   U.S.
BANK NATIONAL ASSOCIATION

      By:  /s/ Frank
Carvelli                                                         By:  /s/ F. August
Haug

      Name:  Frank
Carvelli                                                                          Name:  F.
August Haug

      Title:  Vice
President                                                   
                       Title:  Assistant
Vice President

      

      

      

      

      
        
           

        

        
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