Document:

Exhibit 10.1

 

EXECUTION
COPY

 

 

 

CREDIT AGREEMENT

 

by and among

 

 

COMFORT SYSTEMS USA, INC.,

 

as Borrower

 

and

 

HIBERNIA NATIONAL BANK,

 

as Agent

 

HIBERNIA SOUTHCOAST CAPITAL,
INC.,

 

as Arranger

 

and

 

CERTAIN FINANCIAL INSTITUTIONS

 

as Lenders

 

 

$75,000,000

 

 

 

June 30,
2005

 

 

TABLE OF
CONTENTS

 

	
  ARTICLE I - Definitions and References

  	
   

  
	
  Section 1.1

  	
  Defined Terms

  	
   

  
	
  Section 1.2

  	
  Exhibits and Schedules; Additional
  Definitions

  	
   

  
	
  Section 1.3

  	
  Amendment of Defined Instruments

  	
   

  
	
  Section 1.4

  	
  References and Titles

  	
   

  
	
  Section 1.5

  	
  Calculations and Determinations

  	
   

  
	
  Section 1.6

  	
  Joint Preparation; Construction of
  Indemnities and Releases

  	
   

  
	
   

  	
   

  
	
  ARTICLE II - The Loans and Letters of
  Credit

  	
   

  
	
  Section 2.1

  	
  Commitments to Lend; Notes

  	
   

  
	
  Section 2.2

  	
  Requests for Revolving Loans

  	
   

  
	
  Section 2.3

  	
  Continuations and Conversions of Existing
  Loans

  	
   

  
	
  Section 2.4

  	
  Use of Proceeds

  	
   

  
	
  Section 2.5

  	
  Interest Rates and Fees; Payment Dates

  	
   

  
	
  Section 2.6

  	
  Optional Prepayments and Voluntary
  Reduction of Commitment

  	
   

  
	
  Section 2.7

  	
  Mandatory Prepayments

  	
   

  
	
  Section 2.8

  	
  Borrowing Base

  	
   

  
	
  Section 2.9

  	
  Letters of Credit

  	
   

  
	
  Section 2.10

  	
  Requesting Letters of Credit

  	
   

  
	
  Section 2.11

  	
  Reimbursement and Participations

  	
   

  
	
  Section 2.12

  	
  Letter of Credit Fees

  	
   

  
	
  Section 2.13

  	
  No Duty to Inquire

  	
   

  
	
  Section 2.14

  	
  LC Collateral

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE III - Payments to Lenders

  	
   

  
	
  Section 3.1

  	
  General Procedures

  	
   

  
	
  Section 3.2

  	
  Capital Reimbursement

  	
   

  
	
  Section 3.3

  	
  Increased Cost of Eurodollar Loans or
  Letters of Credit

  	
   

  
	
  Section 3.4

  	
  Illegality

  	
   

  
	
  Section 3.5

  	
  Funding Losses

  	
   

  
	
  Section 3.6

  	
  Reimbursable Taxes

  	
   

  
	
  Section 3.7

  	
  Alternative Rate of Interest

  	
   

  
	
  Section 3.8

  	
  Change of Applicable Lending Office;
  Replacement of Lenders

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV - Conditions Precedent to
  Lending

  	
   

  
	
  Section 4.1

  	
  Documents to be Delivered

  	
   

  
	
  Section 4.2

  	
  Additional Conditions Precedent

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE V - Representations and
  Warranties

  	
   

  
	
  Section 5.1

  	
  No Default

  	
   

  
	
  Section 5.2

  	
  Organization and Good Standing

  	
   

  
	
  Section 5.3

  	
  Authorization

  	
   

  

 

 

	
  Section 5.4

  	
  No Conflicts or Consents

  	
   

  
	
  Section 5.5

  	
  Enforceable Obligations

  	
   

  
	
  Section 5.6

  	
  Initial Financial Statements

  	
   

  
	
  Section 5.7

  	
  Other Obligations and Restrictions

  	
   

  
	
  Section 5.8

  	
  Full Disclosure

  	
   

  
	
  Section 5.9

  	
  Litigation

  	
   

  
	
  Section 5.10

  	
  Labor Disputes and Acts of God

  	
   

  
	
  Section 5.11

  	
  ERISA Plans and Liabilities

  	
   

  
	
  Section 5.12

  	
  Environmental and Other Laws

  	
   

  
	
  Section 5.13

  	
  Names and Places of Business

  	
   

  
	
  Section 5.14

  	
  Subsidiaries

  	
   

  
	
  Section 5.15

  	
  Government Regulation

  	
   

  
	
  Section 5.16

  	
  Insider

  	
   

  
	
  Section 5.17

  	
  Solvency

  	
   

  
	
  Section 5.18

  	
  Tax Shelter Regulations

  	
   

  
	
  Section 5.19

  	
  Title to Properties; Licenses

  	
   

  
	
  Section 5.20

  	
  Regulation U

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI - Affirmative Covenants of
  Borrower

  	
   

  
	
  Section 6.1

  	
  Payment and Performance

  	
   

  
	
  Section 6.2

  	
  Books, Financial Statements and Reports

  	
   

  
	
  Section 6.3

  	
  Other Information and Inspections

  	
   

  
	
  Section 6.4

  	
  Notice of Material Events and Change of
  Address

  	
   

  
	
  Section 6.5

  	
  Maintenance of Properties

  	
   

  
	
  Section 6.6

  	
  Maintenance of Existence and Qualifications

  	
   

  
	
  Section 6.7

  	
  Payment of Taxes

  	
   

  
	
  Section 6.8

  	
  Insurance

  	
   

  
	
  Section 6.9

  	
  Performance on Borrower’s Behalf

  	
   

  
	
  Section 6.10

  	
  Interest

  	
   

  
	
  Section 6.11

  	
  Compliance with Law

  	
   

  
	
  Section 6.12

  	
  Environmental Matters; Environmental
  Reviews

  	
   

  
	
  Section 6.13

  	
  Intentionally Left Blank

  	
   

  
	
  Section 6.14

  	
  Bank Accounts; Offset

  	
   

  
	
  Section 6.15

  	
  Guaranties of Borrower’s Subsidiaries

  	
   

  
	
  Section 6.16

  	
  Agreement to Deliver Security Documents

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII - Negative Covenants of
  Borrower

  	
   

  
	
  Section 7.1

  	
  Indebtedness

  	
   

  
	
  Section 7.2

  	
  Limitation on Liens

  	
   

  
	
  Section 7.3

  	
  Hedging Contracts

  	
   

  
	
  Section 7.4

  	
  Limitation on Mergers, Issuances of
  Securities

  	
   

  
	
  Section 7.5

  	
  Limitation on Sales of Property

  	
   

  
	
  Section 7.6

  	
  Limitation on Distributions, Redemptions,
  Payments on Subordinated Debt

  	
   

  
	
  Section 7.7

  	
  Limitation on Investments, Acquisitions,
  Capital Expenditures, and Lines of Business

  	
   

  

 

 

	
  Section 7.8

  	
  Intentionally Omitted

  	
   

  
	
  Section 7.9

  	
  Transactions with Affiliates

  	
   

  
	
  Section 7.10

  	
  Prohibited Contracts

  	
   

  
	
  Section 7.11

  	
  Financial Covenants

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII - Events of Default and
  Remedies

  	
   

  
	
  Section 8.1

  	
  Events of Default

  	
   

  
	
  Section 8.2

  	
  Remedies

  	
   

  
	
  Section 8.3

  	
  Application of Proceeds after Acceleration

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX - Agent

  	
   

  
	
  Section 9.1

  	
  Appointment and Authority

  	
   

  
	
  Section 9.2

  	
  Exculpation, Agent’s Reliance, Etc.

  	
   

  
	
  Section 9.3

  	
  Credit Decisions

  	
   

  
	
  Section 9.4

  	
  Indemnification

  	
   

  
	
  Section 9.5

  	
  Rights as Lender

  	
   

  
	
  Section 9.6

  	
  Sharing of Set-Offs and Other Payments

  	
   

  
	
  Section 9.7

  	
  Investments

  	
   

  
	
  Section 9.8

  	
  Benefit of Article IX

  	
   

  
	
  Section 9.9

  	
  Resignation

  	
   

  
	
  Section 9.10

  	
  Notice of Default

  	
   

  
	
  Section 9.11

  	
  Co-Agents

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE X - Miscellaneous

  	
   

  
	
  Section 10.1

  	
  Waivers and Amendments; Acknowledgments

  	
   

  
	
  Section 10.2

  	
  Survival of Agreements; Cumulative Nature

  	
   

  
	
  Section 10.3

  	
  Notices

  	
   

  
	
  Section 10.4

  	
  Payment of Expenses; Indemnity

  	
   

  
	
  Section 10.5

  	
  Joint and Several Liability; Parties in
  Interest; Assignments

  	
   

  
	
  Section 10.6

  	
  Confidentiality

  	
   

  
	
  Section 10.7

  	
  Governing Law; Submission to Process

  	
   

  
	
  Section 10.8

  	
  Limitation on Interest

  	
   

  
	
  Section 10.9

  	
  Termination; Limited Survival

  	
   

  
	
  Section 10.10.

  	
  Severability

  	
   

  
	
  Section 10.11

  	
  Counterparts; Fax

  	
   

  
	
  Section 10.12

  	
  Intentionally Omitted

  	
   

  
	
  Section 10.13

  	
  Waiver of Jury Trial, Punitive Damages, etc.

  	
   

  
	
  Section 10.14

  	
  Procedure for Increases and Addition of New Lenders

  	
   

  
	
  Section 10.15

  	
  Renewal and Extension

  	
   

  

 

 

	
  Schedules and Exhibits:

  
	
   

  	
   

  
	
  Pricing Schedule

  	
   

  
	
   

  	
   

  
	
  Exhibit 2.1

  	
  -

  	
  Revolving Note

  
	
  Exhibit 2.2(b)

  	
  Borrowing Notice

  
	
  Exhibit 2.3(c)

  	
  Continuation/Conversion Notice

  
	
  Exhibit 2.8

  	
  Borrowing Base Certificate

  
	
  Exhibit 2.10

  	
  Letter of Credit Application and Agreement

  
	
  Exhibit 4.1(g)(i)

  	
  Opinion of Bracewell & Giuliani
  LLP, Counsel for Restricted Persons

  
	
  Exhibit 4.1(g)(ii)

  	
  Opinion of Trent McKenna, In-House Counsel
  for Restricted Persons

  
	
  Exhibit 6.2(b)

  	
  Certificate Accompanying Financial
  Statements

  
	
  Exhibit 10.5

  	
  Assignment and Acceptance Agreement

  
	
  Exhibit 10.14

  	
  -

  	
  Procedure for Increases and Addition of New
  Lenders

  
	
   

  	
   

  
	
  Schedule 1.1(a)

  	
  Existing Liens

  
	
  Schedule 1.1(b)

  	
  Existing Letters of Credit

  
	
  Schedule 3.1

  	
  Lenders Schedule

  
	
  Schedule 4.1

  	
  Security Schedule

  
	
  Schedule 5

  	
  -

  	
  Disclosure Schedule

  
	
  Section 5.6

  	
  Material Adverse Effect

  
	
  Section 5.7

  	
  Material Restrictions

  
	
  Section 5.9

  	
  Litigation

  
	
  Section 5.10

  	
  Labor Disputes

  
	
  Section 5.11

  	
  ERISA Disclosures

  
	
  Section 5.12

  	
  Environmental Disclosures

  
	
  Section 5.13

  	
  Names and Places of Business

  
	
  Section 5.14

  	
  Subsidiaries

  
	
  Schedule 7.1

  	
  Existing Indebtedness

  
				

 

 

CREDIT AGREEMENT

 

THIS CREDIT AGREEMENT is made as of June 30,
2005, by and among COMFORT SYSTEMS USA, INC., Delaware corporation (“Borrower”);
HIBERNIA NATIONAL BANK, a national banking association (“Agent”); and the
Lenders referred to below.

 

W I T N E S S E T H:

 

In consideration of the mutual covenants and
agreements contained herein in consideration of the loans which may hereafter
be made by Lenders and the Letters of Credit which may be made available by LC
Issuer to Borrower, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto do hereby
agree as follows:

 

ARTICLE I

 

DEFINITIONS AND REFERENCES

 

Section 1.1.                                   Defined Terms.  As used in this Agreement, each of the
following terms has the meaning given to such term in this Section 1.1 or
in the sections and subsections referred to below:

 

“Account Debtor” means
the Person which is obligated on any Receivable.

 

“Acquisition” means the
direct or indirect purchase or acquisition, whether in one or more related
transactions, of all or substantially all of the capital stock of any Person or
group of Persons or all or substantially all of the assets, liabilities, and
business of any Person or group of Persons.

 

“Adjusted Base Rate”
means, on any day, the Base Rate for such day plus the Base Rate Margin for
such day, provided that the Adjusted Base Rate charged by any Person shall
never exceed the Highest Lawful Rate.

 

“Adjusted Borrowing Base”
means the Borrowing Base plus the face amount of all outstanding Letters of
Credit.

 

“Adjusted Eurodollar Rate”
means, for any Eurodollar Loan for any day during any Interest Period therefor,
the rate per annum equal to the sum of (a) the Eurodollar Margin for such
day plus (b) the rate per annum (rounded upwards, if necessary, to the
nearest 1/100 of 1%) determined by Agent to be equal to the quotient obtained
by dividing (i) the Eurodollar Rate for such Eurodollar Loan for such
Interest Period by (ii) 1 minus the Reserve Requirement for such
Eurodollar Loan for such Interest Period, provided that no Adjusted Eurodollar
Rate charged by any Person shall ever exceed the Highest Lawful Rate.  The Adjusted Eurodollar Rate for any 

 

 

Eurodollar
Loan shall change whenever the Eurodollar Margin or the Reserve Requirement
changes.

 

“Affiliate” means, as to
any Person, each other Person that directly or indirectly (through one or more
intermediaries or otherwise) controls, is controlled by, or is under common
control with, such Person.  A Person
shall be deemed to be “controlled by” any other Person if such other Person
possesses, directly or indirectly, power

 

(a)                                  to vote 20% or more of the
securities or other equity interests (on a fully diluted basis) having ordinary
voting power for the election of directors, the managing general partner or
partners or the managing member or members; or

 

(b)                                 to direct or cause the direction
of the management and policies of such Person whether by contract or otherwise.

 

“Aggregate Commitment”
means the aggregate of all Lenders’ Revolving Loan Commitments, as such may be
reduced, amortized or adjusted from time to time in accordance with this
Agreement.

 

“Agent” means Hibernia
National Bank as Agent hereunder, and its successors in such capacity.

 

“Agreement” means this
Credit Agreement.

 

“Applicable Lending Office”
means, with respect to each Lender, such Lender’s Domestic Lending Office in
the case of Base Rate Loans and such Lender’s Eurodollar Lending Office in the
case of Eurodollar Loans.

 

“Arranger” means
Hibernia Southcoast Capital, Inc., a Louisiana corporation.

 

“Assignment and Acceptance”
means the agreement contemplated by Section 10.5.

 

“Assignment of Prior Credit
Documents” means the Assignment of Notes, Liens and Security Agreements
dated as of the Closing Date by the Prior Agent and each of the lenders party to
the Prior Credit Agreement in favor of the Agent and the other Lender Parties.

 

“Base Rate” means, for
any day, the rate per annum equal to the higher of (a) the Federal Funds
Rate for such day plus one-half of one percent (.5%) and (b) the Prime
Rate for such day.  Any change in the
Base Rate due to a change in the Prime Rate or the Federal Funds Rate shall be
effective on the effective date of such change in the Prime Rate or Federal
Funds Rate.  As used in this definition, “Prime
Rate” means the per annum rate of interest established from time to time by
Citibank, N.A. as its Prime Rate, which rate may not be the lowest rate of
interest charged by Citibank, N.A. to its customers.

 

“Base Rate Loan” means a
Loan that bears interest at the Adjusted Base Rate.

 

 

2

 

“Base Rate Margin” means
on any date, with respect to each Base Rate Loan, the rate per annum set forth
as such on the Pricing Schedule.

 

“Basis Point” or “bps”
means one one-hundredth of one percent (0.01%).

 

“Bonded Receivables”
means any Receivable resulting from goods or services provided to an Account
Debtor under a job which is covered by a surety bond provided by Borrower or
its agent, that is secured by assets of any Restricted Person.

 

“Borrower” means Comfort
Systems USA, Inc., a Delaware corporation.

 

“Borrowing” means a
borrowing of new Loans of a single Type (and, in the case of Eurodollar Loans,
with the same Interest Period) pursuant to Section 2.2 or a Continuation
or Conversion of existing Loans into a single Type (and, in the case of
Eurodollar Loans, with the same Interest Period) pursuant to Section 2.3.

 

“Borrowing Base” means,
at any time of its determination, the lesser of (a) the aggregate
Revolving Loan Commitments of the Lenders and (b) an amount equal to (i) sixty-five
percent 65% of Eligible Receivables, less
(ii) the face amount of all outstanding Letters of Credit.

 

“Borrowing Base Certificate”
means a report in the form attached hereto as Exhibit 2.8, appropriately
completed, together with the following attachments: an aging schedule of
all trade Receivables of Borrower on a Consolidated basis as of the date
specified in such report, in summary form, which reflects aging, on an
aggregate basis, of such trade Receivables.

 

“Borrowing Base Deficiency”
has the meaning given to such term in Section 2.7(b).

 

“Borrowing Notice” means
a written or telephonic request, or a written confirmation, made by Borrower
which meets the requirements of Section 2.2.

 

“Business Day” means a day,
other than a Saturday or Sunday, on which commercial banks are open for
business with the public in Houston, Harris County, Texas.  Any Business Day in any way relating to
Eurodollar Loans (such as the day on which an Interest Period begins or ends)
must also be a day on which, in the judgment of Agent, significant transactions
in dollars are carried out in the interbank eurocurrency market.

 

“Capital Asset” means
any asset which would be classified as a fixed or capital asset on a
Consolidated balance sheet of any Person prepared in accordance with GAAP.

 

“Capital Expenditures” means, without
duplication, any expenditures for any purchase or other acquisition of any
Capital Asset, excluding (i) the cost of assets acquired with Capitalized
Lease Obligations, other purchase money financing, or the proceeds of Loans
under this Agreement, (ii) expenditures of insurance proceeds to rebuild
or replace any asset after a casualty loss, and (iii) leasehold
improvement expenditures for which such Person is reimbursed promptly by the
lessor.

 

3

 

“Capital Lease” means a lease with
respect to which the lessee is required concurrently to recognize the
acquisition of an asset and the incurrence of a liability in accordance with
GAAP.

 

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

 

“Cash Equivalents” means Investments
in:

 

(a)                                  marketable
obligations, maturing within twelve months after acquisition thereof, issued or
unconditionally guaranteed by the United States of America or an
instrumentality or agency thereof and entitled to the full faith and credit of
the United States of America;

 

(b)                                 demand deposits, and
time deposits (including certificates of deposit) maturing within twelve months
from the date of deposit thereof, with any office of any Lender or with a domestic
office of any national or state bank or trust company which is organized under
the Laws of the United States of America or any state therein, which has
capital, surplus and undivided profits of at least $500,000,000, and whose long
term certificates of deposit are rated at least Aa3 by Moody’s or AA- by S &
P;

 

(c)                                  repurchase
obligations with a term of not more than seven days for underlying securities
of the types described in subsection (a) above entered into with any
commercial bank meeting the specifications of subsection (b) above;

 

(d)                                 open market commercial
paper, maturing within 270 days after acquisition thereof, which are rated at
least P-1 by Moody’s or A-1 by S & P; and

 

(e)                                  money market or other
mutual funds substantially all of whose assets comprise securities of the types
described in subsections (a) through (d) above.

 

“Change of Control”
means the occurrence of any of the following events: (a) any Person or two
or more Persons acting as a group shall acquire beneficial ownership (within
the meaning of Rule 13d-3 of the Securities and Exchange Commission under
the Securities Act of 1934, as amended, and including holding proxies to vote
for the election of directors other than proxies held by Borrower’s management
or their designees to be voted in favor of Persons nominated by Borrower’s
Board of Directors) of 35% or more of the outstanding voting securities of
Borrower, measured by voting power (including both common stock and any
preferred stock or other equity securities entitling the holders thereof to
vote with the holders of common stock in elections for directors of Borrower)
or (b) a majority of the directors of Borrower shall consist of Persons
not nominated by Borrower’s Board of Directors (not including as Board nominees
any directors which the Board is obligated to nominate pursuant to shareholders
agreements, voting trust arrangements or similar arrangements).

 

4

 

“Closing Date” means the
date on which all of the conditions precedent set forth in Section 4.1 and
Section 4.2 shall have been satisfied or waived.

 

“Collateral” means all
property of any Restricted Person of any kind which, under the terms of any
Security Document, is subject to or is purported to be subject to a Lien in
favor of Lenders (or in favor of Agent for the benefit of Lenders).

 

“Commitment Fee” shall
have the meaning set forth in Section 2.5(c).

 

“Commitment Fee Rate”
means, on any date, the rate per annum designated as such and set forth on the
Pricing Schedule.

 

“Commitment Period”
means the period from and including the Closing Date until the Maturity Date
(or, if earlier, the day on which the obligations of Lenders to make Loans
hereunder or the obligations of LC Issuer to issue Letters of Credit have been
terminated or the Notes become due and payable in full).

 

“Consolidated” refers to
the consolidation of any Person, in accordance with GAAP, with its properly
consolidated subsidiaries.  References
herein to a Person’s Consolidated financial statements, financial position,
financial condition, liabilities, etc. refer to the consolidated financial
statements, financial position, financial condition, liabilities, etc. of such
Person and its properly consolidated subsidiaries.

 

“Consolidated Capital
Expenditures” means, for any Person for any period, the Capital
Expenditures of such Person calculated on a Consolidated basis for such period.

 

“Consolidated EBITDA”
means, for any Person for any period, the sum of (a) such Person’s
Consolidated Net Income during such period, plus (b) all interest expense
which was deducted in determining such Person’s Consolidated Net Income; plus (c) all
income taxes which were deducted in determining such Person’s Consolidated Net
Income; plus (d) all depreciation and amortization which were deducted in
determining such Person’s Consolidated Net Income; plus (e) other non-cash
charges, including non-cash amortization of debt incurrence costs and net
mark-to-market losses.

 

“Consolidated Interest
Expense” means, for any Person, for any period without duplication, all
interest paid or accrued during such period on Indebtedness (including capital
lease obligations) excluding amortization of debt incurrence expenses, original
issue discount, and mark-to-market interest expense.

 

“Consolidated Net Income”
means, for any Person, for any period, such Person’s Consolidated net income
for such period after eliminating earnings or losses attributable to
outstanding minority interests and excluding the net income of any Person other
than a Subsidiary in which such Person has an ownership interest plus any Goodwill Impairment Charges.

 

5

 

“Consolidated Tangible Net
Worth” means, for any Person, at any time, (a) all Consolidated assets
of such Person which would be shown on its Consolidated balance sheet prepared
as of such time in accordance with GAAP, other than intangible assets
(including patents, copyrights, licenses, franchises, goodwill, trade names,
trade secrets and operating leases), minus
(b) the sum of (i) all amounts which would be shown on such balance
sheet as minority interests in any Subsidiaries of such Person, and (ii) all
Consolidated Liabilities of such Person which would be shown on such balance
sheet, adjusted by treating as Liabilities rather than equity all capital stock
and other equity securities which such Person would be required to purchase,
redeem or otherwise acquire at the election of any holder thereof, upon the
passage of time, or upon the occurrence of any contingency (other than the
voluntary election of such Person to make such purchase, redemption or
acquisition).

 

“Consolidated Total
Indebtedness” means, for any Person, as of any date, the sum of the
following (without duplication):  (a) all
Indebtedness which is classified as “long-term indebtedness” on a Consolidated
balance sheet of such Person and its Consolidated Subsidiaries prepared as of
such date in accordance with GAAP and any current maturities and other
principal amount in respect of such Indebtedness due within one year but which
was classified as “long-term indebtedness” at the creation thereof, (b) Indebtedness
for borrowed money of such Person and its Consolidated Subsidiaries outstanding
under a revolving credit or similar agreement providing for borrowings (and
renewals and extensions thereof) over a period of more than one year,
notwithstanding the fact that any such borrowing is made within one year of the
expiration of such agreement, and (c) all Indebtedness in respect of
Capital Leases of such Person and its Consolidated Subsidiaries.

 

“Continuation” shall
refer to the continuation pursuant to Section 2.3 hereof of a Eurodollar
Loan as a Eurodollar Loan from one Interest Period to the next Interest Period.

 

“Continuation/Conversion
Notice” means a written or telephonic request, or a written confirmation,
made by Borrower which meets the requirements of Section 2.3.

 

“Conversion” shall refer
to a conversion pursuant to Section 2.3 or Article III of one Type of
Loan into another Type of Loan.

 

“Default” means any
Event of Default and any default, event or condition which would, with the
giving of any requisite notices and the passage of any requisite periods of
time, constitute an Event of Default.

 

“Default Rate” means, at
the time in question (a) with respect to any Base Rate Loan any other
Obligation except as described in the immediately following clause (b), the
rate per annum equal to four percent (4%) above the Adjusted Base Rate then in
effect for such Loan or other Obligation and (b) with respect to any
Eurodollar Loan, the rate per annum equal to four percent (4%) above the
Adjusted Eurodollar Rate then in effect for such Loan or other Obligation,
provided in each case that no Default Rate charged by any Person shall ever
exceed the Highest Lawful Rate.

 

6

 

“Disclosure Schedule”
means Schedule 5 hereto.

 

“Distribution” means (a) any
dividend or other distribution made by a Restricted Person on or in respect of
any stock, partnership interest, or other equity interest in such Restricted
Person or any other Restricted Person (including any option or warrant to buy
such an equity interest), or (b) any payment made by a Restricted Person
to purchase, redeem, acquire or retire any stock, partnership interest, or
other equity interest in such Restricted Person or any other Restricted Person
(including any such option or warrant).

 

“Domestic Lending Office”
means, with respect to any Lender, the office of such Lender specified as its “Domestic
Lending Office” below its name on Schedule 3.1 hereto, or such other
office as such Lender may from time to time specify to Borrower and Agent; with
respect to LC Issuer, the office, branch, or agency through which it issues
Letters of Credit; and, with respect to Agent, the office, branch, or agency
through which it administers this Agreement.

 

“Eligible Receivables”
means all trade Receivables, less any Bonded
Receivables, less reserves or
allowances for doubtful accounts.

 

“Eligible Transferee”
means a Person which either (a) is a Lender or an Affiliate of a Lender,
or (b) is consented to as an Eligible Transferee by Agent and, so long as
no Default or Event of Default is continuing, by Borrower, which consents in
each case will not be unreasonably withheld (provided that no Person organized
outside the United States may be an Eligible Transferee if Borrower would be
required to pay withholding taxes on interest or principal owed to such
Person).

 

“Environmental Laws”
means any and all Laws relating to the environment or to emissions, discharges,
releases or threatened releases of pollutants, contaminants, chemicals, or
industrial, toxic or hazardous substances or wastes into the environment
including ambient air, surface water, ground water, or land, or otherwise relating
to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport, or handling of pollutants, contaminants, chemicals, or
industrial, toxic or hazardous substances or wastes.

 

“Equity” means shares of capital stock or a partnership,
profits, capital, member or other equity interest, or options, warrants or any
other rights to substitute for or otherwise acquire the capital stock or a
partnership, profits, capital, member or other equity interest of any Person.

 

“ERISA” means the
Employee Retirement Income Security Act of 1974, as amended from time to time,
and any successor statutes or statute, together with all rules and
regulations promulgated with respect thereto.

 

“ERISA Affiliate” means
each Restricted Person and all members of a controlled group of corporations
and all trades or businesses (whether or not incorporated) under common control
that, together with such Restricted Person, are treated as a single employer
under Section 414 of the Internal Revenue Code.

 

7

 

“ERISA Plan” means any
employee pension benefit plan subject to Title IV of ERISA maintained by any
ERISA Affiliate with respect to which any Restricted Person has a fixed or
contingent liability.

 

“Eurodollar Lending Office”
means, with respect to any Lender, the office of such Lender specified as its “Eurodollar
Lending Office” below its name on Schedule 3.1 hereto (or, if no such
office is specified, its Domestic Lending Office), or such other office of such
Lender as such Lender may from time to time specify to Borrower and Agent.

 

“Eurodollar Loan” means
a Loan that bears interest at the Adjusted Eurodollar Rate.

 

“Eurodollar Margin” means, on any
date, with respect to each Eurodollar Loan, the rate per annum set forth on the
Pricing Schedule.

 

“Eurodollar Rate” means,
for any Eurodollar Loan within a Borrowing and with respect to the related
Interest Period therefor, (a) the interest rate per annum (carried out to
the fifth decimal place) equal to the rate determined by the Agent to be the
offered rate that appears on the page of the Telerate Screen that displays
an average British Bankers Association Interest Settlement Rate (such page currently
being page number 3750) for deposits in U.S. dollars (for delivery on the
first day of such Interest Period) with a term equivalent to such Interest
Period, determined as of approximately 11:00 a.m. (London time) two
Business Days prior to the first day of such Interest Period, or (b) in
the event the rate referenced in the preceding subsection (a) does
not appear on such page or service or such page or service shall
cease to be available, the rate per annum (carried out to the fifth decimal
place) equal to the rate determined by the Agent to be the offered rate on such
other page or other service that displays an average British Bankers
Association Interest Settlement Rate for deposits in U.S. dollars (for delivery
on the first day of such Interest Period) with a term equivalent to such
Interest Period, determined as of approximately 11:00 a.m. (London time)
two Business Days prior to the first day of such Interest Period, or (c) in
the event the rates referenced in the preceding subsections (a) and (b) are
not available, the rate per annum determined by the Agent as the rate of
interest at which deposits in U.S. dollars (for delivery on the first day of
such Interest Period) in same day funds in the approximate amount of the
applicable Eurodollar Loan and with a term equivalent to such Interest Period
would be offered by its London branch to major banks in the offshore U.S.
dollar market at their request at approximately 11:00 a.m. (London time)
two Business Days prior to the first day of such Interest Period.

 

“Event of Default” has
the meaning given to such term in Section 8.1.

 

“Existing Letters of Credit”
means the letters of credit listed on Schedule 1.1(b).

 

“Federal Funds Rate”
means, for any day, the rate per annum (rounded upwards, if necessary, to the
nearest 1/100th of one percent) equal to the weighted average of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers on such day, as published by the Federal
Reserve Bank of New York on the Business Day next succeeding such day, provided
that (a) if the day for which such rate is to

 

8

 

be determined
is not a Business Day, the Federal Funds Rate for such day shall be such rate
on such transactions on the next preceding Business Day as so published on the
next succeeding Business Day, and (b) if such rate is not so published for
any day, the Federal Funds Rate for such day shall be the average rate quoted
to Agent on such day on such transactions as determined by Agent.

 

“Fiscal Quarter” means a
three-month period ending on March 31, June 30, September 30 or December 31
of any year.

 

“Fiscal Year” means a
twelve-month period ending on December 31 of any year.

 

“GAAP” means those
generally accepted accounting principles and practices which are recognized as
such by the Financial Accounting Standards Board (or any generally recognized
successor) and which, in the case of Restricted Persons and their Consolidated
Subsidiaries, are applied for all periods after the date hereof in a manner
consistent with the manner in which such principles and practices were applied
to the Initial Financial Statements.  If
any change in any accounting principle or practice is required by the Financial
Accounting Standards Board (or any such successor) in order for such principle
or practice to continue as a generally accepted accounting principle or
practice, all reports and financial statements required hereunder with respect
to any Restricted Person or with respect to any Restricted Person and its
Consolidated Subsidiaries may be prepared in accordance with such change, but
all calculations and determinations to be made hereunder may be made in
accordance with such change only after notice of such change is given to each
Lender, and Required Lenders and Agent agree to such change insofar as it
affects the accounting of such Restricted Person and its Consolidated
Subsidiaries.

 

“Goodwill Impairment Charges”
means accounting charges resulting from the write-up or write-down of acquired
goodwill and other intangible assets in accordance with FAS 142.

 

“Guarantors” means,
collectively, (a) each Subsidiary of the Borrower existing on the Closing
Date, other than an Immaterial Subsidiary and (b) any Subsidiary of
Borrower which executes and delivers a Guaranty to Agent after the date hereof,
pursuant to Section 6.15.

 

“Guaranty” means (a) that
certain Guaranty dated as of the date hereof, executed by each Guarantor
existing on the Closing Date, in favor of the Agent for the ratable benefit of
the Lenders, and (b) any Guaranty or joinder to a Guaranty executed by a
Guarantor after the Closing Date, in favor of the Agent for the ratable benefit
of the Lenders, in each case as such Guaranties may be amended, supplemented,
or modified and in effect from time to time.

 

“Hazardous Materials”
means any substances regulated under any Environmental Law, whether as
pollutants, contaminants, or chemicals, or as industrial, toxic or hazardous
substances or wastes, or otherwise.

 

“Hedging Contract” means
(a) any agreement providing for options, swaps, floors, caps, collars,
forward sales or forward purchases involving interest rates, commodities or
commodity

 

9

 

prices,
equities, currencies, bonds, or indexes based on any of the foregoing, (b) any
option, futures or forward contract traded on an exchange, and (c) any
other derivative agreement or other similar agreement or arrangement.

 

“Highest Lawful Rate”
means, with respect to each Lender Party to whom Obligations are owed, the
maximum nonusurious rate of interest that such Lender Party is permitted under
applicable Law to contract for, take, charge, or receive with respect to such
Obligations.  All determinations herein
of the Highest Lawful Rate, or of any interest rate determined by reference to
the Highest Lawful Rate, shall be made separately for each Lender Party as
appropriate to assure that the Loan Documents are not construed to obligate any
Person to pay interest to any Lender Party at a rate in excess of the Highest
Lawful Rate applicable to such Lender Party.

 

“Immaterial Subsidiary”
means one or more Subsidiaries with aggregate gross assets of less than
$250,000.

 

“Indebtedness” of any
Person means obligations in any of the following categories:

 

(a)                                  debt
for borrowed money;

 

(b)                                 an
obligation to pay the deferred purchase price of property or services;

 

(c)                                  obligations
evidenced by a bond, debenture, note or similar instrument;

 

(d)                                 Off-Balance
Sheet Liabilities;

 

(e)                                  obligations
arising under Hedging Contracts (on a net basis to the extent netting is
provided for in the applicable Hedging Contract);

 

(f)                                    Capital
Lease Obligations;

 

(g)                                 obligations
arising under conditional sales or other title retention agreements;

 

(h)                                 obligations
owing under direct or indirect guaranties of Indebtedness of any other Person
or otherwise constituting obligations to purchase or acquire or to otherwise
protect or insure a creditor against loss in respect of Indebtedness of any
other Person (such as obligations under working capital maintenance agreements,
agreements to keep-well, or agreements to purchase Indebtedness, assets, goods,
securities or services), but excluding endorsements in the ordinary course of
business of negotiable instruments in the course of collection;

 

(i)                                     obligations
to purchase or redeem securities or other property, if such obligations arise
out of or in connection with the sale or issuance of the same or similar
securities or property (for example, repurchase agreements, mandatorily
redeemable preferred stock and sale/leaseback agreements);

 

10

 

(j)                                     obligations
with respect to letters of credit or applications or reimbursement agreements
therefore; or

 

(k)                                  obligations
with respect to banker’s acceptances.

 

provided, however, that the “Indebtedness” of
any Person shall not include obligations that were incurred by such Person to
vendors, suppliers, or other Persons providing goods and services for use by
such Person in the ordinary course of its business.

 

“Initial Financial
Statements” means (a) the audited annual Consolidated financial
statements of Borrower dated as of December 31, 2004, and (b) the
unaudited quarterly Consolidated financial statements of Borrower dated as of March 31,
2005.

 

“Intercreditor Agreement”
means (i) that certain Intercreditor Agreement dated October 23,
2003, as amended by First Amendment to Intercreditor Agreement dated March 1,
2005, and as assigned by the Prior Agent to the Agent pursuant to the
Assignment of Prior Credit Documents, between Federal Insurance Company, an
Indiana corporation, Arch Insurance Company, a Missouri corporation, and the
Agent, and (ii) any other agreement to which Borrower, the Agent, and any
surety are parties that establishes the priorities of the parties with respect
to Bonded Receivables.

 

“Interest Payment Date”
means (a) with respect to each Base Rate Loan, the first Business Day of
each Fiscal Quarter; and (b) with respect to each Eurodollar Loan, the
last day of the Interest Period that is applicable thereto and, if such
Interest Period is greater than three months in length, than the first Business
Day of each Fiscal Quarter shall also be an Interest Payment Date for each such
Eurodollar Loan.

 

“Interest Period” means,
with respect to each Eurodollar Loan, the period specified in the Borrowing
Notice or Continuation/Conversion Notice applicable to such Eurodollar Loan,
beginning on and including the date specified in such Borrowing Notice or
Continuation/Conversion Notice (which must be a Business Day), and ending one,
two, three, and six months thereafter, as Borrower may elect in such notice;
provided that:  (a) any Interest
Period which would otherwise end on a day which is not a Business Day shall be
extended to the next succeeding Business Day unless such Business Day falls in
another calendar month, in which case such Interest Period shall end on the
next preceding Business Day; (b) any Interest Period which begins on the
last Business Day in a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day in a calendar month; and (c) notwithstanding
the foregoing, any Interest Period which would otherwise end after the last day
of the Commitment Period shall end on the last day of the Commitment Period
(or, if the last day of the Commitment Period is not a Business Day, on the
next preceding Business Day).

 

“Internal Revenue Code”
means the United States Internal Revenue Code of 1986, as amended from time to
time and any successor statute or statutes, together with all rules and
regulations promulgated with respect thereto.

 

11

 

“Investment” means any
investment, made directly or indirectly, in any Person, whether by purchase,
acquisition of equity interests, indebtedness or other obligations or
securities or by extension of credit, loan, advance, capital contribution or
otherwise and whether made in cash, by the transfer of property, or by any
other means.

 

“Law” means any statute,
law, regulation, ordinance, rule, treaty, judgment, order, decree, permit,
concession, franchise, license, agreement or other governmental restriction of
the United States or any state or political subdivision thereof or of any
foreign country or any department, province or other political subdivision
thereof.  Any reference to a Law includes
any amendment or modification to such Law, and all regulations, rulings, and
other Laws promulgated under such Law.

 

“LC Application” means
any application for a Letter of Credit hereafter made by Borrower to LC Issuer.

 

“LC Collateral” has the
meaning given to such term in Section 2.14(a).

 

“LC Conditions” has the
meaning given to such term in Section 2.10.

 

“LC Issuer” means
Hibernia National Bank in its capacity as the issuer of Letters of Credit
hereunder, and its successors in such capacity. 
Agent may, with the consent of Borrower and the Lender in question,
appoint any Lender hereunder as an LC Issuer in place of or in addition to
Hibernia National Bank.

 

“LC Obligations” means,
at the time in question, the sum of all Matured LC Obligations plus the maximum
amounts which LC Issuer might then or thereafter be called upon to advance
under all Letters of Credit then outstanding.

 

“Lender
Hedging Obligations” means Indebtedness to a Lender Party arising out of
any Hedging Contract permitted under Section 7.3.

“Lender Parties” means
Agent, LC Issuer, and all Lenders.

 

“Lenders” means each
signatory hereto (other than Borrower and any Restricted Person that is a party
hereto), and the successors of each such party as Lender hereunder pursuant to Section 10.5.

 

“Lenders Schedule” means
Schedule 3.1 hereto.

 

“Letter of Credit” means
any letter of credit issued by LC Issuer hereunder at the application of
Borrower, and shall include the Existing Letters of Credit, in each case as
extended or otherwise modified by the LC Issuer Bank from time to time.

 

“Liabilities” means, as
to any Person, all liabilities that would appear as such on a balance sheet of
such Person under GAAP.

 

12

 

“Lien” means, with
respect to any property or assets, any right or interest therein of a creditor
to secure Liabilities owed to it or any other arrangement with such creditor
which provides for the payment of such Liabilities out of such property or
assets or which allows such creditor to have such Liabilities satisfied out of
such property or assets prior to the general creditors of any owner thereof,
including any lien, mortgage, security interest, pledge, rights of a vendor
under any title retention or conditional sale agreement or lease substantially
equivalent thereto, tax lien, mechanic’s or materialman’s lien, or any other
charge or encumbrance for security purposes, whether arising by Law or
agreement or otherwise, but excluding any right of offset which arises without
agreement in the ordinary course of business.

 

“Loan Documents” means
this Agreement, the Notes, the Security Documents, the Letters of Credit, the
LC Applications, any Hedging Contract or Intercreditor Agreement to which
Borrower and any Lender are a party, and all other agreements, certificates,
documents, instruments and writings at any time delivered in connection
herewith or therewith (exclusive of term sheets and commitment letters).

 

“Loans” means the
Revolving Loans as otherwise described in Section 2.1.

 

“Margin Stock” means
margin stock, as such term is defined in Regulation U promulgated by the Board
of Governors of the Federal Reserve System.

 

“Material Adverse Change”
means a material and adverse change, from the state of affairs presented in the
Initial Financial Statements or as represented or warranted in any Loan
Document, to (a) Borrower’s Consolidated financial condition, (b) Borrower’s
Consolidated business, assets, operations or properties, considered as a whole,
(c) Borrower’s ability to timely pay the Obligations, or (d) the
enforceability of the material terms of any Loan Documents.

 

“Matured LC Obligations”
means all amounts paid by LC Issuer on drafts or demands for payment drawn or
made under or purported to be made under any Letter of Credit and all other
amounts due and owing to LC Issuer under any LC Application for any Letter of
Credit, to the extent the same have not been repaid to LC Issuer (with the
proceeds of Loans or otherwise).

 

“Maturity Date” means
four years from the date hereof.

 

“Maximum Drawing Amount”
means at the time in question the sum of the maximum amounts which LC Issuer
might then or thereafter be called upon to advance under all Letters of Credit
which are then outstanding.

 

“Moody’s” means Moody’s
Investors Service, Inc., or its successor.

 

“Net Casualty Proceeds”
means (a) cash insurance proceeds (other than proceeds of business
interruption insurance) received by Borrower or any of its Subsidiaries in
connection with a loss, damage, destruction, or casualty of any or all of the
assets of Borrower or any of its Subsidiaries (the “Casualty Assets”), minus (b) the amount of such cash insurance proceeds

 

13

 

reinvested by
the Borrower or any of its Subsidiaries, so long as such reinvestment is (i) consummated
or irrevocably committed to be consummated within 365 days after the receipt of
such proceeds and (ii) to restore, repair, or replace the Casualty Assets,
or purchase other assets with substantially the same utility and in the same
line of business as the Casualty Assets

 

“Note(s)” means the
Revolving Notes.

 

“Obligations” means all
indebtedness, liabilities and obligations, whether matured or unmatured,
liquidated or unliquidated, primary or secondary, direct or indirect, absolute,
fixed or contingent, from time to time owing by any Restricted Person to any
Lender Party under or pursuant to any of the Loan Documents, including all LC
Obligations and any Lender Hedging Obligations. 
“Obligation” means any part of the Obligations.

 

“Off-Balance Sheet Liability”
of a Person means (a) any repurchase obligation or liability of such
Person with respect to accounts or notes receivable sold by such Person, (b) Synthetic
Lease Obligations, or (c) any obligation arising with respect to any other
transaction which is the functional equivalent of or takes the place of
borrowing but which does not constitute a liability on the balance sheets of such
Person (but, for the avoidance of doubt, excluding any operating leases other
than a Synthetic Lease).

 

“Percentage Share”
means, with respect to any Lender (a) when used in Section 2.1, 2.2
or 2.5, in any Borrowing Notice or when no Loans are outstanding hereunder, the
percentage set forth opposite such Lender’s name on Schedule 3.1 hereto or
in the most recent Assignment and Acceptance, if any, executed by such Lender,
as such amount may be adjusted, if at all, from time to time in accordance with
this Agreement, and (b) when used otherwise, the percentage obtained by
dividing (i) the sum of the unpaid principal balance of such Lender’s
Loans at the time in question plus the Matured LC Obligations which such Lender
has funded pursuant to Section 2.11(c) plus the portion of the
Maximum Drawing Amount which such Lender might be obligated to fund under Section 2.11(c),
by (ii) the sum of the aggregate unpaid principal balance of all Loans at
such time plus the aggregate amount of LC Obligations outstanding at such time.

 

“Permitted Acquisition”
means an Acquisition that is permitted by Section 7.7(c).

 

“Permitted
Investments” means:

 

(a)                                  Cash
Equivalents;

 

(b)                                 existing
Investments described in the Disclosure Schedule;

 

(c)                                  extensions
of credit by Restricted Persons to their customers for buying goods and
services in the ordinary course of business or to another Restricted Person in
the ordinary course of business;

 

(d)                                 extensions
of credit among Restricted Persons which are subordinated to the Obligations
upon terms and conditions reasonably satisfactory to the Agent;

 

14

 

(e)                                  Investments
by Restricted Persons in the Equity of Subsidiaries of the Borrower;

 

(f)                                    Investments
by Restricted Persons in the Equity of another Person made in connection with a
Permitted Acquisition;

 

(g)                                 repurchases
by Restricted Persons of their Equity that are permitted pursuant to Section 7.6;
and

 

(h)                                 any
Investment made as a result of the receipt of non-cash consideration from a
sale, transfer, lease, exchange, alienation, or disposition of assets that is
permitted pursuant to Section 7.5.

 

“Permitted Liens” means:

 

(a)                                  statutory Liens for
taxes, assessments or other governmental charges or levies which are not yet
delinquent or which are being contested in good faith by appropriate action and
for which adequate reserves have been maintained in accordance with GAAP;

 

(b)                                 landlords’, operators’,
carriers’, warehousemen’s, repairmen’s, mechanics’, materialmen’s, worker’s,
suppliers or other like Liens, in each case only to the extent arising in the
ordinary course of business and only to the extent securing obligations (i) which
are not delinquent or which are being contested in good faith by appropriate
proceedings; and (ii) for which adequate reserves have been maintained in
accordance with GAAP;

 

(c)                                  zoning restrictions,
easements, licenses, and minor defects and irregularities in title to any real
property, so long as such defects and irregularities do not materially impair
the value of such property or the use of such property for the purposes for
which such property is held;

 

(d)                                 pledges or deposits of
cash or securities to secure (i) the performance of bids, trade contracts,
leases, statutory obligations and other obligations of a like nature (excluding
appeal bonds) incurred in the ordinary course of business; or (ii) obligations
under worker’s compensation, unemployment insurance, social security, or public
Laws or similar legislation(excluding Liens arising under ERISA).

 

(e)                                  Liens under the
Security Documents;

 

(f)                                    with respect only
to property subject to any particular Security Document, Liens burdening such
property which are expressly allowed by such Security Document;

 

(g)                                 any Lien in favor of a
surety that is subject to the provisions of an Intercreditor Agreement;

 

(h)                                 deposits securing, or
in lieu of, surety, appeal or customs bonds in proceedings to which Borrower or
any of its Subsidiaries is a party;

 

15

 

(i)                                     any attachment or
judgment Lien not constituting an Event of Default under Section 8.1;

 

(j)                                     Liens existing on
the date hereof and renewals and extensions thereof, which Liens are set forth
on Schedule 1.1(a);

 

(k)                                  Liens securing
Indebtedness permitted by Section 7.1(c), provided that such Liens
attach only to the assets financed by such Indebtedness and any proceeds
thereof;

 

(l)                                     common law
security interests of a surety in the actual proceeds of a project subject to
the underlying surety bond provided by such surety; and

 

(m)                               inchoate Liens arising
under ERISA to secure contingent Liabilities of Borrower or any of its
Subsidiaries.

 

“Person” means an
individual, corporation, general partnership, limited partnership, limited
liability company, association, joint stock company, trust or trustee thereof,
estate or executor thereof, Tribunal, or any other legally recognizable entity.

 

“Pricing Schedule” means
the Schedule attached hereto identified as such.

 

“Prior Agent” means Bank
of Texas, NA, in its capacity as administrative agent under the Prior Credit
Documents.

 

“Prior Credit Agreement”
means that certain Amended and Restated Credit Agreement dated December 31,
2003, as amended from time to time heretofore, among Borrower, the Prior Agent,
as administrative agent and a lender thereunder, and the other financial
institutions party thereto, as lenders.

 

“Prior Credit Documents”
means the Prior Credit Agreement, together with the promissory notes made by
Borrower thereunder and any and all other documents and instruments executed in
connection therewith.

 

“Prior Indebtedness”
means all Indebtedness outstanding under the Prior Credit Documents on the date
hereof.

 

“Rating Agency” means
either S & P or Moody’s.

 

“Receivables” means all
present and future rights of Borrower or any Subsidiary of Borrower to payment
for goods sold or leased or for services rendered (except those evidenced by
instruments or chattel paper), whether now existing or hereafter arising and
wherever arising and whether or not earned by performance.

 

“Regulation D” means
Regulation D of the Board of Governors of the Federal Reserve System as from
time to time in effect.

 

16

 

“Required Lenders” means
Lenders having aggregate Percentage Shares equal or exceed sixty-six and
two-thirds percent (662/3 %).

 

“Reserve Requirement”
means, at any time, the maximum rate at which reserves (including any marginal,
special, supplemental, or emergency reserves) are required to be maintained
under regulations issued from time to time by the Board of Governors of the
Federal Reserve System (or any successor) by member banks of the Federal
Reserve System against “Eurocurrency liabilities” (as such term is used in
Regulation D).  Without limiting the
effect of the foregoing, the Reserve Requirement shall reflect any other
reserves required to be maintained by such member banks with respect to (a) any
category of liabilities which includes deposits by reference to which the
Adjusted Eurodollar Rate is to be determined, or (b) any category of
extensions of credit or other assets which include Eurodollar Loans.

 

“Restricted Person”
means any of Borrower, each Subsidiary of Borrower, and each Guarantor.

 

“Revolving Credit Advance”
has the meaning ascribed to it in Section 2.1.

 

“Revolving Facility Usage”
means, at the time in question, without duplication, the aggregate principal
amount of outstanding Revolving Loans and LC Obligations at such time.

 

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

 

“Revolving Loan(s)”
means, at any time, the aggregate amount of Revolving Credit Advances
outstanding to Borrower.

 

“Revolving Loan Commitment”
means as to any Lender, the commitment of such Lender to make its Percentage
Share of Revolving Credit Advances or incur its Percentage Share of Letter of
Credit Obligations as set forth on Schedule 3.1 hereto or in the most
recent Assignment and Acceptance, if any, executed by such Lender, as such
amount may be adjusted, if at all, from time to time in accordance with this Agreement.

 

“Revolving Notes” has
the meaning ascribed to it in Section 2.1.

 

“S & P” means
Standard & Poor’s Ratings Services (a division of The McGraw Hill
Companies), or its successor.

 

“Secured
Obligations” means all Obligations.

 

“Security Documents” means
the instruments listed on Schedule 4.1 and all other security agreements,
deeds of trust, mortgages, chattel mortgages, pledges, financing statements,
continuation statements, extension agreements and other agreements or
instruments now, heretofore, or hereafter delivered by any Restricted Person to
Agent in connection with this Agreement or any transaction contemplated hereby
to secure the payment of any part of the

 

17

 

Obligations or
the performance of any Restricted Person’s other duties and obligations under
the Loan Documents.

 

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

 

“Subordinated Debt”
means unsecured Indebtedness that is subordinated to the Obligations in a
manner and form reasonably satisfactory to Agent, as to the right and time of
payment and as to any and all other rights and remedies thereunder.

 

“Subsidiary” means, with
respect to any Person, any corporation, association, partnership, limited
liability company, joint venture, or other business or corporate entity,
enterprise or organization which is directly or indirectly (through one or more
intermediaries) controlled by or owned fifty percent or more by such Person.

 

“Synthetic Lease Obligations”
means an arrangement treated as an operating lease for financial accounting
purposes and a financing lease for tax purposes.

 

“Termination Event” means
(a) the occurrence with respect to any ERISA Plan of (i) a reportable
event described in Section 4043(c)(5) or (6) of ERISA or (ii) any
other reportable event described in Section 4043(c) of ERISA other
than a reportable event not subject to the provision for 30-day notice to the
Pension Benefit Guaranty Corporation pursuant to a waiver by such corporation
under Section 4043(a) or 4043(b)(4) of ERISA, or (b) the
withdrawal of any ERISA Affiliate from an ERISA Plan during a plan year in
which it was a “substantial employer” as defined in Section 4001(a)(2) of
ERISA, or (c) the filing of a notice of intent to terminate any ERISA Plan
or the treatment of any ERISA Plan amendment as a termination under Section 4041(c) of
ERISA, or (d) the institution of proceedings to terminate any ERISA Plan
by the Pension Benefit Guaranty Corporation under Section 4042 of ERISA,
or (e) any other event or condition which might constitute grounds under Section 4042
of ERISA for the termination of, or the appointment of a trustee to administer,
any ERISA Plan.

 

“Tribunal” means any
government, any arbitration panel, any court or any governmental department,
commission, board, bureau, agency or instrumentality of the United States of

 

18

 

America or any
state, province, commonwealth, nation, territory, possession, county, parish,
town, township, village or municipality, whether now or hereafter constituted
or existing.

 

“Type” means, with
respect to any Loans, the characterization of such Loans as either Base Rate
Loans or Eurodollar Loans.

 

Section 1.2.                                   Exhibits and Schedules;
Additional Definitions.  All Exhibits and Schedules attached to this
Agreement are a part hereof for all purposes. 
Reference is hereby made to Schedule 4.1 for the meaning of certain
terms defined therein and used but not defined herein, which definitions are
incorporated herein by reference.

 

Section 1.3.                                   Amendment of Defined Instruments.  Unless the context otherwise requires or
unless otherwise provided herein the terms defined in this Agreement which
refer to a particular agreement, instrument or document also refer to and
include all renewals, extensions, modifications, amendments and restatements of
such agreement, instrument or document, provided that nothing contained in this
section shall be construed to authorize any such renewal, extension,
modification, amendment or restatement.

 

Section 1.4.                                   References and Titles.  All references in this Agreement to Exhibits,
Schedules, articles, sections, subsections and other subdivisions refer to the
Exhibits, Schedules, articles, sections, subsections and other subdivisions of
this Agreement unless expressly provided otherwise.  Exhibits and Schedules to any Loan Document shall
be deemed incorporated by reference in such Loan Document.  References to any document, instrument, or
agreement (a) shall include all exhibits, schedules, and other attachments
thereto, and (b) shall include all documents, instruments, or agreements
issued or executed in replacement thereof. 
Titles appearing at the beginning of any subdivisions are for
convenience only and do not constitute any part of such subdivisions and shall
be disregarded in construing the language contained in such subdivisions.  The words “this Agreement”, “this instrument”,
“herein”, “hereof”, “hereby”, “hereunder” and words of similar import refer to
this Agreement as a whole and not to any particular subdivision unless
expressly so limited.  The phrases “this
section” and “this subsection” and similar phrases refer only to the sections
or subsections hereof in which such phrases occur.  The word “or” is not exclusive, and the word “including”
(in its various forms) means “including without limitation”.  Pronouns in masculine, feminine and neuter
genders shall be construed to include any other gender, and words in the
singular form shall be construed to include the plural and vice versa, unless
the context otherwise requires. 
Accounting terms have the meanings assigned to them by GAAP, as applied
the accounting entity to which they refer. 
References to “days” shall mean calendar days, unless the term “Business
Day” is used.  Unless otherwise
specified, references herein to any particular Person also refer to its
successors and permitted assigns.

 

Section 1.5.                                   Calculations and Determinations.  All calculations under the Loan Documents of
interest chargeable with respect to Eurodollar Loans and of fees shall be made
on the basis of actual days elapsed (including the first day but excluding the
last) and a year of 360 days.  All other
calculations of interest made under the Loan Documents shall be made on the
basis of actual days elapsed (including the first day but excluding the last)
and a year of 365 or 366 days, as appropriate. 
Each determination by a Lender Party of amounts to be paid under

 

19

 

Article III or any other matters which
are to be determined hereunder by a Lender Party (such as any Eurodollar Rate,
Adjusted Eurodollar Rate, Business Day, Interest Period, or Reserve
Requirement) shall, in the absence of manifest error, be conclusive and
binding.  Unless otherwise expressly
provided herein or unless Required Lenders otherwise consent all financial
statements and reports furnished to any Lender Party hereunder shall be
prepared and all financial computations and determinations pursuant hereto
shall be made in accordance with GAAP.

 

Section 1.6.                                   Joint Preparation; Construction
of Indemnities and Releases.  This Agreement and the other Loan Documents
have been reviewed and negotiated by sophisticated parties with access to legal
counsel and no rule of construction shall apply hereto or thereto which
would require or allow any Loan Document to be construed against any party
because of its role in drafting such Loan Document.  All indemnification and release provisions of
this Agreement shall be construed broadly (and not narrowly) in favor of the
Persons receiving indemnification or being released.

 

[THE REMAINDER OF THIS PAGE IS
INTENTIONALLY LEFT BLANK]

 

20

 

 

ARTICLE II

 

THE LOANS AND LETTERS OF CREDIT

 

Section 2.1.                                   Commitments to Lend; Notes.  Subject to the terms and conditions hereof,
each Revolving Lender agrees, severally and not jointly, to make Revolving
Loans to Borrower upon the request of Borrower from time to time during the
Commitment Period, provided that (a) subject to Sections 3.3, 3.4 and 3.6,
Revolving Loans of the same Type made on the same day shall be made by
Revolving Lenders in accordance with their respective Percentage Shares and as
part of the same Borrowing; (b) after giving effect to such Revolving Loans,
the Revolving Facility Usage does not exceed the Aggregate Commitment then in
effect; and (c) after giving effect to such Revolving Loans, the aggregate
amount of all outstanding Revolving Loans and outstanding Matured LC
Obligations shall not exceed the Borrowing Base.  The amount of all Revolving Loans in any
Borrowing must be greater than or equal to $100,000 or must equal the remaining
availability under the Borrowing Base. 
The obligation of Borrower to repay to each Revolving Lender the
aggregate amount of all Revolving Loans made by such Revolving Lender, together
with interest accruing in connection therewith, shall be evidenced by one or
more promissory notes made by Borrower payable to the order of such Revolving
Lender in the principal amount of the Revolving Loan Commitment of the
applicable Revolving Lender, substantially in the form of Exhibit 2.1(b) (each
a “Revolving Note” and, collectively, the “Revolving Notes”).  The amount of principal owing on any
Revolving Note at any given time shall be the aggregate amount of all Revolving
Loans theretofore made by such Revolving Lender minus all payments of principal
theretofore received by such Revolving Lender on such Revolving Note.  Interest on each Revolving Note shall accrue
and be due and payable as provided herein. 
Each Revolving Note shall be due and payable as provided herein, and
shall be due and payable in full on the Maturity Date.  Subject to the terms and conditions hereof,
Borrower may borrow, repay, and reborrow hereunder.

 

Section 2.2.                                   Requests for Revolving Loans.  Borrower must give to Agent written or
electronic notice (or telephonic notice promptly confirmed in writing) of any
requested Borrowing of new Revolving Loans to be advanced by Revolving
Lenders.  Each such notice constitutes a “Borrowing
Notice” hereunder and must:

 

(a)                                  specify (i) the aggregate amount
of any such Borrowing of new Base Rate Loans and the date on which such Base
Rate Loans are to be advanced, or (ii) the aggregate amount of any such
Borrowing of new Eurodollar Loans, the date on which such Eurodollar Loans are
to be advanced (which shall be the first day of the Interest Period which is to
apply thereto), and the length of the applicable Interest Period; and

 

(b)                                 be received by Agent not later
than 11:00 a.m., Houston, Texas, time, on (i) the day on which any such Base
Rate Loans are to be made, or (ii) the third Business Day preceding the day on
which any such Eurodollar Loans are to be made.

 

Each such written request or
confirmation must be made in the form and substance of the “Borrowing Notice”
attached hereto as Exhibit 2.2(b), duly completed.  Each such telephonic

 

21

 

request shall
be deemed a representation, warranty, acknowledgment and agreement by Borrower
as to the matters which are required to be set out in such written
confirmation.  Upon receipt of any such
Borrowing Notice, Agent shall give each Lender prompt notice of the terms
thereof.  If all conditions precedent to
such new Revolving Loans have been met, each Revolving Lender will on the date
requested promptly remit to Agent at Agent’s office in Houston, Texas the
amount of such Revolving Lender’s new Revolving Loan in immediately available
funds, and upon receipt of such funds, unless to its actual knowledge any
conditions precedent to such Revolving Loans have been neither met nor waived
as provided herein, Agent shall promptly make such Revolving Loans available to
Borrower.  Unless Agent shall have
received prompt notice from a Revolving Lender that such Revolving Lender will
not make available to Agent such Revolving Lender’s new Revolving Loan, Agent
may in its discretion assume that such Revolving Lender has made such Revolving
Loan available to Agent in accordance with this section and Agent may if
it chooses, in reliance upon such assumption, make such Revolving Loan
available to Borrower.  If and to the
extent such Revolving Lender shall not so make its new Revolving Loan available
to Agent, such Revolving Lender and Borrower severally agree to pay or repay to
Agent within three days after demand the amount of such Revolving Loan together
with interest thereon, for each day from the date such amount was made available
to Borrower until the date such amount is paid or repaid to Agent, with
interest at (i) the Federal Funds Rate, if such Revolving Lender is making such
payment and (ii) the interest rate applicable at the time to the other new
Revolving Loans made on such date, if Borrower is making such repayment.  If neither such Revolving Lender nor Borrower
pays or repays to Agent such amount within such three-day period, Agent shall
in addition to such amount be entitled to recover from such Revolving Lender
and from Borrower, on demand, interest thereon at the Default Rate, calculated
from the date such amount was made available to Borrower.  The failure of any Revolving Lender to make
any new Revolving Loan to be made by it hereunder shall not relieve any other Revolving
Lender of its obligation hereunder, if any, to make its new Revolving Loan, but
no Revolving Lender shall be responsible for the failure of any other Revolving
Lender to make any new Revolving Loan to be made by such other Revolving
Lender.

 

Section 2.3.                                   Continuations and Conversions of
Existing Loans.  Borrower may make the following elections
with respect to Loans already outstanding: to convert Base Rate Loans to
Eurodollar Loans, to convert Eurodollar Loans to Base Rate Loans on the last
day of the Interest Period applicable thereto, and to continue Eurodollar Loans
beyond the expiration of such Interest Period by designating a new Interest
Period to take effect at the time of such expiration.  In making such elections, Borrower may
combine existing Loans made pursuant to separate Borrowings into one new
Borrowing or divide existing Loans made pursuant to one Borrowing into separate
new Borrowings, provided that Borrower may have no more than five Borrowings of
Eurodollar Loans outstanding at any time. 
To make any such election, Borrower must give to Agent written notice
(or telephonic notice promptly confirmed in writing) of any such Conversion or
Continuation of existing Loans, with a separate notice given for each new
Borrowing.  Each such notice constitutes
a “Continuation/Conversion Notice” hereunder and must:

 

(a)                                  specify the existing Loans which
are to be Continued or Converted;

 

22

 

(b)                                 specify (i) the aggregate amount
of any Borrowing of Base Rate Loans into which such existing Loans are to be
converted and the date on which such Continuation or Conversion is to occur, or
(ii) the aggregate amount of any Borrowing of Eurodollar Loans into which such
existing Loans are to be continued or converted, the date on which such
Continuation or Conversion is to occur (which shall be the first day of the
Interest Period which is to apply to such Eurodollar Loans), and the length of
the applicable Interest Period; and

 

(c)                                  be received by Agent not later than
11:00 a.m., Houston, Texas time, on (i) the day on which any such conversion to
Base Rate Loans is to occur, or (ii) the third Business Day preceding the day
on which any such Continuation or Conversion to Eurodollar Loans is to occur.

 

Each such written request or
confirmation must be made in the form and substance of the “Continuation/Conversion
Notice” attached hereto as Exhibit 2.3(c), duly completed.  Each such telephonic request shall be deemed
a representation, warranty, acknowledgment and agreement by Borrower as to the
matters which are required to be set out in such written confirmation.  Upon receipt of any such
Continuation/Conversion Notice, Agent shall give each Lender prompt notice of
the terms thereof.  Each
Continuation/Conversion Notice shall be irrevocable and binding on
Borrower.  During the continuance of any
Default, Borrower may not make any election to convert existing Loans into
Eurodollar Loans or continue existing Loans as Eurodollar Loans.  If (due to the existence of a Default or for
any other reason) Borrower fails to timely and properly give any
Continuation/Conversion Notice with respect to a Borrowing of existing
Eurodollar Loans at least three days prior to the end of the Interest Period
applicable thereto, such Eurodollar Loans shall automatically be converted into
Base Rate Loans at the end of such Interest Period.  No new funds shall be repaid by Borrower or
advanced by any Lender in connection with any Continuation or Conversion of
existing Loans pursuant to this section, and no such Continuation or Conversion
shall be deemed to be a new advance of funds for any purpose; such
Continuations and Conversions merely constitute a change in the interest rate
applicable to already outstanding Loans.

 

Section 2.4.                                   Use of Proceeds.  Borrower shall use the Loans to (i) refinance
Prior Indebtedness under the Prior Credit Documents; (ii) refinance Matured LC
Obligations; and (iii) provide working capital for its operations and for other
general business purposes.  Borrower
shall use all Letters of Credit for its general corporate purposes.  In no event shall the funds from any Loan or
any Letter of Credit be used directly or indirectly by any Person for personal,
family, household or agricultural purposes or for the purpose, whether immediate,
incidental or ultimate, of purchasing, acquiring or carrying any Margin Stock
or to extend credit to others directly or indirectly for the purpose of
purchasing or carrying any such Margin Stock. 
Borrower represents and warrants that Borrower is not engaged
principally, or as one of Borrower’s important activities, in the business of
extending credit to others for the purpose of purchasing or carrying such
Margin Stock.

 

Section 2.5.                                   Interest Rates and Fees; Payment
Dates.  (a) Interest.  Subject to subsection (b) below, (i)
each Base Rate Loan shall bear interest on each day it is outstanding at the
Adjusted Base Rate in effect on such day, and (ii) each Eurodollar Loan shall
bear interest on each day during the related Interest Period at the related
Adjusted Eurodollar Rate in effect on

 

23

 

such day, and (iii) if an Event of Default
has occurred and is continuing, all Loans shall bear interest on each day
outstanding at the applicable Default Rate. 
Past due payments of principal and interest shall bear interest at the
rates and in the manner set forth in the Notes. 
Notwithstanding the forgoing, Borrower may request from time to time
that Borrower and the Lender enter into a Hedging Contract providing for
interest rate protection (1) for a term expiring no earlier than one year after
the Closing Date; and (2) with other terms and conditions reasonably
satisfactory to Agent.

 

(b)                                 Default Rate.  If an Event of Default shall have occurred
and be continuing under Section 8.1(a), (b), (j)(i), (j)(ii), or (j)(iii),
all outstanding Loans shall bear interest at the applicable Default Rate.  In addition, if an Event of Default shall
have occurred and be continuing (other than under Section 8.1(a), (b),
(j)(i), (j)(ii), or (j)(iii)), Required Lenders may, by notice to Borrower,
elect to have the outstanding Loans bear interest at the applicable Default
Rate, whereupon such Loans shall bear interest at the applicable Default Rate
until the earlier of (i) the first date thereafter upon which there shall be no
Event of Default continuing and (ii) the date upon which Required Lenders shall
have rescinded such notice.

 

(c)                                  Commitment Fees.  In consideration of each Revolving Loan
Commitment of each Revolving Lender to make Revolving Loans, Borrower will pay
to Agent for the account of each Revolving Lender a fee (the “Commitment Fee”)
determined on a daily basis by multiplying the applicable Commitment Fee Rate
by the Percentage Share of such Revolving Lender of the unused portion of the
Revolving Loan Commitment on each day during the Commitment Period, determined
for each such day by deducting from the amount of the Revolving Loan Commitment
at the end of such day the Revolving Facility Usage.  This Commitment Fee shall be due and payable
in arrears on the first day of each Fiscal Quarter and at the end of the
Commitment Period.

 

(d)                                 Upfront Fees.  In consideration of the Lenders’ commitment
to make Loans, Borrower will pay to Agent for the ratable account of the Lenders
an upfront fee in the aggregate amount of $300,000, due and payable on the date
hereof.

 

(e)                                  Additional Fees.  In addition to all other amounts due to Agent
under the Loan Documents, Borrower will pay fees to Agent and the Arranger as
described in a letter agreement of even date herewith between Agent, Arranger
and Borrower.  

 

(f)                                    Payment Dates.  On each Interest Payment Date relating to
Base Rate Loans, Borrower shall pay to the Lenders all unpaid interest which
has accrued on the Base Rate Loans to but not including such Interest Payment
Date.  On each Interest Payment Date
relating to a Eurodollar Loan, Borrower shall pay to Lenders all unpaid
interest which has accrued on such Eurodollar Loan to but not including such
Interest Payment Date.

 

Section 2.6.                                   Optional Prepayments and
Voluntary Reduction of Commitment..  Borrower may,
without penalty, (a) upon notice to Agent to be received no later than 11:00
a.m., Houston, Texas time, with respect to any Base Rate Loan and (b) upon
three Business Days’ notice to each Lender with respect to any Eurodollar Loan,
from time to time and without premium or penalty prepay the Loans, in whole or
in part, provided (i) that the aggregate

 

24

 

amounts of all partial prepayments of
principal on the Notes equals $100,000 or any higher integral multiple of
$100,000; and (ii) that if Borrower prepays any Eurodollar Loan on any day
other than the last day of the Interest Period applicable thereto, it shall pay
to Lenders any amounts due under Section 3.5. Each prepayment of principal
of any Eurodollar Loan under this section shall be accompanied by all
interest then accrued and unpaid on the principal so prepaid.  Any principal or interest prepaid pursuant to
this section shall be in addition to, and not in lieu of, all payments
otherwise required to be paid under the Loan Documents at the time of such
prepayment.  During the period from the
Closing Date through the first anniversary of this Agreement, Borrower may,
upon at least three (3) Business Days’ prior written notice to the Agent,
prepay the Obligations in full and upon receipt of such prepayment and a
payment to the Lenders of a termination fee in the amount of $500,000, the
Aggregate Commitments of the Lenders will terminate.  During the period from the first anniversary
of this Agreement until the Maturity Date, Borrower may, upon at least three
(3) Business Days’ prior written notice to the Agent, prepay the Obligations in
full, without premium or penalty, and upon receipt of such prepayment, the
Aggregate Commitments of the Lenders will terminate.  Notwithstanding the forgoing, during the
period from the Closing Date until the first anniversary of this Agreement,
Borrower may not partially reduce the Revolving Loan Commitments
hereunder.  From the date of the first
anniversary of the Agreement until the second anniversary of this Agreement,
Borrower may, upon at least three (3) Business Days’ prior written notice to
the Agent, without premium or penalty, reduce the Revolving Loan Commitments by
an amount not to exceed $5,000,000.  From
the date of the second anniversary of this Agreement through the third
anniversary of this Agreement, Borrower may, upon at least three (3) Business
Days’ prior written notice to the Agent, without premium or penalty, further
reduce the Revolving Loan Commitments; provided, however, the amount by which
the Revolving Loan Commitments were reduced after the first anniversary of this
Agreement and the amount by which the Revolving Loan Commitments are to be
reduced after the second anniversary of this Agreement may not exceed
$10,000,000 in the aggregate.

 

Section 2.7.                                   Mandatory Prepayments.  (a)  If
at any time the Revolving Facility Usage exceeds the Revolving Loan Commitment
(whether due to a reduction in the Revolving Loan Commitment in accordance with
this Agreement, or otherwise), Borrower shall immediately upon demand prepay
the principal of the Loans (and after the Loans are repaid in full, provide LC
Collateral in accordance with Section 2.14(a)) in an amount at least equal
to such excess.

 

(a)                                  If at any time the Revolving
Facility Usage is less than the Revolving Loan Commitment but in excess of the
Adjusted Borrowing Base (such excess being herein called a “Borrowing Base
Deficiency”), Borrower shall, within five Business Days after Agent gives
notice of such fact to Borrower, either:

 

(i)                                     give notice to Agent electing to prepay the
principal of the Revolving Loans (and after all Revolving Loans are repaid in
full, provide LC Collateral in accordance with Section 2.14(a)) in an
aggregate amount at least equal to such Borrowing Base Deficiency (or, if the
Revolving Loans have been paid in full, pay to LC Issuer LC Collateral as
required under Section 2.14(a)), such prepayment to be made in full on or
before the second Business Day after such notice by Borrower, or

 

25

 

(ii)                                  provide the Agent with a revised Borrowing
Base Certificate which indicates therein that the Borrowing Base Deficiency
no longer exists.

 

(b)                                 No later than the 366th day
after the receipt of any Net Casualty Proceeds aggregating in excess of
$1,000,000 for any single transaction or related series of transactions,
Borrower shall apply such Net Casualty Proceeds to repay the Revolving Loans,
and the Revolving Loan Commitment shall be permanently reduced in an aggregate
amount equal to such Net Casualty Proceeds.

 

(c)                                  Each prepayment of principal
under this section shall be accompanied by all interest then accrued and
unpaid on the principal so prepaid.  Any
principal or interest prepaid pursuant to this section shall be in
addition to, and not in lieu of, all payments otherwise required to be paid
under the Loan Documents at the time of such prepayment.

 

Section 2.8.                                   Borrowing Base.  Borrower shall determine from time to time
the Borrowing Base by submitting to the Agent the Borrowing Base Certificate
substantially in the form of Exhibit 2.8 hereto.

 

Section 2.9.                                   Letters of Credit.  Subject to the terms and conditions hereof,
Borrower may during the Commitment Period request LC Issuer to, and LC Issuer
shall, issue one or more Letters of Credit, provided that, after taking such
Letter of Credit into account:

 

(a)                                  the Revolving Facility Usage
does not exceed the Adjusted Borrowing Base at such time; and

 

(b)                                 the expiration date of such
Letter of Credit is prior to the end of the Commitment Period.

 

All Existing Letters of Credit shall be deemed to have been issued
pursuant hereto, and from and after the Closing Date shall be subject to and
governed by the terms and conditions hereof.

 

Section 2.10.                             Requesting Letters of Credit.  Borrower must make written application for
any Letter of Credit at least two (2) Business Days (or such shorter period as
LC Issuer may in its discretion from time to time agree) before the date on
which Borrower desires for LC Issuer to issue such Letter of Credit.  By making any such written application
Borrower shall be deemed to have represented and warranted that the LC
Conditions described in Section 2.11 will be met as of the date of
issuance of such Letter of Credit.  Each
such written application for a Letter of Credit must be made in writing in the
form and substance of Exhibit 2.10, the terms and provisions of which are
hereby incorporated herein by reference (or in such other form as may mutually
be agreed upon by LC Issuer and Borrower). 
Two Business Days after the LC Conditions for a Letter of Credit have
been met as described in Section 2.11 (or if LC Issuer otherwise desires
to issue such Letter of Credit), LC Issuer will issue such Letter of Credit at
LC Issuer’s office in Houston, Texas.  If
any provisions of any LC Application conflict with any provisions of this
Agreement, the provisions of this Agreement shall govern and control.  Borrower shall promptly examine a copy of
each Letter of Credit and each amendment thereto

 

26

 

that is delivered to it and, in the event of any claim of noncompliance
with Borrower’s instructions or other irregularity, Borrower will promptly
notify LC Issuer.

 

Section 2.11.                             Reimbursement and Participations.  (a) Reimbursement by Borrower.  Each Matured LC Obligation shall constitute a
Revolving Loan by LC Issuer to Borrower. 
Borrower promises to pay to LC Issuer, or to LC Issuer’s order, on the
Business Day immediately following the day on which a demand is made, the full
amount of each Matured LC Obligation, together with interest thereon at the
Default Rate applicable to Base Rate Loans. 
The obligation of Borrower to reimburse LC Issuer for each Matured LC
Obligation shall be absolute, unconditional and irrevocable, and shall be paid
strictly in accordance with the terms of this Agreement (including any LC
Application) under all circumstances, including the following: (i) any lack of
validity or enforceability of such Letter of Credit or any other agreement or
instrument relating thereto; (ii) the existence of any claim, counterclaim,
set-off, defense or other right that Borrower may have at any time against any
beneficiary or any transferee of such Letter of Credit (or any Person for whom
any such beneficiary or any such transferee may be acting), LC Issuer or any
other Person, whether in connection with this Agreement, the transactions
contemplated hereby or by such Letter of Credit or any agreement or instrument
relating thereto, or any unrelated transaction; (iii) any draft, demand,
certificate or other document presented under such Letter of Credit proving to
be forged, fraudulent, invalid or insufficient in any respect or any statement
therein being untrue or inaccurate in any respect; or any loss or delay in the
transmission or otherwise of any document required in order to make a drawing
under such Letter of Credit; (iv) any payment by LC Issuer under such Letter of
Credit against presentation of a draft or certificate that does not strictly
comply with the terms of such Letter of Credit; or (v) any other circumstance
or happening whatsoever, whether or not similar to any of the foregoing.  Without limiting the generality of the
foregoing, it is expressly agreed that the absolute and unconditional nature of
Borrower’s obligations under this section to reimburse LC Issuer for each
drawing under a Letter of Credit will not be excused by the gross negligence or
willful misconduct of LC Issuer. 
However, the foregoing shall not be construed to excuse LC Issuer from
liability to Borrower to the extent of any direct damages (as opposed to
consequential damages, claims in respect of which are hereby waived by Borrower
to the extent permitted by applicable Law) suffered by Borrower that are caused
by LC Issuer’s gross negligence or willful misconduct in determining whether
drafts and other documents presented under a Letter of Credit comply with the
terms thereof.

 

(b)                                 Letter of Credit Advances.  If the beneficiary of any Letter of Credit
makes a draft or other demand for payment thereunder then Borrower may, during
the interval between the making thereof and the honoring thereof by LC Issuer,
request Lenders to make Loans to Borrower in the amount of such draft or
demand, which Loans shall be made concurrently with LC Issuer’s payment of such
draft or demand and shall be immediately used by LC Issuer to repay the amount
of the resulting Matured LC Obligation. 
Such a request by Borrower shall be made in compliance with all of the
provisions hereof, provided that for the purposes of the first sentence of Section 2.1(b),
the amount of such Loans shall be considered, but the amount of the Matured LC
Obligation to be concurrently paid by such Loans shall not be considered.

 

(c)                                  Participation by Lenders.  LC Issuer irrevocably agrees to grant and
hereby grants to each Lender, and to induce LC Issuer to issue Letters of
Credit hereunder each Lender

 

27

 

irrevocably agrees
to accept and purchase and hereby accepts and purchases from LC Issuer, on the
terms and conditions hereinafter stated and for such Lender’s own account and
risk, an undivided interest equal to such Lender’s Percentage Share of LC
Issuer’s obligations and rights under each Letter of Credit issued hereunder
and the amount of each Matured LC Obligation paid by LC Issuer thereunder.  Each Lender unconditionally and irrevocably
agrees with LC Issuer that, if a Matured LC Obligation is paid under any Letter
of Credit for which LC Issuer is not reimbursed in full by Borrower in
accordance with the terms of this Agreement and the related LC Application
(including any reimbursement by means of concurrent Loans or by the application
of LC Collateral), such Lender shall (in all circumstances and without set-off
or counterclaim) pay to LC Issuer on demand, in immediately available funds at
LC Issuer’s address for notices hereunder, such Lender’s Percentage Share of
such Matured LC Obligation (or any portion thereof which has not been
reimbursed by Borrower).  Each Lender’s
obligation to pay LC Issuer pursuant to the terms of this subsection is
irrevocable and unconditional.  If any
amount required to be paid by any Lender to LC Issuer pursuant to this subsection is
paid by such Lender to LC Issuer within three Business Days after the date such
payment is due, LC Issuer shall in addition to such amount be entitled to
recover from such Lender, on demand, interest thereon calculated from such due
date at the Federal Funds Rate.  If any
amount required to be paid by any Lender to LC Issuer pursuant to this subsection is
not paid by such Lender to LC Issuer within three Business Days after the date
such payment is due, LC Issuer shall in addition to such amount be entitled to
recover from such Lender, on demand, interest thereon calculated from such due
date at the Default Rate.

 

(d)                                 Distributions to Participants.  Whenever LC Issuer has in accordance with
this section received from any Lender payment of such Lender’s Percentage
Share of any Matured LC Obligation, if LC Issuer thereafter receives any
payment of such Matured LC Obligation or any payment of interest thereon
(whether directly from Borrower or by application of LC Collateral or
otherwise, and excluding only interest for any period prior to LC Issuer’s
demand that such Lender make such payment of its Percentage Share), LC Issuer
will distribute to such Lender its Percentage Share of the amounts so received
by LC Issuer; provided, however, that if any such payment received by LC Issuer
must thereafter be returned by LC Issuer, such Lender shall return to LC Issuer
the portion thereof which LC Issuer has previously distributed to it.

 

(e)                                  Calculations.  A written advice setting forth in reasonable
detail the amounts owing under this section, submitted by LC Issuer to Borrower
or any Lender from time to time, shall be conclusive, absent manifest error, as
to the amounts thereof.

 

Section 2.12.                             Letter of Credit Fees.  In consideration of LC Issuer’s issuance of
any Letter of Credit, Borrower agrees to pay (a) to Agent, for the account of
all Lenders in accordance with their respective Percentage Shares, a per annum
letter of credit issuance fee at a rate equal to 75% of the Eurodollar Margin
in effect for Revolving Loans, and (b) to such LC Issuer for its own account, a
letter of credit fronting fee at a rate equal to 0.125% per annum.  The letter of credit fee and the letter of
credit fronting fee will be calculated on the undrawn face amount of each
Letter of Credit outstanding on each day at the above-applicable rates and will
be due and payable in arrears on the first day of each Fiscal Quarter and at
the end of the Commitment Period.

 

28

 

Section 2.13.                             No Duty to Inquire.  (a) Drafts and Demands.  LC Issuer is authorized and instructed to
accept and pay drafts and demands for payment under any Letter of Credit
without requiring, and without responsibility for, any determination as to the
existence of any event giving rise to said draft, either at the time of
acceptance or payment or thereafter.  LC
Issuer is under no duty to determine the proper identity of anyone presenting
such a draft or making such a demand (whether by tested telex or otherwise) as
the officer, representative or Agent of any beneficiary under any Letter of
Credit, and payment by LC Issuer to any such beneficiary when requested by any
such purported officer, representative or Agent is hereby authorized and
approved.  Borrower releases each Lender
Party from, and agrees to hold each Lender Party harmless and indemnified
against, any liability or claim in connection with or arising out of the
subject matter of this section, which indemnity shall apply whether or not any
such liability or claim is in any way or to any extent caused, in whole or in
part, by any negligent act or omission of any kind by any Lender Party,
provided only that no Lender Party shall be entitled to indemnification for
that portion, if any, of any liability or claim which is proximately caused by
its own individual gross negligence or willful misconduct, as determined in a
final judgment.

 

(b)                                 Extension of Maturity.  If the maturity of any Letter of Credit is
extended by its terms or by Law or governmental action, if any extension of the
maturity or time for presentation of drafts or any other modification of the
terms of any Letter of Credit is made at the request of any Restricted Person,
or if the amount of any Letter of Credit is increased at the request of any
Restricted Person, this Agreement shall be binding upon all Restricted Persons
with respect to such Letter of Credit as so extended, increased or otherwise
modified, with respect to drafts and property covered thereby, and with respect
to any action taken by LC Issuer, LC Issuer’s correspondents, or any Lender
Party in accordance with such extension, increase or other modification.

 

(c)                                  Transferees of Letters of Credit.  If any Letter of Credit provides that it is
transferable, LC Issuer shall have no duty to determine the proper identity of
anyone appearing as transferee of such Letter of Credit, nor shall LC Issuer be
charged with responsibility of any nature or character for the validity or
correctness of any transfer or successive transfers, and payment by LC Issuer
to any purported transferee or transferees as determined by LC Issuer is hereby
authorized and approved, and Borrower releases each Lender Party from, and
agrees to hold each Lender Party harmless and indemnified against, any liability
or claim in connection with or arising out of the foregoing, which indemnity
shall apply whether or not any such liability or claim is in any way or to any
extent caused, in whole or in part, by any negligent act or omission of any
kind by any Lender Party, provided only that no Lender Party shall be entitled
to indemnification for that portion, if any, of any liability or claim which is
proximately caused by its own individual gross negligence or willful
misconduct, as determined in a final judgment.

 

Section 2.14.                             LC Collateral.  (a) If, after the making of all mandatory
prepayments of principal of the Loans required under Section 2.7(a), the
outstanding LC Obligations will exceed the Adjusted Borrowing Base, then in
addition to prepayment of the entire principal balance of the Loans, Borrower
will immediately pay to the Agent an amount equal to such excess.  The Agent will hold such amount as security
for the remaining LC Obligations (all such amounts held as security for LC
Obligations being herein collectively called “LC Collateral”) and the other
Obligations, and such collateral may be applied from time to time to any
Matured LC

 

29

 

Obligations or other Obligations which are
due and payable.  At the Borrower’s
request and when no Default exists, the Agent shall return to the Borrower the
amount held as LC Collateral, to the extent such amount is in excess of the
amount required under the first sentence of this Section 2.14(a).  Neither this subsection nor the
following subsection shall, however, limit or impair any rights which LC
Issuer may have under any other document or agreement relating to any Letter of
Credit, LC Collateral or LC Obligation, including any LC Application, or any
rights which any Lender Party may have to otherwise apply any payments by
Borrower and any LC Collateral under Section 3.1.

 

(b)                                 Acceleration of LC Obligations.  If the Obligations or any part thereof become
immediately due and payable pursuant to Section 8.1 then, unless Required
Lenders otherwise specifically elect to the contrary (which election may
thereafter be retracted by Required Lenders at any time), all LC Obligations
shall be deemed to become immediately due and payable without regard to whether
or not actual drawings or payments on the Letters of Credit have occurred, and
Borrower shall be obligated to pay to LC Issuer immediately an amount equal to
the aggregate LC Obligations which are then outstanding, which amount shall be
held by LC Issuer as LC Collateral securing the remaining LC Obligations and
the other Obligations, and such LC Collateral may be applied from time to time
to any Matured LC Obligations or any other Obligations which are due and
payable.

 

(c)                                  Investment of LC Collateral.  Pending application thereof, all LC
Collateral shall be invested by the Agent in such Investments as the Agent may
choose in its sole discretion.  All
interest on (and other proceeds of) such Investments shall be reinvested or
applied to Matured LC Obligations or other Obligations which are due and
payable.  When all Obligations have been
satisfied in full, including all LC Obligations, all Letters of Credit have
expired or been terminated, and all of Borrower’s reimbursement obligations in
connection therewith have been satisfied in full or when the condition pursuant
to which the LC Collateral was required no longer exists, the Agent shall
release any remaining LC Collateral. 
Borrower hereby assigns and grants to the Agent a continuing security
interest in all LC Collateral paid by it to the Agent, all Investments
purchased with such LC Collateral, and all proceeds thereof to secure its
Matured LC Obligations and its Obligations under this Agreement, each Note, and
the other Loan Documents, and Borrower agrees that such LC Collateral,
Investments and proceeds shall be subject to all of the terms and conditions of
the Security Documents.  Borrower further
agrees that the Agent shall have all of the rights and remedies of a secured
party under the Uniform Commercial Code as adopted in the State of Texas with
respect to such security interest and that an Event of Default under this
Agreement shall constitute a default for purposes of such security interest.

 

(d)                                 Payment of LC Collateral.  When Borrower is required to provide LC Collateral
for any reason and fails to do so on the day when required, the Agent or LC
Issuer may without notice to Borrower or any other Restricted Person provide
such LC Collateral (whether by application of proceeds of other Collateral, by
transfers from other accounts maintained with the Agent or LC Issuer, or
otherwise) using any available funds of Borrower or any other Person also
liable to make such payments.  Any such
amounts which are required to be provided as LC Collateral and which are not
provided on the date required shall, for purposes of each Security Document, be
considered past due Obligations owing hereunder, and LC Issuer is hereby

 

30

 

authorized to
exercise its respective rights under each Security Document to obtain such
amounts.

 

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31

 

ARTICLE III

 

PAYMENTS TO LENDERS

 

Section 3.1.                                   General Procedures.  Borrower will make each payment which it owes
under the Loan Documents to Agent for the account of the Lender Party to whom
such payment is owed, in lawful money of the United States of America, without
set-off, deduction or counterclaim, and in immediately available funds.  Each such payment must be received by Agent
not later than 11:00 a.m., Houston, Texas time, on the date such payment
becomes due and payable.  Any payment
received by Agent after such time will be deemed to have been made on the next
following Business Day.  Should any such
payment become due and payable on a day other than a Business Day, the maturity
of such payment shall be extended to the next succeeding Business Day, and, in
the case of a payment of principal or past due interest, interest shall accrue
and be payable thereon for the period of such extension as provided in the Loan
Document under which such payment is due. 
Each payment under a Loan Document shall be due and payable at the place
set forth for Agent on Schedule 3.1 hereto. When Agent collects or receives
money on account of the Obligations, Agent shall distribute all money so
collected or received, and each Lender Party shall apply all such money so
distributed, as follows (except as otherwise provided in Section 8.3):

 

(a)                                  first, for the payment of all
Obligations which are then due (and if such money is insufficient to pay all
such Obligations, first to any reimbursements due Agent under Section 6.9
or 10.4 and then to the partial payment of all other Obligations then due in
proportion to the amounts thereof, or as Lender Parties shall otherwise agree);

 

(b)                                 then for the prepayment of
amounts owing under the Loan Documents (other than principal of the Loans) if
so specified by Borrower;

 

(c)                                  then for the prepayment of
principal of the Loans, together with accrued and unpaid interest on the
principal so prepaid; and

 

(d)                                 last, for the payment or
prepayment of any other Obligations.

 

All payments applied to principal or interest on any
Note shall be applied first to any interest then due and payable, then to
principal then due and payable, and last to any prepayment of principal and
interest in compliance with Sections 2.6 and 2.7.  All distributions of amounts described in any
of subsections (b), (c) or (d) above shall be made by Agent pro rata to each
Lender Party then owed Obligations described in such subsection in
proportion to all amounts owed to all Lender Parties which are described in
such subsection; provided that if any Lender then owes payments to LC Issuer
for the purchase of a participation under Section 2.13(c) or to Agent
under Section 9.9, any amounts otherwise distributable under this section to
such Lender shall be deemed to belong to LC Issuer, or Agent, respectively, to
the extent of such unpaid payments, and Agent shall apply such amounts to make
such unpaid payments rather than distribute such amounts to such Lender.

 

32

 

Section 3.2.                                   Capital Reimbursement.  If either (a) the introduction or
implementation after the date hereof of or the compliance with or any change
after the date hereof in or in the interpretation of any Law regarding capital
adequacy, or (b) the introduction or implementation after the date hereof of or
the compliance with any request, directive or guideline issued after the date
hereof from any central bank or other governmental authority (whether or not
having the force of Law) regarding capital requirements has or would have the
effect of reducing the rate of return on any Lender Party’s capital, or on the
capital of any corporation controlling such Lender Party, as a consequence of
the Loans made, or Letters of Credit issued, by such Lender Party, to a level
below that which such Lender Party or such corporation could have achieved but
for such change (taking into consideration such Lender Party’s policies and the
policies of any such corporation with respect to capital adequacy), then from
time to time Borrower will pay to Agent for the benefit of such Lender Party,
within five (5) Business Days of demand therefore by such Lender Party, such
additional amount or amounts which such Lender Party shall determine to be
appropriate to compensate such Lender Party for such reduction.

 

Section 3.3.                                   Increased Cost of Eurodollar
Loans or Letters of Credit.  (a) If any change after the date hereof in
any applicable Law (whether now in effect or hereinafter enacted or
promulgated, including Regulation D) or any interpretation or administration
thereof by any governmental authority charged with the interpretation or
administration thereof (whether or not having the force of Law):

 

(i)                                     shall
change the basis of taxation of payments to any Lender Party of any principal,
interest, or other amounts attributable to any Eurodollar Loan or Letter of
Credit or otherwise due under this Agreement in respect of any Eurodollar Loan
or Letter of Credit (other than Reimbursable Taxes governed by Section 3.6
and taxes imposed on or measured by its overall net income, and franchise taxes
imposed on it (in lieu of net income taxes), by the jurisdiction (or any
political subdivision thereof) under the Laws of which it is organized or
otherwise resides for tax purposes or maintains any Applicable Lending Office);
or

 

(ii)                                  shall
change, impose, modify, apply or deem applicable any reserve, special deposit or
similar requirements in respect of any Eurodollar Loan made by any Lender Party
or any Letter of Credit (excluding any reserve requirement included in the
computation of the Adjusted Eurodollar Rate) or against assets of, deposits
with or for the account of, or credit extended by, such Lender Party; or

 

(iii)                               shall
impose on any Lender Party or the interbank eurocurrency deposit market any
condition affecting any Eurodollar Loan or Letter of Credit,

 

the result of which is to increase the cost to any Lender Party of
agreeing to make or making, funding or maintaining Eurodollar Loans or (as the
case may be) issuing or participating in Letters of Credit, or a reduction in
the amount received or receivable by such Lender in connection with any of the
foregoing, then such Lender Party shall promptly notify Agent and Borrower in
writing of the happening of such event and of the amount required to compensate
such Lender Party for such additional costs or reduced return (on an after-tax
basis, taking into account any taxes on and deductions, credits or other tax
benefits in respect of such

 

33

 

compensation), whereupon (i) Borrower shall pay such amount to Agent
for the account of such Lender Party and (ii) Borrower may elect, by giving to
Agent and such Lender Party not less than three Business Days’ notice, to
convert all (but not less than all) of any such Eurodollar Loans of such Lender
Party into Base Rate Loans.

 

(b)                                 A certificate of a Lender Party
setting forth the amount or amounts necessary to compensate such Lender Party
or the corporation controlling such Lender Party, as the case may be, as
specified in Section 3.2 or this Section 3.3 shall be delivered to
Borrower and shall be conclusive absent manifest error.  Borrower shall pay the applicable Lender
Party the amount shown as due on any such certificate within 3 Business Days
after receipt thereof.

 

(c)                                  Failure or delay on the part of
any Lender Party to demand compensation pursuant to Section 3.2 or this Section 3.3
shall not constitute a waiver of such Lender Party’s right to demand such
compensation.

 

Section 3.4.                                   Illegality.  If any change after the date hereof in
applicable Laws, or in the interpretation or administration thereof of or in
any jurisdiction whatsoever, domestic or foreign, shall make it unlawful for
any Lender Party to fund or maintain Eurodollar Loans, then, upon notice by
such Lender Party to Borrower and Agent, (a) Borrower’s right to elect
Eurodollar Loans from such Lender Party shall be suspended to the extent and
for the duration of such illegality, (b) all Eurodollar Loans of such Lender
Party which are then the subject of any Borrowing Notice and which cannot be
lawfully funded shall be funded as Base Rate Loans of such Lender Party, and
(c) all Eurodollar Loans of such Lender Party shall be converted automatically
to Base Rate Loans on the respective last days of the then current Interest
Periods with respect to such Loans or within such earlier period as required by
Law.  If any such conversion of a
Eurodollar Loan occurs on a day which is not the last day of the then current
Interest Period with respect thereto, Borrower shall pay to such Lender Party
such amounts, if any, as may be required pursuant to Section 3.5.

 

Section 3.5.                                   Funding Losses.  In addition to its other obligations
hereunder, Borrower will indemnify each Lender Party against, and reimburse
each Lender Party on demand for, any loss or expense incurred or sustained by
such Lender Party (including any loss or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by a Lender
Party to fund or maintain Eurodollar Loans but excluding any loss of Base Rate
Margin or Eurodollar Margin), as a result of (a) any payment or prepayment
(whether authorized or required hereunder or otherwise) of all or a portion of
a Eurodollar Loan on a day other than the day on which the applicable Interest
Period ends, (b) any payment or prepayment, whether required hereunder or
otherwise, of a Loan made after the delivery, but before the effective date, of
a Continuation/Conversion Notice requesting the continuation of outstanding
Eurodollar Loans as, or the conversion of outstanding Base Rate Loans to,
Eurodollar Loans, if such payment or prepayment prevents such
Continuation/Conversion Notice from becoming fully effective, (c) the failure
of any Loan to be made or of any Continuation/Conversion Notice requesting the
continuation of outstanding Eurodollar Loans as, or the conversion of
outstanding Base Rate Loans to, Eurodollar Loans to become effective due to any
condition precedent not being satisfied or due to any other action or inaction
of any Restricted Person, (d) any Conversion (whether authorized or required
hereunder or otherwise) of all or any portion of any

 

34

 

Eurodollar Loan into a Base Rate Loan or into
a different Eurodollar Loan on a day other than the day on which the applicable
Interest Period ends, or (e) any assignment of a Eurodollar Loan on a day other
than the last day of the Interest Period therefor as a result of a request by
Borrower pursuant to Section 3.8(b).

 

Section 3.6.                                   Reimbursable Taxes.  Borrower covenants and agrees that:

 

(a)                                  Borrower will indemnify each
Lender Party against and reimburse each Lender Party for all present and future
income, stamp and other taxes, levies, costs and charges whatsoever imposed,
assessed, levied or collected on or in respect of this Agreement or any
Eurodollar Loans or Letters of Credit (whether or not legally or correctly
imposed, assessed, levied or collected), excluding, however, (i) taxes imposed
on or measured by its overall net income, and franchise taxes imposed on it (in
lieu of net income taxes), by the jurisdiction (or any political subdivision
thereof) under the Laws of which it is organized or otherwise resides for tax
purposes or maintains any Applicable Lending Office, (ii) with respect to each
Lender Party, taxes imposed by reason of any present or former connection
between such Lender Party and the jurisdiction imposing such taxes, other than
solely as a result of this Agreement or any Note or any transaction
contemplated hereby, and (iii) any United States withholding tax imposed on any
payment by Borrower pursuant to this Agreement or under any Eurodollar Loans or
Letters of Credit, but not excluding any portion of such tax that exceeds the
United States withholding tax which would have been imposed on such a payment
to such Lender Party under the laws and treaties in effect when such Lender
Party first becomes a party to this Agreement (all such non-excluded taxes,
levies, costs and charges being collectively called “Reimbursable Taxes”).  Such indemnification shall be on an after-tax
basis and, except as otherwise provided in Section 3.6(b), paid within 3
Business Days after a Lender Party makes demand therefor.

 

(b)                                 All payments on account of the
principal of, and interest on, each Lender Party’s Loans and Note, and all
other amounts payable by Borrower to any Lender Party hereunder, shall be made
in full without set-off or counterclaim and shall be made free and clear of and
without deductions or withholdings of any nature by reason of any Reimbursable
Taxes, all of which will be for the account of Borrower.  In the event of Borrower being compelled by
Law to make any such deduction or withholding from any payment to any Lender
Party, Borrower shall pay on the due date of such payment, by way of additional
interest, such additional amounts as are needed to cause the amount receivable
by such Lender Party after such deduction or withholding to equal the amount
which would have been receivable in the absence of such deduction or
withholding.  If Borrower should make any
deduction or withholding as aforesaid, Borrower shall within 60 days thereafter
forward to such Lender Party an official receipt or other official document
evidencing payment of such deduction or withholding.

 

(c)                                  If Borrower is ever required to
pay any Reimbursable Tax with respect to any Eurodollar Loan, Borrower may
elect, by giving to Agent and such Lender Party not less than three Business
Days’ notice, to convert all (but not less than all) of any such Eurodollar
Loan into a Base Rate Loan, but such election shall not diminish Borrower’s
obligation to pay all Reimbursable Taxes.

 

35

 

(d)                                 Notwithstanding the foregoing
provisions of this section, Borrower shall be entitled, to the extent it is
required to do so by Law, to deduct or withhold (and not to make any indemnification
or reimbursement for) income or other similar taxes imposed by the United
States of America from interest, fees or other amounts payable hereunder for
the account of any Lender Party, other than a Lender Party (i) who is a U.S.
person for Federal income tax purposes or (ii) who has the Prescribed Forms on
file with Agent (with copies provided to Borrower) for the applicable year to
the extent deduction or withholding of such taxes is not required as a result
of the filing of such Prescribed Forms, provided that if Borrower shall so
deduct or withhold any such taxes, it shall provide a statement to Agent and
such Lender Party, setting forth the amount of such taxes so deducted or
withheld, the applicable rate and any other information or documentation which
such Lender Party may reasonably request for assisting such Lender Party to
obtain any allowable credits or deductions for the taxes so deducted or
withheld in the jurisdiction or jurisdictions in which such Lender Party is
subject to tax.  As used in this section,
“Prescribed Forms” means such duly executed forms or statements, and in such
number of copies, which may, from time to time, be prescribed by Law and which,
pursuant to applicable provisions of (x) an income tax treaty between the
United States and the country of residence of the Lender Party providing the
forms or statements, (y) the Internal Revenue Code, or (z) any applicable rules
or regulations thereunder, permit Borrower to make payments hereunder for the
account of such Lender Party free of such deduction or withholding of income or
similar taxes.

 

Section 3.7.                                   Alternative Rate of Interest.  If prior to the commencement of any Interest
Period for a Borrowing of Eurodollar Loans:

 

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

 

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

then Agent
shall give notice thereof to Borrower and Lenders by telephone or telecopy as
promptly as practicable thereafter and, until Agent notifies Borrower and
Lenders that the circumstances giving rise to such notice no longer exist, (i)
any Continuation/Conversion Notice that requests the conversion of any
Borrowing to, or continuation of any Borrowing as, a Borrowing of Eurodollar
Loans shall be ineffective and shall be deemed a request to continue such
Borrowing as a Borrowing of Base Rate Loans and (ii) if any Borrowing Notice
requests a Borrowing of Eurodollar Loans, such Borrowing shall be made as a
Borrowing of Base Rate Loans.  Upon
receipt of such notice, Borrower may revoke any pending request for a Borrowing
of, conversion to or continuation of Eurodollar Loans.

 

Section 3.8.                                   Change of Applicable Lending
Office; Replacement of Lenders.

 

(a)                                  Each Lender Party
agrees that, upon the occurrence of any event giving rise to the operation of
Sections 3.2, 3.3, 3.4 or 3.6 with respect to such Lender Party, it will, if
requested by Borrower, use reasonable efforts (subject to overall policy
considerations of such Lender

 

36

 

Party) to designate another Applicable Lending Office, provided that
such designation is made on such terms that such Lender Party and its
Applicable Lending Office suffer no economic, legal or regulatory disadvantage,
with the object of avoiding the consequence of the event giving rise to the
operation of any such section.  Nothing
in this section shall affect or postpone any of the obligations of
Borrower or the rights of any Lender Party provided in Sections 3.2, 3.3, 3.4,
or 3.6.

 

(b)                                 If any Lender requests
compensation under Section 3.2 or 3.3, or if Borrower is required to pay
any additional amount to any Lender Party or any governmental authority for the
account of any Lender Party pursuant to Section 3.6, or if the obligation
of any Lender Party to make or maintain Loans as, or convert Loans to,
Eurodollar Loans is suspended pursuant to Section 3.4, or if any Lender
Party defaults in its obligation to fund Loans hereunder, then Borrower may, at
its sole expense and effort (such expense to include any transfer fee payable
to Agent under Section 10.5(c) and any expense pursuant to Article III),
upon notice to such Lender Party and Agent, require such Lender Party to assign
and delegate in whole (but not in part), without recourse (in accordance with
and subject to the restrictions contained in Section 10.5), all its
interests, rights and obligations under this Agreement to an Eligible
Transferee that shall assume such obligations (which Eligible Transferee may be
another Lender Party, if a Lender Party accepts such assignment); provided that
(i) Borrower shall have received the prior written consent of Agent, which
consent shall not unreasonably be withheld, (ii) such Lender Party shall have
received payment of an amount equal to the outstanding principal of its Loans,
accrued interest thereon, accrued fees and all other amounts payable to it
hereunder from Borrower or such Eligible Transferee (including any amounts payable pursuant to Section 3.5), (iii)
in the case of any such assignment resulting from a claim for compensation
under Section 3.2 or 3.3 or payments required to be made pursuant to Section 3.6,
such assignment will result in a reduction in such compensation or payments,
and (iv) if the Borrower elects to
exercise such right with respect to any Lender Party, it shall be obligated to
replace all Lender Parties that have made similar requests.  A Lender Party shall not be required to make
any such assignment and delegation if, prior thereto, as a result of a waiver
by such Lender Party or otherwise, the circumstances entitling Borrower to
require such assignment and delegation cease to apply.  Any
Lender Party being replaced shall execute and deliver an Assignment and
Acceptance with respect to such Lender Party’s outstanding Loans and
participations in LC Obligations.

 

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37

 

ARTICLE IV

 

CONDITIONS PRECEDENT TO LENDING

 

Section 4.1.                                   Documents to be Delivered.  No Lender has any obligation to make its
first Loan, and LC Issuer has no obligation to issue the first Letter of
Credit, unless Agent shall have received all of the following, at Agent’s
office in Houston, Texas, duly executed and delivered and in form, substance
and date reasonably satisfactory to the Agent, the Lenders and their counsel:

 

(a)                                  This Agreement.

 

(b)                                 Each Revolving Note.

 

(c)                                  A Guaranty executed by each
Guarantor existing on the date hereof.

 

(d)                                 Each Security Document listed on
the Schedule 4.1.

 

(e)                                  The following certificates of
Borrower and, as appropriate, the Subsidiaries:

 

(i)                                     An
“Omnibus Certificate” of the Secretary or Assistant Secretary of the Borrower
and each Guarantor, which shall contain the names and signatures of the
officers of Borrower and each Guarantor authorized to execute Loan Documents
and which shall certify to the truth, correctness and completeness of the
following exhibits attached thereto:  (1)
a copy of resolutions duly adopted by the Board of Directors of Borrower and
each Guarantor and in full force and effect at the time this Agreement is
entered into, authorizing the execution of this Agreement and the other Loan
Documents delivered or to be delivered in connection herewith and the consummation
of the transactions contemplated herein and therein, (2) a copy of the charter
documents of Borrower and each Guarantor and all amendments thereto, certified
by the appropriate official of such party’s state of organization, and (3) a
copy of the bylaws of Borrower and each Guarantor;

 

(ii)                                  A
“Closing Certificate” of the chief financial officer of Borrower, as of the
Closing Date, certifying that (A) the conditions set out in subsections (a),
(b), and (c) of Section 4.2 have been satisfied and (B) the Initial
Financial Statements of Borrower delivered to the Agent fairly present the
Consolidated financial position for the periods covered thereby, as of the date
of such Initial Financial Statements; and

 

(iii)                               A
Borrowing Base Certificate dated as of the Closing Date

 

(f)                                    A certificate of existence and
good standing for Borrower issued by the Secretary of State of Delaware, a
certificate of due qualification to do business for the Borrower issued by the
Secretary of State of Texas, and a certificate of account status for the
Borrower issued by the Texas Comptroller of Public Accounts.

 

38

 

(g)                                 A favorable opinion of (i)
Bracewell & Giuliani LLP, counsel for Restricted Persons, substantially in
the form set forth in Exhibit 4.1(g)(i); and (ii) Trent McKenna, in-house
counsel for Restricted Persons, substantially in the form set forth in Exhibit
4.1(g)(ii).

 

(h)                                 The Initial Financial
Statements.

 

(i)                                     The certificate or certificates
of insurance required by Section 6.8.

 

(j)                                     Payment of all fees including
all Commitment Fees, upfront, Agent, and Arranger fees required to be paid to
any Lender or any other Party pursuant to any Loan Documents.

 

(k)                                  Confirmation of the payment in
full of all Indebtedness under the Prior Credit Documents.

 

(l)                                     The Assignment of Prior Credit
Documents in form and substance satisfactory to the Agent in its sole
discretion, executed by the Prior Agent, as agent, and each of the lenders
party to the Prior Credit Agreement on the Closing Date and the delivery of all
Collateral in possession of the Prior Agent. 

 

(m)                               Such other documents and
instruments as the Agent and its counsel may reasonably require.

 

Section 4.2.                                   Additional Conditions Precedent.  No Lender has any obligation to make any Loan
(including its first), and LC Issuer has no obligation to issue any Letter of
Credit (including its first), unless the following conditions precedent have
been satisfied:

 

(a)                                  All representations and
warranties made by any Restricted Person in any Loan Document shall be true in
all material respects (without duplication of materiality qualifiers
contained therein) on and as of the date of such Loan or the date of
issuance of such Letter of Credit as if such representations and warranties had
been made as of the date of such Loan or the date of issuance of such Letter of
Credit, except to the extent that such representation or warranty was made as
of a specific date or updated, modified or supplemented as of a subsequent date
with the consent of Required Lenders.

 

(b)                                 No Default shall exist at the
date of such Loan or the date of issuance of such Letter of Credit.

 

(c)                                  The making of such Loan or the
issuance of such Letter of Credit shall not be prohibited by any Law and shall
not subject any Lender or any LC Issuer to any penalty or other onerous
condition under or pursuant to any such Law.

 

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39

 

ARTICLE V

 

REPRESENTATIONS AND WARRANTIES

 

To confirm
each Lender’s understanding concerning Restricted Persons and Restricted
Persons’ businesses, properties and obligations and to induce each Lender to
enter into this Agreement and to extend credit hereunder, Borrower represents
and warrants to each Lender that:

 

Section 5.1.            No Default. 
No event has occurred and is continuing which constitutes a Default or
an Event of Default.

 

Section 5.2.            Organization and Good Standing.  Each Restricted Person is duly organized,
validly existing and in good standing under the Laws of its jurisdiction of
organization, having all powers required to carry on its business and enter
into and carry out the transactions contemplated hereby.  Each Restricted Person is duly qualified, in
good standing, and authorized to do business in all other jurisdictions within
the United States wherein the character of the properties owned or held by it
or the nature of the business transacted by it makes such qualification
necessary, except where the failure to so qualify or be authorized could not
reasonably be expected to result in a Material Adverse Change.  Each Restricted Person has taken all actions
and procedures customarily taken in order to enter, for the purpose of
conducting business or owning property, each jurisdiction outside the United
States wherein the character of the properties owned or held by it or the
nature of the business transacted by it makes such actions and procedures
desirable could not reasonably be expected to result in a Material Adverse
Change.

 

Section 5.3.            Authorization. 
Each Restricted Person has the power and authority to execute, deliver,
and perform its respective obligations under this Agreement and the other Loan
Documents. Each Restricted Person has taken all action necessary to authorize
the execution and delivery by it of the Loan Documents to which it is a party
and to authorize the consummation of the transactions contemplated thereby and
the performance of its obligations thereunder. 
This Agreement and the other Loan Documents have been duly executed and
delivered by Borrower and each other Restricted Person a Party thereto.  Borrower is duly authorized to borrow funds
hereunder.

 

Section 5.4.            No Conflicts or Consents.  The execution and
delivery by the various Restricted Persons of the Loan Documents to which each
is a party, the performance by each of its obligations under such Loan
Documents, and the consummation of the transactions contemplated by the various
Loan Documents, do not and will not (a) conflict with any provision of (i) any
Law, (ii) the organizational documents of any Restricted Person, or (iii) any
material agreement, judgment, license, order or permit applicable to or binding
upon any Restricted Person; (b) result in the acceleration of any Indebtedness
owed by any Restricted Person; or (c) result in or require the creation of any
Lien upon any assets or properties of any Restricted Person except as expressly
contemplated or permitted in the Loan Documents.  Except as expressly contemplated in the Loan
Documents, no permit, consent, approval, authorization or

 

40

 

order of, and no notice to or filing with, any Tribunal or third party
is required in connection with the execution, delivery or performance by any
Restricted Person of any Loan Document or to consummate any transactions
contemplated by the Loan Documents.

 

Section 5.5.            Enforceable Obligations.  This Agreement is, and the other Loan
Documents when duly executed and delivered will be, legal, valid and binding
obligations of each Restricted Person which is a party hereto or thereto,
enforceable in accordance with their respective terms except as such
enforcement may be limited by bankruptcy, insolvency or similar Laws of general
application relating to the enforcement of creditors’ rights.

 

Section 5.6.            Initial Financial Statements.  Restricted
Persons have heretofore delivered to each Lender true, correct and complete
copies of the Initial Financial Statements. 
The Initial Financial Statements fairly present Borrower’s Consolidated
financial position at the respective dates thereof and the Consolidated results
of Borrower’s operations and Borrower’s Consolidated cash flows for the
respective periods thereof.  Since the
date of the annual Initial Financial Statements, no Material Adverse Change has
occurred, except as reflected in the quarterly Initial Financial Statements or
in Section 5.6 of the Disclosure Schedule.

 

Section 5.7.            Other Obligations and Restrictions.  As of the Closing Date, no Restricted Person
has any outstanding Liabilities of any kind which are, in the aggregate,
material to Borrower or material with respect to Borrower’s Consolidated
financial condition and not shown in the Initial Financial Statements or
disclosed in Section 5.7 of the Disclosure Schedule or otherwise permitted
under Section 7.1.  Except as shown in
the Initial Financial Statements or disclosed in Section 5.7 of the Disclosure
Schedule, no Restricted Person is subject to or restricted by any franchise,
contract, deed, charter restriction, or other instrument or restriction which
could reasonably be expected to cause a Material Adverse Change.

 

Section 5.8.            Full Disclosure. 
No certificate, written statement or other written information delivered
herewith or heretofore by any Restricted Person to any Lender in connection
with the negotiation of this Agreement or in connection with any transaction
contemplated hereby contains any untrue statement of a material fact or omits
to state any material fact known to any Restricted Person (other than industry-wide
risks normally associated with the types of businesses conducted by Restricted
Persons) necessary to make the statements contained herein or therein, taken as
a whole, not misleading as of the date made or deemed made.  There is no fact known to any Restricted
Person that has not been disclosed to each Lender in writing which could
reasonably be expected to cause a Material Adverse Change.  There are no statements or conclusions in any
report delivered by any Restricted Person to the Lenders which are based upon
or include misleading information or fail to take into account material
information regarding the matters reported therein.

 

Section 5.9.            Litigation. 
Except as disclosed in the Initial Financial Statements or in Section
5.9 of the Disclosure Schedule:  (a)
there are no actions, suits or legal, equitable, arbitrative or administrative
proceedings pending, or to the knowledge of any Restricted Person threatened,
against any Restricted Person or affecting any Collateral (including any which
challenge or otherwise pertain to any Restricted Person’s title to any
Collateral) before any Tribunal which could reasonably be expected to cause a
Material Adverse Change, and (b) there

 

41

 

are no outstanding judgments, injunctions, writs, rulings or orders by
any such Tribunal against any Restricted Person or, to the knowledge of
Borrower, any Restricted Person’s stockholders, partners, directors or
officers, or affecting any Collateral or any of its material assets or property
which could reasonably be expected to cause a Material Adverse Change.

 

Section 5.10.          Labor Disputes and Acts of God.  Except as disclosed in Section 5.10 of the
Disclosure Schedule, neither the business nor the properties of any Restricted Person
has been affected by any fire, explosion, accident, strike, lockout or other
labor dispute, drought, storm, hail, earthquake, embargo, act of God or of the
public enemy or other casualty (whether or not covered by insurance), which
could reasonably be expected to cause a Material Adverse Change.

 

Section 5.11.          ERISA Plans and Liabilities.  All ERISA Plans in effect on the Closing Date
are listed in Section 5.11 of the Disclosure Schedule.  Except as disclosed in the Initial Financial
Statements or in Section 5.11 of the Disclosure Schedule, no Termination Event
has occurred with respect to any ERISA Plan and all ERISA Affiliates are in
compliance with ERISA which could reasonably be expected to cause a Material
Adverse Change.  Except as permitted under
Section 7.10 hereof, no ERISA Affiliate is required to contribute to, or has
any other absolute or contingent liability in respect of, any “multiemployer
plan” as defined in Section 4001 of ERISA. 
Except as set forth in Section 5.11 of the Disclosure Schedule as of the
Closing Date:  (a) no “accumulated
funding deficiency” (as defined in Section 412(a) of the Internal Revenue Code)
exists with respect to any ERISA Plan, whether or not waived by the Secretary
of the Treasury or his delegate, and (b) the current value of each ERISA Plan’s
benefits does not exceed the current value of such ERISA Plan’s assets
available for the payment of such benefits which could reasonably be expected
to cause a Material Adverse Change.

 

Section 5.12.          Environmental and Other Laws.  Except as disclosed in Section 5.12 of the
Disclosure Schedule: (a) Restricted Persons are conducting their businesses in
compliance with all applicable Laws, including Environmental Laws, which the
failure to so comply could reasonably be expected to cause a Material Adverse
Change, and have and are in compliance with all licenses and permits required
under any such Laws which the failure to so comply could reasonably be expected
to cause a Material Adverse Change; (b) none of the operations or properties of
any Restricted Person is the subject of federal, state or local investigation
evaluating whether any material remedial action is needed to respond to a
release of any Hazardous Materials into the environment or to the improper
storage or disposal (including storage or disposal at offsite locations) of any
Hazardous Materials which could reasonably be expected to cause a Material
Adverse Change; (c) no Restricted Person (and to the best knowledge of
Borrower, no other Person) has filed any notice under any Law indicating that
any Restricted Person is responsible for the improper release into the
environment, or the improper storage or disposal, of any material amount of any
Hazardous Materials or that any Hazardous Materials have been improperly released,
or are improperly stored or disposed of, upon any property of any Restricted
Person which could reasonably be expected to cause a Material Adverse Change;
(d) to the knowledge of Borrower, no Restricted Person has transported or
arranged for the transportation of any Hazardous Material to any location which
is (i) listed on the National Priorities List under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended,
listed for possible inclusion on such National Priorities

 

42

 

List by the Environmental Protection Agency in its Comprehensive
Environmental Response, Compensation and Liability Information System List, or
listed on any similar state list or (ii) the subject of federal, state or local
enforcement actions or other investigations, in the case of either of the
forgoing clauses (i) and (ii), which may lead to claims against any Restricted
Person for clean-up costs, remedial work, damages to natural resources or for
personal injury claims (whether under Environmental Laws or otherwise) which
could reasonably be expected to cause a Material Adverse Change; and (e) no
Restricted Person otherwise has any known material contingent liability under
any Environmental Laws or in connection with the release into the environment,
or the storage or disposal, of any Hazardous Materials which could reasonably
be expected to cause a Material Adverse Change. 
Each Restricted Person undertook, at the time of its acquisition of each
of its material properties, all appropriate inquiry into the previous ownership
and uses of the Property and any potential environmental liabilities associated
therewith.

 

Section 5.13.          Names and Places of Business.  As of the Closing Date, no Restricted Person
has, during the preceding two (2) years, been known by, or used any other trade
or fictitious name, except as disclosed in Section 5.13 of the Disclosure
Schedule.  Except as otherwise indicated
in Section 5.13 of the Disclosure Schedule, as of the Closing Date, the chief
executive office and principal place of business of each Restricted Person are
(and for the preceding two (2) years have been) located at the address of
Borrower set out on the signature pages hereto. 
Except as indicated in Section 5.13 of the Disclosure Schedule otherwise
disclosed in writing to Agent, no Restricted Person has any other office or
place of business.

 

Section 5.14.          Subsidiaries. 
Borrower does not presently have any Subsidiary except those listed in
Section 5.14 of the Disclosure Schedule or disclosed to Agent in writing.  No Restricted Person has any equity
investments in any other Person except those listed in Section 5.14 of the
Disclosure Schedule or otherwise permitted under this Agreement.  Borrower owns, directly or indirectly, the
equity interests in each of its Subsidiaries indicated in Section 5.14 of the
Disclosure Schedule or as disclosed to Agent in writing.

 

Section 5.15.          Government Regulation.  Neither Borrower nor any other Restricted
Person owing Obligations is (a) a “registered holding company”, or a
“subsidiary company” of a “registered holding company”, or an “affiliate” of a
“registered holding company” within the meaning of the Public Utility Holding
Company Act of 1935, as amended; or (b) an “investment company” or a company
“controlled” by an “investment company” within the meaning of the Investment
Company Act of 1940, as amended.  The
pledge of the Equity of each Subsidiary of Borrower does not violate Regulation
T, U, or X of the Board of Governors of the Federal Reserve System.

 

Section 5.16.          Insider.  No
Restricted Person, nor, to the knowledge of Borrower as of the Closing Date,
any Person having “control” (as that term is defined in 12 U.S.C. § 375b(9) or
in regulations promulgated pursuant thereto) of any Restricted Person, is a
“director” or an “executive officer” or “principal shareholder” (as those terms
are defined in 12 U.S.C. § 375b(8) or (9) or in regulations promulgated
pursuant thereto) of any Lender, of a bank holding company of which any Lender
is a Subsidiary or of any Subsidiary of a bank holding company of which any
Lender is a Subsidiary.

 

43

 

Section 5.17.          Solvency. 
Upon giving effect to the issuance of the Notes, the execution of the
Loan Documents by Borrower and each Guarantor and the consummation of the
transactions contemplated hereby, Borrower and the Guarantors, on a
Consolidated basis, will be Solvent. 
Neither Borrower nor any Restricted Person has incurred (whether under
the Loan Documents or otherwise), nor does any Restricted Person intend to
incur or believe that it will incur Liabilities which will be beyond its
ability to pay as such debts mature.

 

Section 5.18.          Tax Shelter Regulations.  Borrower does not intend to treat the Loans
and/or Letters of Credit and related transactions as being a “reportable
transaction” (within the meaning of Treasury Regulation Section 1.6011-4).  In the event Borrower determines to take any
action inconsistent with such intention, it will promptly notify Agent
thereof.  If Borrower so notifies Agent,
Borrower acknowledges that one or more of the Lenders may treat its Loans
and/or Letters of Credit as part of a transaction that is subject to Treasury
Regulation Section 301.6112-1, and such Lender or Lenders, as applicable, will
maintain the lists and other records required by such Treasury Regulation.

 

Section 5.19.          Title to Properties; Licenses.  Each Restricted Person has good and
defensible title to all of the Collateral and to all of its material properties
and assets, free and clear of all Liens, encumbrances, or adverse claims other
than Permitted Liens and free and clear of all impediments to the use of such
properties and assets in such Restricted Person’s business.  Each Restricted Person possesses all
licenses, permits, franchises, patents, copyrights, trademarks and trade names,
and other intellectual property (or otherwise possesses the right to use such
intellectual property without violation of the rights of any other Person)
which are necessary to carry out its business as presently conducted and as
presently proposed to be conducted hereafter, which could reasonably be
expected to cause a Material Adverse Change and no Restricted Person is in
violation of the terms under which it possesses such intellectual property or
the right to use such intellectual property, the violation of which could
reasonably be expected to cause a Material Adverse Change.

 

Section 5.20.          Regulation U. 
None of the Borrower and its Subsidiaries are engaged in the business of
extending credit for the purpose of purchasing or carrying Margin Stock, and no
proceeds of any Loans will be used for a purpose which violates Regulation U.

 

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44

 

ARTICLE VI

 

AFFIRMATIVE COVENANTS OF BORROWER.

 

Borrower covenants and agrees
that until the full and final payment of the Obligations and the termination of
this Agreement, unless Required Lenders have previously agreed otherwise:

 

Section 6.1.                                   Payment and Performance.  Borrower will cause each other Restricted
Person to observe, perform and comply with every term, covenant and condition
in any Loan Document.

 

Section 6.2.                                   Books, Financial Statements and
Reports.  Each Restricted Person will at all times maintain
full and accurate books of account and records. 
Borrower will maintain and will cause its Subsidiaries to maintain a
standard system of accounting, will maintain its Fiscal Year, and will furnish
the following statements and reports to each Lender Party at Borrower’s
expense:

 

(a)                                  As soon as available, and in any
event within one hundred twenty (120) days after the end of each Fiscal Year,
complete Consolidated and consolidating financial statements of Borrower
together with all notes thereto, prepared in reasonable detail in accordance
with GAAP, together with an unqualified opinion on the Consolidated Statements,
based on an audit using GAAP, by independent certified public accountants
selected by Borrower of nationally recognized standing, stating that such
Consolidated financial statements have been so prepared.  These financial statements shall contain a
Consolidated and consolidating balance sheet as of the end of such Fiscal Year
and Consolidated and consolidating statements of income for such Fiscal Year
and Consolidated statements of cash flows and stockholders’ equity for such
Fiscal Year, each setting forth in comparative form the corresponding figures
for the preceding Fiscal Year.

 

(b)                                 As soon as available, and in any
event within forty-five (45) days after the end of the first three Fiscal
Quarters in each Fiscal Year, Borrower’s unaudited Consolidated and
consolidating balance sheet and income statements as of the end of such Fiscal
Quarter and Consolidated statements of Borrower’s cash flows and stockholders’
equity for the period from the beginning of the then current Fiscal Year to the
end of such Fiscal Quarter, all in reasonable detail and prepared in accordance
with GAAP, subject to changes resulting from normal year-end adjustments.  In addition Borrower will, together with each
such set of financial statements and each set of financial statements furnished
under subsection (a) of this section, furnish a certificate in the form of
Exhibit 6.2(b) signed by the chief financial officer of Borrower stating that
such financial statements are fair and complete in all material respects and
fairly present the Consolidated financial position of Borrower for the periods
covered thereby (subject to normal year-end adjustments), stating that he has
reviewed the Loan Documents, containing calculations showing compliance (or
non-compliance) at the end of such Fiscal Quarter with the requirements of Section 7.11
and stating that no Default exists at the end of such Fiscal Quarter or at the
time of such certificate or specifying the nature and period of existence of
any such Default.

 

45

 

(c)                                  Promptly upon their becoming
available, copies of all financial statements, reports, notices and proxy statements
sent by any Restricted Person to its stockholders and all registration
statements, periodic reports and other statements and schedules filed by any
Restricted Person with any securities exchange, the Securities and Exchange
Commission or any similar governmental authority.

 

(d)                                 As soon as available, and in any
event within twenty (20) days after the end of each calendar month, (i) a
Borrowing Base Certificate substantially in the form of Exhibit 2.8, duly
completed by an authorized officer of Borrower, with information required
therein completed to reflect the Borrowing Base as of the end of the preceding
calendar month; and (ii) an aging schedule of all Receivables of Borrower
on a Consolidated basis in summary form, certified by an authorized officer of
Borrower, which reflects aging, on an aggregate basis, of Receivables which are
current or 30, 60, or 90 days past due from the date of invoice with respect
thereto.

 

Section 6.3.                                   Other Information and
Inspections.  Each Restricted Person will furnish to each
Lender any information which Agent may from time to time reasonably request
concerning any provision of the Loan Documents, any Collateral, or any matter
in connection with Restricted Persons’ businesses, properties, prospects,
financial condition and operations, including all evidence which Agent from
time to time reasonably requests in writing as to the accuracy and validity of
or compliance with all representations, warranties and covenants made by any
Restricted Person in the Loan Documents, the satisfaction of all conditions
contained therein, and all other matters pertaining thereto.  Each Restricted Person will permit
representatives appointed by Agent (including independent accountants,
auditors, Agents, attorneys, appraisers and any other Persons) to visit and
inspect during normal business hours any of such Restricted Person’s property,
including its books of account, other books and records, and any facilities or
other business assets, and to make extra copies therefrom and photocopies and photographs
thereof, and to write down and record any information such representatives
obtain, and each Restricted Person shall permit Agent or its representatives to
investigate and verify the accuracy of the information furnished to Agent or
any Lender in connection with the Loan Documents and to discuss all such
matters with its officers, employees and representatives.

 

Section 6.4.                                   Notice of Material Events and
Change of Address.  Borrower will, after it has knowledge
thereof, promptly notify each Lender in writing, stating that such notice is
being given pursuant to this Agreement, of:

 

(a)                                  the occurrence of any Material
Adverse Change,

 

(b)                                 the occurrence of any Default or
Event of Default,

 

(c)                                  the acceleration of the maturity
of any Indebtedness owed by any Restricted Person or of any default by any
Restricted Person under any indenture, mortgage, agreement, contract or other
instrument to which any of them is a party or by which any of them or any of
their properties is bound, if such acceleration or default could reasonably be
expected to cause a Material Adverse Change,

 

46

 

(d)                                 the occurrence of any
Termination Event,

 

(e)                                  any claim of $1,000,000 or more,
any notice of potential liability under any Environmental Laws which might
exceed such amount, or any other material adverse claim asserted against any
Restricted Person or with respect to any Restricted Person’s properties,

 

(f)                                    the filing of any suit or
proceeding against any Restricted Person in which an adverse decision could
reasonably be expected to cause a Material Adverse Change, and

 

(g)                                 the filing of any material
financing statement, registration of a pledge (such as with an issuer of
uncertificated securities), or other arrangement or action which would serve to
perfect a Lien, regardless of whether such financing statement is filed, such
registration is made, or such arrangement or action is undertaken before or
after such Lien exists.

 

Upon the occurrence of any of
the foregoing Restricted Persons will take all necessary or appropriate steps
to promptly remedy any such Material Adverse Change, Default, Event of Default,
acceleration, default or Termination Event, to protect against any such adverse
claim, to defend any such suit or proceeding, and to resolve all controversies
on account of any of the foregoing. 
Borrower will also notify Agent and Agent’s counsel in writing at least
ten (10) Business Days prior to the date that any Restricted Person changes its
name or the location of its chief executive office or its location under the
Uniform Commercial Code.

 

Section 6.5.                                   Maintenance of Properties.  Each Restricted Person will maintain,
preserve, protect, and keep all Collateral and all other material property used
or useful in the conduct of its business in good condition (ordinary wear and
tear excepted) in accordance with reasonably prudent industry standards, and in
compliance with all applicable Laws which could reasonably be expected to cause
a Material Adverse Change, in conformity with all applicable contracts,
servitudes, leases and agreements which could reasonably be expected to cause a
Material Adverse Change, and will from time to time make all commercially
reasonable repairs, renewals and replacements needed to enable the business and
operations carried on in connection therewith to be promptly and advantageously
conducted at all times.

 

Section 6.6.                                   Maintenance of Existence and
Qualifications.  Except as permitted under Section 7.4,
each Restricted Person will maintain and preserve its existence and its rights
and franchises in full force and effect and will qualify to do business in all
states or jurisdictions where required by applicable Law, except where the
failure to maintain, preserve and qualify could reasonably be expected to cause
a Material Adverse Change.

 

Section 6.7.                                   Payment of Taxes.  Each Restricted Person will (a) timely file
all required tax returns including any extensions; (b) timely pay all taxes,
assessments, and other governmental charges or levies imposed upon it or upon
its income, profits or property before the same become delinquent; and (c)
maintain appropriate accruals and reserves for all of the foregoing in
accordance with GAAP.  Each Restricted
Person may, however, delay paying or discharging any of the foregoing so long
as it is in good faith contesting the validity thereof by appropriate
proceedings, if necessary, and has set aside on its books adequate reserves
therefore which are required by GAAP.

 

47

 

Section 6.8.                                   Insurance.

 

(a)                                  Each Restricted Person shall at
all times maintain (at its own expense) insurance for its property and
insurance with respect to all Collateral and liability insurance, with
financially sound and reputable insurance companies, in such amounts and
against such risks as is customary in the industry for similarly situated
businesses and properties.  All insurance
policies covering Collateral shall be endorsed (i) to provide for payment of losses
to Agent as its interests may appear and Borrower shall deliver a certificate
to that effect, (ii) to provide that such policies may not be canceled or
reduced or affected in any material manner for any reason without ten (10) days
prior notice to Agent from the insurer, (iii) to provide for any other matters
specified in any applicable Security Document or which Agent may reasonably
require; and (iv) to provide for insurance against fire, casualty and any other
hazards normally insured against, (less a reasonable deductible not to exceed amounts
customary in the industry for similarly situated businesses and properties) of
the property insured.

 

(b)                                 Each such policy shall (A) if
such policy is for liability insurance, name the appropriate Restricted Person
and Agent, as agent for the Lenders, as insured parties thereunder (without any
representation or warranty by or obligation upon Agent or Lenders) as their
interests may appear, (B) if such policy is for property insurance, contain the
agreement by the insurer that any loss thereunder shall be payable to Agent
notwithstanding any action, inaction or breach of representation or warranty by
any Restricted Person, and (C) provide that there shall be no recourse against
Agent or Lenders for payment of premiums or other amounts with respect thereto.  Each Restricted Person will, if so requested
by Agent, deliver to Agent original or duplicate policies of such
insurance.  Agent is hereby authorized to
enforce payment under all such insurance policies and to compromise and settle
any claims thereunder, in its own name or in the name of the Restricted
Persons.

 

(c)                                  Reimbursement under any
liability insurance maintained by Restricted Persons pursuant to this Section 6.8
may be paid directly to the Person who has incurred the liability covered by
such insurance.  With respect to any loss
involving damage to Collateral as to which subsection (d) of this Section 6.8
is not applicable, each Restricted Person will make or cause to be made the
necessary repairs to or replacements of such Collateral, and any proceeds of
insurance maintained by each Restricted Person pursuant to this Section 6.8
shall be paid to such Restricted Person by Agent as reimbursement for the costs
of such repairs or replacements as such repairs or replacements are made or
acquired.

 

(d)                                 Upon the occurrence and during
the continuance of an Event of Default or upon the occurrence of a loss of any
Collateral, all property and casualty insurance payments in respect of such
Collateral shall be paid to Agent and applied as specified in Section 2.7.

 

Section 6.9.                                   Performance on Borrower’s Behalf.  If any Restricted Person fails to pay any
taxes, insurance premiums, expenses, attorneys’ fees or other amounts it is
required to pay under any Loan Document, Agent may pay the same.  Borrower shall immediately reimburse Agent
for any such payments and each amount paid by Agent shall constitute an
Obligation owed hereunder which is due and payable on the date such amount is
paid by Agent.

 

48

 

Section 6.10.                             Interest.  Borrower hereby promises to each Lender Party
to pay interest at the Default Rate on all Obligations (including Obligations
to pay fees or to reimburse or indemnify any Lender) which Borrower has in this
Agreement promised to pay to such Lender Party and which are not paid when
due.  Such interest shall accrue from the
date such Obligations become due until they are paid.

 

Section 6.11.                             Compliance with Law.  Each Restricted Person will conduct its
business and affairs in compliance with all Laws applicable thereto. Each
Restricted Person will cause all licenses and permits necessary or appropriate
for the conduct of its business and the ownership and operation of its property
used and useful in the conduct of its business to be at all times maintained in
good standing and in full force and effect, except as could reasonably be
expected to cause a Material Adverse Change.

 

Section 6.12.                             Environmental Matters;
Environmental Reviews.

 

(a)                                  Each Restricted Person will
comply with all Environmental Laws now or hereafter applicable to such
Restricted Person, as well as all contractual obligations and agreements with
respect to environmental remediation or other environmental matters (except as
could not reasonably be expected to result in a Material Adverse Change), and
shall obtain, at or prior to the time required by applicable Environmental
Laws, all environmental, health and safety permits, licenses and other
authorizations necessary for its operations (except as could not reasonably be
expected to result in a Material Adverse Change) and will maintain such
authorizations in full force and effect (except as could not reasonably be
expected to result in a Material Adverse Change).  No Restricted Person will do anything or
permit anything to be done which will subject any of its properties to any
remedial obligations under, or result in noncompliance with applicable permits
and licenses issued under, any applicable Environmental Laws, assuming
disclosure to the applicable governmental authorities of all relevant facts,
conditions and circumstances (except as could not reasonably be expected to
result in a Material Adverse Change).

 

(b)                                 Borrower will promptly furnish
to Agent copies of all written notices of violation, orders, claims, citations,
complaints, penalty assessments, suits or other proceedings received by any
Restricted Person, or of which Borrower otherwise has notice, pending or
threatened against any Restricted Person by any governmental authority with
respect to any alleged violation of or non-compliance with any Environmental
Laws or with respect to any permits, licenses or authorizations in connection
with any Restricted Person’s ownership or use of its properties or the
operation of its business, in each case, that could reasonably be expected to
result in a Material Adverse Change.

 

(c)                                  Borrower will promptly furnish
to Agent all written requests for information, notices of claim, demand
letters, and other written notifications, received by Borrower in connection
with any Restricted Person’s ownership or use of its properties or the conduct
of its business, relating to potential responsibility with respect to any
investigation or clean-up of Hazardous Material at any location that could
reasonably be expected to have a Material Adverse Change.

 

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Section 6.13.                             Intentionally Left Blank.

 

Section 6.14.                             Bank Accounts; Offset.  To secure the repayment of the Obligations
Borrower hereby grants to each Lender a security interest, a lien, and a right
of offset, each of which shall be in addition to all other interests, liens,
and rights of any Lender at common law, under the Loan Documents, or otherwise,
and each of which shall be upon and against (a) any and all moneys, securities
or other property (and the proceeds therefrom) of Borrower now or hereafter
held or received by or in transit to any Lender from or for the account of
Borrower, whether for safekeeping, custody, pledge, transmission, collection or
otherwise, (b) any and all deposits (general or special, time or demand,
provisional or final) of Borrower with any Lender, and (c) any other credits
and claims of Borrower at any time existing against any Lender, including
claims under certificates of deposit.  At
any time and from time to time after the occurrence of any Event of Default,
each Lender is hereby authorized to foreclose upon, or to offset against the
Obligations then due and payable (in either case without notice to Borrower),
any and all items hereinabove referred to. 
The remedies of foreclosure and offset are separate and cumulative, and
either may be exercised independently of the other without regard to procedures
or restrictions applicable to the other.

 

Section 6.15.                             Guaranties of Borrower’s
Subsidiaries.  Each Subsidiary created, acquired or coming
into existence after the date hereof, other than an Immaterial Subsidiary
shall, promptly upon request by Agent, execute and deliver to Agent an absolute
and unconditional guaranty of the timely repayment of the Obligations and the due
and punctual performance of the obligations of Borrower hereunder, which
guaranty shall be reasonably satisfactory to Agent in form and substance.  Borrower will cause each of its Subsidiaries
hereafter formed or acquired, other than an Immaterial Subsidiary, to deliver
to Agent, simultaneously with its delivery of such a guaranty, written evidence
satisfactory to Agent and its counsel that such Subsidiary has taken all
corporate or partnership action necessary to duly approve and authorize its
execution, delivery and performance of such guaranty and any other documents
which it is required to execute.

 

Section 6.16.                             Agreement to Deliver Security
Documents.  Borrower agrees to deliver and to cause each
other Restricted Person to deliver, to further secure the Obligations whenever
requested by Agent in its sole and absolute discretion, deeds of trust,
mortgages, chattel mortgages, security agreements, financing statements
continuation statements, extension agreements, acknowledgments, and other
Security Documents in form and substance satisfactory to Agent for the purpose
of granting, confirming, protecting and perfecting Liens or security interests
in any personal property now owned or hereafter acquired by any Restricted
Person.

 

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ARTICLE VII

 

NEGATIVE
COVENANTS OF BORROWER

 

To conform with the terms and
conditions under which each Lender is willing to have credit outstanding to
Borrower, and to induce each Lender to enter into this Agreement and make the
Loans, Borrower warrants, covenants and agrees that until the full and final
payment of the Obligations and the termination of this Agreement, unless
Required Lenders have previously agreed otherwise:

 

Section 7.1.                                   Indebtedness.  No Restricted Person will in any manner owe
or be liable for Indebtedness except:

 

(a)                                  the Obligations;

 

(b)                                 unsecured Indebtedness among
Borrower and the Guarantors arising in the ordinary course of business;

 

(c)                                  purchase money Indebtedness and
Capital Lease Obligations in an aggregate principal amount not to exceed
$5,000,000 at any time, provided that the original principal amount of any such
Indebtedness shall not be in excess of the purchase price of the assets acquired
thereby and such Indebtedness shall be secured only by the acquired assets;

 

(d)                                 Indebtedness existing
on the date hereof and listed on Schedule 7.1, and renewals and extensions
thereof;

 

(e)                                  Subordinated Debt
incurred in connection with Permitted Acquisitions having a maturity date
beyond the term of this Agreement;

 

(f)                                    Indebtedness in
respect of deferred software licensing fees in connection with Borrower or any
of its Subsidiaries licensing software in the ordinary course of business
consistent with past practices in a total amount not to exceed $1,000,000 in
the aggregate at any time outstanding;

 

(g)                                 unsecured Indebtedness
consisting of industrial revenue bonds in a total amount not to exceed $300,000
in the aggregate at any time outstanding; and

 

(h)                                 any other unsecured Indebtedness
not to exceed $1,000,000 in the aggregate at any time outstanding.

 

Section 7.2.                                   Limitation on Liens.  Except for Permitted Liens, no Restricted
Person will create, assume or permit to exist any Lien upon any of the properties
or assets which it now owns or hereafter acquires.

 

51

 

Section 7.3.                                   Hedging Contracts.  No Restricted Person will be a party to or in
any manner be liable on any Hedging Contract except Hedging Contracts entered
into by a Restricted Person and the Agent or any other Lender with the purpose
and effect of fixing interest rates on a principal amount of indebtedness of
such Restricted Person that is accruing interest at a variable rate, provided
that (a) the aggregate notional amount of such contracts never exceeds
seventy-five percent (75%) of the anticipated outstanding principal balance of
the indebtedness to be hedged by such contracts or an average of such principal
balances calculated using a generally accepted method of matching interest swap
contracts to declining principal balances, and (b) the floating rate index of
each such contract generally matches the index used to determine the floating
rates of interest on the corresponding indebtedness to be hedged by such
contract.

 

Section 7.4.                                   Limitation on Mergers, Issuances
of Securities.  No Restricted Person will merge or
consolidate with or into any other Person except that any Subsidiary of
Borrower may be merged into or consolidated with (a) another Subsidiary of
Borrower and, if a Guarantor is one of the merged entities, so long as a
Guarantor is the surviving business entity, or (b) Borrower, so long as
Borrower is the surviving business entity. 
Borrower will not issue any securities other than shares of its common
or preferred stock and any options or warrants giving the holders thereof only
the right to acquire such shares.  No
Subsidiary of Borrower will issue any additional shares of its capital stock or
other securities or any options, warrants or other rights to acquire such
additional shares or other securities except to Borrower or another Subsidiary
of Borrower and only to the extent not otherwise forbidden under the terms
hereof.  No Subsidiary of Borrower which
is a partnership will allow any diminution of Borrower’s interest (direct or
indirect) therein.

 

Section 7.5.                                   Limitation on Sales of Property.  No Restricted Person will sell, transfer,
lease, exchange, alienate or dispose of any of its material assets or
properties or any material interest therein, or discount, sell, pledge or
assign any notes payable to it, accounts receivable or future income, except:

 

(a)                                  equipment which is worthless,
obsolete, no longer used by or useful to a Restricted Person or which is
replaced by equipment of equal suitability and value;

 

(b)                                 inventory which is sold in the
ordinary course of business; and

 

(c)                                  other property which is sold for
fair consideration not in the aggregate in excess of $15,000,000 in any Fiscal
Year, the sale of which will not materially impair or diminish the value of the
Collateral or the Consolidated financial condition, business or operations of
Borrower.

 

Section 7.6.                                   Limitation on Distributions,
Redemptions, Payments on Subordinated Debt.

 

(a)                                  No Restricted Person will
declare or make any Distribution, other than (i) Distributions payable to
Borrower or to Guarantors which are Subsidiaries of Borrower and (ii) provided
that no Default or Event of Default exists at the time of any such Distribution
or would

 

52

 

occur as a result
thereof, Distributions not to exceed an aggregate of $20,000,000 in any Fiscal
Year.

 

(b)                                 No Restricted Person will make
any payments on Subordinated Debt, other than (i) provided that no Default or
Event of Default exists at such time or would occur as a result thereof,
regularly scheduled cash interest payments thereon and (ii) payments of
principal approved in writing by the Required Lenders.

 

Section 7.7.                                   Limitation on Investments,
Acquisitions, Capital Expenditures, and Lines of Business.  No Restricted Person will

 

(a)                                  make any Investments other than
Permitted Investments;

 

(b)                                 make any Capital Expenditures in
excess of the sum of (i) $20,000,000 in the aggregate in any Fiscal Year plus
(ii) the cash proceeds from the sale of Capital Assets received in such fiscal
year;

 

(c)                                  make any Acquisition (i) for
which the cash portion of the purchase price for such individual Acquisition is
greater than $10,000,000 or (ii) which would cause the aggregate cash portions
of the purchase prices for all Acquisitions during any Fiscal Year to exceed
$20,000,000; or

 

(d)                                 engage directly or indirectly in
any business or conduct any operations except in connection with or incidental
to its present businesses and operations.

 

Section 7.8.                                   Intentionally Omitted.

 

Section 7.9.                                   Transactions with Affiliates.  Neither Borrower nor any of its Subsidiaries
will engage in any material transaction with any of its Affiliates on terms
which are less favorable to it than those which would have been obtainable at
the time in arm’s-length dealing with Persons other than such Affiliates,
provided that such restriction shall not apply to transactions among Borrower
and its Subsidiaries.

 

Section 7.10.                             Prohibited Contracts.  Except as expressly provided for in the Loan
Documents, no Restricted Person will, directly or indirectly, enter into,
create, or otherwise allow to exist any contract that restricts or other
consensual restriction on, the ability of any Subsidiary of Borrower to: (a)
pay dividends or make other Distributions to Borrower, (b) to redeem Equity
held in it by Borrower, (c) to repay loans and other Indebtedness owing by it
to Borrower, (d) to transfer any of its assets to Borrower, or (e) make loans
or advances to Borrower or any of its Subsidiaries.  No Restricted Person will enter, or permit
the entry by any Restricted Person into, any contract, lease, or amendment that
releases, qualifies, limits, makes contingent or otherwise materially detrimentally
affects the rights and benefits of Agent or any Lender under or acquired
pursuant to any Security Documents.  No
ERISA Affiliate will incur any obligation to contribute to any “multiemployer
plan” as defined in Section 4001 of ERISA, except in the ordinary course
of business for employees subject to collective bargaining agreements.

 

53

 

Section 7.11.                             Financial Covenants.

 

(a)                                  Minimum Fixed
Charge Coverage Ratio.  The Borrower
will not permit the ratio, determined as of the end of each of its Fiscal
Quarters for the then most-recently ended four Fiscal Quarters, of its (i)
Consolidated EBITDA, minus
Consolidated Capital Expenditures, minus permitted
Distributions, minus the provision for income
taxes (excluding one-time tax charges arising solely from changes to GAAP), all
calculated on a Consolidated basis, to (ii) Consolidated Interest Expense, plus scheduled principal payments of
Indebtedness, to be less than 1.5 to 1.0.

 

(b)                                 Minimum Tangible
Net Worth.  The Borrower will not
permit its Consolidated Tangible Net Worth, determined as of the end of each of
its Fiscal Quarters, to be less than the sum of (i) eighty-five percent (85%)
of the Consolidated Tangible Net Worth as of March 31, 2005, plus (ii)
fifty percent (50%) of its Consolidated Net Income earned from April 1,
2005 through the last day of the most recently ended Fiscal Quarter, plus (iii)
100% of the net proceeds of any offering, sale, or other transfer of any Equity
of any kind of the Borrower or any Subsidiary (other than to the Borrower or
another Subsidiary).

 

(c)                                  Consolidated Total
Indebtedness Ratio.  The Borrower
will not permit the ratio, determined as of the end of each of its Fiscal
Quarters for the then most-recently ended four Fiscal Quarters, of its
Consolidated Total Indebtedness on such day to its Consolidated EBITDA for such
period, to be greater than 2.5 to 1.0.

 

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ARTICLE VIII

 

EVENTS OF DEFAULT AND REMEDIES

 

Section 8.1.                                   Events of Default.  Each of the following events constitutes an
Event of Default under this Agreement:

 

(a)                                  Any Restricted Person fails to
pay any principal component of any Obligation when due and payable

 

(b)                                 Any Restricted Person fails to
pay any payment of interest or fees on the date which such payment is due and
such failure continues for a period of three (3) days;

 

(c)                                  Any Restricted Person fails to
pay any Obligation (other than the Obligations in subsection (a) above)
within three Business Days after the same becomes due and payable, whether at a
date for the payment of a fixed installment or as a contingent or other payment
becomes due and payable or as a result of acceleration or otherwise;

 

(d)                                 Any “default” or “event of
default” occurs under any Loan Document which defines either such term, and the
same is not remedied within the applicable period of grace (if any) provided in
such Loan Document;

 

(e)                                  Any Restricted Person fails to
duly observe, perform or comply with any covenant, agreement or provision of Article VI
and such failure continues for a period for a period of thirty (30) days;

 

(f)                                    Any Restricted Person fails to
duly observe, perform or comply with any covenant, agreement or provision of Article VII;

 

(g)                                 Any Restricted Person fails
(other than as referred to in subsections (a), (b), (c) or (d) above) to duly
observe, perform or comply with any covenant, agreement, condition or provision
of any Loan Document, and such failure remains unremedied for a period of thirty
(30) days after notice of such failure is given by Agent to Borrower;

 

(h)                                 Any representation or warranty
previously, presently or hereafter made in writing by or on behalf of any
Restricted Person in connection with any Loan Document shall prove to have been
false or incorrect in any material respect on any date on or as of which made,
or any Loan Document at any time ceases to be valid, binding and enforceable as
warranted in Section 5.5 for any reason other than its release or
subordination by Agent;

 

(i)                                     Any Restricted Person (i) fails
to pay any portion, when such portion is due, of any of its Indebtedness in
excess of $5,000,000, or (ii) breaches or defaults in the performance of any
agreement or instrument by which any such Indebtedness is issued, evidenced,
governed, or secured, and any such failure, breach or default continues beyond
any applicable period of grace provided therefor;

 

55

 

(j)                                     Either (i) any “accumulated
funding deficiency” (as defined in Section 412(a) of the Internal Revenue
Code) in excess of $5,000,000 exists with respect to any ERISA Plan, whether or
not waived by the Secretary of the Treasury or his delegate, or (ii) any
Termination Event occurs with respect to any ERISA Plan and the then current
value of such ERISA Plan’s benefit liabilities exceeds the then current value
of such ERISA Plan’s assets available for the payment of such benefit
liabilities by more than $5,000,000 (or in the case of a Termination Event
involving the withdrawal of a substantial employer, the withdrawing employer’s
proportionate share of such excess exceeds such amount);

 

(k)                                  Any Restricted Person:

 

(i)                                     suffers
the entry against it of a judgment, decree or order for relief by a Tribunal of
competent jurisdiction in an involuntary proceeding commenced under any
applicable bankruptcy, insolvency or other similar Law of any jurisdiction now
or hereafter in effect, including the federal Bankruptcy Code, as from time to
time amended, or has any such proceeding commenced against it which remains
undismissed for a period of sixty days; or

 

(ii)                                  commences
a voluntary case under any applicable bankruptcy, insolvency or similar Law now
or hereafter in effect, including the federal Bankruptcy Code, as from time to
time amended; or applies for or consents to the entry of an order for relief in
an involuntary case under any such Law; or makes a general assignment for the
benefit of creditors; or fails generally to pay (or admits in writing its
inability to pay) its debts as such debts become due; or takes corporate or
other action to authorize any of the foregoing; or

 

(iii)                               suffers
the appointment of or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of all or a substantial
part of its assets or of any part of the Collateral in a proceeding brought
against or initiated by it, and such appointment or taking possession is
neither made ineffective nor discharged within sixty days after the making
thereof, or such appointment or taking possession is at any time consented to,
requested by, or acquiesced to by it; or

 

(iv)                              suffers
the entry against it of a final judgment for the payment of money in excess of
$5,000,000 (not covered by insurance satisfactory to Agent in its reasonable
discretion), unless the same is discharged within forty-five days after the
date of entry thereof or an appeal or appropriate proceeding for review thereof
is taken within such period and a stay of execution pending such appeal is
obtained; or

 

(v)                                 suffers
a writ or warrant of attachment or any similar process to be issued by any
Tribunal against all or any substantial part of its assets or any part of the
Collateral, and such writ or warrant of attachment or any similar process is
not stayed or released within forty-five days after the entry or levy thereof
or after any stay is vacated or set aside;

 

(l)                                     Any Change of Control occurs;

 

56

 

(m)                               The occurrence of an event of
default under any document to which any Restricted Person and any surety are
both parties that, with the passage of time, would permit foreclosure by such
surety on a material portion of the Collateral.

 

Upon the occurrence of an Event of Default described
in subsection (j)(i), (j)(ii) or (j)(iii) of this section with
respect to Borrower, all of the Obligations shall thereupon be immediately due
and payable, without demand, presentment, notice of demand or of dishonor and
nonpayment, protest, notice of protest, notice of intention to accelerate,
declaration or notice of acceleration, or any other notice or declaration of
any kind, all of which are hereby expressly waived by Borrower and each
Restricted Person who at any time ratifies or approves this Agreement.  Upon any such acceleration, any obligation of
any Lender and any obligation of LC Issuer to issue Letters of Credit hereunder
to make any further Loans shall be permanently terminated.  During the continuance of any other Event of
Default, Agent at any time and from time to time may (and upon written
instructions from Required Lenders, Agent shall), without notice to Borrower or
any other Restricted Person, do either or both of the following:  (1) terminate any obligation of Lenders to make
Loans hereunder, and any obligation of LC Issuer to issue Letters of Credit
hereunder, and (2) declare any or all of the Obligations immediately due and
payable, and all such Obligations shall thereupon be immediately due and
payable, without demand, presentment, notice of demand or of dishonor and
nonpayment, protest, notice of protest, notice of intention to accelerate,
declaration or notice of acceleration, or any other notice or declaration of
any kind, all of which are hereby expressly waived by Borrower and each
Restricted Person who at any time ratifies or approves this Agreement.

 

Section 8.2.                                   Remedies.  If any Event of Default shall occur and be
continuing, each Lender Party may terminate its Revolving Loan Commitment and
protect and enforce its rights under the Loan Documents by any appropriate
proceedings, including proceedings for specific performance of any covenant or
agreement contained in any Loan Document, and each Lender Party may enforce the
payment of any Obligations due it or enforce any other legal or equitable right
which it may have.  All rights, remedies
and powers conferred upon Lender Parties under the Loan Documents shall be
deemed cumulative and not exclusive of any other rights, remedies or powers
available under the Loan Documents or at Law or in equity.

 

Section 8.3.                                   Application of Proceeds after
Acceleration.  Except as otherwise provided in the Security
Documents with respect to application of proceeds to any reimbursements due
Agent thereunder and to the Lender Hedging Obligations, if Agent collects or
receives money on account of the Obligations after the acceleration of the
Obligations as provided in Section 8.1, Agent shall distribute all money
so collected or received:

 

(a)                                  First, to any reimbursements due
Agent hereunder;

 

(b)                                 Second, ratably to payment of that
portion of Obligations constituting accrued and unpaid interest and Lender
Hedging Obligations; provided that Agent shall have no independent
responsibility to determine the existence or amount of Lender Hedging
Obligations and may reserve from the application of amounts under this Section amounts
distributable in respect of Lender Hedging Obligations until it has received
evidence satisfactory to it of the existence and amount of such Lender Hedging
Obligations; provided further, however, that Agent may rely on

 

57

 

statements of the
Lender Parties as to the existence and amounts of Lender Hedging Obligations
owing to them;

 

(c)                                  Third, ratably to the payment or
cash-collateralization of all other Obligations of the Borrower or any
Guarantor owing under or in respect of the Loan Documents that are due and
payable on such date (and among such Obligations in the manner provided in Section 3.1);
and

 

(d)                                 The balance, if any, after all
of the Obligations have been indefeasibly paid in full, to the Borrower or as
otherwise required by Law.

 

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ARTICLE IX

 

AGENT

 

Section 9.1.                                   Appointment and Authority.  Each Lender Party hereby irrevocably
authorizes Agent, and Agent hereby undertakes, to receive payments of
principal, interest and other amounts due hereunder as specified herein and to
take all other actions and to exercise such powers under the Loan Documents as
are specifically delegated to Agent by the terms hereof or thereof, together
with all other powers reasonably incidental thereto.  The relationship of Agent to the other Lender
Parties is only that of one commercial lender acting as Agent for others, and
nothing in the Loan Documents shall be construed to constitute Agent a trustee
or other fiduciary for any Lender Party or any holder of any participation in a
Note nor to impose on Agent duties and obligations other than those expressly
provided for in the Loan Documents.  With
respect to any matters not expressly provided for in the Loan Documents and any
matters which the Loan Documents place within the discretion of Agent, Agent
shall not be required to exercise any discretion or take any action, and it may
request instructions from Lenders with respect to any such matter, in which
case it shall be required to act or to refrain from acting (and shall be fully
protected and free from liability to all Lender Parties in so acting or
refraining from acting) upon the instructions of Required Lenders (including
itself), provided, however, that Agent shall not be required to take any action
which exposes it to a risk of personal liability that it considers unreasonable
or which is contrary to the Loan Documents or to applicable Law.

 

Section 9.2.                                   Exculpation, Agent’s Reliance,
Etc.  Neither Agent nor any of its directors,
officers, Agents, attorneys, or employees shall be liable for any action taken
or omitted to be taken by any of them under or in connection with the Loan
Documents, including their negligence of any kind, except that each shall be
liable for its own gross negligence or willful misconduct.  Without limiting the generality of the
foregoing, Agent (a) may treat the Person whose name is set forth on the
Register as the holder of any Obligation as the holder thereof until Agent
receives written notice of the assignment or transfer thereof in accordance
with this Agreement, signed by such Person and in the form required under Section 10.5(c)
payee and in form satisfactory to Agent; (b) may consult with legal counsel
(including counsel for Borrower), independent public accountants and other
experts selected by it and shall not be liable for any action taken or omitted
to be taken in good faith by it in accordance with the advice of such counsel,
accountants or experts; (c) makes no warranty or representation to any other
Lender and shall not be responsible to any other Lender Party for any
statements, warranties or representations made in or in connection with the
Loan Documents; (d) shall not have any duty to ascertain or to inquire as to
the performance or observance of any of the terms, covenants or conditions of
the Loan Documents on the part of any Restricted Person or to inspect the
property (including the books and records) of any Restricted Person; (e) shall
not be responsible to any other Lender for the due execution, legality,
validity, enforceability, genuineness, sufficiency or value of any Loan
Document or any instrument or document furnished in connection therewith; (f)
may rely upon the representations and warranties of each Restricted Person or
Lender Party in exercising its powers hereunder; and (g) shall incur no
liability under or in respect of the Loan Documents by acting upon any notice,
consent, certificate or other instrument or writing

 

59

 

(including any facsimile, telegram, cable or
telex) believed by it to be genuine and signed or sent by the proper Person or
Persons.

 

Section 9.3.                                   Credit Decisions.  Each Lender Party acknowledges that it has,
independently and without reliance upon any other Lender Party, made its own
analysis of Borrower and the transactions contemplated hereby and its own
independent decision to enter into this Agreement and the other Loan
Documents.  Each Lender Party also
acknowledges that it will, independently and without reliance upon any other
Lender Party and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Loan Documents.

 

Section 9.4.                                   Indemnification.  Each Lender agrees to indemnify Agent (to the
extent not reimbursed by Borrower within ten (10) days after demand) from and
against such Lender’s Percentage Share of any and all liabilities, obligations,
claims, losses, damages, penalties, fines, actions, judgments, suits,
settlements, costs, expenses or disbursements (including reasonable fees of
attorneys, accountants, experts and advisors) of any kind or nature whatsoever
(in this section collectively called “liabilities and costs”) which to any
extent (in whole or in part) may be imposed on, incurred by, or asserted
against Agent growing out of, resulting from or in any other way associated
with any of the Collateral, the Loan Documents and the transactions and events
(including the enforcement thereof) at any time associated therewith or
contemplated therein (whether arising in contract or in tort and otherwise and
including any violation or noncompliance with any Environmental Laws by any
Person or any liabilities or duties of any Person with respect to Hazardous
Materials found in or released into the environment).

 

THE FOREGOING
INDEMNIFICATION SHALL APPLY WHETHER OR NOT SUCH LIABILITIES AND COSTS ARE IN
ANY WAY OR TO ANY EXTENT OWED, IN WHOLE OR IN PART, UNDER ANY CLAIM OR THEORY
OF STRICT LIABILITY, OR ARE CAUSED, IN WHOLE OR IN PART, BY ANY NEGLIGENT ACT
OR OMISSION OF ANY KIND BY AGENT,

 

provided only that no Lender shall be obligated under this section to
indemnify Agent for that portion, if any, of any liabilities and costs which is
proximately caused by Agent’s own individual gross negligence or willful
misconduct, as determined in a final judgment. 
Cumulative of the foregoing, each Lender agrees to reimburse Agent
promptly upon demand for such Lender’s Percentage Share of any costs and
expenses to be paid to Agent by Borrower under Section 10.4(a) to the
extent that Agent is not timely reimbursed for such expenses by Borrower as
provided in such section.  As used in
this section the term “Agent” shall refer not only to the Person
designated as such in Section 1.1 but also to each director, officer,
Agent, attorney, employee, representative and Affiliate of such Person.

 

Section 9.5.                                   Rights as Lender.  In its capacity as a Lender, Agent shall have
the same rights and obligations as any Lender and may exercise such rights as
though it were not Agent.  Agent may
accept deposits from, lend money to, act as trustee under indentures of, and
generally engage in any kind of business with any Restricted Person or their
Affiliates, all as if it were not Agent hereunder and without any duty to
account therefor to any other Lender.

 

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Section 9.6.                                   Sharing of Set-Offs and Other
Payments.  Each Lender Party agrees that if it shall,
whether through the exercise of rights under Security Documents or rights of
banker’s lien, set off, or counterclaim against Borrower or otherwise, obtain
payment of a portion of the aggregate Obligations owed to it which, taking into
account all distributions made by Agent under Section 3.1, causes such
Lender Party to have received more than it would have received had such payment
been received by Agent and distributed pursuant to Section 3.1, then (a)
it shall be deemed to have simultaneously purchased and shall be obligated to
purchase interests in the Obligations as necessary to cause all Lender Parties
to share all payments as provided for in Section 3.1, and (b) such other adjustments
shall be made from time to time as shall be equitable to ensure that Agent and
all Lender Parties share all payments of Obligations as provided in Section 3.1;
provided, however, that nothing herein contained shall in any way affect the
right of any Lender Party to obtain payment (whether by exercise of rights of
banker’s lien, set-off or counterclaim or otherwise) of indebtedness other than
the Obligations.  Borrower expressly
consents to the foregoing arrangements and agrees that any holder of any such
interest or other participation in the Obligations, whether or not acquired
pursuant to the foregoing arrangements, may to the fullest extent permitted by
Law exercise any and all rights of banker’s lien, set-off, or counterclaim as
fully as if such holder were a holder of the Obligations in the amount of such
interest or other participation.  If all
or any part of any funds transferred pursuant to this section is
thereafter recovered from the seller under this section which received the
same, the purchase provided for in this section shall be deemed to have
been rescinded to the extent of such recovery, together with interest, if any,
if interest is required pursuant to the order of a Tribunal order to be paid on
account of the possession of such funds prior to such recovery.

 

Section 9.7.                                   Investments.  Whenever Agent in good faith determines that
it is uncertain about how to distribute to Lender Parties any funds which it
has received, or whenever Agent in good faith determines that there is any dispute
among Lender Parties about how such funds should be distributed, Agent may
choose to defer distribution of the funds which are the subject of such
uncertainty or dispute.  If Agent in good
faith believes that the uncertainty or dispute will not be promptly resolved,
or if Agent is otherwise required to invest funds pending distribution to
Lender Parties, Agent shall invest such funds pending distribution; all
interest on any such Investment shall be distributed upon the distribution of
such Investment and in the same proportion and to the same Persons as such
Investment.  All monies received by Agent
for distribution to Lender Parties (other than to the Person who is Agent in
its separate capacity as a Lender Party) shall be held by Agent pending such distribution
solely as Agent for such Lender Parties, and Agent shall have no equitable
title to any portion thereof.

 

Section 9.8.                                   Benefit of Article IX.  The provisions of this Article (other
than the following Section 9.9) are intended solely for the benefit of
Lender Parties, and no Restricted Person shall be entitled to rely on any such
provision or assert any such provision in a claim or defense against any
Lender.  Lender Parties may waive or
amend such provisions as they desire without any notice to or consent of
Borrower or any Restricted Person.

 

Section 9.9.                                   Resignation.  Agent may resign at any time by giving
written notice thereof to Lenders and Borrower. 
Each such notice shall set forth the date of such resignation.  Upon any such resignation , Required Lenders
shall have the right to appoint (with, unless an Event of Default shall have
occurred and be continuing, the consent of Borrower, such consent

 

61

 

not to be unreasonably withheld or delayed) a
successor Agent.  A successor must be
appointed for any retiring Agent, and such Agent’s resignation shall become
effective when such successor accepts such appointment.  If, within thirty days after the date of the
retiring Agent’s resignation, no successor Agent has been appointed and has
accepted such appointment, then the retiring Agent may appoint (with, unless an
Event of Default shall have occurred and be continuing, the consent of
Borrower, such consent not to be unreasonably withheld or delayed) a successor
Agent, which shall be a commercial bank organized or licensed to conduct a
banking or trust business under the Laws of the United States of America or of
any state thereof.  Upon the acceptance
of any appointment as Agent hereunder by a successor Agent, the retiring Agent
shall be discharged from its duties and obligations under this Agreement and
the other Loan Documents.  After any
retiring Agent’s resignation hereunder the provisions of this Article IX
shall continue to inure to its benefit as to any actions taken or omitted to be
taken by it while it was Agent under the Loan Documents.

 

Section 9.10.                             Notice of Default.  Agent shall not be deemed to have knowledge
or notice of the occurrence of any Default, except with respect to defaults in
the payment of principal, interest and fees required to be paid to Agent for
the account of Lenders, unless Agent shall have received written notice from a
Lender or Borrower referring to this Agreement, describing such Default and
stating that such notice is a “notice of default.”  Agent will notify Lenders of its receipt of
any such notice.  Agent shall take such
action with respect to such Default as may be directed by Required Lenders in
accordance with Article VIII; provided, however, that unless and until
Agent has received any such direction, Agent may (but shall not be obligated
to) take such action, or refrain from taking such action, with respect to such
Default as it shall deem advisable or in the best interest of Lenders.

 

Section 9.11.                             Co-Agents.  The Party identified on the facing page of
this Agreement as “Arranger” has no right, power, obligation, liability,
responsibility, or duty under the Loan Documents in such capacity.  Without limiting the foregoing, the Party so
identified as “Arranger” shall not have and shall not be deemed to have any
fiduciary relationship with any other Lender. 
Each Lender acknowledges that it has not relied, and will not rely, on
taking or not taking action hereunder.

 

[THE REMAINDER OF THIS PAGE IS
INTENTIONALLY LEFT BLANK]

 

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ARTICLE X

 

MISCELLANEOUS

 

Section 10.1.                             Waivers and Amendments;
Acknowledgments.

 

(a)                                  Waivers and Amendments.  No failure or delay (whether by course of
conduct or otherwise) by any Lender in exercising any right, power or remedy
which such Lender Party may have under any of the Loan Documents shall operate
as a waiver thereof or of any other right, power or remedy, nor shall any
single or partial exercise by any Lender Party of any such right, power or
remedy preclude any other or further exercise thereof or of any other right,
power or remedy.  No waiver of any
provision of any Loan Document and no consent to any departure therefrom shall
ever be effective unless it is in writing and signed as provided below in this
section, and then such waiver or consent shall be effective only in the
specific instances and for the purposes for which given and to the extent
specified in such writing.  No notice to
or demand on any Restricted Person shall in any case of itself entitle any
Restricted Person to any other or further notice or demand in similar or other
circumstances.  This Agreement and the
other Loan Documents set forth the entire understanding between the parties
hereto with respect to the transactions contemplated herein and therein and
supersede all prior discussions and understandings with respect to the subject
matter hereof and thereof, and no waiver, consent, release, modification or
amendment of or supplement to this Agreement or the other Loan Documents shall
be valid or effective against any party hereto unless the same is in writing
and signed by (i) if such party is Borrower, by Borrower, (ii) if such party is
Agent or LC Issuer, by such party, and (iii) if such party is a Lender, by such
Lender or by Agent on behalf of Lenders with the written consent of Required
Lenders (which consent has already been given as to the termination of the Loan
Documents as provided in Section 10.9). 
Notwithstanding the foregoing or anything to the contrary herein, Agent
shall not, without the prior consent of each individual Lender, execute and
deliver on behalf of such Lender any waiver or amendment which would:  (1) waive any of the conditions specified in Article IV
(provided that Agent may in its discretion withdraw any request it has made
under Section 4.2), (2) increase the maximum amount which such Lender is
committed hereunder to lend, (3) reduce any fees payable to such Lender
hereunder, or the principal of, or interest on, either of such Lender’s Notes,
(4) extend the Maturity Date, or postpone any date fixed for any payment of any
such fees, principal or interest, (5) amend the definition herein of “Required
Lenders” or otherwise change the aggregate amount of Percentage Shares which is
required for Agent, Lenders or any of them to take any particular action under
the Loan Documents, (6) release Borrower from its obligation to pay such Lender’s
Obligations or any Guarantor (other than a Guarantor which ceases to be a
Subsidiary pursuant to a sale or other disposition permitted by the Loan
Documents) from its guaranty of such payment or (7) release all or
substantially all of the any Collateral, except for such releases relating to
sales or dispositions of property permitted by the Loan Documents, or (8) amend
this Section 10.1(a). 
Notwithstanding the foregoing or anything to the contrary herein, Agent
shall not, without the prior consent of each individual Lender affected thereby
(or, as applicable, an Affiliate of such Lender), execute and deliver any
waiver or amendment to any Loan Document which would (i) cause an obligation
under any outstanding Hedging Contract owing to such Lender (or its Affiliate)
that, prior to such waiver or amendment, constituted a “Lender Hedging

 

63

 

Obligation” to cease
to be a “Lender Hedging Obligation” or (ii) cause the priority of the Lien
securing such obligation or the priority of payment with respect to such
obligation in connection with the exercise of remedies under such Loan Document
to be subordinate in any manner to the Obligations (other than expense
reimbursements, expenses of enforcement, and other similar obligations owing
under the Loan Documents).

 

(b)                                 Acknowledgments and Admissions.  Borrower hereby represents, warrants,
acknowledges and admits that (i) it has been advised by counsel in the
negotiation, execution and delivery of the Loan Documents to which it is a
party, (ii) it has made an independent decision to enter into this Agreement
and the other Loan Documents to which it is a party, without reliance on any
representation, warranty, covenant or undertaking by Agent or any Lender,
whether written, oral or implicit, other than as expressly set out in this
Agreement or in another Loan Document delivered on or after the date hereof,
(iii) there are no representations, warranties, covenants, undertakings or
agreements by any Lender as to the Loan Documents except as expressly set out
in this Agreement or in another Loan Document delivered on or after the date
hereof, (iv) no Lender has any fiduciary obligation toward Borrower with
respect to any Loan Document or the transactions contemplated thereby, (v) the
relationship pursuant to the Loan Documents between Borrower and the other
Restricted Persons, on one hand, and each Lender, on the other hand, is and
shall be solely that of debtor and creditor, respectively, provided that,
solely for purposes of Section 10.5(f), Agent shall act as Agent of
Borrower in maintaining the Register as set forth therein, (vi) no partnership
or joint venture exists with respect to the Loan Documents between any
Restricted Person and any Lender, (vii) Agent is not Borrower’s Agent, but
Agent for Lenders, provided that, solely for purposes of Section 10.5(f),
Agent shall act as Agent of Borrower in maintaining the Register as set forth
therein, (viii) should an Event of Default or Default occur or exist, each
Lender will determine in its sole discretion and for its own reasons what
remedies and actions it will or will not exercise or take at that time subject
to the terms of this Agreement, (ix) without limiting any of the foregoing,
Borrower is not relying upon any representation or covenant by any Lender, or
any representative thereof, and no such representation or covenant has been
made, that any Lender will, at the time of an Event of Default or Default, or
at any other time, waive, negotiate, discuss, or take or refrain from taking
any action permitted under the Loan Documents with respect to any such Event of
Default or Default or any other provision of the Loan Documents, and (x) all
Lender Parties have relied upon the truthfulness of the acknowledgments in this
section in deciding to execute and deliver this Agreement and to become
obligated hereunder.

 

(c)                                  Joint Acknowledgment.  THIS WRITTEN AGREEMENT AND THE
OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY
NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES.

 

THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN
THE PARTIES.

 

Section 10.2.                             Survival of Agreements;
Cumulative Nature.  Except for representations and warranties
given as of a specified date, all of Restricted Persons’ various
representations, warranties, covenants and agreements in the Loan Documents
shall survive the execution and

 

64

 

delivery of this Agreement and the other Loan
Documents and the performance hereof and thereof, including the making or
granting of the Loans and the delivery of the Notes and the other Loan
Documents, and shall further survive until all of the Obligations are paid in
full to each Lender Party and all of Lender Parties’ obligations to Borrower
are terminated.  All statements and
agreements contained in any certificate or other instrument delivered by any
Restricted Person to any Lender Party under any Loan Document shall be deemed
representations and warranties by Borrower or agreements and covenants of
Borrower under this Agreement.  The
representations, warranties, indemnities, and covenants made by Restricted
Persons in the Loan Documents, and the rights, powers, and privileges granted
to Lender Parties in the Loan Documents, are cumulative, and, except for
expressly specified waivers and consents, no Loan Document shall be construed
in the context of another to diminish, nullify, or otherwise reduce the benefit
to any Lender Party of any such representation, warranty, indemnity, covenant,
right, power or privilege.  In particular
and without limitation, no exception set out in this Agreement to any
representation, warranty, indemnity, or covenant herein contained shall apply
to any similar representation, warranty, indemnity, or covenant contained in
any other Loan Document, unless the Loan Documents shall expressly provide that
such exception shall apply to such similar representation, warranty, indemnity,
or covenant.

 

Section 10.3.                             Notices.  All notices, requests, consents, demands and
other communications required or permitted under any Loan Document shall be in
writing, unless otherwise specifically provided in such Loan Document (provided
that Agent may give telephonic notices to the other Lender Parties), and shall
be deemed sufficiently given or furnished if delivered by personal delivery, by
facsimile or other electronic transmission, by delivery service with proof of
delivery, or by registered or certified United States mail, postage prepaid, to
Borrower and Restricted Persons at the address of Borrower specified on the
signature pages hereto and to each Lender Party at its address specified on Schedule 3.1
hereto (unless changed by similar notice in writing given by the particular
Person whose address is to be changed). 
Any such notice or communication shall be deemed to have been given (a)
in the case of personal delivery or delivery service, as of the date of first
attempted delivery during normal business hours at the address provided herein,
(b) in the case of facsimile or other electronic transmission, upon receipt, or
(c) in the case of registered or certified United States mail, three days after
deposit in the mail; provided, however, that no Borrowing Notice shall become
effective until actually received by Agent.

 

Section 10.4.                             Payment of Expenses; Indemnity.

 

(a)                                  Payment of Expenses.  Whether or not the transactions contemplated
by this Agreement are consummated, Borrower will promptly (and in any event,
within thirty (30) days after any invoice or other statement or notice) pay:
(i) all transfer, stamp, mortgage, documentary or other similar taxes,
assessments or charges levied by any governmental or revenue authority in
respect of this Agreement or any of the other Loan Documents or any other
document or transaction referred to herein or therein, (ii) all reasonable
costs and expenses incurred by or on behalf of Agent (including without
limitation reasonable attorneys’ fees, travel costs and miscellaneous
expenses), but excluding consultants fees other than in connection with an
annual field audit permitted below, in connection with (1) the negotiation,
preparation, execution and delivery of the Loan Documents, and any and all
consents, waivers or other documents or

 

65

 

instruments relating thereto, (2) the filing, recording, refiling and
re-recording of any Loan Documents and any other documents or instruments or
further assurances required to be filed or recorded or refiled or re-recorded
by the terms of any Loan Document, (3) the borrowings hereunder and other
action reasonably required in the course of administration hereof, (4)
monitoring or confirming (or preparation or negotiation of any document related
to) any Restricted Person’s compliance with any covenants or conditions
contained in this Agreement or in any Loan Document, and (iii) all reasonable
costs and expenses incurred by the Agent on behalf of any Lender Party
(including without limitation reasonable attorneys’ fees, reasonable
consultants’ fees and reasonable accounting fees) in connection with the
conduct of an annual field audit, the preservation of any rights under the Loan
Documents or the defense or enforcement of any of the Loan Documents (including
this section), any attempt to cure any breach thereunder by any Restricted
Person, or the defense of any Lender Party’s exercise of its rights
thereunder.  In addition to the
foregoing, until all Obligations have been paid in full, Borrower will also pay
or reimburse Agent for all reasonable out-of-pocket costs and expenses of Agent
or its agents or employees in connection with the continuing administration of
the Loans and the related due diligence of Agent, including travel and
miscellaneous expenses and reasonable fees and expenses of Agent’s outside
counsel and consultants engaged in connection with the Loan Documents.

 

(b)                                 Indemnity.  Borrower agrees to indemnify each Lender
Party, upon demand, from and against any and all liabilities, obligations,
broker’s fees, claims, losses, damages, penalties, fines, actions, judgments,
suits, settlements, costs, expenses or disbursements (including reasonable fees
of attorneys, accountants, experts and advisors) of any kind or nature
whatsoever (in this section collectively called “liabilities and costs”)
which to any extent (in whole or in part) may be imposed on, incurred by, or
asserted against such Lender Party growing out of, resulting from or in any
other way associated with any of the Collateral, the Loan Documents and the
transactions and events (including the enforcement or defense thereof) at any
time associated therewith or contemplated therein (whether arising in contract
or in tort or otherwise).  Among other
things, the foregoing indemnification covers all liabilities and costs incurred
by any Lender Party related to any breach of a Loan Document by a Restricted
Person, any bodily injury to any Person or damage to any Person’s property, or
any violation or noncompliance with any Environmental Laws by any Lender Party
or any other Person or any liabilities or duties of any Lender Party or any
other Person with respect to Hazardous Materials found in or released into the
environment.

 

THE FOREGOING INDEMNIFICATION SHALL APPLY
WHETHER OR NOT SUCH LIABILITIES AND COSTS ARE IN ANY WAY OR TO ANY EXTENT OWED,
IN WHOLE OR IN PART, UNDER ANY CLAIM OR THEORY OF STRICT LIABILITY OR CAUSED,
IN WHOLE OR IN PART BY ANY NEGLIGENT ACT OR OMISSION OF ANY KIND BY ANY LENDER
PARTY,

 

provided only that no Lender Party shall be entitled under this section to
receive indemnification for that portion, if any, of any liabilities and costs
which is proximately caused by its own individual gross negligence or willful
misconduct, as determined in a final judgment. 
If any Person (including Borrower or any of its Affiliates) ever alleges
such gross negligence or willful

 

66

 

misconduct by any Lender Party, the indemnification provided for in
this section shall nonetheless be paid upon demand, subject to later
adjustment or reimbursement, until such time as a court of competent
jurisdiction enters a final judgment as to the extent and effect of the alleged
gross negligence or willful misconduct. 
As used in this section the term “Lender Party” shall refer not
only to each Person designated as such in Section 1.1 but also to each
director, officer, Agent, trustee, attorney, employee, representative and
Affiliate of or for such Person.

 

Section 10.5.                             Joint and Several Liability;
Parties in Interest; Assignments.

 

(a)                                  All Obligations which are
incurred by two or more Restricted Persons shall be their joint and several obligations
and liabilities.  All grants, covenants
and agreements contained in the Loan Documents shall bind and inure to the
benefit of the parties thereto and their respective successors and assigns;
provided, however, that no Restricted Person may assign or transfer any of its
rights or delegate any of its duties or obligations under any Loan Document
without the prior consent of the Required Lenders.  Neither Borrower nor any Affiliates of
Borrower shall directly or indirectly purchase or otherwise retire any
Obligations owed to any Lender nor will any Lender accept any offer to do so,
unless each Lender shall have received substantially the same offer with
respect to the same Percentage Share of the Obligations owed to it.  If Borrower or any Affiliate of Borrower at
any time purchases some but less than all of the Obligations owed to all Lender
Parties, such purchaser shall not be entitled to any rights of any Lender under
the Loan Documents unless and until Borrower or its Affiliates have purchased
all of the Obligations.

 

(b)                                 No Lender shall sell any
participation interest in its commitment hereunder or any of its rights under
its Loans or under the Loan Documents to any Person unless the agreement
between such Lender and such participant at all times provides: (i) that such
participation exists only as a result of the agreement between such participant
and such Lender and that such transfer does not give such participant any right
to vote as a Lender or any other direct claims or rights against any Person
other than such Lender, (ii) that such participant is not entitled to payment
from any Restricted Person under Sections 3.2 through 3.8 of amounts in excess
of those payable to such Lender under such sections (determined without regard
to the sale of such participation), and (iii) unless such participant is an
Affiliate of such Lender, that such participant shall not be entitled to
require such Lender to take any action under any Loan Document or to obtain the
consent of such participant prior to taking any action under any Loan Document,
except for actions which would require the consent of all Lenders under subsection (a)
of Section 10.1.  No Lender selling
such a participation shall, as between the other parties hereto and such
Lender, be relieved of any of its obligations hereunder as a result of the sale
of such participation.  Each Lender which
sells any such participation to any Person (other than an Affiliate of such
Lender) shall give prompt notice thereof to Agent and Borrower.

 

(c)                                  Except for sales of
participations under the immediately preceding subsection, no Lender shall make
any assignment or transfer of any kind of its commitments or any of its rights
under its Loans or under the Loan Documents, except for assignments to an
Eligible Transferee, and then only if such assignment is made in accordance
with the following requirements:

 

67

 

(i)                                     Each
such assignment shall apply to all Obligations owing to the assignor Lender
hereunder and to the unused portion of the assignor Lender’s Revolving Loan
Commitment, so that after such assignment is made the assignor Lender shall
have a fixed (and not a varying) Percentage Share in its Loans and Notes and be
committed to make that Percentage Share of all future Loans, the assignee shall
have a fixed Percentage Share in the aggregate Loans and Notes and be committed
to make that Percentage Share of all future Loans, and, except in the case of
an assignment of the entire remaining amount of the assignor’s Percentage Share
of the Revolving Loan Commitment, the Revolving Loan Commitment of both the
assignor and assignee, after giving effect to such assignment, shall equal or
exceed $2,500,000.

 

(ii)                                  The
parties to each such assignment shall execute and deliver to Agent, for its
acceptance and recording in the “Register” (as defined below in this section),
an Assignment and Acceptance in the form of Exhibit 10.5, appropriately
completed, together with the Note subject to such assignment and a processing
fee payable to Agent of $3,500.  Upon
such execution, delivery, and payment and upon the satisfaction of the
conditions set out in such Assignment and Acceptance, then (1) Borrower shall
issue new Notes to such assignor and assignee upon return of the old Notes to
Borrower, and (2) as of the “Settlement Date” specified in such Assignment and
Acceptance the assignee thereunder shall be a party hereto and a Lender
hereunder and Agent shall thereupon deliver to Borrower and each Lender a schedule showing
the revised Percentage Shares of such assignor Lender and such assignee Lender
and the Percentage Shares of all other Lenders.

 

(iii)                               Each
assignee Lender which is not a United States person (as such term is defined in
Section 7701(a)(30) of the Internal Revenue Code) for Federal income tax
purposes, shall (to the extent it has not already done so) provide Agent and
Borrower with the “Prescribed Forms” referred to in Section 3.6(d).

 

(iv)                              Unless
the assignee is an Affiliate of the assignor, such assignment shall not be effective
unless consented to in writing by Agent and, unless an Event of Default shall
have occurred and be continuing, Borrower (such consent not to be unreasonably
withheld or delayed).

 

(d)                                 Nothing contained in this section shall
prevent or prohibit any Lender from assigning or pledging all or any portion of
its Loans and Notes to any Federal Reserve Bank as collateral security pursuant
to Regulation A of the Board of Governors of the Federal Reserve System and any
Operating Circular issued by such Federal Reserve Bank; provided that no such
assignment or pledge shall relieve such Lender from its obligations hereunder.

 

(e)                                  By executing and delivering an
Assignment and Acceptance, each assignee Lender thereunder will be confirming
to and agreeing with Borrower, Agent and each other Lender Party that such
assignee understands and agrees to the terms hereof, including Article IX
hereof.

 

68

 

(f)                                    Agent shall maintain a copy of
each Assignment and Acceptance and a register for the recordation of the names
and addresses of Lenders and the Percentage Shares of, and principal amount of
the Loans owing to, each Lender from time to time (in this section called
the “Register”).  The entries in the
Register shall be conclusive, in the absence of manifest error, and Borrower
and each Lender Party may treat each Person whose name is recorded in the
Register as a Lender hereunder for all purposes.  The Register shall be available for inspection
by Borrower or any Lender Party at any reasonable time and from time to time
upon reasonable prior notice.  Agent
shall act as Agent of Borrower solely for purposes of maintaining the Register
as set forth in this Section 10.5(f).

 

Section 10.6.          Confidentiality.  Each Lending Party agrees to keep
confidential any information furnished or made available to it by any
Restricted Person pursuant to this Agreement that is financial information,
information in connection with a proposed transaction, or information marked
confidential; provided that nothing herein shall prevent any Lending Party from
disclosing such information (a) to any other Lending Party or any Affiliate of
any Lending Party, or any officer, director, employee, Agent, attorney,
auditor, or advisor of any Lending Party or Affiliate of any Lending Party, (b)
to any other Person if reasonably incidental to the administration of the
credit facility provided herein, (c) as required by any Law, (d) upon the order
of any court or administrative agency, (e) upon the request or demand of any
Tribunal, (f) that is or becomes available to the public or that is or becomes
available to any Lending Party other than as a result of a disclosure by any
Lending Party prohibited by this Agreement, (g) to the extent necessary in
connection with the exercise of any right or remedy under this Agreement or any
other Loan Document, (h) subject to provisions substantially similar to those
contained in this section, to any actual or proposed participant or assignee or
any actual or proposed contractual counterparty (or its advisors) to any
securitization, hedge, or other derivative transaction relating to the parties’
obligations hereunder, and (i) if it is otherwise available in the public
domain.  Notwithstanding anything set
forth herein to the contrary, each party to this Agreement and each of its
employees, representatives, and other Agents is hereby expressly authorized to
disclose the “tax treatment” and “tax structure” (as those terms are defined in
Treas. Reg. §§ 1.6011-4(c)(8) and (9), respectively) of the transactions
contemplated hereby and all materials of any kind, including opinions or other
tax analyses, that have been provided to it by any other party relating to such
tax treatment or tax structure.  Any
Person required to maintain the confidentiality of information described in
this section shall be considered to have complied with its obligation to do so
if such Person has exercised the same degree of care to maintain the
confidentiality of such information as such Person would accord to its own
confidential information.

 

Section 10.7.                             Governing Law; Submission to
Process.  Except to the extent that the Law of another
jurisdiction is expressly elected in a Loan Document, the Loan Documents shall
be deemed contracts and instruments made under the Laws of the State of Texas
and shall be construed and enforced in accordance with and governed by the Laws
of the State of Texas and the Laws of the United States of America, without
regard to principles of conflicts of law. 
Chapter 346 of the Texas Finance Code (which regulates certain revolving
credit loan accounts and revolving tri-party accounts) does not apply to this
Agreement or to the Notes.  Borrower
hereby irrevocably submits itself and each other Restricted Person to the
exclusive jurisdiction of the state and federal courts sitting in the State of
Texas and agrees and consents that service of

 

69

 

process may be made upon it or any Restricted
Person in any legal proceeding relating to the Loan Documents or the
Obligations by any means allowed under Texas or federal law.  Any legal proceeding arising out of or in any
way related to any of the Loan Documents shall be brought and litigated
exclusively in the United States District Court for the Southern District of
Texas, Houston Division, to the extent it has subject matter jurisdiction, and
otherwise in the Texas District Courts sitting in Harris County, Texas.  The parties hereto hereby waive and agree not
to assert, by way of motion, as a defense or otherwise, that any such
proceeding is brought in an inconvenient forum or that the venue thereof is
improper, and further agree to a transfer of any such proceeding to a federal
court sitting in the State of Texas to the extent that it has subject matter
jurisdiction, and otherwise to a state court in Houston, Texas.  In furtherance thereof, Borrower and Lender
Parties each hereby acknowledge and agree that it was not inconvenient for them
to negotiate and receive funding of the transactions contemplated by this
Agreement in such county and that it will be neither inconvenient nor unfair to
litigate or otherwise resolve any disputes or claims in a court sitting in such
county.

 

Section 10.8.                             Limitation on Interest.  Lender Parties, Restricted Persons and any
other parties to the Loan Documents intend to contract in strict compliance
with applicable usury Law from time to time in effect.  In furtherance thereof such Persons stipulate
and agree that none of the terms and provisions contained in the Loan Documents
shall ever be construed to create a contract to pay, for the use, forbearance
or detention of money, interest in excess of the maximum amount of interest
permitted to be charged by applicable Law from time to time in effect.  Neither any Restricted Person nor any present
or future guarantors, endorsers, or other Persons hereafter becoming liable for
payment of any Obligation shall ever be liable for unearned interest thereon or
shall ever be required to pay interest thereon in excess of the maximum amount
that may be lawfully contracted for, charged, or received under applicable Law
from time to time in effect, and the provisions of this section shall
control over all other provisions of the Loan Documents which may be in
conflict or apparent conflict herewith. 
Lender Parties expressly disavow any intention to contract for, charge,
or collect excessive unearned interest or finance charges in the event the
maturity of any Obligation is accelerated. 
If (a) the maturity of any Obligation is accelerated for any reason, (b)
any Obligation is prepaid and as a result any amounts held to constitute
interest are determined to be in excess of the legal maximum, or (c) any Lender
or any other holder of any or all of the Obligations shall otherwise collect moneys
which are determined to constitute interest which would otherwise increase the
interest on any or all of the Obligations to an amount in excess of that
permitted to be charged by applicable Law then in effect, then all sums
determined to constitute interest in excess of such legal limit shall, without
penalty, be promptly applied to reduce the then outstanding principal of the
related Obligations or, at such Lender’s or holder’s option, promptly returned
to Borrower or the other payor thereof upon such determination.  In determining whether or not the interest
paid or payable, under any specific circumstance, exceeds the maximum amount
permitted under applicable Law, Lender Parties and Restricted Persons (and any
other payors thereof) shall to the greatest extent permitted under applicable
Law, (i) characterize any non-principal payment as an expense, fee or premium
rather than as interest, (ii) exclude voluntary prepayments and the effects
thereof, and (iii) amortize, prorate, allocate, and spread the total amount of
interest throughout the entire contemplated term of the instruments evidencing
the Obligations in accordance with the amounts outstanding from time to time
thereunder and the maximum legal rate of interest from time to time in effect
under applicable Law in order to lawfully contract for,

 

70

 

charge, or receive the maximum amount of
interest permitted under applicable Law. 
In the event applicable Law provides for an interest ceiling under Chapter
303 of the Texas Finance Code (the “Texas Finance Code”) as amended, for that
day, the ceiling shall be the “weekly ceiling” as defined in the Texas Finance
Code, provided that if any applicable Law permits greater interest, the Law
permitting the greatest interest shall apply. As used in this section the
term “applicable Law” means the Laws of the State of Texas or the Laws of the
United States of America, whichever Laws allow the greater interest, as such
Laws now exist or may be changed or amended or come into effect in the future.

 

Section 10.9.                             Termination; Limited Survival.  In its sole and absolute discretion Borrower
may at any time that no Obligations are owing (other than indemnity obligations
and similar obligations that survive the termination of this Agreement for
which no notice of a claim has been received by Borrower) elect in a written
notice delivered to Agent to terminate this Agreement.  Upon receipt by Agent of such a notice, if no
Obligations are then owing, this Agreement and all other Loan Documents shall
thereupon be terminated and the parties thereto released from all prospective
obligations thereunder.  Notwithstanding
the foregoing or anything herein to the contrary, any waivers or admissions
made by any Restricted Person in any Loan Document, any Obligations under
Sections 3.2 through Section 3.6, and any obligations which any Person may
have to indemnify or reimburse any Lender Party shall survive any termination
of this Agreement or any other Loan Document. 
At the request and expense of Borrower, Agent shall prepare and execute
all necessary instruments to reflect and effect such termination of the Loan
Documents.  Agent is hereby authorized to
execute all such instruments on behalf of all Lenders, without the joinder of
or further action by any Lender.

 

Section 10.10.                       Severability.  If any term or provision of any Loan Document
shall be determined to be illegal or unenforceable all other terms and
provisions of the Loan Documents shall nevertheless remain effective and shall
be enforced to the fullest extent permitted by applicable Law.

 

Section 10.11.                       Counterparts; Fax.  This Agreement may be separately executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to constitute one
and the same Agreement.  This Agreement
and the Loan Documents may be validly executed and delivered by facsimile or
other electronic transmission.

 

Section 10.12.                       Intentionally Omitted.

 

Section 10.13.                       Waiver of Jury Trial, Punitive
Damages, etc.  Each of the Borrower and each Lender Party
hereby knowingly, voluntarily, intentionally, and irrevocably (a) waives, to
the maximum extent not prohibited by Law, any right it may have to a trial by
jury in respect of any litigation based hereon, or directly or indirectly at
any time arising out of, under or in connection with the Loan Documents or any
transaction contemplated thereby or associated therewith, before or after
maturity; (b) waives, to the maximum extent not prohibited by Law, any right
they may have to claim or recover in any such litigation any “Special Damages”,
as defined below, (c) certifies that no party hereto nor any representative or
Agent or counsel for any party hereto has represented, expressly or otherwise,
or implied that such party would not, in

 

71

 

the event of litigation, seek to enforce the
foregoing waivers, and (d) acknowledges that it has been induced to enter into
this Agreement, the other Loan Documents and the transactions contemplated
hereby and thereby by, among other things, the mutual waivers and
certifications contained in this section. 
As used in this section, “Special Damages” includes all special,
consequential, exemplary, or punitive damages (regardless of how named), but
does not include any payments or funds which any party hereto has expressly
promised to pay or deliver to any other party hereto.

 

Section 10.14.                       Procedure for Increases and
Addition of New Lenders.  This Agreement permits certain increases in a
Lender’s Commitment and the admission of new Lenders providing new commitments,
none of which require any consents or approvals from the other Lenders.  Any amendment hereto for such an increase or
addition shall be in the form attached hereto as Exhibit 10.14 and shall only
require the written signatures of the Agent, Borrower and the Lender(s) being
added or increasing their Commitment.  In
addition, within a reasonable time after the effective date of any increase,
the Agent shall, and is hereby authorized and directed to, revise the Schedule 3.1
reflecting such increase and shall distribute such revised Schedule to
each of the Lenders and Borrower, whereupon such revised Schedule 3.1
shall replace the old Schedule 3.1 and become part of this Agreement.  On the Business Day following any such
increase, all outstanding Base Rate Loans shall be reallocated among the
Lenders (including any newly added Lenders) in accordance with the Lenders’
respective revised Percentage Shares. 
Eurodollar Loans shall not be reallocated among the Lenders prior to the
expiration of the applicable Interest Period in effect at the time of any such
increase.

 

Section 10.15.                       Renewal and Extension.  The Indebtedness arising under this Agreement
is a renewal, extension and restatement on revised terms of (but not an
extinguishment or novation of) the Prior Indebtedness and, from and after the
date hereof, the terms and provisions of the Prior Credit Documents shall be
superseded by the terms and provisions of this Agreement.  Borrower hereby agrees that (i) the Prior
Indebtedness, all accrued and unpaid interest thereon, and all accrued and
unpaid fees under the Prior Credit Documents shall be deemed to be Indebtedness
of Borrower outstanding under and governed by this Agreement and (ii) all Liens
securing the Prior Indebtedness shall continue in full force and effect to
secure the Secured Obligations.

 

[THE REMAINDER OF THIS PAGE IS
INTENTIONALLY LEFT BLANK]

 

72

 

 

IN WITNESS WHEREOF, this Agreement is
executed as of the date first written above.

 

	
   

  	
  COMFORT SYSTEMS USA, INC.,

  
	
   

  	
  Borrower

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William
  George, III

  	
   

  
	
   

  	
   

  	
  William George, III

  
	
   

  	
   

  	
  Executive Vice President and Chief

  Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
  777 Post Oak Boulevard, Suite 500

  
	
   

  	
  Houston, Texas 77056

  
	
   

  	
  Attention: William George, III

  
	
   

  	
   

  
	
   

  	
  Telephone: (713) 830-9650

  
	
   

  	
  Fax: (713) 830-9659

  

 

[THE REMAINDER OF THIS PAGE IS
INTENTIONALLY LEFT BLANK]

 

 

	
   

  	
  HIBERNIA NATIONAL BANK,

  
	
   

  	
  Agent, LC Issuer and Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Debra H.
  Rings

  	
   

  
	
   

  	
   

  	
  Debra H. Rings

  
	
   

  	
   

  	
  Vice President

  
	
   

  	
  Address:

  
	
   

  	
  Hibernia National Bank

  
	
   

  	
  5718 Westheimer, Suite 600

  
	
   

  	
  Houston, Texas 77057

  
	
   

  	
  Attention: Debra H. Rings

  
	
   

  	
  Telephone: (713) 435-5024

  
	
   

  	
  Fax: (713) 706-5499

  
	
   

  	
   

  
	
   

  	
  With a copy to:

  
	
   

  	
  Hibernia Southcoast Capital

  
	
   

  	
  909 Poydras Street, Suite 1000

  
	
   

  	
  New Orleans, Louisiana 70112

  
	
   

  	
  Attention: Troy Villafarra, CFA

  
	
   

  	
  Telephone: (504) 593-6126

  
	
   

  	
  Fax: (504) 593-6175

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BANK OF TEXAS NA,

  
	
   

  	
  Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Edward
  H. Braddock

  	
   

  
	
   

  	
  Name:

  	
   Edward H. Braddock

  	
   

  
	
   

  	
  Title:

  	
     Senior Vice President

  	
   

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
   

  
	
   

  	
  Bank of Texas NA

  
	
   

  	
  5 Houston Center

  
	
   

  	
  1401 McKinney, Suite 1650

  
	
   

  	
  Houston, Texas 77010

  
	
   

  	
  Attention:

  	
                                           

  
	
   

  	
   

  
	
   

  	
  Telephone: (713) 289-5855

  
	
   

  	
  Fax: (713) 289-5825

  
							

 

2

 

	
   

  	
  BANK OF SCOTLAND,

  
	
   

  	
  Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Amena
  Nabi

  	
   

  
	
   

  	
   

  	
  Name:  Amena
  Nabi

  
	
   

  	
   

  	
  Title:  Asst. Vice President

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
   

  
	
   

  	
  Bank of Scotland

  
	
   

  	
  565 Fifth Avenue

  
	
   

  	
  New York, New York 10017

  
	
   

  	
  Attention: Shirley Vargas

  
	
   

  	
   

  
	
   

  	
  Telephone: (212) 450-0875

  
	
   

  	
  Fax: (212) 479-2807

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  FIRST BANK & TRUST,

  
	
   

  	
  Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael
  S. Martin

  	
   

  
	
   

  	
   

  	
  Michael S. Martin

  
	
   

  	
   

  	
  Vice President, Commercial Lending

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
   

  
	
   

  	
  First Bank & Trust

  
	
   

  	
  9155 W. Sam Houston Parkway N.

  
	
   

  	
  Houston, Texas 77064

  
	
   

  	
  Attention: Michael S. Martin

  
	
   

  	
   

  
	
   

  	
  Telephone: (281) 970-9636, Ext. 4022

  
	
   

  	
  Fax: (281) 970-9280

  
						

 

3

 

	
   

  	
  RZB FINANCE LLC,

  
	
   

  	
  Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Eric
  Salat

  	
   

  
	
   

  	
   

  	
  Eric Salat,
  Group Vice President

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Griselda
  Alvizo

  	
   

  
	
   

  	
  Griselda
  Alvizo, Vice President

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
  RZB Finance LLC

  
	
   

  	
  1133 Avenue of the Americas

  
	
   

  	
  16th Floor

  
	
   

  	
  New York, New York 10036

  
	
   

  	
  Attention: Pamela Flynn

  
	
   

  	
   

  
	
   

  	
  Telephone: (212) 845-8357

  
	
   

  	
  Fax: (212) 944-2093

  
					

 

4Exhibit 10.1

 

Published CUSIP Number:                           

 

 

CREDIT AGREEMENT

 

 

Dated as of June 28, 2005

 

among

 

TRAMMELL CROW COMPANY,

as Borrower,

 

BANK OF AMERICA, N.A.,

as Administrative Agent,

Swing Line Lender,

and

Issuing Bank,

 

and

 

The Other Lenders Party Hereto

 

BANC OF AMERICA SECURITIES LLC,

as

Sole Lead Arranger and Sole Book Manager

 

 

TABLE OF CONTENTS

 

	
  SECTION 1 DEFINITIONS

  	
   

  
	
  1.1

  	
  Certain Defined Terms

  	
   

  
	
  1.2

  	
  Accounting
  Terms, Utilization of GAAP for Purposes of Calculations Under Agreement

  	
   

  
	
  1.3

  	
  Other Definitional Provisions

  	
   

  
	
  1.4

  	
  Time
  References

  	
   

  
	
  1.5

  	
  Letter of Credit Amounts

  	
   

  
	
  1.6

  	
  Changes
  in GAAP

  	
   

  
	
   

  
	
  SECTION 2 AMOUNTS AND TERMS OF
  COMMITMENTS AND LOANS

  	
   

  
	
  2.1

  	
  Revolving Credit Facility; Making of
  Committed Loans; Register; Optional Notes

  	
   

  
	
  2.2

  	
  Letters of Credit

  	
   

  
	
  2.3

  	
  Interest on the Committed Loans

  	
   

  
	
  2.4

  	
  Fees

  	
   

  
	
  2.5

  	
  Scheduled Payments, Prepayments, and
  Reductions

  	
   

  
	
  2.6

  	
  Use
  of Proceeds

  	
   

  
	
  2.7

  	
  Special Provisions Governing Eurodollar
  Rate Loans

  	
   

  
	
  2.8

  	
  Increased Costs; Taxes; Capital Adequacy

  	
   

  
	
  2.9

  	
  Obligation of Lenders to Mitigate; Replacement
  of Lenders

  	
   

  
	
  2.10

  	
  Security for the Loans

  	
   

  
	
  2.11

  	
  Possible Increase in Total Commitment

  	
   

  
	
  2.12

  	
  Swing
  Line Loans

  	
   

  
	
   

  
	
  SECTION 3 CONDITIONS PRECEDENT

  	
   

  
	
  3.1

  	
  Conditions to Initial Loans on the Closing
  Date

  	
   

  
	
  3.2

  	
  Conditions to all Loans

  	
   

  

 

i

 

	
  SECTION 4 BORROWER’S REPRESENTATIONS
  AND WARRANTIES

  	
   

  
	
  4.1

  	
  Organization, Powers, Qualification, Good
  Standing, Business and Subsidiaries

  	
   

  
	
  4.2

  	
  Authorization of Borrowing, Etc.

  	
   

  
	
  4.3

  	
  Financial Condition

  	
   

  
	
  4.4

  	
  No Material Adverse Change; No Restricted
  Junior Payments

  	
   

  
	
  4.5

  	
  Title to Properties; Liens

  	
   

  
	
  4.6

  	
  Litigation; Adverse Facts

  	
   

  
	
  4.7

  	
  Payment
  of Taxes

  	
   

  
	
  4.8

  	
  Performance of Agreements; Materially
  Adverse Agreements

  	
   

  
	
  4.9

  	
  Governmental Regulation

  	
   

  
	
  4.10

  	
  Securities Activities

  	
   

  
	
  4.11

  	
  Employee Benefit Plans

  	
   

  
	
  4.12

  	
  Certain Fees

  	
   

  
	
  4.13

  	
  Environmental Protection

  	
   

  
	
  4.14

  	
  Employee
  Matters

  	
   

  
	
  4.15

  	
  Solvency

  	
   

  
	
  4.16

  	
  Disclosure

  	
   

  
	
  4.17

  	
  Security Interests

  	
   

  
	
   

  
	
  SECTION 5 BORROWER’S AFFIRMATIVE
  COVENANTS

  	
   

  
	
  5.1

  	
  Financial Statements and Other Reports

  	
   

  
	
  5.2

  	
  Corporate Existence, etc.

  	
   

  
	
  5.3

  	
  Payment of Taxes and Claims; Tax Consolidation

  	
   

  
	
  5.4

  	
  Maintenance of Properties; Insurance

  	
   

  
	
  5.5

  	
  Inspection; Lender Meeting

  	
   

  
	
  5.6

  	
  Compliance with Laws etc.

  	
   

  
	
  5.7

  	
  Environmental Disclosure and Inspection

  	
   

  
	
  5.8

  	
  Borrower’s Remedial Action Regarding
  Hazardous Materials

  	
   

  
	
  5.9

  	
  Collateral Documents; Further Assurances

  	
   

  
	
  5.10

  	
  New
  Subsidiaries

  	
   

  
	
  5.11

  	
  Interest Rate Agreements; Currency
  Agreements

  	
   

  

 

ii

 

	
  SECTION 6 BORROWER’S NEGATIVE COVENANTS

  	
   

  
	
  6.1

  	
  Liens and Related Matters

  	
   

  
	
  6.2

  	
  Investments; Unconsolidated Entities

  	
   

  
	
  6.3

  	
  Restricted Junior Payments

  	
   

  
	
  6.4

  	
  Financial Covenants

  	
   

  
	
  6.5

  	
  Recourse Obligations

  	
   

  
	
  6.6

  	
  Restriction on Fundamental Changes, Asset
  Sales, and Acquisitions

  	
   

  
	
  6.7

  	
  Transactions with Shareholders and
  Affiliates

  	
   

  
	
  6.8

  	
  Conduct of Business

  	
   

  
	
   

  
	
  SECTION 7 EVENTS OF DEFAULT

  	
   

  
	
  7.1

  	
  Failure to Make Payment

  	
   

  
	
  7.2

  	
  Default in Other Agreements

  	
   

  
	
  7.3

  	
  Breach of Certain Covenants

  	
   

  
	
  7.4

  	
  Breach of Warranty

  	
   

  
	
  7.5

  	
  Other Defaults Under Loan Documents

  	
   

  
	
  7.6

  	
  Involuntary Bankruptcy, Appointment of
  Receiver, etc.

  	
   

  
	
  7.7

  	
  Voluntary Bankruptcy; Appointment of
  Receiver, etc.

  	
   

  
	
  7.8

  	
  Judgments and Attachments

  	
   

  
	
  7.9

  	
  Dissolution

  	
   

  
	
  7.10

  	
  Employee Benefit Plans

  	
   

  
	
  7.11

  	
  Change
  in Control

  	
   

  
	
  7.12

  	
  Invalidity of Guaranty

  	
   

  
	
  7.13

  	
  Failure of Security

  	
   

  
	
   

  
	
  SECTION 8 ADMINISTRATIVE AGENT

  	
   

  
	
  8.1

  	
  Administrative Agent

  	
   

  
	
  8.2

  	
  Delegation of Duties

  	
   

  
	
  8.3

  	
  Liability of Administrative Agent

  	
   

  
	
  8.4

  	
  Reliance by Administrative Agent

  	
   

  
	
  8.5

  	
  Notice of Event of Default

  	
   

  
	
  8.6

  	
  Credit Decision; Disclosure of Information
  by Administrative Agent

  	
   

  
	
  8.7

  	
  Indemnification of Administrative Agent

  	
   

  
	
  8.8

  	
  Administrative Agent in its Individual
  Capacity

  	
   

  

 

iii

 

	
  8.9

  	
  Successor Administrative Agent

  	
   

  
	
  8.10

  	
  Administrative Agent May File Proofs of
  Claim

  	
   

  
	
  8.11

  	
  Collateral and Guaranty Matters

  	
   

  
	
  8.12

  	
  Other Agents; Arrangers and Managers

  	
   

  
	
  8.13

  	
  Approval of Lenders

  	
   

  
	
   

  
	
  SECTION 9 MISCELLANEOUS

  	
   

  
	
  9.1

  	
  Assignments and Participations in Loans

  	
   

  
	
  9.2

  	
  Expenses; Indemnity; Damage Waiver

  	
   

  
	
  9.3

  	
  Ratable
  Sharing

  	
   

  
	
  9.4

  	
  Amendments and Waivers

  	
   

  
	
  9.5

  	
  Independence of Covenants

  	
   

  
	
  9.6

  	
  Notices

  	
   

  
	
  9.7

  	
  Survival of Representations, Warranties,
  and Agreements

  	
   

  
	
  9.8

  	
  Failure or Indulgence Not Waiver; Remedies
  Cumulative

  	
   

  
	
  9.9

  	
  Marshalling; Payments Set Aside

  	
   

  
	
  9.10

  	
  Severability

  	
   

  
	
  9.11

  	
  Obligations Several; Independent Nature of
  Lenders’ Rights

  	
   

  
	
  9.12

  	
  Headings

  	
   

  
	
  9.13

  	
  Applicable
  Law

  	
   

  
	
  9.14

  	
  Successors and Assigns

  	
   

  
	
  9.15

  	
  Consent to Jurisdiction and Service of
  Process

  	
   

  
	
  9.16

  	
  Waiver of Jury Trial

  	
   

  
	
  9.17

  	
  Confidentiality

  	
   

  
	
  9.18

  	
  Counterparts; Effectiveness

  	
   

  
	
  9.19

  	
  USA PATRIOT Act Notice

  	
   

  
	
  9.20

  	
  Replacement of Lenders

  	
   

  
	
  9.21

  	
  Entire
  Agreement

  	
   

  

 

iv

 

EXHIBITS

 

	
  Exhibit A

  	
  FORM
  OF ASSIGNMENT AGREEMENT

  	
   

  
	
  Exhibit B

  	
  FORM
  OF BORROWER PLEDGE AGREEMENT

  	
   

  
	
  Exhibit C

  	
  FORM
  OF CERTIFICATE RE NON-BANK STATUS

  	
   

  
	
  Exhibit D

  	
  FORM
  OF COMPLIANCE CERTIFICATE

  	
   

  
	
  Exhibit E

  	
  FORM
  OF SUBSIDIARY GUARANTY

  	
   

  
	
  Exhibit F

  	
  FORM
  OF NOTE

  	
   

  
	
  Exhibit G

  	
  FORM
  OF NOTICE OF BORROWING

  	
   

  
	
  Exhibit H

  	
  FORM
  OF NOTICE OF CONVERSION/CONTINUATION

  	
   

  
	
  Exhibit I

  	
  FORM
  OF PLEDGE AGREEMENT - SUBSIDIARIES

  	
   

  
	
  Exhibit J

  	
  FORM
  OF OPINION OF VINSON & ELKINS L.L.P.

  	
   

  
	
  Exhibit K

  	
  FORM
  OF SWING LINE LOAN NOTICE

  	
   

  

 

SCHEDULES

 

	
  1.1

  	
   

  	
  APPROVED TAKEOUT PARTIES

  
	
  2.1

  	
   

  	
  LENDERS’
  COMMITMENTS AND COMMITMENT PERCENTAGES

  
	
  2.2

  	
   

  	
  EXISTING
  LETTER OF CREDIT

  
	
  4.l-1

  	
   

  	
  SUBSIDIARIES OF COMPANY

  
	
  4.1-2

  	
   

  	
  SIGNIFICANT
  SUBSIDIARIES

  
	
  4.6

  	
   

  	
  LITIGATION

  
	
  4.11

  	
   

  	
  CERTAIN EMPLOYEE BENEFIT
  PLANS

  
	
  4.13

  	
   

  	
  ENVIRONMENTAL MATTERS

  
	
  6.7

  	
   

  	
  CERTAIN AFFILIATE
  TRANSACTIONS

  

 

v

 

CREDIT AGREEMENT

 

THIS
CREDIT AGREEMENT (as renewed, extended, amended, or restated from time to time,
this “Agreement”)
is dated as of June 28, 2005 and entered into by and among TRAMMELL CROW COMPANY, a Delaware
corporation (“Borrower”),
each lender that is a signatory hereto or that becomes a signatory hereto as
provided in Section 9.1
(individually, together with its successors and assigns, a “Lender,” and collectively, “Lenders”), and BANK OF AMERICA, N.A., a national banking
association, (“Bank of
America”), as Administrative Agent for Lenders (in such
capacity, together with its successors and assigns, “Administrative Agent”),
as Swing Line Lender (in such capacity, together with its successors and
assigns, “Swing Line
Lender”), and as Issuing Bank (in such capacity, together with
its successors and assigns, “Issuing Bank”).

 

R E  C  I  T  A  L
S:

 

1.             Borrower desires that Lenders provide
Borrower with a $175,000,000 revolving credit facility for general corporate
purposes including, without limitation, the acquisition and development of Real
Estate Investments, Permitted Acquisitions, and working capital.

 

2.             Lenders are willing to extend the requested
credit facility to Borrower on the terms and subject to the conditions set
forth in this Agreement.

 

NOW,
THEREFORE, in consideration of the premises and the agreements, provisions, and
covenants herein contained, the parties hereto agree as follows:

 

SECTION 1

DEFINITIONS

 

1.1          Certain Defined Terms.  The following terms used in this Agreement
shall have the following meanings:

 

“Adjusted Eurodollar Rate”
means, as of any Interest Rate Determination Date with respect to an Interest
Period for a Eurodollar Rate Loan, the rate per annum obtained by dividing (a) the Eurodollar Rate, by (b) a percentage equal to 100% minus the stated maximum rate of all
reserve requirements (including, without limitation, any marginal, emergency,
supplemental, special, or other reserves) applicable on such Interest Rate
Determination Date to any member bank of the Federal Reserve System in respect
of “Eurocurrency liabilities” as
defined in Regulation D (or any successor category of liabilities under
Regulation D).

 

“Adjusted Gross EBITDA”
means, for any period, Gross EBITDA (other than Gross EBITDA from International
Operations, Gross EBITDA of Mortgaged Real Estate Subsidiaries and Gross EBITDA
attributable to investment in, ownership of and disposition of the Companies’
Stock in Savills and activities and operations related thereto).

 

“Administrative Agent”
has the meaning assigned to such term in the introduction to this Agreement.

 

 

“Affected Lender” has
the meaning assigned to such term in Section 2.7(c).

 

“Affiliate” means, for
any Person, any other Person directly or indirectly controlling, controlled by,
or under common control with, that Person. 
For the purposes of this definition, “control” (including, with correlative
meanings, the terms “controlling,”
“controlled by,” and “under common control with”), as applied to
any Person, means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of that Person,
whether through the ownership of voting Stock, by contract, or otherwise.

 

“Agent-Related Persons”
means Administrative Agent, together with its Affiliates (including, in the
case of Bank of America in its capacity as Administrative Agent, the Arranger),
and the officers, directors, employees, agents and attorneys-in-fact of such
Persons.

 

“Agreement” has the
meaning assigned to such term in the introduction to this Agreement.

 

“Applicable Margin”
means, as of any date of determination, a percentage per annum determined by
the Level in effect on such date as shown below:

 

	
  Level

  	
   

  	
  Eurodollar Rate Loans

  and

  Letters of Credit

  	
   

  	
  Base Rate Loans

  	
   

  
	
  Level I (Recourse Leverage Ratio < 2.0
  to 1.0)

  	
   

  	
  1.75

  	
  %

  	
  0.00

  	
  %

  
	
  Level II (Recourse Leverage Ratio > 2.0
  to 1.0 but < 2.5 to 1.0)

  	
   

  	
  1.875

  	
  %

  	
  0.00

  	
  %

  
	
  Level III (Recourse Leverage Ratio > 2.5
  to 1.0 but < 3.25 to 1.0)

  	
   

  	
  2.00

  	
  %

  	
  0.25

  	
  %

  

 

The
Applicable Margin, as of any date, shall be determined based upon the Level as
of such date based upon the most recent Level Determination Certificate
delivered pursuant to Section 5.1(j);
provided that (a) on the
Closing Date, the Applicable Margin shall be determined based upon Level 1
until adjusted as provided in clause (b), (b) the Applicable Margin shall be
adjusted in accordance with the Level in effect as determined by the Level
Determination Certificate delivered pursuant to Section 5.1(j), such adjustment to
become effective (i) in the case of a Level Determination Certificate
delivered with the financial statements requested under Section 5.1(a),
on the date such Level Determination Certificate was required to be delivered
pursuant to pursuant to Sections 5.1(a)
and (j),
and (ii) in the case of a Level Determination Certificate delivered with
the financial statements requested under Section 5.1(b), on date that such Level
Determination Certificate is actually delivered pursuant to pursuant to Sections 5.1(b)
and (j),
(c) if a Level Determination Certificate is not delivered at the time
required pursuant to Section 5.1(j),
Level III shall be applicable from such time until delivery of a succeeding
Level Determination Certificate, and (d) if a Level Determination
Certificate erroneously indicates a Level more favorable to Borrower than
should be afforded by the actual calculation of the Recourse Leverage Ratio,
then Borrower shall promptly pay additional interest to correct for such error.

 

“Approved Credit Support”
means a reimbursement, indemnity, or similar obligation issued by a Person (the
“Support Provider”)
pursuant to which the Support Provider agrees to reimburse, indemnify, or hold
harmless a Company for any Indebtedness, liability, or other obligation of such
Company, but only to the extent (a) the Support Provider satisfies the
criteria set forth in clauses (a), (b), (c) or (d) of the

 

2

 

definition
of “Approved Take Out
Party,” or (b) the obligations of the Support Provider are
secured by an irrevocable third-party letter of credit from a financial
institution with a debt rating of A- or higher from S&P and A3 or higher
from Moody’s.

 

“Approved Take Out Commitment”
means a Take Out Commitment (a) which is issued by an Approved Take Out
Party, and (b) in which the funding obligation of the issuer of such Take
Out Commitment is not subject to any material condition other than
(i) completion of construction in accordance with all Legal Requirements
and agreed plans and specifications and by a date certain, (ii) issuance
of a certificate of occupancy, and (iii) in the event such transaction involves
a Qualifying Lease, the commencement of payment of rent by the tenant.  Any Approved Take Out Commitment shall cease
to be an Approved Take Out Commitment (x) if the issuer of such Take Out
Commitment at any time no longer meets the definition of “Approved Take Out Party” (provided that  the failure of one (but
not more than one) provider of a Take Out Commitment to meet the definition of
Approved Take Out Party shall not result in the disqualification of such Take
Out Commitment pursuant to this clause (x)  so
long as, at the time such Take Out Commitment was initially issued,
such provider did meet the definition of Approved Take Out Party and only
failed to meet such definition due to its inability to meet the requirements
outlined in (a) or (b) in the Approved Take Out Party definition after the
issuance of such Take Out Commitment), (y) to the extent the issuer of such Approved Take Out Commitment
fails or refuses to fund under such Approved Take Out Commitment or notifies
any Company of its intention to not fund under such Approved Take Out
Commitment, or (z) at such time as Borrower acquires actual knowledge that
the Approved Take Out Commitment will not fund.

 

“Approved Take Out Party”
means a Person which issues a Take Out Commitment and which satisfies any of
the following criteria: (a) the senior unsecured debt of such Person is
rated BBB or higher by S&P or Baa2 or higher by Moody’s, (b) such
Person is an endowment or pension fund (or such Take Out Commitment is
guaranteed by an endowment or pension fund) in compliance with ERISA and having
net liquid assets and a consolidated net worth (including equity commitments)
determined in accordance with GAAP (as reflected in its most recent annual
audited financial statements issued within twelve (12) months of the date of
determination) of not less than $500,000,000, (c) such Person is set forth
on Schedule 1.1
(subject to the right of Requisite Lenders to make prospective additions or
deletions to such list from time to time), or (d) such Person is otherwise
approved by Requisite Lenders after receipt of all information necessary to
make such determination; provided that
Borrower pays a work fee of $2,500 per consenting Lender for consideration of
each new Approved Take Out Party if such consent is obtained within twenty-one
(21) days from the delivery of all information necessary to make such
determination.

 

“Arranger” means Banc
of America Securities LLC, together with its successors and assigns.

 

“Assignment Agreement”
means an Assignment Agreement substantially in the form of Exhibit A.

 

“Bank of America” has
the meaning assigned to such term in the preamble.

 

“Bankruptcy Code”
means Title 11 of the United
States Code entitled “Bankruptcy,”
as now and hereafter in effect, or any successor statute.

 

“Base Rate” means, as
of any date, the greater of (a)
the Prime Rate, or (b) the sum of
(i) the Federal Funds Effective Rate, and (ii) one-half of one
percent (0.5%).

 

3

 

“Base Rate Loans”
means Committed Loans bearing interest at rates determined by reference to the
Base Rate as provided in Section 2.3(a).

 

“Borrower” has the
meaning assigned to such term in the introduction to this Agreement.

 

“Borrower Pledge Agreement”
means the Pledge Agreement executed and delivered by Borrower, substantially in
the form of Exhibit B,
as such Pledge Agreement may hereafter be modified, amended, restated, or
supplemented from time to time.

 

“Brokerage Services Line”
means brokerage services related to ownership represented project leasing and
investment sales.

 

“Business Day” means
any day excluding Saturday, Sunday, and any day which is a legal holiday under
the laws of the State of Texas or is a day on which banking institutions
located in such state are authorized or required by any Legal Requirement to
close.

 

“Capital Lease” means,
for any Person, any lease of any property (whether real, personal, or mixed) by
such Person as lessee that, in conformity with GAAP, is accounted for as a
capital lease on the balance sheet of such Person.

 

“Cash” means money,
currency, or a credit balance in a Deposit Account.

 

“Cash Collateralize” has
the meaning assigned to such term in Section 2.2(g).

 

“Cash Equivalents”
means, as of any date of determination, (a) marketable securities
(i) issued or directly and unconditionally guaranteed as to interest and
principal by the United States of America, or (ii) issued by any agency of
the United States of America the obligations of which are backed by the full
faith and credit of the United States of America, in each case maturing within
one (1) year after such date, (b) marketable direct obligations issued by
any state of the United States of America or any political subdivision of any
such state or any public instrumentality thereof, in each case maturing within
one (1) year after such date and having, at the time of the acquisition
thereof, the highest rating obtainable from either S&P or Moody’s,
(c) commercial paper maturing no more than one (1) year from the date of
creation thereof and having, at the time of the acquisition thereof, a rating
of at least A-1 from S&P or at least P-1 from Moody’s,
(d) certificates of deposit or bankers’ acceptances maturing within one
(1) year after such date and issued or accepted by any Lender or by any
commercial bank organized under the laws of the United States of America or any
state thereof or the District of Columbia that (i) is at least “adequately capitalized” (as defined in the
regulations of its primary federal banking regulator), and (ii) has Tier 1
capital (as defined in such regulations) of not less than $100,000,000, and
(e) shares of any money market mutual fund that has (i) at least
ninety-five percent (95%) of its assets invested continuously in the types of
investments referred to in clauses (a)and (b) above,
(ii) net assets of not less than $500,000,000, and (iii) the highest rating
obtainable from either S&P or Moody’s.

 

“Cash Taxes” means,
for any Person for any period, income Taxes paid or payable in respect of
taxable income for such Person for such period.

 

“Certificate re Non-Bank Status”
means a certificate substantially in the form of Exhibit C delivered by a Lender to
Administrative Agent pursuant to Section 2.8(b)(iii).

 

4

 

“Change of Control”
means: (a) the acquisition, in one or more transactions, of beneficial
ownership (within the meaning of Rule 13d-3
under the Exchange Act) by (i) any Person, or (ii) any group of
Persons who constitute a group (within the meaning of Section 13(d)(3) of the Exchange
Act), in either case, of any Company Voting Stock such that, as a result of
such acquisition, such Person or group of Persons beneficially owns (within the
meaning of Rule 13d-3 under the
Exchange Act), directly or indirectly, thirty-five percent (35%) or more of
Company Voting Stock then outstanding; or (b) during any period of twelve
(12) consecutive calendar months, Continuing Directors shall cease to
constitute a majority of the Board of Directors of Borrower; or
(c) Company Voting Stock shall cease to be listed for trading and be
traded on a United States securities exchange or market on which equity
securities are regularly traded; or (d) Borrower shall cease to have a class of
equity securities that are registered pursuant to Section 12 of the Exchange Act.

 

“Closing Date” means June 28,
2005.

 

“Collateral” means all
of the Stock in Borrower’s Significant Subsidiaries subject to a Lien pursuant
to the Collateral Documents.

 

“Collateral Documents”
means all pledge and security agreements, assignments, financing and
continuation statements, and all other instruments or documents delivered by
any Obligor pursuant to this Agreement (including, but not limited to, the
Pledge Agreements) in order to grant to Administrative Agent, for the benefit
of the Credit Parties, Liens in the Collateral, and all modifications,
amendments, restatements, and supplements thereof.

 

“Committed Loan” has
the meaning specified in Section 2.1(a).

 

“Commitment” means,
for any Lender as of any date of determination, the amount stated beside each
Lender’s name on the most-recently amended Schedule 2.1 to this Agreement (which
amount is subject to increase, reduction, or cancellation in accordance with
this Agreement).

 

“Commitment Percentage”
means, for any Lender as of any date of determination, the proportion (stated
as a percentage) that its Commitment bears to the Total Commitment.

 

“Commitment Usage”
means, at any time, the sum of
(without duplication) (a) the Principal Debt plus (b) the Letter of Credit Exposure.

 

“Companies” means
Borrower and its Subsidiaries, and “Company” means any one of the Companies.

 

“Company Voting Stock”
means issued and outstanding Stock of Borrower entitled (without regard to the
occurrence of any contingency) to vote for the election of members of the Board
of Directors of Borrower.

 

“Compensation Period”
has the meaning assigned to such term in Section2.1(c)(ii)(B).

 

“Compliance Certificate”
means a certificate substantially in the form of Exhibit D delivered to
Administrative Agent by Borrower pursuant to Section 5.1(c).

 

“Consolidated Companies”
means Borrower and its Consolidated Subsidiaries, and “Consolidated Company”
means any one of the Consolidated Companies.

 

5

 

“Consolidated Subsidiary”
means, with respect to any Person, any Subsidiary of such Person the accounts
of which would be consolidated with those of such Person in its consolidated
financial statements prepared in accordance with GAAP.  Without limiting the foregoing, the Funds
shall not be considered to be Consolidated Subsidiaries of Borrower and will be
treated as Unconsolidated Entities for purposes of calculation of the financial
covenants set forth in Section 6.4.

 

“Constituent Documents”
means, with respect to any Person, its articles or certificate of
incorporation, constitution, bylaws, partnership agreements, organizational
documents, limited liability company agreements, or such other document as may
govern such entity’s formation or organization.

 

“Contingent Obligation”
means, for any Person, any direct or indirect liability, contingent or
otherwise, of such Person, without duplication, (a) with respect to any
Indebtedness, lease, dividend, or other obligation of another Person if the
primary purpose or intent thereof by the Person incurring the Contingent
Obligation is to provide assurance to the obligee of such obligation of another
Person that such obligation of another Person will be paid or discharged, or
that any agreements relating thereto will be complied with, or that the holders
of such obligation will be protected (in whole or in part) against loss in
respect thereof, (b) with respect to any letter of credit issued for the
account of such Person or as to which such Person is otherwise liable for
reimbursement of drawings, or (c) under Interest Rate Agreements and Currency
Agreements.  Contingent Obligations
include, without limitation, (i) the direct or indirect guaranty, endorsement
(otherwise than for collection or deposit in the ordinary course of business),
co-making, discounting with recourse, or sale with recourse by such Person of
the obligation of another Person (whether or not such guaranty or other
agreement is unconditional or conditional upon the happening of an any event or
circumstances), (ii) the obligation to make take-or-pay or similar payments if
required regardless of nonperformance by any other party or parties to an
agreement, (iii) all obligations of such Person to purchase, acquire, or
otherwise make any payment in respect of any Stock in any other Person which
can be called without the consent of such Person or its Affiliates and which,
when fulfilled, will constitute a Real Estate Investment (provided that this
clause (iii) will not be applicable prior to September 30, 2005), and (iv)
any liability of such Person for the obligation of another Person through any
agreement (contingent or otherwise) (A) to purchase, repurchase, or otherwise
acquire such obligation or any security therefor, or to provide funds for the
payment or discharge of such obligation (whether in the form of loans, advances,
Stock purchases, capital contributions, or otherwise), or (B) to maintain the
solvency or any balance sheet item, level of income, or financial condition of
another if, in the case of any agreement described under subclauses (A) or (B) of this sentence,
the primary purpose or intent thereof is as described in the preceding
sentence. The amount of any Contingent Obligation shall be equal to the amount
of the obligation so guaranteed or otherwise supported or, if less, the amount
to which such Contingent Obligation is specifically limited.  If any Company’s Contingent Obligations may
be reduced or eliminated solely by payment of another monetary obligation of a
lesser amount (for example, by making an equity investment in the primary
obligor), then for purposes of this Agreement, such Contingent Obligations
shall be deemed to be such lesser amount. Notwithstanding
the foregoing, Contingent Obligations of the Companies shall not
include the following: (w) completion or budget guarantees issued by a Company pursuant
to which such Company guarantees the timely completion of construction of any
construction project in accordance with applicable plans and specifications
and/or project budget or otherwise indemnifies a construction lender or other
party from loss resulting from a failure to timely complete any project
financed by such lender or other party in accordance with applicable plans and
specifications and/or project budget; (x) guarantees of Exempt Construction
Loans; and (y) the fair value of guarantees to be recognized under the
Financial Accounting Standards Board Interpretation No. 45 to the extent such
amounts required to be recognized thereunder are otherwise included in
Contingent Obligations.

 

6

 

“Contractual Obligation”
means, for any Person, any provision of any Stock issued by such Person or of
any material indenture, mortgage, deed of trust, contract, undertaking,
agreement, or other instrument to which such Person is a party or by which it
or any of its properties is bound or to which it or any of its properties is
subject.

 

“Continuing Director”
means, as of the date of determination, any Person who (a) was a member of
the Board of Directors of Borrower on the Closing Date, or (b) was
nominated for election or elected to the Board of Directors of Borrower with
the affirmative vote of a majority of the Continuing Directors.

 

“Credit Parties” means
Administrative Agent, Arranger, Issuing Bank, and Lenders, and “Credit Party” means
any one of the Credit Parties.

 

“Currency Agreement”
means any foreign exchange contract, currency swap agreement, futures contract,
option contract, synthetic cap, or other similar agreement or arrangement
designed to protect any Company against fluctuations in currency values.

 

“Current Assets” means
the current assets of the Consolidated Companies determined in accordance with
GAAP (in any event to include any real estate asset whose associated
Indebtedness is classified as a current liability in accordance with GAAP), but excluding all receivables that are more
than ninety (90) days past due in respect of products, goods, and/or services
which were delivered or performed by any Consolidated Company more than ninety
(90) days prior to such date.

 

“Current Liabilities”
means the current liabilities of the Consolidated Companies determined in
accordance with GAAP.

 

“Customary Recourse Exceptions”
means, with respect to any Non-Recourse Obligations, exclusions from the
exculpation provisions with respect to such Non-Recourse Obligations for fraud,
misapplication of cash, environmental claims, failure to comply with bankruptcy
remote and special purpose entity requirements, and other circumstances
customarily excluded by institutional lenders from exculpation provisions
and/or included in separate indemnification agreements in non-recourse
financings of real estate.

 

“Debt Service” means,
for any Person for any period, the sum of
(a) all regularly scheduled principal payments (excluding maturities of real
estate construction mortgages, and (b) all Interest Expense that are paid or
payable during such period in respect of all Indebtedness of such Person.

 

“Defaulting Lender”
means any Lender that, at the time of determination thereof, is in default with
respect to any of its obligations under this Agreement or the other Loan
Documents.

 

“Deposit Account”
means a demand, time, savings, passbook, or like account with a bank, savings
and loan association, credit union, or like organization, other than an account
evidenced by a negotiable certificate of deposit.

 

“Dollars” and the sign
“$” mean
the lawful money of the United States of America.

 

“EBITDA from Real Estate Gains”
means the product of (a) twenty
five percent (25%), times (b)
(i) net gains on the disposition of Real Estate Investments, minus (ii) to the extent included in
clause (i), the Share of such gains attributable to the owners (other than
Borrower or a wholly-owned Subsidiary of

 

7

 

Borrower)
of Stock of any Subsidiary of Borrower which realizes such gains, plus (iii) net income from Real
Estate Investments consisting of Stock of Unconsolidated Entities.

 

“Eligible Assignee”
has the meaning assigned to such term in Section 9.1(g).

 

“Employee Benefit Plan”
means any “employee benefit plan”
as defined in Section 3(3)
of ERISA, other than plans that are exempt from ERISA by reason of the
regulations promulgated thereunder and Multiemployer Plans, which is, or was at
any time, maintained or contributed to by Borrower or any of its ERISA
Affiliates.

 

“Environmental Claim”
means any notice of violation, claim, demand, abatement order, or other order
or direction by any Governmental Authority or any Person for any damage,
including, without limitation, personal injury (including sickness, disease, or
death), tangible or intangible property damage, contribution, indemnity,
indirect or consequential damages, damage to the environment, nuisance,
pollution, contamination, or other adverse effects on the environment, or for
fines or penalties, in each case relating to, resulting from or in connection
with Hazardous Materials and relating to any Company or any of its Affiliates
or any Real Estate Investment.

 

“Environmental Laws”
means all Legal Requirements relating to (a) environmental matters,
including, without limitation, those relating to fines, injunctions, penalties,
damages, contribution, cost recovery compensation, losses, or injuries
resulting from the Release or threatened Release of Hazardous Materials,
(b) the generation, use, storage, transportation, or disposal of Hazardous
Materials, or (c) occupational safety and health, industrial hygiene, land
use, or the protection of human, plant, or animal health or welfare, in any
manner applicable to any Company or any of its Real Estate Investments or other
assets.

 

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

 

“ERISA Affiliate”
means, for any Person, (a) any corporation which is a member of a
controlled group of corporations within the meaning of Section 414(b) of the Internal
Revenue Code of which such Person is a member; (b) any trade or business
(whether or not incorporated) which is a member of a group of trades or
businesses under common control within the meaning of Section 414(c) of the Internal
Revenue Code of which such Person is a member; and (c) any member of an
affiliated service group within the meaning of Section 414(m)
or (o) of the Internal Revenue
Code of which such Person, any corporation described in clause (a)
above, or any trade or business described in clause (b) above is a member.

 

“ERISA Event” means:
(a) a “reportable event”
within the meaning of Section 4043
of ERISA and the regulations issued thereunder with respect to any Pension Plan
(excluding those for which the provision for thirty (30) day notice to the PBGC
has been waived by regulation); (b) the failure to meet the minimum
funding standard in a material amount of Section 412
of the Internal Revenue Code with respect to any Pension Plan (whether or not
waived in accordance with Section 412(d)
of the Internal Revenue Code) or the failure to make by its due date a required
installment in a material amount under Section 412(m)
of the Internal Revenue Code with respect to any Pension Plan or the failure to
make any required contribution in a material amount to a Multiemployer Plan;
(c) the provision by the administrator of any Pension Plan pursuant to Section 4041(a)(2) of ERISA of a
notice of intent to terminate such plan in a distress termination described in Section 4041(c) of ERISA;
(d) the withdrawal by Borrower or any of its ERISA Affiliates from any
Pension Plan with two (2) or more contributing sponsors or the

 

8

 

termination
of any such Pension Plan resulting in a material amount of liability pursuant
to Sections 4063 or 4064 of ERISA; (e) the institution by
the PBGC of proceedings to terminate any Pension Plan, or the occurrence of any
event or condition which constitutes grounds under ERISA for the termination
of, or the appointment of a trustee to administer, any Pension Plan;
(f) the imposition of a material amount of liability on Borrower or any of
its ERISA Affiliates pursuant to Section 4062(e)
or 4069 of ERISA or by reason of
the application of Section 4212(c)
of ERISA; (g) the withdrawal by Borrower or any of its ERISA Affiliates in
a complete or partial withdrawal (within the meaning of Sections 4203 and 4205 of ERISA) from any
Multiemployer Plan if such withdrawal would result in a material amount of
liability to Borrower or an ERISA Affiliate, or the receipt by Borrower or any
of its ERISA Affiliates of notice from any Multiemployer Plan that it is in
reorganization or insolvency pursuant to Section 4241
or 4245 of ERISA, or that it
intends to terminate or has terminated under Section 4041A
or 4042 of ERISA; (h) the
occurrence of an act or omission which could give rise to the imposition on
Borrower or any of its ERISA Affiliates of a material amount of fines,
penalties, Taxes, or related charges under Chapter 43
of the Internal Revenue Code or under Section 409
or 502(c), (i) or (1) or 4071
of ERISA in respect of any Employee Benefit Plan; (i) receipt from the
Internal Revenue Service of notice of the failure of any Pension Plan (or any
other Employee Benefit Plan intended to be qualified under Section 401(a) of the Internal
Revenue Code) to qualify under Section 401(a)
of the Internal Revenue Code, or the failure of any trust forming part of any
Pension Plan to qualify for exemption from taxation under Section 501(a) of the Internal
Revenue Code; or (j) the imposition of a Lien pursuant to Section 401(a)(29) or 412(n) of the Internal Revenue Code or
pursuant to ERISA with respect to any Pension Plan.

 

“Eurodollar Rate” means
for any Interest Period with respect to a Eurodollar Rate Loan:

 

(a)           the rate
per annum equal to the British Bankers Association LIBOR Rate (“BBA LIBOR”), as
published by Reuters (or other commercially available source providing
quotations of BBA LIBOR as designated by Administrative Agent from time to
time) at approximately 11:00 a.m., London time, two (2) Business Days prior to
the commencement of such Interest Period, for Dollar deposits (for delivery on
the first day of such Interest Period) with a term equivalent to such Interest
Period; or

 

(b)           if such
rate is not available at such time for any reason, then the “Eurodollar Rate” for
such Interest Period shall be the rate per annum determined by Administrative
Agent to be the rate at which deposits in Dollars for delivery on the first day
of such Interest Period in same day funds in the approximate amount of the
Eurodollar Rate Loan being made, continued or converted by Administrative Agent
and with a term equivalent to such Interest Period would be offered by
Administrative Agent’s London Branch to major banks in the London interbank
eurodollar market at their request at approximately 11:00 a.m. (London time)
two (2) Business Days prior to the commencement of such Interest Period.

 

“Eurodollar Rate Loans”
means Committed Loans bearing interest at rates determined by reference to the
Adjusted Eurodollar Rate as provided in Section 2.3(a).

 

“Event of Default”
means each of the events set forth in Section 7.

 

“Exchange Act” means
the Securities Exchange Act of 1934,
as amended from time to time, and any successor statute.

 

“Exempt Construction Loan”
means any interim construction loan (or Contingent Obligations related thereto)
(a) that is subject to or backed by an Approved Take Out Commitment, or
(b) in which the

 

9

 

Mortgaged
Real Estate Subsidiary that is the obligor of such construction loan has
entered into a Qualifying Lease of the property securing such Exempt
Construction Loan (or Contingent Obligations related thereto) and such lease
supports a refinance of the entire interim construction loan amount based upon
prevailing permanent loan terms at the time the interim construction loan is
closed.  Notwithstanding the foregoing,
construction loans (and Contingent Obligations related thereto) shall cease to
be treated as Exempt Construction Loans in the event that any of the following
occur:  (i) the obligor of such Exempt
Construction Loan is in default beyond any applicable notice and cure periods
of any obligations under such Exempt Construction Loan credit agreement; or
(ii) the underlying real property securing such Exempt Construction Loan has
not been sold by a date which is no later than fifteen (15) months (unless
subject to or backed by an Approved Take Out Commitment from Lion Industrial
Trust in which case no deadline for the sale of such real property shall apply)
after completion of construction.

 

“Existing Credit Agreement”
means that certain Credit Agreement dated as of June 28, 2002, by and among
Borrower, Bank of America, N.A., as Administrative Agent and Issuing Bank, and
Lenders defined therein, as modified, amended, and supplemented through the
date hereof.

 

“Existing Letters of Credit”
means the Letters of Credit listed on Schedule 2.2.

 

“Federal Funds Effective Rate”
means, for any day, the rate per annum equal to the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank on the Business Day next succeeding such day; provided that (a) if such day is not a
Business Day, then the Federal Funds Effective Rate for such day shall be such
rate on such transactions on the next preceding Business Day as so published on
the next succeeding Business Day, and (b) if no such rate is so published on
such next succeeding Business Day, then the Federal Funds Effective Rate for
such day shall be the average rate (rounded upward, if necessary, to a whole
multiple of 1/100 of 1%) charged to Administrative Agent on such day on such
transactions as determined by Administrative Agent.

 

“Fee Letter” means
the letter agreement, dated as of May 3, 2005, among Borrower, Administrative
Agent, and the Arranger.

 

“Fiscal Quarter” means
a fiscal quarter of any Fiscal Year.

 

“Fiscal Year” means
the fiscal year of the Consolidated Companies ending on December 31 of
each calendar year.  For purposes of this
Agreement, any particular Fiscal Year shall be designated by reference to the
calendar year in which such Fiscal Year ends.

 

“Fixed Charge Coverage Ratio”
means, as of the last day of any Fiscal Quarter, the ratio of (a) Gross
EBITDA, to (b) Fixed Charges, in each case for the four (4) Fiscal Quarters
ending on the date of determination.

 

“Fixed Charges” means,
for the Consolidated Companies for any period, (a) Debt Service, plus (b) Cash Taxes, plus (c) all Restricted Junior
Payments in respect of all outstanding Stock of the Consolidated Companies
consisting of preferred Stock (excluding Restricted Junior Payments made by any
Consolidated Subsidiary to another Consolidated Company, to the extent such
payments would create no net increase in the amount of Restricted Junior
Payments of the Consolidated Companies determined in accordance with GAAP on a
consolidated basis).

 

10

 

“Floating Eurodollar Rate”
means, on any date of determination, for any Swing Line Loan, the sum of: (a) the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) appearing on Telerate Page
3750 (or any successor page) as the London interbank offered rate for 30-day
deposits in Dollars at approximately 11:00 a.m. (London time) on the date such
rate shall apply; plus (b) the
Applicable Margin then in effect for Eurodollar Rate Loans.  If for any reason such rate is not available,
the term “Floating
Eurodollar Rate” shall mean, for any Swing Line Loan, the sum of: (a) the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) appearing on Reuters Screen
LIBO Page as the London interbank offered rate for 30-day deposits in Dollars
at approximately 11:00 a.m. (London time) on the date such rate shall apply; provided, however, if more than one rate
is specified on Reuters Screen LIBO Page, the applicable rate shall be the
arithmetic mean of all such rates (rounded upwards, if necessary, to the
nearest 1/100 of 1%); plus (b)
the Applicable Margin then in effect for Eurodollar Rate Loans.

 

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

 

“Fund” means (a) any
limited partnership, limited liability company, or other entity sponsored by a
Company (i) in which a special purpose Subsidiary of Borrower acts as the
general partner, managing member, or in a similar capacity, (ii) which
issues Stock to investors other than one or more of the Companies (but not to
the exclusion of the Companies), (iii) in which a Company may, but is not
required to, receive a promoted or carried interest relative to other
investors, and (iv) which is established primarily for the purposes of
acquiring, owning, developing, operating, and disposing of multiple investments
in real property assets in multiple geographic locations, and (b) any Partners
Health Trust Development Entity.  As used
herein, any reference to a “Fund” shall also be deemed a reference to Subsidiaries
of such Fund.

 

“Funding and Payment Office”
means the office of Administrative Agent located at 901 Main Street, 14th
Floor, Dallas, Texas 75202.

 

“Funding Date” means
the date of the funding of a Loan.

 

“GAAP” means, subject
to the limitations on the application thereof set forth in Section 1.2,
generally accepted accounting principles set forth in opinions and
pronouncements of the Accounting Principles Board of the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such other entity as
may be approved by a significant segment of the accounting profession, in each
case as the same are applicable to the circumstances as of the date of
determination.

 

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

 

“Governmental Authorization”
means any permit, license, authorization, plan, directive, consent order, or
consent decree of or from any Governmental Authority.

 

“Gross EBITDA” means,
for any period and calculated for the Consolidated Companies on a Pro Forma
Basis, (a) Net Income, plus
(b) the following to the extent deducted from Net Income in

 

11

 

accordance
with GAAP (i) Interest Expense, plus
(ii) income Taxes, plus
(iii) total depreciation expense, plus
(iv) total amortization expense, plus
(v) other non-cash and non-recurring items, less (c) other non-cash and non-recurring items
increasing Net Income, minus (d)
any net extraordinary gains, plus
(e) any net extraordinary losses; provided,
however, that there shall be excluded from “Gross EBITDA” any
portion of Gross EBITDA (i) from the Consolidated Companies’ Brokerage
Services Line that exceeds in the aggregate thirty-five percent (35%) of Gross
EBITDA, (ii) attributable to the Consolidated Companies’ International
Operations (other than business operations, assets, and properties located in
Canada) that exceed in the aggregate twenty-five percent (25%) of Gross EBITDA,
(iii) attributable to EBITDA from Real Estate Gains that exceeds in the
aggregate thirty percent (30%) of Gross EBITDA, (iv) attributable to the
Share of Gross EBITDA of the owners (other than Borrower or a wholly-owned
Subsidiary of Borrower) of Stock of any Subsidiary of Borrower (to the extent
included in Gross EBITDA), (v) attributable to real property subject to
Exempt Construction Loans (except for EBITDA from Real Estate Gains subject to
the limitations set forth above), and (vi) attributable to EBITDA from the
Consolidated Companies’ Brokerage Services Line, Real Estate Gains, and
Consolidated Companies’ International Operations (other than business
operations, assets, and properties located in Canada) that exceeds in the
aggregate sixty-five percent (65%) of Gross EBITDA.  The percentage limitations calculated in clauses (i)
through (iv)
and clause (vi)
of the immediately preceding sentence shall be calculated, in each case, prior
to reduction of Gross EBITDA as a result of any such limitations.

 

“Guarantors” means all
existing and future Significant Subsidiaries.

 

“Hazardous Materials”
means:  (a) any chemical, material,
or substance at any time defined as or included in the definition of “hazardous substances,” “hazardous wastes,” “hazardous materials,” “extremely hazardous waste,” “restricted hazardous waste,” “infectious waste,” “toxic substances,” or any other
formulations intended to define, list, or classify substances by reason of
deleterious properties under any applicable Environmental Laws or publications
promulgated pursuant thereto; (b) any oil, petroleum, petroleum fraction,
or petroleum derived substance; (c) any drilling fluids, produced waters,
and other wastes associated with the exploration, development, or production of
crude oil, natural gas, or geothermal resources; and (d) any other
chemical, material, or substance, exposure to which is prohibited, limited, or
regulated by any Governmental Authority or which may or could pose a hazard to
the health and safety of the owners, occupants, or any Persons in the vicinity
of any Real Estate Investment.

 

“Honor Date” has
the meaning assigned to such term in Section 2.2(c).

 

“Increasing
Lender” has the meaning assigned to such term in Section 2.10(b).

 

“Indebtedness” means,
for any Person, without duplication, (a) all indebtedness for borrowed
money, (b) that portion of obligations with respect to Capital Leases that
is properly classified as a liability on a balance sheet of such Person in
conformity with GAAP, (c) notes payable and drafts accepted representing
extensions of credit whether or not representing obligations for borrowed
money, (d) any obligation owed for all or any part of the deferred
purchase price of property or services (excluding obligations for further
payments for businesses acquired based solely upon future earnings, cash flow,
or other performance measures or conditions precedent, and any such obligations
incurred under ERISA), which purchase price is (i) due more than six (6)
months from the date of incurrence of the obligation in respect thereof, or (ii) evidenced
by a note or similar written instrument, (e) all indebtedness secured by
any Lien (other than Permitted Encumbrances) on any property or asset owned or
held by such Person regardless of whether the indebtedness secured thereby shall
have been assumed by such Person or is nonrecourse to the credit of such
Person, and (f) all Stock of such Person that is subject to repurchase or
redemption other than at the sole option of such Person. Obligations under
Interest Rate Agreements and

 

12

 

Currency
Agreements constitute Contingent Obligations and not Indebtedness.  Contingent Obligations are not Indebtedness
unless any event or circumstance has occurred that has triggered any Company’s
liability thereunder in which case such liability shall constitute Indebtedness
to the extent such liability otherwise meets the definition of “Indebtedness” hereunder.

 

“Indemnitee” has the
meaning assigned to such term in Section 9.2.

 

“Intercreditor Agreement”
means one or more Intercreditor Agreements approved by Administrative Agent
(such approval to not be unreasonably withheld) to be entered into among
Administrative Agent and the Pari Passu Lenders providing for the equal and
ratable sharing of the Collateral and all collateral for the Pari Passu
Indebtedness for the benefit of the Lenders and the Pari Passu Lenders.

 

“Interest Coverage Ratio”
means, as of the last day of any Fiscal Quarter, the ratio of (a) Gross
EBITDA, to (b) Interest Expense, in each case for the four (4) Fiscal Quarters
ending on the date of determination.

 

“Interest Expense”
means, for any period, total interest expense (including that portion
attributable to Capital Leases in accordance with GAAP and capitalized
interest) of the Consolidated Companies, as determined on a consolidated basis
in accordance with GAAP, with respect to all outstanding Indebtedness of the
Consolidated Companies, including, without limitation, all commissions,
discounts, and other fees and charges owed with respect to letters of credit
and bankers’ acceptance financing and net costs under Interest Rate Agreements
(but reduced by net gains under Interest Rate Agreements); provided that for purposes of this
definition, “Interest
Expense” shall (a) include all interest on the Obligations
whether or not such interest is expensed or capitalized during such period in
accordance with GAAP, (b) not include interest capitalized in accordance
with GAAP in connection with the construction of Real Estate Investments so
long as the applicable Consolidated Company has obtained construction loan
financing pursuant to which construction loan advances are made in the amount
of such interest expense, and (c) not include Interest Expense on Exempt
Construction Loans to the extent such Interest Expense is either fully
supported by net operating income from the underlying Real Estate Investment or
is covered by advances under such Exempt Construction Loans.

 

“Interest Payment Date”
means, (a) as to any Committed Loan other than a Base Rate Loan, the last day
of each Interest Period applicable to such Committed Loan and the Maturity
Date; provided, however,
that if any Interest Period for a Eurodollar Rate Loan exceeds three (3)
months, the respective dates that fall every three (3) months after the
beginning of such Interest Period shall also be Interest Payment Dates; (b) as
to any Base Rate Loan, the last Business Day of each March, June, September and
December, and the Maturity Date, and (c) as to each Swing Line Loan, (i) the
earlier of the last Business Day of each March, June, September and
December, or the date of repayment of the Principal Debt of such Swing Line
Loan and (ii) the Maturity Date.

 

“Interest Period” has
the meaning assigned to such term in Section 2.3(b).

 

“Interest Rate Agreement”
means any interest rate swap agreement, interest rate cap agreement, interest
rate collar agreement, or other similar agreement or arrangement designed to
protect any Company against fluctuations in interest rates.

 

“Interest Rate Determination Date”
means, with respect to any Interest Period, the second (2nd) Business Day prior
to the first (1st) day of such Interest Period.

 

13

 

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

 

“International Operations”
means the Companies’ business operations, assets, and properties located
outside of the United States of America and Canada including all International
Subsidiaries other than Subsidiaries organized under the laws of any province
or territory of Canada, but expressly excluding the investment in, ownership
of, and disposition of the Companies’ Stock in Savills and activities and
operations related thereto.

 

“International Subsidiaries” means Subsidiaries of Borrower that are not
organized under the laws of any State of the United States of America or the
District of Columbia, and “International
Subsidiary” means any one of the International Subsidiaries.

 

“Investment” means any
(a) direct or indirect purchase or other acquisition by any Company of, or
of a beneficial interest in, any Stock of any other Person (other than a Person
that, prior to such purchase or acquisition, was a Subsidiary of Borrower),
(b) purchase or acquisition by any Company of all or substantially all of
the assets of any other Person, or (c) direct or indirect loan, advance,
or capital contribution by any Company to any other Person other than a
wholly-owned Subsidiary of Borrower, including all Indebtedness and accounts
receivable from such other Person that are not current assets or did not arise
from sales or the provision of services to such other Person in the ordinary
course of business.  The amount of any
Investment shall be the original cost of such Investment plus the cost of all additions thereto,
and minus any return in cash of
the original amount of such Investment, without any adjustments for increases
or decreases in value, or write-ups, write-downs, or write-offs with respect to
such Investment.

 

“ISP” means, with
respect to any Letter of Credit, the “International Standby Practices 1998”
published by the Institute of International Banking Law & Practice (or such
later version thereof as may be in effect at the time of issuance).

 

“Issuance Date” means,
with respect to any Letter of Credit, the date of issuance of such Letter of
Credit.

 

“Issuer Documents”
means with respect to any Letter of Credit, the Letter of Credit Application,
and any other document, agreement and instrument entered into by the Issuing
Bank and Borrower (or any Subsidiary) or in favor of Issuing Bank and relating
to any such Letter of Credit.

 

“Issuing Bank” has the
meaning assigned to such term in the introduction to this Agreement.

 

“L/C Advance”
means, with respect to each Lender, such Lender’s funding of its participation
in any L/C Borrowing in accordance with its Pro Rata Share.

 

“L/C Borrowing”
means an extension of credit resulting from a drawing under any Letter of
Credit which has not been reimbursed on the date when made or refinanced as a
Committed Loan bearing interest at the Base Rate.

 

“L/C Credit
Extension” means, with respect to any Letter of Credit, the
issuance thereof or extension of the expiry date thereof, or the increase of
the amount thereof.

 

14

 

“Legal Requirements”
means all applicable statutes, laws, treaties, ordinances, rules, regulations,
orders, writs, injunctions, decrees, judgments, and opinions of any
Governmental Authority, including the interpretation or administration thereof
by any Governmental Authority charged with the enforcement, interpretation or
administration thereof, and all applicable administrative orders, directed
duties, licenses, authorizations, and permits of any Governmental Authority.

 

“Lender” and “Lenders” have the
meanings assigned to such terms in the introduction of this Agreement and, as
the context requires, includes the Swing Line Lender.

 

“Letter of
Credit” means any letter of credit issued hereunder and shall
include the Existing Letters of Credit.

 

“Letter of
Credit Application” means an application and agreement for the
issuance or amendment of a Letter of Credit in the form from time to time in
use by the Issuing Bank.

 

“Letter of
Credit Expiration Date” means the day that is seven (7) days
prior to the Maturity Date then in effect (or, if such day is not a Business
Day, the next preceding Business Day).

 

“Letter of
Credit Exposure” means, without duplication, the sum of (a) the
total face amount of all undrawn and uncancelled Letters of Credit plus (b) the
total unpaid reimbursement obligations of Borrower under drawings under all
Letters of Credit.  For purposes of
computing the amount available to be drawn under any Letter of Credit, the
amount of such Letter of Credit shall be determined in accordance with Section 1.5.  For all purposes of this Agreement, if on any
date of determination a Letter of Credit has expired by its terms but any
amount may still be drawn thereunder by reason of the operation of Rule 3.14 of
the ISP, such Letter of Credit shall be deemed to be “outstanding” in the
amount so remaining available to be drawn.

 

“Letter of
Credit Fee” has the meaning assigned to such term in Section 2.2(i).

 

“Letter of
Credit Sublimit” means an amount equal to $25,000,000.  The Letter of Credit Sublimit is part of, and
not in addition to, the Total Commitment.

 

“Level” means Level I,
Level II, or Level III, in each case whichever is in effect on the date of
determination.

 

“Level I” means such
periods as the Recourse Leverage Ratio is less than 2.0 to 1.0.

 

“Level II” means such
periods as the Recourse Leverage Ratio is greater than or equal to 2.0 to 1.0
and less than 2.5 to 1.0.

 

“Level III” means
such periods as the Recourse Leverage Ratio is greater than or equal to 2.5 to
1.0.

 

“Level Determination Certificate”
means an Officers’ Certificate of Borrower delivered on the Closing Date and
thereafter in accordance with Section 5.1(j) setting forth in reasonable detail
the Recourse Leverage Ratio that is applicable pursuant to the definition
thereof as of the date on which such Officers’ Certificate is delivered.

 

15

 

“Lien” means any lien,
mortgage, pledge, assignment, security interest, charge, or encumbrance of any
kind (including any conditional sale or other title retention agreement, any
lease in the nature thereof, and any agreement to give any security interest).

 

“Liquid Assets” means,
as of the last day of each Fiscal Quarter, the
sum of (a) the Consolidated Companies’ Cash and Cash
Equivalents (in each case not subject to any Liens or other encumbrances) and
(b) the lesser of
(i) the Unused Commitment as of such date, and (ii) the maximum
amount of Loans that Borrower could, subject to the terms and conditions of
this Agreement, receive on such date from Lenders.

 

“Loan Documents” means
this Agreement, the Notes, the Subsidiary Guaranty, the Pledge Agreements, the
Collateral Documents, and any Interest Rate Agreement between Borrower and any
Lender.

 

“Loan” means an
extension of credit by a Lender to Borrower under Section 2 in the form of a
Committed Loan or a Swing Line Loan, and “Loans” means collectively, the Committed
Loans and the Swing Line Loans.

 

“Margin Stock” has the
meaning assigned to such term in Regulation U
of the Board of Governors of the Federal Reserve System as in effect from time
to time.

 

“Material Adverse Effect”
means (a) a material adverse effect upon the business, operations,
properties, assets, condition (financial or otherwise), or prospects of the
Companies, taken as a whole, or (b) the impairment in any material respect
of the ability of Borrower to perform the Obligations, or (c) the
impairment in any material respect of the ability of Administrative Agent or
Lenders to enforce the Obligations.

 

“Maturity Date” means
the earlier of (a) June 28, 2008, and (b) the date that the
Total Commitment is terminated or reduced to zero in accordance with the terms
of this Agreement.

 

“Minimum Net Worth”
means, as of the last day of each Fiscal Quarter (a) $235,000,000 plus (b) fifty percent (50%)
of the cumulative Net Income (without deduction for losses) for each Fiscal
Year during the term hereof commencing with the Fiscal Year ending December 31,
2005 plus (c) fifty percent
(50%) of the net proceeds from any Stock issuances of Borrower excluding Stock
issued pursuant to employee stock ownership or employee stock option plans.

 

“Moody’s” means Moody’s
Investors Service, Inc. or, if Moody’s no longer publishes ratings, another
ratings agency acceptable to Administrative Agent.

 

“Mortgaged Real Estate Subsidiary”
means, as of any date, a Real Estate Subsidiary whose assets are subject to
Liens securing Indebtedness to bona fide third parties incurred to finance a
material portion of the acquisition, construction, and/or development costs of
such Real Estate Subsidiary’s assets.

 

“Multiemployer Plan”
means a “multiemployer plan,” as
defined in Section 3(37) of
ERISA, to which Borrower or any of its ERISA Affiliates is contributing, or
ever has contributed, or to which Borrower or any of its ERISA Affiliates has,
or ever has had, an obligation to contribute.

 

“Net Income” means, for any period, the net income (or
loss) of the Consolidated Companies on a consolidated basis for such period
taken as a single accounting period determined in conformity with

 

16

 

GAAP;
provided that there shall be
excluded from “Net Income” (a) the income (or
loss) of Persons (other than Consolidated Subsidiaries of Borrower) in which
any other Person (other than Consolidated Companies) has a joint interest,
except to the extent of the amount of dividends or other distributions actually
paid to Consolidated Companies by all such Persons during such period,
(b) the income (or loss) of any Person accrued prior to the date it
becomes a Consolidated Subsidiary of Borrower or is merged into or consolidated
with any Consolidated Company or such Person’s assets are acquired by any
Consolidated Company, and (c) the income of any Consolidated Subsidiary of
Borrower to the extent that the declaration or payment of dividends or similar
distributions by that Subsidiary of such income is not at the time permitted by
operation of the terms of its Constituent Documents, any Contractual Obligation,
or any Legal Requirement (other than Legal Requirements restricting the making
of dividends or distributions on Stock generally) applicable to such
Subsidiary.

 

“Net Worth” means, for
the Consolidated Companies on a consolidated basis as of the last day of each
Fiscal Quarter, net worth determined in accordance with GAAP.

 

“Non-Recourse Obligations”
means, for any Person, any Indebtedness of such Person in which the holder of
such Indebtedness (a) may not look to such Person personally for
repayment, other than to the extent of any security therefor or pursuant to
Customary Recourse Exceptions, or (b) may look to such Person personally
for repayment (but not to any constituent owner of such Person other than for
Customary Recourse Exceptions) and such Person is a single purpose entity
owning a single Real Estate Investment, or (c) in the case of Indebtedness
of any Fund or any Subsidiary of such Fund, may look to such Fund, and any
special purpose corporation or limited liability company serving as the general
partner of such Fund (but not to any other constituent owner of such Fund other
than for Customary Recourse Exceptions).

 

“Notes” means any
promissory notes of Borrower issued to evidence Loans of Lenders, substantially
in the form of Exhibit F,
as they may be modified, amended, renewed, extended, restated, or supplemented
from time to time, and “Note”
means any one of the Notes.

 

“Notice of Borrowing”
means a notice substantially in the form of Exhibit G delivered by Borrower to
Administrative Agent pursuant to Section 2.1(c) with respect to a
proposed Committed Loan.

 

“Notice of Conversion/Continuation”
means a notice substantially in the form of Exhibit H delivered by Borrower to
Administrative Agent pursuant to Section 2.3(d) with respect to a proposed
conversion or continuation of the applicable basis for determining the interest
rate with respect to any Committed Loans.

 

“Obligations” means
all obligations of every nature of Borrower from time to time owed to any
Credit Party, or any of them under the Loan Documents, whether for principal,
interest, fees, expenses, indemnification, or otherwise.

 

“Obligors” means
Borrower and Guarantors, and “Obligor” means any one of the Obligors.

 

“Officers’ Certificate”
means, as applied to any corporation, a certificate executed on behalf of such
corporation by its chairman of the board (if an officer) or its president or
one of its vice presidents and by its chief financial officer or its treasurer.

 

17

 

“Operating Lease”
means, as applied to any Person, any lease (including, without limitation,
leases that may be terminated by the lessee at any time) of any property
(whether real, personal, or mixed) that is not a Capital, Lease other than any
lease under which such Person is the lessor.

 

“Participant” has the
meaning assigned to such term in Section 9.1(d).

 

“Pari Passu Indebtedness”
means Indebtedness of one or more of the Companies that is (a) secured ratably
and on a pari passu basis with the Obligations and (b) constitutes a “Permitted Recourse Obligation”
pursuant to clause (e)
of the definition of such term.

 

“Pari Passu Lenders”
means one or more lenders or holders of Pari Passu Indebtedness, and such term
shall also include any agent, trustee or other representative acting on behalf
of such lenders or holders.

 

“Pari Passu Collateral Document
Amendments” means amendments to the Collateral Documents
approved by Administrative Agent (such approval to not be unreasonably
withheld) to be entered into among the Companies who are parties to the
Collateral Documents, Administrative Agent and the Pari Passu Lenders pursuant
to which the Collateral Documents will be amended to secure the Pari Passu
Indebtedness ratably with the Obligations.

 

“Partners Health Trust Development
Entity” means a Subsidiary of Borrower (a) formed to develop
medical office buildings and related buildings (such as parking garages), (b)
whose Indebtedness consists entirely of Non-Recourse Obligations, and (c) which
has entered into a pre-sale arrangement or contract with a Partners Health
Trust Venture for the sale of such buildings subject to the completion thereof
and which includes a commitment from Partners Health Trust to purchase a
portion of the Stock of such Partners Health Trust Venture subject to
completion of such buildings.

 

“Partners Health Trust Venture”
means any limited partnership, limited liability company, or other entity
sponsored by a Company (a) which is established solely for the purposes of
developing or acquiring medical office buildings and related buildings (such as
parking garages), (b) a portion of the Stock of which is held by Partners
Health Trust, and (c) whose Indebtedness consists entirely of Non-Recourse
Obligations.

 

“PBGC” means the
Pension Benefit Guaranty Corporation (or any successor thereto).

 

“Pension Plan” means
any Employee Benefit Plan, other than a Multiemployer Plan, which is subject to
Section 412 of the Internal
Revenue Code or Section 302
of ERISA.

 

“Performance Bond”
means any letter of credit, bond, or similar security device securing the
obligation of any Company to complete construction of improvements to real
property.

 

“Permitted Acquisition”
means any acquisition or series of acquisitions, by purchase, merger, or
otherwise after the Closing Date by any Company of any Person or substantially
all of the assets of any Person or operating division of any Person (as
applicable, the “Target”);
provided that each of the
following conditions shall have been satisfied:

 

(a)           the Target is engaged in substantially the
same business as the business conducted by any Company on the date of such
acquisition or another business permitted pursuant to Section 6.8;

 

18

 

(b)           prior to such acquisition or series of acquisitions,
Administrative Agent shall have received (x) financial statements of the
Target for at least the last one (1) year period, which financial statements
have been (i) reviewed by independent certified public accountants if the
purchase price of the Target is in excess of $20,000,000, but is less than
$40,000,000, and (ii) audited by independent certified public accountants
if the purchase price of the Target is equal to or greater than $40,000,000,
and (y) an Officer’s Certificate (i) confirming that all
representations and warranties set forth in the Loan Documents continue to be
true and correct in all material respects immediately prior to and after giving
effect to the Permitted Acquisition and the transactions contemplated thereby,
and (ii) setting forth the calculations supporting compliance with the
limitations prescribed herein (including pro forma compliance with all
financial covenants);

 

(c)           as of the closing of such acquisition, the
acquisition has been approved and recommended by the Board of Directors or
other applicable governing body of the Target and the Person from which the
Target is to be acquired;

 

(d)           as of the closing of such acquisition, after
giving effect to such acquisition, the Company that is the acquiring party must
be Solvent and the Companies, on a consolidated basis, must be Solvent;

 

(e)           as of the closing of such acquisition, after
giving effect to such acquisition, no Event of Default shall exist or occur as
a result of, and after giving effect to, such acquisition; and

 

(f)            if the Target is to be a Significant
Subsidiary of Borrower, then Borrower shall have complied with the terms and
conditions set forth in Section 5.10.

 

“Permitted Distributions”
means, for (a) Borrower in any fiscal year of Borrower, Restricted Junior
Payments in an amount not to exceed the sum of (i) fifty percent (50%) of the
sum of Net Income for the immediately preceding fiscal year, plus to the extent
deducted in the calculation of Net Income, in conformity with GAAP,
depreciation and amortization expense, plus (ii) for the fiscal year ending December 31,
2005 only, an amount equal to $20,000,000, and (b) for any Subsidiary in any
fiscal year of such Subsidiary, any Restricted Junior Payments made in
proportion to the ownership of the Stock of such Subsidiary.

 

“Permitted Encumbrances”
means the following types of Liens (other than any such Lien imposed pursuant
to Section 401(a)(29) or 412(n) of the Internal Revenue Code or by
ERISA):

 

(a)           Liens for Taxes, assessments, or governmental
charges or claims the payment of which is not, at the time, required by Section 5.3;

 

(b)           statutory and contractual Liens of landlords
and Liens of carriers, warehousemen, mechanics, and materialmen and other Liens
imposed by applicable Legal Requirements incurred in the ordinary course of
business for sums not yet delinquent or being contested in good faith, if such
reserve or other appropriate provision, if any, as shall be required by GAAP
shall have been made therefor;

 

(c)           Liens incurred or deposits made in the ordinary
course of business in connection with workers’ compensation, unemployment
insurance, and other types of social security, or to secure the performance of
tenders, statutory obligations, surety, indemnity, and appeal bonds, bids,
leases, government contracts, trade contracts, performance, and return-of-money
bonds and other similar obligations (exclusive of obligations for the payment
of borrowed money);

 

19

 

(d)           any attachment or judgment Lien not constituting
an Event of Default under Section 7.8;

 

(e)           leases or subleases granted to others not
interfering in any material respect with the ordinary conduct of the business
of any Company;

 

(f)            easements, rights-of-way, restrictions, minor
defects, encroachments, or irregularities in title and other similar charges or
encumbrances not interfering in any material respect with the ordinary conduct
of the business of any Company;

 

(g)           any (i) interest or title of a lessor or
sublessor under any lease, (ii) restriction or encumbrance that the
interest or title of such lessor or sublessor may be subject to, or
(iii) subordination of the interest of the lessee or sublessee under such
lease to any restriction or encumbrance referred to in the preceding clause (ii);

 

(h)           Liens arising from filing of precautionary
UCC financing statements relating solely to leases not prohibited by this
Agreement;

 

(i)            Liens in favor of customs and revenue
authorities arising as a matter of law to secure payment of customs duties in connection
with the importation of goods;

 

(j)            Liens created for the benefit of
Administrative Agent or Lenders pursuant to the terms of this Agreement and the
Collateral Documents; and

 

(k)           Liens in favor of the Pari Passu Lenders ; provided that the Obligations
are secured ratably with such Liens.

 

“Permitted Recourse Obligations”
means: (a) the Obligations; (b) Recourse Obligations for interim
secured construction loans entered into by the Companies and Unconsolidated
Entities in the ordinary course of business not to exceed in the aggregate
$125,000,000; (c) Indebtedness between Companies; (d) Exempt
Construction Loans and any guarantees thereof; and (e) other unsecured
Recourse Obligations or Pari Passu Indebtedness not to exceed in the aggregate
$150,000,000 at any time outstanding; provided
that the amount of such Recourse Obligations or Pari Passu
Indebtedness which exceeds $25,000,000: (a) is governed by covenants not
more restrictive than those under this Agreement; (b) has a maturity date
which is at least one hundred eighty (180) days after the Maturity Date;
(c) if such Indebtedness is suitable for syndication to banks, then the
Lenders have an opportunity to participate in such financing; and (d) is
governed by contracts or agreements in form and substance acceptable to
Administrative Agent (such acceptance not to be unreasonably withheld).

 

“Person” means and
includes natural persons, corporations, limited partnerships, general
partnerships, joint stock companies, joint ventures, associations, companies,
trusts, banks, trust companies, land trusts, business trusts, or other
organizations, whether or not legal entities, and Governmental Authorities.

 

“Pledge Agreements”
means the Borrower Pledge Agreement and the Subsidiary Pledge Agreement, and “Pledge Agreement”
means any one of the Pledge Agreements.

 

“Potential Default”
means a condition or event that, after notice or lapse of time or both, would
constitute an Event of Default.

 

20

 

“Prime Rate” means the
rate of interest in effect for any day as publicly announced from time to time
by Administrative Agent as
its “prime rate.”  The “prime rate” is a
rate set by Administrative Agent based
upon various factors including Administrative Agent’s costs and desired return, general economic
conditions, and other factors, and is used as a reference point for pricing
some loans, which may be priced at, above, or below such announced rate.  Any change in such rate announced by Administrative
Agent shall take effect at the opening
of business on the day specified in the public announcement of such change.

 

“Principal Debt”
means, on any date of determination and without duplication, the aggregate
unpaid principal balance of all Loans, together with all aggregate unpaid
reimbursement obligations of Borrower in respect of drawings under all Letters
of Credit.

 

“Pro Forma Basis”
means, with respect to Gross EBITDA for any period, the calculation of such
Gross EBITDA to give effect to the acquisition or disposition of any
Consolidated Company or of any Consolidated Company assets during such period
as of the first day of such period; provided
that (a) EBITDA from Real Estate Gains with respect to Real
Estate Investments disposed of during such measurement period shall be included
in Gross EBITDA subject to the limitations set forth in the definition of Gross
EBITDA, and (b) Gross EBITDA with respect to real property assets (and not
constituting EBITDA from Real Estate Gains) disposed of during such measurement
period may be included in Gross EBITDA unless otherwise requested by
Administrative Agent in its sole discretion.

 

“Pro Rata Share”
means, for any Lender, on any date of determination (a) for purposes of
sharing any amount or fee payable to such Lender, the proportion which the
portion of the Principal Debt owed to such Lender (whether held directly or
through a participation in respect of the Letters of Credit and determined
after giving effect thereto) bears to the Principal Debt owed to all Lenders at
the time in question, and (b) for all other purposes, the proportion which
the portion of the Principal Debt owed to such Lender bears to the Principal
Debt owed to all Lenders at the time in question, or if no Principal Debt is
outstanding, then the proportion that the aggregate of such Lender’s Commitment
then in effect bears to the Total Commitment then in effect.

 

“Qualifying Lease”
means a lease agreement entered into by a Mortgaged Real Estate Subsidiary to
lease the real property owned by such Mortgaged Real Estate Subsidiary upon
completion of construction thereof to the extent that (a) the senior
unsecured debt of the tenant or the guarantor of the tenant’s obligations under
such lease is rated BBB- or higher by S&P or Baa3 or higher by Moody’s,
(b) the obligation of such tenant to accept possession of such real
property and begin paying rent under such lease is not subject to any material
condition other than (i) completion of construction in accordance with Legal
Requirements and approved plans and specifications and on or before a date
certain and (ii) issuance of a certificate of occupancy, (c) such
lease has a non-cancelable primary term of ten (10) years or more, and
(d) such tenant has not failed or refused to perform under such lease agreement
or notified the applicable Mortgaged Real Estate Subsidiary of its intention to
not perform under such lease agreement (provided
that the failure of one (but not
more than one) tenant under a Qualifying Lease to meet the ratings criteria set
forth in clause (a)
of this definition shall not result in the disqualification of such lease as a
Qualifying Lease, so long as, at
the time such lease was entered into, such ratings criteria were satisfied, and
such tenant only fails to satisfy such ratings criteria due to subsequent
rating downgrades).

 

“Real Estate Investment”
means, for any Person, (a) the purchase, acquisition, investment, or ownership
(whether in fee or via ground lease but excluding those financed pursuant to
Exempt Construction Loans) of real property (including, without limitation, all
buildings, fixtures, or other

 

21

 

improvements
located thereon) by such Person, (b) the Investment by such Person in
Unconsolidated Entities formed for, or engaged primarily in, real property
development and/or ownership, (c) the Investment by such Person in Stock of
Persons that are special purpose entities formed to own one or more real
properties, or (d) the Investment by such Person in Indebtedness secured by
Liens in real property (including, without limitation, all buildings, fixtures,
or other improvements located thereon).

 

“Real Estate Subsidiary”
means a Subsidiary of Borrower that is engaged in the business of real estate
development, investment, and/or ownership.

 

“Recourse Leverage Ratio”
means, as of the last day of each Fiscal Quarter, the ratio of (a) Total
Recourse Debt as of such date, to (b) Gross EBITDA for four (4) Fiscal
Quarters ending on the last day of such Fiscal Quarter.

 

“Recourse Obligations”
means, for any Person, Indebtedness of such Person that is not Non-Recourse
Obligations.

 

“Register” has the
meaning assigned to such term in Section 2.1(e).

 

“Regulation D” means Regulation D of the Board of Governors of
the Federal Reserve System, as in effect from time to time.

 

“Release” means any
release, spill, emission, leaking, pumping, pouring, injection, escaping,
deposit, disposal, discharge, dispersal, dumping, leaching, or migration of
Hazardous Materials into the indoor or outdoor environment (including, without
limitation, the abandonment or disposal of any barrels, containers, or other
closed receptacles containing any Hazardous Materials), or into or out of any
Real Estate Investment, including the movement of any Hazardous Material
through the air, soil, surface water, groundwater, or property.

 

“Representatives”
means, for any Person, representatives, officers, directors, employees,
attorneys, and agents.

 

“Requisite Lenders”
means (a) on any date of determination prior to the Maturity Date, those Lenders
(other than Defaulting Lenders) holding sixty-six and two-thirds percent (662/3%)
or more of the Total Commitment, and (b) on any date of determination on
or after the Maturity Date, those Lenders holding sixty-six and two-thirds
percent (662/3%) or more of the Principal Debt.

 

“Restricted Junior Payment”
means, for any Person, (a) any dividend or other distribution, direct or
indirect, on account of any shares of any class of Stock of such Person now or
hereafter outstanding, except a dividend payable solely in shares of such class
of stock to the holders of that class, (b) any redemption, retirement,
sinking fund, or similar payment, purchase, or other acquisition for value,
direct or indirect, of any shares of any class of Stock of such Person now or
hereafter outstanding, and (c) any payment made to retire, or to obtain
the surrender of, any outstanding warrants, options, or other rights to acquire
shares of any class of Stock of such Person now or hereafter outstanding; provided, that Restricted Junior Payments
shall not include payments made by Borrower to the United States Treasury or
other Tax authorities on behalf of employees of the Companies in respect of the
exercise or vesting of stock options, restricted stock grants and similar
programs.

 

“Revolving Credit Facility”
means the Credit Facility described in and subject to the limitations set forth
in Section 2.1(a)
including the subfacility for the issuance of Letters of Credit.

 

22

 

“Savills” means
Savills plc, a company formed under the laws of England and Wales with company
number 2122174.

 

“Securities Act” means
the Securities Act of 1933, as
amended from time to time, and any successor statute.

 

“Share” means, for any
Person, such Person’s share of the assets, liabilities, revenues, income,
losses, or expenses of any Subsidiary or Unconsolidated Entity based upon such
Person’s percentage ownership of the Stock of such Subsidiary or Unconsolidated
Entity.

 

“Significant Subsidiaries”
means, as of the last day of each Fiscal Quarter, (a) each Consolidated
Subsidiary of Borrower (other than an International Subsidiary or a Mortgaged
Real Estate Subsidiary) whose contribution to Gross EBITDA exceeds five percent
(5%) of Adjusted Gross EBITDA, and (b) other Consolidated Subsidiaries of
Borrower (other than International Subsidiaries and Mortgaged Real Estate
Subsidiaries) designated in writing by Borrower and acceptable to
Administrative Agent that, together with Borrower and all Significant Subsidiaries
described in clause (a)
preceding, contribute at least eighty percent (80%) of Adjusted Gross EBITDA,
including, without limitation, the Consolidated Subsidiaries of Borrower listed
on Schedule 4.1-2,
as such Schedule may
be amended from time to time. 
Notwithstanding the foregoing, “Significant Subsidiary” shall not include any
Consolidated Subsidiary which was formerly a Mortgaged Real Estate Subsidiary so long as (i) the net cash gain on
any sale of any Real Estate Investment formerly owned by such Consolidated
Subsidiary (less any portion of such gain required to be held in escrow or
subjected to a lien pertaining to post-closing obligations related to the sale
of such Real Estate Investment or required to be distributed to other owners of
such Consolidated Subsidiary, if any) is distributed to Borrower or a
Significant Subsidiary within thirty (30) days following completion of such
sale and (ii) such Consolidated Subsidiary is not thereafter recapitalized
with assets that causes such Subsidiary to otherwise be a “Significant Subsidiary” pursuant to this
definition.  Borrower may by written
notice to Administrative Agent, re-designate any Significant Subsidiary (other
than a Consolidated Subsidiary of Borrower described in clause (a) above), as
not a Significant Subsidiary so long as immediately following such designation
no Potential Default or Event of Default exists.

 

“Solvent” means, with
respect to any Person, that as of the date of determination both:
(a)(i) the then fair saleable value of the property of such Person is
(A) greater than the total amount of liabilities (including contingent
liabilities) of such Person, and (B) not less than the amount that will be
required to pay the probable liabilities on such Person’s then existing debts
as they become absolute and matured considering all financing alternatives and
potential asset sales reasonably available to such Person; (ii) such
Person’s capital is not unreasonably small in relation to its business or any
contemplated or undertaken transaction; and (iii) such Person does not
intend to incur, or believe (nor should it reasonably believe) that it will
incur, debts beyond its ability to pay such debts as they become due; and
(b) such Person is “solvent”
within the meaning given such term and similar terms under applicable laws
relating to fraudulent transfers and conveyances.  For purposes of this definition, the amount
of any contingent liability at any time shall be computed as the amount that,
in light of all of the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an actual or
matured liability.

 

“S&P” means
Standard & Poor’s Rating Group, a division of McGraw Hill, Inc., a New York
corporation, or, if S&P no longer publishes ratings, then another ratings
agency acceptable to Administrative Agent.

 

23

 

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

 

“Subsequent
Lender” has the meaning assigned to such term in Section 2.10(b).

 

“Subsidiary” means, in
respect of any Person, any other Person in whom such Person holds Stock
and whose financial results would be consolidated under GAAP with the financial
results of such Person on the consolidated financial statements of such Person.

 

“Subsidiary Guaranty”
means an Unconditional Guaranty Agreement executed and delivered by each
Guarantor, substantially in the form of Exhibit E, as each such guaranty may
hereafter be modified, amended, restated, or supplemented from time to time.

 

“Subsidiary Pledge Agreement”
means the Pledge Agreement executed and delivered by each of Borrower’s
Significant Subsidiaries that, individually or together with any other Obligor,
holds ownership interests in one or more of Borrower’s Significant
Subsidiaries, and substantially in the form of Exhibit I, as such Pledge Agreement
may hereafter be modified, amended, restated, or supplemented from time to
time.

 

“Support Provider” has
the meaning assigned to such term in the definition of “Approved Credit Support.”

 

“Swing Line” means the
revolving credit facility made available by the Swing Line Lender pursuant to Section 2.12.

 

“Swing Line Borrowing”
means a borrowing of a Swing Line Loan pursuant to Section 2.12.

 

“Swing Line Lender”
has the meaning assigned to such term in the introduction to this Agreement.

 

“Swing Line Loan” has
the meaning specified in Section 2.12(a).

 

“Swing Line Loan Notice”
means a notice of a Swing Line Borrowing pursuant to Section 2.12(b),
which, if in writing, shall be substantially in the form of Exhibit K.

 

“Swing Line Sublimit”
means an amount equal to $25,000,000. 
The Swing Line Sublimit is part of, and not in addition to, the Total
Commitments.

 

“Take Out Commitment”
means a written obligation of a Person either (a) to purchase real
property and the improvements thereon for an amount sufficient to repay the
interim construction loan used to acquire and construct such real property and
improvements, or (b) to provide debt and/or equity financing the proceeds
of which are to be used to repay the interim construction loan used to acquire and
construct real property and improvements thereon.

 

24

 

“Tax” or “Taxes” means any
present or future tax or government levy in the nature of a tax; provided that “Tax on the overall net income” of a Person shall be
construed as a reference to a tax imposed by the jurisdiction in which that
Person’s principal office (and/or, in the case of a Lender, its lending office)
is located or in which that Person is deemed to be doing business on all or
part of the net income, profits, or gains of that Person (whether worldwide, or
only insofar as such income, profits, or gains are considered to arise in or to
relate to a particular jurisdiction, or otherwise).

 

“Total Commitment”
means, on any date of determination, the sum
of all Commitments then in effect for all Lenders (as any of the
same may have been reduced or canceled as provided in the Loan Documents).

 

“Total Debt” means, as
of the last day of each Fiscal Quarter, without duplication for the
Consolidated Companies (a) Total Liabilities plus (b) Contingent Obligations, less (c) the sum of
all (i) accounts payable, (ii) accrued expenses, (iii) payables
to Affiliates incurred in the ordinary course of business,
(iv) liabilities to any Governmental Authority for Taxes, (v) other
Current Liabilities not constituting Indebtedness, (vi) the Share of
Non-Recourse Obligations of any Company attributable to the owners (other than
Borrower or a wholly owned Subsidiary of Borrower) of Stock of such Company
(other than Borrower), (vii) Exempt Construction Loans of any Company,
(viii) reimbursement obligations with respect to Performance Bonds, and
(ix) the amount of Total Liabilities and Contingent Obligations which are
supported by Approved Credit Support.

 

“Total Leverage Ratio”
means, as of the last day of each Fiscal Quarter, the ratio of (a) Total
Debt as of such date, to (b) Gross EBITDA for four (4) Fiscal Quarters
ending on the last day of such Fiscal Quarter.

 

“Total Liabilities”
means, as of the last day of each Fiscal Quarter for the Consolidated Companies
on a consolidated basis, all liabilities of the Consolidated Companies
determined in accordance with GAAP.

 

“Total Recourse Debt”
means, as of the last day of each Fiscal Quarter, without duplication
for the Consolidated Companies, the sum of (a) Total Debt less (b) Non-Recourse Obligations.

 

“Total Revenues”
means, for the Consolidated Companies on a consolidated basis for any period,
all items customarily reported on the Consolidated Companies’ audited income
statement as “revenues,” but
excluding (a) revenues of Persons (other than Consolidated Subsidiaries of
Borrower) in which any other Person (other than Consolidated Companies) has a
joint interest, except to the extent of the amount of dividends or other
distributions actually paid to Consolidated Companies by all such Persons
during such period, and (b) any gains from asset sales not permitted
pursuant to Section 6.6.

 

“Unconsolidated Entity”
means (a) in respect of any Person, any other Person in whom such Person holds
Stock and whose financial results would not be consolidated under GAAP with the
financial results of such Person on the consolidated financial statements of
such Person, and (b) any Fund.

 

“Unused Commitment”
means, at any time, (a) the Total Commitment minus (b) the Commitment Usage; provided, however, that solely for
purposes of calculating the unused fee set forth in Section 2.4(b),
Commitment Usage shall exclude the aggregate unpaid principal balance of all
Swing Line Loans.

 

“Unreimbursed
Amount” has the meaning assigned to such term in Section 2.2(c).

 

25

 

“UCP”
means, with
respect to any Letter of Credit, the rules of the Uniform Customs and
Practice for Documentary Credits, as most recently published by the
International Chamber of Commerce.

 

1.2          Accounting Terms,
Utilization of GAAP for Purposes of Calculations Under Agreement.  Except as otherwise expressly provided in
this Agreement, all accounting terms not otherwise defined herein shall have
the meanings assigned to them in conformity with GAAP.  Financial statements and other information
required to be delivered by Borrower to Lenders pursuant to Sections 5.1(a) and
5.1(b) shall be
prepared in accordance with GAAP as in effect at the time of such preparation
(and delivered together with the reconciliation statements provided for in Section 5.1(d)).  Calculations in connection with the
definitions, covenants, and other provisions of this Agreement shall utilize
GAAP as in effect at the time of such calculation.

 

1.3          Other Definitional
Provisions. Unless otherwise specified in the Loan Documents
(a) where appropriate, the singular includes the plural and vice versa,
and words of any gender include each other gender, (b) headings and
caption references may not be construed in interpreting provisions,
(c) section, paragraph, annex, schedule, exhibit, and similar references
are to the particular Loan Document in which they are used, (d) references
to “telecopy,” “facsimile,” “fax,” or similar terms are to facsimile or telecopy
transmissions, (e) references to “including”
mean including without limiting the generality of any description preceding
that word, (f) the rule of construction that references to general items
that follow references to specific items are limited to the same type or
character of those specific items is not applicable in the Loan Documents,
(g) references to any Person include that Person’s heirs, personal
representatives, successors, trustees, receivers, and permitted assigns,
(h) references to any Legal Requirement include every amendment or
supplement to it, rule and regulation adopted under it, and successor or
replacement for it, and (i) references to any Loan Document or other
document include every renewal and extension of it, amendment and supplement to
it, and replacement or substitution for it.

 

1.4          Time References.
 Unless otherwise specified in the Loan
Documents (a) time references are to time in Dallas, Texas, and
(b) in calculating a period from one date to another, the word “from” means “from and including” and the word “to” or “until”
means “to but excluding.”

 

1.5          Letter
of Credit Amounts.  Unless
otherwise specified herein, the amount of a Letter of Credit at any time shall
be deemed to be the stated amount of such Letter of Credit in effect at such
time; provided, however, that
with respect to any Letter of Credit that, by its terms or the terms of any
Issuer Document related thereto, provides for one or more automatic increases
in the stated amount thereof, the amount of such Letter of Credit shall be
deemed to be the maximum stated amount of such Letter of Credit after giving
effect to all such increases, whether or not such maximum stated amount is in
effect at such time.

 

1.6          Changes
in GAAP.  If at any time any
change in GAAP would affect the computation of any financial ratio, covenant,
or requirement set forth in any Loan Document, and either Borrower or the
Requisite Lenders shall so request, Administrative Agent, the Lenders and
Borrower shall negotiate in good faith to amend such ratio or requirement to
preserve the original intent thereof in light of such change in GAAP (subject
to the approval of the Requisite Lenders); provided
that, until so amended, (i) such ratio or requirement shall
continue to be computed in accordance with GAAP prior to such change therein
and (ii) Borrower shall provide to Administrative Agent and the Lenders
financial statements and other documents required under this Agreement or as
reasonably requested hereunder

 

26

 

setting forth a reconciliation between
calculations of such ratio or requirement made before and after giving effect
to such change in GAAP.

 

SECTION 2

AMOUNTS AND TERMS OF COMMITMENTS AND LOANS

 

2.1          Revolving Credit Facility; Making of Committed
Loans; Register; Optional Notes.

 

(a)           Revolving Credit Facility.  Subject to the terms and conditions in the
Loan Documents, each Lender severally but not jointly agrees to lend to
Borrower one (1) or more loans under the Revolving Credit Facility (each such
loan, a “Committed Loan”),
which Borrower may borrow, repay, and reborrow under this Agreement, subject to
the following conditions:

 

(i)            each
Committed Loan requested by Borrower hereunder must occur on a Business Day and
no later than the Business Day immediately preceding the Maturity Date;

 

(ii)           each
Committed Loan requested by Borrower that will be (i) a Base Rate Loan
must be in an amount not less than $1,000,000 or a greater integral multiple of
$250,000 or, if less, the Unused Commitment, and (ii) a Eurodollar Rate
Loan must be in an amount not less than $5,000,000 or a greater integral
multiple of $1,000,000;

 

(iii)         the
Commitment Usage may not exceed the Total Commitment; and

 

(iv)          the sum of (without duplication)
(A) each Lender’s Principal Debt plus
(B) such Lender’s Commitment Percentage of the Letter of Credit Exposure
may not exceed such Lender’s Commitment.

 

(b)           Borrowing Mechanics.

 

(i)            With
respect to Committed Loans to be made on any Funding Date, Borrower shall
deliver to Administrative Agent a Notice of Borrowing no later than 11:00 a.m.
(Dallas, Texas time) at least three (3) Business Days in advance of the Funding
Date (in the case of a Eurodollar Rate Loan) or at least one (1) Business Day
in advance of the Funding Date (in the case of a Base Rate Loan) and shall
specify (A) the proposed Funding Date, (B) the amount of the
Committed Loans requested, (C) whether such Committed Loans shall be
Eurodollar Rate Loans or Base Rate Loans, and (D) in the case of Committed
Loans to be made as Eurodollar Rate Loans, the initial Interest Period requested
therefore.  In lieu of delivering the
above described Notice of Borrowing, Borrower may give Administrative Agent
telephonic notice by the required time of any proposed borrowing under this Section 2.1(b); provided that such notice shall be
promptly confirmed in writing by delivery of a Notice of Borrowing to
Administrative Agent on or before the Funding Date.

 

(ii)           Neither
Administrative Agent nor any Lender shall incur any liability to Borrower in
acting upon any telephonic notice referred to above that Administrative Agent
believes in good faith to have been given by a duly authorized officer or other
Person authorized to borrow on behalf of Borrower or for otherwise acting in
good faith under this Section 2.1(b),
and upon the funding of Committed Loans by Lenders in accordance with this
Agreement

 

27

 

pursuant to any such telephonic
notice, Borrower shall have effected Committed Loans hereunder.

 

(iii)         Borrower
shall notify Administrative Agent prior to the funding of any Committed Loan in
the event that any of the matters to which Borrower is required to certify in
the applicable Notice of Borrowing is no longer true and correct in all
material respects as of the Funding Date, and the acceptance by Borrower of the
proceeds of each Committed Loan shall constitute a re-certification by
Borrower, as of the Funding Date, as to the matters to which Borrower is
required to certify in the applicable Notice of Borrowing.

 

(iv)          Except
as otherwise provided in Sections 2.7(b),
2.7(c),
and 2.7(g), a Notice of Borrowing for a Eurodollar
Rate Loan (or telephonic notice in lieu thereof) shall be irrevocable on and
after the related Interest Rate Determination Date, and Borrower shall be bound
to make a borrowing in accordance therewith.

 

(c)           Disbursement of Funds.

 

(i)            The
Committed Loans under this Agreement shall be made by Lenders simultaneously
and proportionately to their respective Commitment Percentage, it being
understood that no Lender shall be responsible for any default by any other
Lender in such other Lender’s obligation to make a Committed Loan requested
hereunder nor shall the Commitment of any Lender be increased or decreased as a
result of a default by any other Lender in such other Lender’s obligation to
make a Committed Loan requested hereunder. 
Promptly after receipt by Administrative Agent of a Notice of Borrowing
pursuant to Section 2.1(c)
(or telephonic notice in lieu thereof), Administrative Agent shall notify each
Lender of the proposed borrowing.  Each
Lender shall make the amount of its Committed Loan available to Administrative
Agent not later than 11:00 a.m. (Dallas, Texas time) on the Funding Date, in
same day funds in Dollars, at the Funding and Payment Office.

 

(ii)           Unless
Administrative Agent shall have received notice from a Lender prior to the
proposed date of any Committed Loan that such Lender will not make available to
Administrative Agent such Lender’s share of such Committed Loan, then
Administrative Agent may assume that such Lender has made such share available
on such date in accordance with Section 2.1(c)(i) and may, in reliance upon such
assumption, make available to Borrower a corresponding amount.  In such event, if a Lender has not in fact
made its share of the applicable Committed Loan available to Administrative
Agent, then the applicable Lender and Borrower severally agree to pay to
Administrative Agent forthwith on demand such corresponding amount in
immediately available funds with interest thereon, for each day from and
including the date such amount is made available to Borrower to but excluding
the date of payment to Administrative Agent, at (A) in the case of a
payment to be made by such Lender, the greater of the Federal Funds Effective
Rate and a rate determined by Administrative Agent in accordance with banking
industry rules on interbank compensation and (B) in the case of a payment
to be made by Borrower, the interest rate applicable to Base Rate Loans.  If Borrower and such Lender shall pay such
interest to Administrative Agent for the same or an overlapping period, then
Administrative Agent shall promptly remit to Borrower the amount of such
interest paid by Borrower for such period. 
Any payment by Borrower shall be without prejudice to any claim Borrower
may have against a Lender that shall have failed to make such payment to
Administrative Agent.

 

28

 

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

 

A
notice of Administrative Agent to any Lender or Borrower with respect to any
amount owing under subsections (ii) and (iii) above shall be conclusive, absent
manifest error.

 

(d)           The Register.

 

(i)            Administrative
Agent shall maintain, at its address referred to in Section 9.6, a
register for the recordation of the names and addresses of Lenders and the
Commitment and Loans of each Lender from time to time (the “Register”).  The Register shall be available for
inspection by Borrower or any Lender at any reasonable time and from time to
time upon reasonable prior notice.

 

(ii)           Administrative
Agent shall record in the Register the Commitment and Loans of each
Lender.  Any such recordation shall be
conclusive and binding on Borrower and each Lender, absent manifest error; provided that failure to make any such recordation,
or any error in such recordation, shall not affect Borrower’s Obligations in
respect of the applicable Loans.

 

(iii)         Each
Lender shall record on its internal records (including, without limitation, any
Note held by such Lender) the amount of Loans made by it and each payment in
respect thereof.  Any such recordation
shall be conclusive and binding on Borrower, absent manifest error; provided that failure to make any such
recordation, or any error in such recordation, shall not affect Borrower’s Obligations
in respect of the Loans; and provided
further that in the event of any inconsistency between the Register
and any Lender’s records, the recordations in the Register shall govern.

 

(iv)          Borrower
and each of the Credit Parties shall deem and treat the Persons listed as
Lenders in the Register as the holders and owners of the corresponding
Commitments and Loans listed therein for all purposes hereof, and no assignment
or transfer of any such Commitments and Loans shall be effective, in each case unless
and until an Assignment Agreement effecting the assignment or transfer thereof
shall have been accepted by Administrative Agent and recorded in the Register
as provided in Section 9.1(b)(ii).  Prior to such recordation, all amounts owed
with respect to the applicable Commitments and Loans shall be owed to Lenders
listed in the Register as the owners thereof, and any request, authority, or
consent of any Person who, at the time of making such request or giving such
authority or consent, is listed in the Register as a Lender shall be conclusive
and binding on any subsequent holder, assignee, or transferee of the
corresponding Commitments and Loans.

 

29

 

(v)            Borrower
hereby designates Administrative Agent to serve as Borrower’s agent solely for
purposes of maintaining the Register as provided in this Section 2.1(d), and Borrower hereby agrees that, to the
extent Administrative Agent serves in such capacity, Administrative Agent and
its Representatives shall constitute Indemnitees for all purposes under Section 9.2.

 

2.2          Letters of Credit.

 

(a)           The Letter of Credit
Commitment.

 

(i)            Subject
to the terms and conditions set forth herein, (A) the Issuing Bank agrees,
in reliance upon the agreements of the Lenders set forth in this Section 2.2, (1)
from time to time on any Business Day during the period from the Closing Date
until the Letter of Credit Expiration Date, to issue Letters of Credit for the
account of Borrower or its Subsidiaries, and to amend or extend Letters of
Credit previously issued by it, in accordance with subsection (b) below,
and (2) to honor drawings under the Letters of Credit; and (B) the Lenders
severally agree to participate in Letters of Credit issued for the account of
Borrower or its Subsidiaries and any drawings thereunder; provided  that
after giving effect to any L/C Credit Extension with respect to any Letter of
Credit, (x) the Commitment Usage shall not exceed the Total Commitment, (y) the
aggregate outstanding amount of the Committed Loans of any Lender plus such Lender’s Commitment Percentage
of the aggregate outstanding amount of the Swing Line Loans plus such Lender’s Commitment Percentage
of the Letter of Credit Exposure shall not exceed such Lender’s Commitment, and
(z) the Letter of Credit Exposure shall not exceed the Letter of Credit
Sublimit.  Each request by Borrower for
the issuance or amendment of a Letter of Credit shall be deemed to be a
representation by Borrower that the L/C Credit Extension so requested complies
with the conditions set forth in the proviso to the preceding sentence.  Within the foregoing limits, and subject to
the terms and conditions hereof, Borrower’s ability to obtain Letters of Credit
shall be fully revolving, and accordingly Borrower may, during the foregoing
period, obtain Letters of Credit to replace Letters of Credit that have expired
or that have been drawn upon and reimbursed. 
All Existing Letters of Credit shall be deemed to have been issued
pursuant hereto, and from and after the Closing Date shall be subject to and
governed by the terms and conditions hereof.

 

(ii)           The
Issuing Bank shall not issue any Letter of Credit, if:

 

(A)          subject
to Section 2.2(b)(iii),
the expiry date of such requested Letter of Credit would occur more than twelve
months after the date of issuance or last extension, unless the Requisite
Lenders have approved such expiry date; or

 

(B)          the
expiry date of such requested Letter of Credit would occur after the Letter of
Credit Expiration Date, unless all the Lenders have approved such expiry date.

 

(iii)         The
Issuing Bank shall not be under any obligation to issue any Letter of Credit
if:

 

(A)          any
order, judgment or decree of any Governmental Authority or arbitrator shall by
its terms purport to enjoin or restrain the Issuing Bank from issuing such
Letter of Credit, or any Legal Requirement applicable to the Issuing Bank or
any request or directive (whether or not having the force of law) from any
Governmental Authority with jurisdiction over the Issuing Bank shall prohibit,
or request that the

 

30

 

Issuing Bank refrain from, the issuance of letters of credit generally
or such Letter of Credit in particular or shall impose upon the Issuing Bank
with respect to such Letter of Credit any restriction, reserve or capital
requirement (for which the Issuing Bank is not otherwise compensated hereunder)
not in effect on the Closing Date, or shall impose upon the Issuing Bank any
unreimbursed loss, cost or expense which was not applicable on the Closing Date
and which the Issuing Bank in good faith deems material to it;

 

(B)          the
issuance of such Letter of Credit would violate one or more policies of general
application of the Issuing Bank;

 

(C)          such
Letter of Credit is to be denominated in a currency other than Dollars; and

 

(D)          a
default of any Lender’s obligations to fund under Section 2.2(c) exists or any Lender
is at such time a Defaulting Lender hereunder, unless the Issuing Bank has
entered into satisfactory arrangements with Borrower or such Lender to
eliminate the Issuing Bank’s risk with respect to such Lender.

 

(iv)          The
Issuing Bank shall not amend any Letter of Credit if the Issuing Bank would not
be permitted at such time to issue such Letter of Credit in its amended form
under the terms hereof.

 

(v)            The
Issuing Bank shall be under no obligation to amend any Letter of Credit if the
beneficiary of such Letter of Credit does not accept the proposed amendment to
such Letter of Credit.

 

(vi)          The
Issuing Bank shall act on behalf of the Lenders with respect to any Letters of
Credit issued by it and the documents associated therewith, and the Issuing
Bank shall have all of the benefits and immunities (A) provided to
Administrative Agent in Section 8
with respect to any acts taken or omissions suffered by the Issuing Bank in
connection with Letters of Credit issued by it or proposed to be issued by it
and Issuer Documents pertaining to such Letters of Credit as fully as if the
term “Administrative Agent” as used in Section 8 included the Issuing Bank with
respect to such acts or omissions, and (B) as additionally provided herein with
respect to the Issuing Bank.

 

(b)           Procedures
for Issuance and Amendment of Letters of Credit; Auto-Extension Letters of
Credit.

 

(i)            Each
Letter of Credit shall be issued or amended, as the case may be, upon the
request of Borrower delivered to the Issuing Bank (with a copy to
Administrative Agent) in the form of a Letter of Credit Application,
appropriately completed and signed by a responsible officer of Borrower.  Such Letter of Credit Application must be
received by the Issuing Bank and Administrative Agent not later than 11:00 a.m.
at least two (2) Business Days (or such later date and time as Administrative
Agent and the Issuing Bank may agree in a particular instance in their sole
discretion) prior to the proposed issuance date or date of amendment, as the
case may be.  In the case of a request
for an initial issuance of a Letter of Credit, such Letter of Credit Application
shall specify in form and detail satisfactory to the Issuing Bank: (A) the
proposed issuance date of the requested Letter of Credit (which shall be a
Business Day); (B) the amount thereof; (C) the expiry date thereof; (D) the
name and address of the beneficiary thereof; (E) the documents to be

 

31

 

presented by such beneficiary in case of any drawing thereunder; (F)
the full text of any certificate to be presented by such beneficiary in case of
any drawing thereunder; and (G) such other matters as the Issuing Bank may
require.  In the case of a request for an
amendment of any outstanding Letter of Credit, such Letter of Credit
Application shall specify in form and detail satisfactory to the Issuing Bank
(A) the Letter of Credit to be amended; (B) the proposed date of amendment
thereof (which shall be a Business Day); (C) the nature of the proposed
amendment; and (D) such other matters as the Issuing Bank may require.  Additionally, Borrower shall furnish to the
Issuing Bank and Administrative Agent such other documents and information
pertaining to such requested Letter of Credit issuance or amendment, including
any Issuer Documents, as the Issuing Bank or Administrative Agent may require.

 

(ii)           Promptly
after receipt of any Letter of Credit Application, the Issuing Bank will
confirm with Administrative Agent (by telephone or in writing) that
Administrative Agent has received a copy of such Letter of Credit Application
from Borrower and, if not, the Issuing Bank will provide Administrative Agent
with a copy thereof.  Unless the Issuing
Bank has received written notice from any Lender, Administrative Agent or any
Loan Party, at least one Business Day prior to the requested date of issuance
or amendment of the applicable Letter of Credit, that one or more applicable
conditions contained in Section 3
shall not then be satisfied, then, subject to the terms and conditions hereof,
the Issuing Bank shall, on the requested date, issue a Letter of Credit for the
account of Borrower (or the applicable Subsidiary) or enter into the applicable
amendment, as the case may be, in each case in accordance with the Issuing Bank’s
usual and customary business practices. 
Immediately upon the issuance of each Letter of Credit, each Lender
shall be deemed to, and hereby irrevocably and unconditionally agrees to,
purchase from the Issuing Bank a risk participation in such Letter of Credit in
an amount equal to the product of such Lender’s Pro Rata Share times the amount of such Letter of Credit.

 

(iii)         If
Borrower so requests in any applicable Letter of Credit Application, the
Issuing Bank agrees to issue a Letter of Credit that has automatic extension
provisions (each, an “Auto-Extension
Letter of Credit”); provided
that any such Auto-Extension Letter of Credit must permit the Issuing Bank to
prevent any such extension at least once in each twelve-month period
(commencing with the date of issuance of such Letter of Credit) by giving prior
notice to the beneficiary thereof not later than a day (the “Non-Extension Notice Date”)
in each such twelve-month period to be agreed upon at the time such Letter of
Credit is issued.  Unless otherwise
directed by the Issuing Bank, Borrower shall not be required to make a specific
request to the Issuing Bank for any such extension.  Once an Auto-Extension Letter of Credit has
been issued, the Lenders shall be deemed to have authorized (but may not
require) the Issuing Bank to permit the extension of such Letter of Credit at
any time to an expiry date not later than the Letter of Credit Expiration Date;
provided, however, that the Issuing Bank shall not
permit any such extension if (A) the Issuing Bank has determined that it would
not be permitted, or would have no obligation, at such time to issue such
Letter of Credit in its revised form (as extended) under the terms hereof (by
reason of the provisions of clause (ii) or (iii) of Section 2.2(a)
or otherwise), or (B) it has received notice (which may be by telephone or in
writing) on or before the day that is five (5) Business Days before the Non-Extension
Notice Date from Administrative Agent, any Lender or Borrower that one or more
of the applicable conditions specified in Section 3.2 is not then satisfied, and
in each such case directing the Issuing Bank not to permit such extension.

 

(iv)          Promptly
after its delivery of any Letter of Credit or any amendment to a Letter of
Credit to an advising bank with respect thereto or to the beneficiary thereof,
the Issuing Bank will also deliver to Borrower and Administrative Agent a true
and complete copy of such Letter

 

32

 

of Credit or amendment.

 

(c)           Drawings
and Reimbursements; Funding of Participations.

 

(i)            Upon
receipt from the beneficiary of any Letter of Credit of any notice of a drawing
under such Letter of Credit, the Issuing Bank shall notify Borrower and
Administrative Agent thereof.  Not later
than 11:00 a.m. on the date of any payment by the Issuing Bank under a Letter
of Credit (each such date, an “Honor Date”), Borrower shall reimburse the Issuing Bank
through Administrative Agent in an amount equal to the amount of such
drawing.  If Borrower fails to so
reimburse the Issuing Bank by such time, Administrative Agent shall promptly
notify each Lender of the Honor Date, the amount of the unreimbursed drawing
(the “Unreimbursed
Amount”), and the amount of such Lender’s Pro Rata Share
thereof.  In such event, Borrower shall
be deemed to have requested a Committed Loan bearing interest at the Base Rate
to be disbursed on the Honor Date in an amount equal to the Unreimbursed
Amount, without regard to the minimum and multiples specified in Section 2.1 for
the principal amount of Base Rate Loans, but subject to the amount of the
unutilized portion of the Total Commitment and the conditions set forth in Section 3.2
(other than the delivery of a Notice of Borrowing).  Any notice given by the Issuing Bank or
Administrative Agent pursuant to this Section 2.2(c)(i) may be given by
telephone if immediately confirmed in writing; provided
that the lack of such an immediate confirmation shall not affect the
conclusiveness or binding effect of such notice.

 

(ii)           Each
Lender shall upon any notice pursuant to Section 2.2(c)(i) make funds available
to Administrative Agent for the account of the Issuing Bank in an amount equal
to its Pro Rata Share of the Unreimbursed Amount not later than 1:00 p.m. on
the Business Day specified in such notice by Administrative Agent, whereupon,
subject to the provisions of Section 2.2(c)(iii), each Lender that so makes
funds available shall be deemed to have made a Committed Loan to Borrower in
such amount.  Administrative Agent shall
remit the funds so received to the Issuing Bank.

 

(iii)         With
respect to any Unreimbursed Amount that is not fully refinanced by a Committed
Loan because the conditions set forth in Section 3.2 cannot be satisfied or for
any other reason, Borrower shall be deemed to have incurred from the Issuing
Bank an L/C Borrowing in the amount of the Unreimbursed Amount that is not so
refinanced, which L/C Borrowing shall be due and payable on demand (together
with interest) and shall bear interest at the rate set forth in Section 2.3(e).  In such event, each Lender’s payment to
Administrative Agent for the account of the Issuing Bank pursuant to Section 2.2(c)(ii)
shall be deemed payment in respect of its participation in such L/C Borrowing
and shall constitute an L/C Advance from such Lender in satisfaction of its
participation obligation under this Section 2.2.

 

(iv)          Until
each Lender funds its Committed Loan or L/C Advance pursuant to this Section 2.2(c)
to reimburse the Issuing Bank for any amount drawn under any Letter of Credit,
interest in respect of such Lender’s Pro Rata Share of such amount shall be
solely for the account of the Issuing Bank.

 

(v)            Each
Lender’s obligation to make Committed Loans or L/C Advances to reimburse the
Issuing Bank for amounts drawn under Letters of Credit, as contemplated by this
Section 2.2(c),
shall be absolute and unconditional and shall not be affected by any
circumstance, including (A) any setoff, counterclaim, recoupment, defense or
other right which such Lender may have against the Issuing Bank, Borrower or
any other Person for any reason whatsoever;

 

33

 

(B) the occurrence or continuance of a Potential Default or Event of
Default, or (C) any other occurrence, event or condition, whether or not
similar to any of the foregoing; provided,
however, that each Lender’s
obligation to make Committed Loans pursuant to this Section 2.2(c)
is subject to the conditions set forth in Section 3.2 (other than delivery by
Borrower of a Notice of Borrowing).  No
such making of an L/C Advance shall relieve or otherwise impair the obligation
of Borrower to reimburse the Issuing Bank for the amount of any payment made by
the Issuing Bank under any Letter of Credit, together with interest as provided
herein.

 

(vi)          If
any Lender fails to make available to Administrative Agent for the account of
the Issuing Bank any amount required to be paid by such Lender pursuant to the
foregoing provisions of this Section 2.2(c) by the time specified in Section 2.2(c)(ii),
then the Issuing Bank shall be entitled to recover from such Lender (acting
through Administrative Agent), on demand, such amount with interest thereon for
the period from the date such payment is required to the date on which such
payment is immediately available to the Issuing Bank at a rate per annum equal
to the greater of the Federal Funds Rate and a rate determined by the Issuing
Bank in accordance with banking industry rules on interbank compensation.  A certificate of the Issuing Bank submitted
to any Lender (through Administrative Agent) with respect to any amounts owing
under this clause (vi) shall be conclusive absent manifest error.

 

(d)           Repayment
of Participations.

 

(i)            At
any time after the Issuing Bank has made a payment under any Letter of Credit
and has received from any Lender such Lender’s L/C Advance in respect of such
payment in accordance with Section 2.2(c),
if Administrative Agent receives for the account of the Issuing Bank any
payment in respect of the related Unreimbursed Amount or interest thereon
(whether directly from Borrower or otherwise, including proceeds of Cash
Collateral applied thereto by Administrative Agent), Administrative Agent will
distribute to such Lender its Pro Rata Share thereof (appropriately adjusted,
in the case of interest payments, to reflect the period of time during which
such Lender’s L/C Advance was outstanding) in the same funds as those received
by Administrative Agent.

 

(ii)           If
any payment received by Administrative Agent for the account of the Issuing
Bank pursuant to Section 2.2(c)(i)
is required to be returned under any of the circumstances described in Section 9.9
(including pursuant to any settlement entered into by the Issuing Bank in its
discretion), each Lender shall pay to Administrative Agent for the account of
the Issuing Bank its Pro Rata Share thereof on demand of Administrative Agent,
plus interest thereon from the date of such demand to the date such amount is
returned by such Lender, at a rate per annum equal to the Federal Funds Rate
from time to time in effect.  The
obligations of the Lenders under this clause shall survive the payment in full
of the Obligations and the termination of this Agreement.

 

(e)           Obligations
Absolute.  The obligation of
Borrower to reimburse the Issuing Bank for each drawing under each Letter of
Credit and to repay each L/C Borrowing shall be absolute, unconditional and
irrevocable, and shall be paid strictly in accordance with the terms of this
Agreement under all circumstances, including the following:

 

(i)            any
lack of validity or enforceability of such Letter of Credit, this Agreement, or
any other Loan Document;

 

(ii)           the
existence of any claim, counterclaim, setoff, defense or other right that

 

34

 

Borrower or any Subsidiary may have at any time against any beneficiary
or any transferee of such Letter of Credit (or any Person for whom any such
beneficiary or any such transferee may be acting), the Issuing Bank or any
other Person, whether in connection with this Agreement, the transactions
contemplated hereby or by such Letter of Credit or any agreement or instrument
relating thereto, or any unrelated transaction;

 

(iii)         any
draft, demand, certificate or other document presented under such Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any respect
or any statement therein being untrue or inaccurate in any respect; or any loss
or delay in the transmission or otherwise of any document required in order to
make a drawing under such Letter of Credit;

 

(iv)          any
payment by the Issuing Bank under such Letter of Credit against presentation of
a draft or certificate that does not strictly comply with the terms of such
Letter of Credit; or any payment made by the Issuing Bank under such Letter of
Credit to any Person purporting to be a trustee in bankruptcy,
debtor-in-possession, assignee for the benefit of creditors, liquidator,
receiver or other representative of or successor to any beneficiary or any
transferee of such Letter of Credit, including any arising in connection with
any proceeding under the Bankruptcy Code or any similar proceeding; or

 

(v)            any
other circumstance or happening whatsoever, whether or not similar to any of
the foregoing, including any other circumstance that might otherwise constitute
a defense available to, or a discharge of, Borrower or any Subsidiary.

 

Borrower shall promptly examine a copy of each Letter of Credit and each
amendment thereto that is delivered to it and, in the event of any claim of
noncompliance with Borrower’s instructions or other irregularity, Borrower will
promptly notify the Issuing Bank. 
Borrower shall be conclusively deemed to have waived any such claim
against the Issuing Bank and its correspondents unless such notice is given as
aforesaid.

 

(f)            Role
of Issuing Bank.  Issuing Bank
agrees with Borrower that it will exercise the same degree of care and
attention to each Letter of Credit that it gives to other letters of credit
issued by it.  Each Lender and Borrower
agree that, in paying any drawing under a Letter of Credit, the Issuing Bank
shall not have any responsibility to obtain any document (other than any sight
draft, certificates and documents expressly required by the Letter of Credit)
or to ascertain or inquire as to the validity or accuracy of any such document
or the authority of the Person executing or delivering any such document.  None of the Issuing Bank, Administrative
Agent, any Agent-Related Person nor any correspondent, participant or assignee
of the Issuing Bank shall be liable to any Lender for (i) any action taken or
omitted in connection herewith at the request or with the approval of the
Lenders or the Requisite Lenders, as applicable; (ii) any action taken or
omitted in the absence of gross negligence or willful misconduct; or (iii) the
due execution, effectiveness, validity or enforceability of any document or
instrument related to any Letter of Credit or Issuer Document.  Borrower hereby assumes all risks of the acts
or omissions of any beneficiary or transferee with respect to its use of any
Letter of Credit; provided that
the Issuing Bank has acted in good faith and in accordance with the rules of
the ISP and the UCP; and provided further,
that this assumption is not intended to, and shall not, preclude Borrower’s
pursuing such rights and remedies as it may have against the beneficiary or
transferee at law or under any other agreement. 
None of the Issuing Bank, Administrative Agent, any of their respective
Agent-Related Persons nor any correspondent, participant or assignee of the
Issuing Bank shall be liable or responsible for any of the matters described in
clauses (i) through (v) of Section 2.2(e);
provided, however, that anything in such clauses to
the contrary notwithstanding, Borrower may have a claim against the Issuing
Bank, and the

 

35

 

Issuing Bank may be liable to Borrower, to the extent, but only to the
extent, of any direct, as opposed to consequential or exemplary, damages
suffered by Borrower which Borrower proves were caused by the Issuing Bank’s
(a) willful misconduct or gross negligence or (b) the Issuing Bank’s willful
failure to pay under any Letter of Credit after the presentation to it by the
beneficiary of a sight draft and certificate(s) strictly complying with the
terms and conditions of a Letter of Credit. 
In furtherance and not in limitation of the foregoing, the Issuing Bank
may accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary, and the Issuing Bank shall not be responsible for
the validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign a Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason.

 

(g)           Cash
Collateral.  Upon the request of
Administrative Agent, (i) if the Issuing Bank has honored any full or partial
drawing request under any Letter of Credit and such drawing has resulted in an
L/C Borrowing, or (ii) if, as of the Letter of Credit Expiration Date, any
Letter of Credit Exposure for any reason remains outstanding, then Borrower
shall, in each case, immediately Cash Collateralize the then outstanding Letter
of Credit Exposure.  For purposes of this
Section 2.2,
“Cash Collateralize”
means to pledge and deposit with or deliver to Administrative Agent, for the
benefit of the Issuing Bank and the Lenders, as collateral for the Letter of
Credit Exposure, cash or deposit account balances pursuant to documentation in
form and substance satisfactory to Administrative Agent and the Issuing Bank (which
documents are hereby consented to by the Lenders).  Derivatives of such term have corresponding
meanings.  Borrower hereby grants to
Administrative Agent, for the benefit of the Issuing Bank and the Lenders, a
security interest in all such cash, deposit accounts and all balances therein
and all proceeds of the foregoing.  Cash
Collateral shall be maintained in blocked, non-interest bearing deposit
accounts at Administrative Agent.

 

(h)           Applicability
of ISP and UCP. Unless otherwise expressly agreed by the Issuing Bank
and Borrower when a Letter of Credit is issued (including any such agreement
applicable to an Existing Letter of Credit), the rules of the ISP and UCP shall
apply to each standby Letter of Credit.

 

(i)            Letter
of Credit Fees.  Borrower shall
pay to Administrative Agent for the account of each Lender in accordance with
its Pro Rata Share a Letter of Credit fee (the “Letter of Credit Fee”) equal to the
Applicable Margin times the daily
amount available to be drawn under such Letter of Credit.  For purposes of computing the daily amount
available to be drawn under any Letter of Credit, the amount of such Letter of
Credit shall be determined in accordance with Section 1.5.  Letter of Credit Fees shall be (i) computed
on a quarterly basis in arrears and (ii) due and payable on the first (1st)
Business Day after the end of each March, June, September and December,
commencing with the first (1st) such date to occur after the
issuance of such Letter of Credit, on the Maturity Date and thereafter on demand.  If there is any change in the Applicable Rate
during any quarter, the daily amount available to be drawn under each Letter of
Credit shall be computed and multiplied by the Applicable Rate separately for
each period during such quarter that such Applicable Margin was in effect.  Notwithstanding anything to the contrary
contained herein, upon the request of the Requisite Lenders, while any Event of
Default exists, all Letter of Credit Fees shall accrue at the rate set forth in
Section 2.3(e).

 

(j)            Fronting
Fee and Documentary and Processing Charges Payable to Issuing Bank.  Borrower shall pay directly to the Issuing
Bank for its own account a fronting fee with respect to each Letter of Credit,
at the rate per annum specified in the Fee Letter, computed on the daily amount
available to be drawn under such Letter of Credit on a quarterly basis in
arrears, and due and payable on the first (1st) Business Day after
the end of each March, June, September and December, commencing with the
first (1st) such date to occur after the issuance of such Letter of
Credit, on the Letter of Credit Expiration

 

36

 

Date and thereafter on demand. 
For purposes of computing the daily amount available to be drawn under
any Letter of Credit, the amount of such Letter of Credit shall be determined
in accordance with Section 1.5.  In addition, Borrower shall pay directly to
the Issuing Bank for its own account the customary issuance, presentation,
amendment and other processing fees, and other standard costs and charges, of
the Issuing Bank relating to letters of credit as from time to time in
effect.  Such customary fees and standard
costs and charges are due and payable on demand and are nonrefundable.

 

(k)           Conflict
with Issuer Documents.  In the
event of any conflict between the terms hereof and the terms of any Issuer
Document, the terms hereof shall control.

 

(l)            Letters of Credit Issued for Subsidiaries.  Notwithstanding that a Letter of Credit
issued or outstanding hereunder is in support of any obligations of, or is for
the account of, a Subsidiary, Borrower shall be obligated to reimburse the
Issuing Bank hereunder for any and all drawings under such Letter of
Credit.  Borrower hereby acknowledges
that the issuance of Letters of Credit for the account of Subsidiaries inures
to the benefit of Borrower, and that Borrower’s business derives substantial
benefits from the businesses of such Subsidiaries.

 

2.3          Interest on the
Committed Loans.

 

(a)           Rate
of Interest.

 

(i)            Subject
to the provisions of Sections 2.7
and 2.8, the
Committed Loans shall bear interest on the unpaid Principal Debt from the date
made through maturity (whether by acceleration or otherwise) at a rate
determined by reference to the Base Rate or the Adjusted Eurodollar Rate, as
the case may be.  The applicable basis
for determining the rate of interest with respect to any Committed Loan shall
be selected by Borrower initially at the time a Notice of Borrowing is given
with respect to such Committed Loan pursuant to Section 2.1(b).  The
basis for determining the interest rate with respect to any Committed Loan may
be changed from time to time pursuant to Section 2.3(d).
 If on any day a Committed
Loan is outstanding with respect to which notice has not been delivered to
Administrative Agent in accordance with the terms of this Agreement specifying
the applicable basis for determining the rate of interest, then for that day
such Committed Loan shall bear interest determined by reference to the Base
Rate.

 

(ii)           Subject
to the provisions of Sections 2.3(e)
and 2.8, the
Committed Loans shall bear interest through maturity as follows:

 

(A)          if a Base Rate Loan,
then at the sum of the Base Rate plus the Applicable Margin for Base Rate
Loans; or

 

(B)          if a Eurodollar Rate
Loan, then at the sum of the
Adjusted Eurodollar Rate plus the
Applicable Margin for Eurodollar Rate Loans.

 

(b)           Interest Periods.  In connection with each Eurodollar Rate Loan,
Borrower may, pursuant to the applicable Notice of Borrowing or Notice of
Conversion/Continuation, as the case may be, select an interest period (each an
“Interest Period”)
to be applicable to such Committed Loan, which Interest Period shall be, at
Borrower’s option, either a one (1), two (2), three (3), or six (6) month
period; provided that:

 

37

 

(i)            the
initial Interest Period for the Eurodollar Rate Loan shall commence on the
Funding Date in respect of such Committed Loan, in the case of a Committed Loan
initially made as a Eurodollar Rate Loan, or on the date specified in the
applicable Notice of Conversion/Continuation, in the case of a Committed Loan
converted to a Eurodollar Rate Loan;

 

(ii)           in
the case of immediately successive Interest Periods applicable to a Eurodollar
Rate Loan continued as such pursuant to a Notice of Conversion/Continuation,
each successive Interest Period shall commence on the day on which the next
preceding Interest Period expires;

 

(iii)         if an Interest Period would otherwise
expire on a day that is not a Business Day, then such Interest Period shall
expire on the next succeeding Business Day; provided
that, if any Interest Period would otherwise expire on a day that is
not a Business Day but is a day of the month after which no further Business
Day occurs in such month, then such Interest Period shall expire on the next
preceding Business Day;

 

(iv)          any
Interest Period that begins on the last Business Day of a calendar month (or on
a day for which there is no numerically corresponding day in the calendar month
at the end of such Interest Period) shall, subject to Section 2.3(b)(v), end on the last
Business Day of a calendar month;

 

(v)            there
shall be no more than five (5) Interest Periods outstanding at any time; and

 

(vi)          if
Borrower fails to specify an Interest Period for any Eurodollar Rate Loan in
the applicable Notice of Borrowing or Notice of Conversion/Continuation, then
Borrower shall be deemed to have selected an Interest Period of one (1) month.

 

(c)           Interest Payments.  Subject to the provisions of Section 2.3(d),
interest on each Loan shall be payable in arrears on and to each Interest
Payment Date applicable to such Loan, upon any prepayment of such Loan (to the
extent accrued on the amount being prepaid) and at maturity (including final
maturity); provided, however,
that if any Loans that are Base Rate Loans are prepaid pursuant to Section 2.5(b),
then interest on such Loans through the date of such prepayment shall be
payable on the next succeeding Interest Payment Date applicable to Base Rate
Loans (or, if earlier, upon the final termination for any reason of the Total
Commitment).

 

(d)           Conversion or Continuation.

 

(i)            Subject
to the provisions of Section 2.7,
Borrower shall have the option (A) to convert at any time all or any part
of the outstanding Committed Loans equal to $5,000,000 or a greater integral
multiple of $1,000,000 from Committed Loans bearing interest at a rate
determined by reference to one basis to Committed Loans bearing interest at a
rate determined by reference to an alternative basis, or (B) upon the
expiration of any Interest Period applicable to a Eurodollar Rate Loan, to
continue all or any portion of such Committed Loan (together with other
Committed Loans) equal to $5,000,000 or a greater integral multiple of
$1,000,000 as a Eurodollar Rate Loan; provided,
however, that a Eurodollar Rate Loan may only be converted into a
Base Rate Loan on the expiration date of an Interest Period applicable thereto.

 

(ii)           Borrower
shall deliver a Notice of Conversion/Continuation to Administrative Agent no
later than 11:00 a.m. (Dallas, Texas time) at least one (1) Business Day
in advance of the proposed conversion date (in the case of a conversion to a
Base Rate Loan) and at least three (3)

 

38

 

Business Days
in advance of the proposed conversion/continuation date (in the case of a
conversion to, or a continuation of, a Eurodollar Rate Loan).  A Notice of Conversion/Continuation shall
specify (A) the proposed conversion/continuation date (which shall be a
Business Day), (B) the amount and type of the Committed Loan to be
converted/continued, (C) the nature of the proposed
conversion/continuation, (D) in the case of a conversion to, or a
continuation of, a Eurodollar Rate Loan, the requested Interest Period, and
(E) in the case of a conversion to, or a continuation of, a Eurodollar
Rate Loan, that no Potential Default or Event of Default has occurred and is
continuing.  In lieu of delivering the
above-described Notice of Conversion/Continuation, Borrower may give
Administrative Agent telephonic notice by the required time of any proposed
conversion/continuation under this Section 2.3(d); provided that such notice shall be
promptly confirmed in writing by delivery of a Notice of
Conversion/Continuation to Administrative Agent on or before the proposed
conversion/continuation date.

 

(iii)         Neither Administrative Agent nor any
Lender shall incur any liability to Borrower in acting upon any telephonic
notice referred to above that Administrative Agent believes in good faith to
have been given by a duly authorized officer or other person authorized to act
on behalf of Borrower or for otherwise acting in good faith under this Section 2.3(c),
and upon conversion or continuation of the applicable basis for determining the
interest rate with respect to any Committed Loans in accordance with this
Agreement pursuant to any such telephonic notice Borrower shall have effected a
conversion or continuation, as the case may be, hereunder.

 

(iv)          Except
as otherwise provided in Sections 2.7(b), 2.7(c),
and 2.7(g), a Notice
of Conversion/Continuation for conversion to, or continuation of, a Eurodollar
Rate Loan (or telephonic notice in lieu thereof) shall be irrevocable on and
after the related Interest Rate Determination Date, and Borrower shall be bound
to effect a conversion or continuation in accordance therewith.

 

(e)           Default Rate.  Upon the occurrence and during the
continuation of any Event of Default, the outstanding Principal Debt and, to
the extent permitted by applicable Legal Requirements, any interest payments
thereon not paid when due and any fees and other amounts then due and payable
hereunder, shall thereafter bear interest (including post-petition interest in
any proceeding under the Bankruptcy Code or other applicable bankruptcy laws)
payable upon demand at a rate that is two percent (2%) per annum in excess of
the interest rate otherwise payable under this Agreement with respect to the
applicable Loans (or, in the case of any such fees and other amounts, at a rate
which is two percent (2%) per annum in excess of the interest rate otherwise
payable under this Agreement for Base Rate Loans); provided that in the case of Eurodollar Rate Loans, upon the
expiration of the Interest Period in effect at the time any such increase in
interest rate is effective such Eurodollar Rate Loans shall thereupon become
Base Rate Loans and shall thereafter bear interest payable upon demand at a
rate which is two percent (2%) per annum in excess of the interest rate
otherwise payable under this Agreement for Base Rate Loans.  Payment or acceptance of the increased rates
of interest provided for in this Section 2.3(e)
is not a permitted alternative to timely payment and shall not
constitute a waiver of any Event of Default or otherwise prejudice or limit any
rights or remedies of Administrative Agent or any Lender.

 

(f)            Computation of Interest.  Interest on the Loans, and all fees payable
under this Agreement and the other Loan Documents, shall be computed on the
basis of a 360-day year, in each case for the actual number of days elapsed in
the period during which it accrues.  In
computing interest on any Loan, the date of the making of such Loan or the
first (1st) day of an Interest Period applicable to such

 

39

 

Loan or, with respect to a Base Rate Loan being converted from a
Eurodollar Rate Loan, the date of conversion of such Eurodollar Rate Loan to
such Base Rate Loan, as the case may be, shall be included, and the date of
payment of such Loan or the expiration date of an Interest Period applicable to
such Loan or, with respect to a Base Rate Loan being converted to a Eurodollar
Rate Loan, the date of conversion of such Base Rate Loan to such Eurodollar
Rate Loan, as the case may be, shall be excluded; provided that if a Loan is repaid on the same day on which
it is made, one (1) day’s interest shall be paid on such Loan.

 

(g)           Maximum Rate.  Regardless of any provision contained in any
Loan Document or any document related thereto, it is the intent of the parties
to this Agreement that neither Administrative Agent nor any Lender contract
for, charge, take, reserve, receive, or apply, as interest on all or any part
of the Obligations any amount in excess of the Maximum Rate or the Maximum Amount
or receive any unearned interest in violation of any applicable Legal
Requirements, and, if Administrative Agent or Lenders ever do so, then any
excess shall be treated as a partial repayment or prepayment of the Principal
Debt and any remaining excess shall be refunded to Borrower.  In determining if the interest paid or
payable exceeds the Maximum Rate, Borrower, Administrative Agent, and Lenders
shall, to the maximum extent permitted under applicable Legal Requirements,
(i) treat all Loans as but a single extension of credit (and
Administrative Agent, Lenders, and Borrower agree that is the case and that
provision in this Agreement for multiple Loans is for convenience only),
(ii) characterize any non-principal payment as an expense, fee, or premium
rather than as interest, (iii) exclude voluntary repayments or prepayments
and their effects (solely for purposes of this calculation), and
(iv) amortize, prorate, allocate, and spread the total amount of interest
throughout the entire contemplated term of the Obligations.  However, if the Obligations are paid in full
before the end of its full contemplated term, and if the interest received for
its actual period of existence exceeds the Maximum Amount, then Lenders shall
refund any excess (and Lenders may not, to the extent permitted by Legal
Requirements, be subject to any penalties provided by any Legal Requirements
for contracting for, charging, taking, reserving, or receiving interest in
excess of the Maximum Amount).  If the
Legal Requirements of the State of Texas are applicable for purposes of
determining the “Maximum Rate” or
the “Maximum Amount,” then those
terms mean the “weekly ceiling”
from time to time in effect under Texas
Finance Code § 303.001, as amended, as limited by Texas Finance Code § 303.009, as
amended.  Borrower agrees that Chapter 346 of the Texas Finance Code, as amended (which
regulates certain revolving credit loan accounts and revolving tri-party
accounts), does not apply to the Obligations.

 

2.4          Fees.

 

(a)           Administrative Agent and Arranger Fees.  Borrower shall pay to Administrative
Agent and Arranger the fees specified in the Fee Letter.

 

(b)           Unused Fees.  Borrower shall pay to Administrative Agent,
for the ratable account of Lenders, a quarterly unused fee (prorated for
partial quarters) equal to the sum of the
amounts obtained by multiplying the daily Unused Commitment times one-quarter of one percent (0.25%)
per annum.  Such commitment fee shall
accrue commencing on the Closing Date, and shall be due and payable on the last
day of each March, June, September, and December during the term hereof,
commencing on June 30, 2005, and on the Maturity Date, based upon the
Unused Commitment for each day during the quarter ending on such date.  Solely for purposes of this Section 2.4(b),
“ratable” means, for any
calculation period, with respect to any Lender, the proportion that
(i) the daily Unused Commitment of such Lender during such period bears to
(ii) the aggregate amount of the daily Unused Commitment of all Lenders
during such period.

 

40

 

(c)           Issuing Bank’s Fees.  As an inducement for the issuance (including,
without limitation, the extension) of each Letter of Credit, Borrower agrees to
pay the fees described in Sections
2.2(i) and (j).

 

2.5          Scheduled Payments, Prepayments, and Reductions.

 

(a)           Scheduled Payment.

 

(i)            Committed
Loans.  The Principal Debt of the
Committed Loans is due and payable on the Maturity Date.

 

(ii)           Swing
Line Loans.  The Principal Debt
of each Swing Line Loan is due and payable on the earlier to occur of (i) the
date five (5) Business Days after such Loan is made and (ii) the Maturity Date.

 

(b)           Voluntary Prepayments.

 

(i)            Prepayment
of Committed Loans.  Borrower
may, upon not less than one (1) Business Day prior written or telephonic
notice in the case of Base Rate Loans, or three (3) Business Days’ prior
written or telephonic notice in the case of Eurodollar Rate Loans, given to
Administrative Agent and, if given by telephone, promptly confirmed in writing
to Administrative Agent (which original written or telephonic notice
Administrative Agent will promptly transmit by telefacsimile or telephone to
each Lender), at any time and from time to time prepay any Committed Loans on
any Business Day in whole or in part in an aggregate minimum amount of
$1,000,000 or a greater integral multiple of $250,000 (or such lesser amount
representing payment in full of all Principal Debt); provided, however, that if Borrower repays any Eurodollar
Rate Loan prior to the expiration of the Interest Period applicable thereto,
then Borrower shall be obligated to pay the amounts required pursuant to Section 2.7(d).  Notice of prepayment having been given as
aforesaid, the principal amount of the Committed Loans specified in such notice
shall become due and payable on the prepayment date specified therein.

 

(ii)           Prepayment
of Swing Line Loans.  Borrower
may, upon notice to Swing Line Lender (with a copy to Administrative Agent), at
any time or from time to time, voluntarily prepay Swing Line Loans in whole or
in part without premium or penalty; provided
that (i) such notice must be received by Swing Line Lender and
Administrative Agent not later than 1:00 p.m. on the date of the prepayment,
and (ii) any such prepayment shall be in a minimum principal amount of
$1,000,000 or a greater integral multiple of $100,000 (or such lesser amount
representing payment in full of all Swing Line Loans).  Each such notice shall specify the date and
amount of such prepayment.  If such
notice is given by Borrower, Borrower shall make such prepayment and the
payment amount specified in such notice shall be due and payable on the date
specified therein.

 

(c)           General Provisions Regarding Payments.

 

(i)            Manner and Time of Payment.  All payments by Borrower of principal,
interest, fees, and other Obligations hereunder and under the Notes shall be
made in Dollars in same day funds, without defense, setoff, or counterclaim,
free of any restriction or condition, and delivered to Administrative Agent not
later than 12:00 noon (Dallas, Texas time) on the date due at the Funding and
Payment Office for the account of Lenders; funds received by Administrative

 

41

 

Agent after
that time on such due date shall be deemed to have been paid by Borrower on the
next succeeding Business Day.

 

(ii)           Application of Payments to Principal and Interest.  All payments in respect of the Principal Debt
of any Loan shall include payment of accrued interest on the Principal Debt
being repaid or prepaid, and all such payments shall be applied to the payment
of interest before application to Principal Debt.

 

(iii)         Application of Prepayments
to Base Rate Loans and Eurodollar Rate Loans.  Any prepayment shall be applied first (1st)
to Base Rate Loans made for the purpose specified, if any, to the full extent
thereof before application to Eurodollar Rate Loans, in each case in a manner
which minimizes the amount of any payments required to be made by Borrower
pursuant to Section 2.7(d).

 

(iv)          Apportionment of Payments.  Aggregate principal and interest payments in
respect of the Loans shall be apportioned among all outstanding Loans to which
such payments relate, in each case proportionately to Lenders’ respective Pro
Rata Shares.  Administrative Agent shall
promptly distribute to each Lender, at its primary address set forth on Schedule 2.1
or at such other address as such Lender may request, its Pro Rata Share of all
such payments received by Administrative Agent. Notwithstanding the foregoing
provisions of this Section 2.5(c)(iv),
if, pursuant to the provisions of Section 2.7(c), any Notice of
Conversion/Continuation is withdrawn as to any Affected Lender or if any
Affected Lender makes Base Rate Loans in lieu of its Commitment Percentage of
any Eurodollar Rate Loans, then Administrative Agent shall give effect thereto
in apportioning payments received thereafter.

 

(v)            Payments on Business Days.  Whenever any payment to be made hereunder
shall be stated to be due on a day that is not a Business Day, such payment
shall be made on the next succeeding Business Day and such extension of time
shall be included in the computation of the payment of interest hereunder, as
the case may be.

 

(vi)          Notation of Payment.  Each Lender agrees that before disposing of any
Note held by it, or any part thereof (other than by granting participations
therein), such Lender will make a notation thereon of the Loans evidenced by
that Note and all principal payments previously made thereon and of the date to
which interest thereon has been paid; provided
that the failure to make (or any error in the making of) a notation
of the Loans made under such Note shall not limit or otherwise affect the
obligations of Borrower hereunder or under such Note with respect to the Loans
or any payments of principal or interest on such Note.

 

(vii)         Payments to Lenders.  Administrative Agent shall pay to each Lender
any payment or prepayment to which such Lender is entitled hereunder on the
same day Administrative Agent shall have received the same from Borrower; provided that such payment or prepayment
is received by Administrative Agent prior to 12:00 noon (Dallas, Texas
time), and otherwise before 12:00 noon (Dallas, Texas time) on the
Business Day next following.  If and to the
extent Administrative Agent shall not make such payments to Lenders when due as
set forth in the preceding sentence, then such unpaid amounts shall accrue
interest, payable by Administrative Agent, at the Federal Funds Effective Rate
from time to time in effect from the due date until (but not including) the
date on which Administrative Agent makes such payments to Lenders.

 

42

 

2.6          Use
of Proceeds.

 

(a)           Loans and Letters of Credit.  The proceeds of the Loans shall be applied by
Borrower, and Letters of Credit shall be issued for the account of Borrower,
for the purposes described in the Recitals.

 

(b)           Margin Regulations.  No portion of the proceeds of any Loan under
this Agreement shall be used by any Company in any manner that would cause the
Loans or the application of such proceeds to violate Regulation U, Regulation T, or Regulation X of the Board of
Governors of the Federal Reserve System or any other regulation of such Board
or to violate the Exchange Act, in each case as in effect on the date or dates
of such Loans and such use of proceeds.

 

2.7          Special
Provisions Governing Eurodollar Rate Loans.  Notwithstanding any other provision of this
Agreement to the contrary, the following provisions shall govern with respect
to Eurodollar Rate Loans as to the matters covered:

 

(a)           Determination of Applicable Interest Rate.  As soon as practicable after 10:00 a.m.
(Dallas, Texas time) on each Interest Rate Determination Date, Administrative
Agent shall determine (which determination shall, absent manifest error, be
final, conclusive, and binding upon all parties) the interest rate that shall
apply to the Eurodollar Rate Loans for which an interest rate is then being
determined for the applicable Interest Period and shall promptly give notice
thereof (in writing or by telephone confirmed in writing) to Borrower and each
Lender.

 

(b)           Inability to Determine Applicable Interest Rate.  If Administrative Agent shall have determined
(which determination shall be final and conclusive and binding upon all parties
hereto), on any Interest Rate Determination Date with respect to any Eurodollar
Rate Loans, that by reason of circumstances affecting the interbank Eurodollar
market, adequate and fair means do not exist for ascertaining the interest rate
applicable to such Loans on the basis provided for in the definition of
Adjusted Eurodollar Rate or Eurodollar Rate, then Administrative Agent shall on
such date give notice (by telefacsimile or by telephone confirmed in writing)
to Borrower and each Lender of such determination, whereupon (i) no Loans
may be made as, or converted to, Eurodollar Rate Loans until such time as
Administrative Agent notifies Borrower and Lenders that the circumstances
giving rise to such notice no longer exist, and (ii) any Notice of
Borrowing or Notice of Conversion/Continuation given by Borrower with respect
to the Loans in respect of which such determination was made shall be deemed to
be rescinded by Borrower.

 

(c)           Illegality or Impracticability of Eurodollar Rate
Loans.  If on any date any
Lender shall have determined (which determination shall be final and conclusive
and binding upon all parties hereto but shall be made only after consultation
with Borrower and Administrative Agent) that the making, maintaining, or continuation
of its Eurodollar Rate Loans (i) has become unlawful as a result of
compliance by such Lender in good faith with any Legal Requirements (or would
conflict with any such Legal Requirement not having the force of law even
though the failure to comply therewith would not be unlawful), or (ii) has
become impracticable, or would cause such Lender material hardship, as a result
of contingencies occurring after the date of this Agreement which materially
and adversely affect the interbank Eurodollar market or the position of such
Lender in that market, then, and in any such event, such Lender shall be an “Affected Lender”
and it shall on that day give notice (by telefacsimile or by telephone
confirmed in writing) to Borrower and Administrative Agent of such
determination (which notice Administrative Agent shall promptly transmit to
each other Lender).  Thereafter
(A) the obligation of the Affected Lender to make Committed Loans as, or
to convert Committed Loan to, Eurodollar Rate

 

43

 

Loans shall be suspended until such notice shall be withdrawn by the
Affected Lender, (B) to the extent such determination by the Affected
Lender relates to a Eurodollar Rate Loan then being requested by Borrower
pursuant to a Notice of Borrowing or a Notice of Conversion/Continuation, the
Affected Lender shall make such Committed Loan as (or convert such Committed
Loan to, as the case may be) a Base Rate Loan, (C) the Affected Lender’s
obligation to maintain its outstanding Eurodollar Rate Loans (the “Affected Loans”)
shall be terminated at the earlier to occur of the expiration of the Interest
Period then in effect with respect to the Affected Loans or when required by
law, and (D) the Affected Loans shall automatically convert into Base Rate
Loans on the date of such termination. 
Notwithstanding the foregoing, to the extent a determination by an
Affected Lender as described above relates to a Eurodollar Rate Loan then being
requested by Borrower pursuant to a Notice of Borrowing or a Notice of
Conversion/Continuation, Borrower shall have the option, subject to the
provisions of Section 2.7(d),
to rescind such Notice of Borrowing or Notice of Conversion/Continuation as to
all Lenders by giving notice (by telefacsimile or by telephone confirmed in
writing) to Administrative Agent of such rescission on the date on which the
Affected Lender gives notice of its determination as described above (which
notice of rescission Administrative Agent shall promptly transmit to each other
Lender).  Except as provided in the
immediately preceding sentence, nothing in this Section 2.7(c) shall affect the
obligation of any Lender other than an Affected Lender to make or maintain
Committed Loans as, or to convert Committed Loans to, Eurodollar Rate Loans in
accordance with the terms of this Agreement.

 

(d)           Compensation For Breakage or Non-Commencement of
Interest Periods. 
Borrower shall compensate each Lender, upon written request by such
Lender (which request shall set forth the basis for requesting such amounts),
for all reasonable losses, expenses, and liabilities (including, without
limitation, any interest paid by such Lender to lenders of funds borrowed by it
to make or carry its Eurodollar Rate Loans and any loss, expense, or liability
sustained by such Lender in connection with the liquidation or reemployment of
such funds) which such Lender may sustain: (i) if for any reason (other
than a default by such Lender) a borrowing of any Eurodollar Rate Loan does not
occur on a date specified therefor in a Notice of Borrowing or a telephonic
request for borrowing, or a conversion to or continuation of any Eurodollar
Rate Loan does not occur on a date specified therefor in a Notice of
Conversion/ Continuation or a telephonic request for conversion or continuation
(unless such borrowing or conversion does not occur by reason of the inability
to determine the applicable interest rate as provided in Section 2.7(b) and the illegality or
impracticability to make Eurodollar Rate Loans as provided in Section 2.7(c));
(ii) if any prepayment or other principal payment or any conversion of any
of its Eurodollar Rate Loans occurs on a date prior to the last day of an
Interest Period applicable to such Committed Loan; (iii) if any prepayment
of any of its Eurodollar Rate Loans is not made on any date specified in a
notice of prepayment given by Borrower; or (iv) as a consequence of any
other default by Borrower in the repayment of its Eurodollar Rate Loans when
required by the terms of this Agreement.

 

(e)           Booking of Eurodollar Rate Loans.  Any Lender may make, carry, or transfer
Eurodollar Rate Loans at, to, or for the account of any of its branch offices
or the office of an Affiliate of such Lender.

 

(f)            Assumptions Concerning Funding of Eurodollar Rate
Loans.  Calculation of all
amounts payable to a Lender under this Section 2.7
and under Section 2.8(a)
shall be made as though such Lender had actually funded each of
its relevant Eurodollar Rate Loans through the purchase of a Eurodollar deposit
bearing interest at the rate obtained pursuant to the definition of
Eurocurrency Rate in an amount equal to the amount of such Eurodollar Rate Loan
and having a maturity comparable to the relevant Interest Period and through
the transfer of such Eurodollar deposit from an offshore office of such Lender
to a domestic office of such Lender in the United States of America; provided, however, that each Lender may
fund each of its Eurodollar Rate Loans in any manner it sees fit and the
foregoing

 

44

 

assumptions shall be utilized only for the purposes of calculating
amounts payable under this Section 2.7 and under Section 2.8(a).

 

(g)           Eurodollar Rate Loans After Default.  After the occurrence of and during the
continuation of a Potential Default or an Event of Default, (i) Borrower
may not elect to have a Committed Loan be made or maintained as, or converted
to, a Eurodollar Rate Loan after the expiration of any Interest Period then in
effect for such Loan, and (ii) subject to the provisions of Section 2.7(d),
any Notice of Borrowing or Notice of Conversion/Continuation given by Borrower
with respect to a requested borrowing or conversion/continuation that has not
yet occurred shall be deemed to be rescinded by Borrower.

 

2.8          Increased
Costs; Taxes; Capital Adequacy.

 

(a)           Compensation for Increased Costs and Taxes.  Subject to the provisions of Section 2.8(b),
if any Lender shall determine (for Loans hereunder and other similar loans made
by such Lender to borrowers similarly situated as Borrower) (which
determination shall, absent manifest error, be final and conclusive and binding
upon all parties hereto) that any Legal Requirement, or any change therein or
in the interpretation, administration, or application thereof (including the introduction
of any new Legal Requirement), or any determination of any Governmental
Authority, in each case that becomes effective after the date hereof, or
compliance by such Lender with any guideline, request or directive issued or
made after the date hereof by any central bank or other Governmental Authority
or quasi-Governmental Authority (whether or not having the force of law):

 

(i)            subjects
such Lender (or its applicable lending office) to any additional Tax (other
than any Tax on the overall net income of such Lender) with respect to this
Agreement or any of its obligations hereunder or any payments to such Lender
(or its applicable lending office) of principal, interest, fees, or any other
amount payable hereunder;

 

(ii)           imposes,
modifies, or holds applicable any reserve (including without limitation any
marginal, emergency, supplemental, special, or other reserve), special deposit,
compulsory loan, FDIC insurance, or similar requirement against assets held by,
or deposits or other liabilities in or for the account of, or advances or loans
by, or other credit extended by, or any other acquisition of funds by, any
office of such Lender (other than any such reserve or other requirements with
respect to Eurodollar Rate Loans that are reflected in the definition of
Adjusted Eurodollar Rate); or

 

(iii)         imposes any other condition (other than
with respect to a Tax matter) on or affecting such Lender (or its applicable
lending office) or its obligations hereunder or the interbank Eurodollar
market;

 

and
the result of any of the foregoing is to increase the cost to such Lender of
agreeing to make, making, or maintaining Loans hereunder or to reduce any
amount received or receivable by such Lender (or its applicable lending office)
with respect thereto; then, in any such case, Borrower shall promptly pay to
such Lender, upon receipt of the statement referred to in the next sentence,
such additional amount or amounts (in the form of an increased rate of, or a
different method of calculating, interest or otherwise as such Lender in its
sole discretion shall determine) as may be necessary to compensate such Lender
for any such increased cost or reduction in amounts received or receivable
hereunder.  Such Lender shall deliver to
Borrower (with a copy to Administrative Agent) as soon as practicable (but in
any event within one hundred and twenty (120) days) after such Lender obtains
actual knowledge of the event or condition

 

45

 

prompting
such Lender to make such determination a written statement, setting forth in
reasonable detail the basis for calculating the additional amounts owed to such
Lender under this Section 2.8(a),
which statement shall be conclusive and binding upon all parties hereto absent
manifest error.  Borrower shall not be
liable for any such amount that accrues between the date such statement is
required to be given and the date such statement is actually given.

 

(b)           Withholding
of Taxes.

 

(i)            Payments to Be Free and Clear.  All sums payable by Borrower under this
Agreement and the other Loan Documents shall be paid free and clear of and
(except to the extent required by any Legal Requirement) without any deduction
or withholding on account of any Tax (other than a Tax on the overall net
income of any Lender) imposed, levied, collected, withheld, or assessed by or
within the United States of America or any political subdivision in or of the
United States of America or any other jurisdiction from or to which a payment
is made by or on behalf of Borrower or by any federation or organization of
which the United States of America or any such jurisdiction is a member at the
time of payment.

 

(ii)           Grossing-up of Payments.  If Borrower or any other Person is
required by any Legal Requirement to make any deduction or withholding on
account of any such Tax (other than a Tax on the overall net income of any
Lender) from any sum paid or payable by Borrower to Administrative Agent or any
Lender under any of the Loan Documents:

 

(A)          Borrower shall
notify Administrative Agent of any such requirement or any change in any such
requirement as soon as Borrower becomes aware of it;

 

(B)          Borrower shall pay
any such Tax before the date on which penalties attach thereto, such payment to
be made (if the liability to pay is imposed on Borrower) for its own account or
(if that liability is imposed on Administrative Agent or such Lender, as the
case may be) on behalf of and in the name of Administrative Agent or such
Lender;

 

(C)          the sum payable by
Borrower in respect of which the relevant deduction, withholding, or payment is
required shall be increased to the extent necessary to ensure that, after the
making of that deduction, withholding, or payment, Administrative Agent or such
Lender, as the case may be, receives on the due date a net sum equal to what it
would have received had no such deduction, withholding, or payment been
required or made (but net of any tax credit realized by Administrative Agent or
such Lender); and

 

(D)          within thirty (30)
days after paying any sum from which it is required by law to make any
deduction or withholding, and within thirty (30) days after the due date of
payment of any Tax which it is required by Section 2.8(b)(ii)(B) to pay, Borrower
shall deliver to Administrative Agent evidence satisfactory to the other
affected parties of such deduction, withholding, or payment and of the
remittance thereof to the relevant taxing or other authority;

 

provided that no such additional amount shall be required to be paid to any Lender
under Section 2.8(b)(ii)(C)
except to the extent that any change after the date hereof (in
the case of each Lender listed on the signature pages hereof) or after the date
of the Assignment Agreement pursuant to which such Lender became a Lender (in
the case of each other Lender) in any such

 

46

 

requirement
for a deduction, withholding, or payment as is mentioned therein shall result
in an increase in the rate of such deduction, withholding, or payment from that
in effect at the date of this Agreement or at the date of such Assignment
Agreement, as the case may be, in respect of payments to such Lender.

 

(iii)         Status of Lenders.  Any Foreign Lender that is entitled to an
exemption from or reduction of withholding tax under the law of the jurisdiction
in which Borrower is resident for tax purposes, or any treaty to which such
jurisdiction is a party, with respect to payments hereunder or under any other
Loan Document shall deliver to Borrower (with a copy to Administrative Agent),
at the time or times prescribed by applicable law or reasonably requested by
Borrower or Administrative Agent, such properly completed and executed
documentation prescribed by applicable law as will permit such payments to be
made without withholding or at a reduced rate of withholding.  In addition, any Lender, if requested by
Borrower or Administrative Agent, shall deliver such other documentation
prescribed by applicable law or reasonably requested by Borrower or
Administrative Agent as will enable Borrower or Administrative Agent to
determine whether or not such Lender is subject to backup withholding or
information reporting requirements.

 

Without limiting the generality of the foregoing, in the event that
Borrower is resident for tax purposes in the United States, any Foreign Lender
shall deliver to each of Borrower and Administrative Agent (in such number of
copies as shall be requested by the recipient, but in no event less than two)
on or prior to the date on which such Foreign Lender becomes a Lender under
this Agreement (and from time to time thereafter as necessary to assure that
such remain current and accurate in all material respects or upon the request
of Borrower or Administrative Agent, but only if such Foreign Lender is legally
entitled to do so), whichever of the following is applicable:

 

(A)          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;

 

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

 

(C)          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 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

 

(D)          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 Borrower to determine the withholding or deduction required to be made.

 

(iv)          Notwithstanding
anything in this Section 2.8
to the contrary, Borrower shall not be required to pay any additional amount in
respect of any deduction or withholding on account of any Tax to any Foreign
Lender to the extent that (A) such deduction or withholding is required

 

47

 

by any Legal Requirement on the date hereof (in the case of any Foreign
Lender listed as a Lender on the signature pages hereof), the date of admission
as a Lender hereunder (in the case of any Foreign Lender that becomes a
Subsequent Lender) or the date of the Assignment Agreement (in the case of any
Foreign Lender that becomes a Lender hereunder by assignment from another
Lender), or (B) to the extent that such withholding or deduction results from
Lender’s failure to furnish or delay in furnishing or correcting and/or
refreshing any document required to be furnished, corrected or refreshed
pursuant to Section 2.8(b)(iii)
for any reason other than the Lender’s lack of legal entitlement to furnish any
such document as a result of any change in any applicable Legal Requirement, or
any change in the interpretation, administration, or application thereof after
such Foreign Lender becomes a Lender hereunder.

 

(c)           Capital Adequacy Adjustment.  If any Lender shall have determined that the
adoption, effectiveness, phase-in, or applicability after the date hereof of
any Legal Requirement (or any provision thereof) regarding capital adequacy, or
any change therein or in the interpretation or administration thereof by any
Governmental Authority charged with the interpretation or administration
thereof, or compliance by any Lender (or its applicable lending office) with
any guideline, request, or directive regarding capital adequacy (whether or not
having the force of law) of any such Governmental Authority, has or would have
the effect of reducing the rate of return on the capital of such Lender or any
corporation controlling such Lender as a consequence of, or with reference to,
such Lender’s Commitment or participations therein or other obligations
hereunder with respect to the Loans to a level below that which such Lender or
such controlling corporation could have achieved but for such adoption,
effectiveness, phase-in, applicability, change, or compliance (taking into
consideration the policies of such Lender or such controlling corporation with
regard to capital adequacy), then from time to time, within five (5) Business Days after receipt by Borrower from such
Lender of the statement referred to in the next sentence, Borrower shall pay to
such Lender such additional amount or amounts as will compensate such Lender or
such controlling corporation on an after-tax basis for such reduction.  Such Lender shall deliver to Borrower (with a
copy to Administrative Agent) a written statement, setting forth in reasonable
detail the basis of the calculation of such additional amounts, which statement
shall be conclusive and binding upon all parties hereto absent manifest error.

 

2.9          Obligation
of Lenders to Mitigate; Replacement of Lenders.

 

(a)           Each
Lender agrees that, as promptly as practicable after the officer of such Lender
responsible for administering the Loans of such Lender, as the case may be,
becomes aware of the occurrence of an event or the existence of a condition
that would cause such Lender to become an Affected Lender under Section 2.7(c) or
that would entitle such Lender to receive payments under Section 2.8, it will, to the extent not inconsistent with
the internal policies of such Lender and any applicable legal or regulatory
restrictions, use reasonable efforts (a) to make, issue, fund, or maintain
the Commitment of such Lender or the affected Loans of such Lender through
another lending office of such Lender or Affiliate, or (b) take such other
measures as such Lender may deem reasonable, if as a result thereof the
circumstances which would cause such Lender to be an Affected Lender would cease
to exist or the additional amounts which would otherwise be required to be paid
to such Lender pursuant to Section 2.8
would be materially reduced and if, as determined by such Lender in its sole
discretion, the making, issuing, funding, or maintaining of such Commitment or
Loans through such other lending office or in accordance with such other
measures, as the case may be, would not otherwise materially adversely affect
such Commitment or Loans or the interests of such Lender; provided that such Lender will not be
obligated to utilize such other lending office pursuant to this Section 2.9
unless Borrower agrees to pay all incremental and reasonable expenses incurred
by such Lender as a result of utilizing such other lending office as described
in clause (a) above.  A certificate as to the amount of any such
expenses

 

48

 

payable by Borrower pursuant to this Section 2.9
(setting forth in reasonable detail the basis for requesting such amount)
submitted by such Lender to Borrower (with a copy to Administrative Agent)
shall be conclusive absent manifest error.

 

(b)           If
any Lender requests compensation under Section 2.8,
or if Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.8,
Borrower may replace such Lender in accordance with Section 9.20.

 

2.10        Security
for the Loans.

 

(a)           Pledge Agreements.  As security for the payment and performance
of the Obligations, on or prior to the Closing Date, (i) Borrower shall
execute and deliver to Administrative Agent the Borrower Pledge Agreement
pursuant to which Borrower shall grant Administrative Agent, for the benefit of
the Credit Parties, a first priority perfected security interest in, and lien
upon, the Stock of each of its Significant Subsidiaries, and (ii) each of
Borrower’s Significant Subsidiaries that, individually or together with any
other Obligor, holds ownership interests in one or more Significant
Subsidiaries shall execute and deliver to Administrative Agent the Subsidiary
Pledge Agreement pursuant to which such Significant Subsidiaries shall grant
Administrative Agent, for the benefit of the Credit Parties, a first priority
perfected security interest in, and lien upon, the Stock of each Significant
Subsidiary owned by each such Significant Subsidiary.

 

(b)           Subsidiary Guaranty.  Each of Borrower’s Significant Subsidiaries
shall execute and deliver to Borrower the Subsidiary Guaranty, pursuant to
which such Significant Subsidiaries shall guaranty all of the Obligations of
Borrower.

 

(c)           Further Assurances.  Borrower hereby agrees to execute and
deliver, and to cause to be executed and delivered, to Administrative Agent, at
Borrower’s sole cost and expense, such replacement guaranties, financing or
continuation statements, third party consents, and such other amendments,
agreements, documents, assignments, statements, or instruments as
Administrative Agent may from time to time reasonably request to evidence,
perfect, or otherwise implement the security for performance and repayment of
the Obligations and the obligations of Borrower’s Significant Subsidiaries
under the Subsidiary Guaranty.  All of
the foregoing shall be reasonably satisfactory in form and substance to Administrative
Agent.

 

(d)           Ratable Security for Pari Passu Indebtedness.  Each Lender acknowledges and agrees that in
the event any Company hereafter incurs Pari Passu Indebtedness, upon written
request by Borrower, such Pari Passu Indebtedness shall be equally and ratably
secured on a pari passu basis with the Obligations.  In furtherance thereof, Administrative Agent
agrees, upon request of Borrower, to enter into (and each Lender hereby
authorizes Administrative Agent to enter into) (a) Pari Passu Collateral
Document Amendments, (b) an Intercreditor Agreement, and (c) such other
documents, instruments and agreements as Borrower shall reasonably request and
Administrative Agent shall approve (such approval to not be unreasonably
withheld) in connection with the incurrence of such Pari Passu Indebtedness and
the securing of the Obligation and the Pari Passu Indebtedness on an equal,
ratable and pari passu basis.

 

2.11        Possible
Increase in Total Commitment.

 

(a)           Lenders
on the Closing Date shall be Lenders set forth on Schedule 2.1 on the Closing Date.

 

49

 

(b)           At
any time after the Closing Date (but not more than two (2) times) and prior to
the date that is ninety (90) days prior to the Maturity Date, Administrative
Agent shall, without the consent of Lenders (except as specified in this Section 2.10),
from time to time at the request of Borrower, increase the Total Commitment by
(i) admitting additional Lenders hereunder (each a “Subsequent Lender”), or (ii) increasing
the Commitment of any Lender (each an “Increasing
Lender”), subject to the following conditions:

 

(A)          each
Subsequent Lender is an Eligible Assignee;

 

(B)          Borrower
executes (x) a new Note payable to the order of a Subsequent Lender, or
(y) a replacement Note payable to the order of an Increasing Lender;

 

(C)          each
Subsequent Lender executes and delivers to Administrative Agent a signature
page to this Agreement;

 

(D)          after
giving effect to the admission of any Subsequent Lender or the increase in the
Commitment of any Increasing Lender, the Total Aggregate Commitment does not
exceed $250,000,000;

 

(E)           each
increase in the Total Commitment shall be in the amount of $10,000,000 or a
greater integral multiple of $1,000,000;

 

(F)           no
admission of any Subsequent Lender shall increase the Commitment of any
existing Lender without the written consent of such Lender;

 

(G)          no
Potential Default or Event of Default exists; and

 

(H)          no
Lender shall be an Increasing Lender without the written consent of such
Lender.

 

After the admission of any Subsequent Lender or increase in the
Commitment of any Increasing Lender, Administrative Agent shall promptly
provide to each Lender and to Borrower a new Schedule 2.1 to this Agreement (and
each Lender acknowledges that its percentage obligation under such Schedule will
change in accordance with its Pro Rata Share determined after giving effect to
the adjustment contemplated in the following sentence and the increase in the
Total Commitment).  In the event that there are any Loans
outstanding after giving effect to an increase in the Total Commitment pursuant
to this Section 2.10,
upon notice from Administrative Agent to each Lender, the amount of such Loans
owing to each Lender shall be appropriately adjusted to reflect the new Pro
Rata Shares of each Lender, and Borrower shall pay any amounts required
pursuant to Section 2.7.

 

2.12        Swing Line Loans.

 

(a)           The Swing Line. 
Subject to the terms and conditions set forth herein, the Swing Line
Lender agrees, in reliance upon the agreements of the other Lenders set forth
in this Section 2.12, to make loans (each such loan, a “Swing Line Loan”) to
Borrower from time to time on any Business Day prior to the Maturity Date in an
aggregate amount not to exceed at any time outstanding the amount of the Swing
Line Sublimit, notwithstanding the fact that such Swing Line Loans, when
aggregated with the Principal Debt and L/C Obligations of the Lender acting as
Swing Line Lender, may exceed the amount of such Lender’s Commitment; provided, however, that after giving
effect to any Swing Line Loan, (i) the

 

50

 

Commitment Usage shall not exceed the Total Commitment, and (ii) the aggregate Principal
Debt of any Lender, plus such
Lender’s Commitment Percentage of the Letter of Credit Exposure, plus such Lender’s Commitment Percentage of
the Principal Debt of all Swing Line Loans shall not exceed such Lender’s
Commitment, and provided, further,
that Borrower shall not use the proceeds of any Swing Line Loan to refinance
any outstanding Swing Line Loan.  Within
the foregoing limits, and subject to the other terms and conditions hereof,
Borrower may borrow under this Section 2.12, prepay under Section 2.5(b),
and reborrow under this Section 2.12.  Each Swing Line Loan shall bear interest at
the Floating Eurodollar Rate. 
Immediately upon the making of a Swing Line Loan, each Lender shall be
deemed to, and hereby irrevocably and unconditionally agrees to, purchase from
the Swing Line Lender a risk participation in such Swing Line Loan in an amount
equal to the product of such Lender’s Commitment Percentage times the amount of
such Swing Line Loan.

 

(b)           Borrowing Procedures.  Each
Swing Line Borrowing shall be made upon Borrower’s irrevocable notice to Swing
Line Lender and Administrative Agent, which may be given by telephone. Each
such notice must be received by Swing Line Lender and Administrative Agent not
later than 1:00 p.m. on the requested borrowing date, and shall specify (i) the
amount to be borrowed, which shall be a minimum of $1,000,000 or a greater
integral multiple of $100,000, and (ii) the requested borrowing date, which
shall be a Business Day.  Each such
telephonic notice must be confirmed promptly by delivery to Swing Line Lender
and Administrative Agent of a written Swing Line Loan Notice, appropriately
completed and signed.  Promptly after
receipt by Swing Line Lender of any telephonic Swing Line Loan Notice, Swing
Line Lender will confirm with Administrative Agent (by telephone or in writing)
that Administrative Agent has also received such Swing Line Loan Notice and, if
not, Swing Line Lender will notify Administrative Agent (by telephone or in
writing) of the contents thereof.  Unless
Swing Line Lender has received notice (by telephone or in writing) from
Administrative Agent (including at the request of any Lender) prior to 2:00
p.m. on the date of the proposed Swing Line Borrowing (A) directing Swing Line
Lender not to make such Swing Line Loan as a result of the limitations set
forth in the proviso to the first sentence of Section 2.12(a), or (B) that one or
more of the applicable conditions specified in Section 3 is not then satisfied,
then, subject to the terms and conditions hereof, Swing Line Lender will, not
later than 3:00 p.m. on the borrowing date specified in such Swing Line Loan
Notice, make the amount of its Swing Line Loan available to Borrower at its
office by crediting the account of Borrower on the books of Swing Line Lender
in immediately available funds.

 

(c)           Refinancing of Swing Line
Loans.

 

(i)            Swing Line Lender at any time in its sole and
absolute discretion may request, on behalf of Borrower (which hereby
irrevocably authorizes Swing Line Lender to so request on its behalf), that
each Lender make a Base Rate Committed Loan in an amount equal to such Lender’s
Commitment Percentage of the amount of Swing Line Loans then outstanding.  Such request shall be made in writing (which
written request shall be deemed to be a Notice of Borrowing for purposes
hereof) and in accordance with the requirements of Section 2.01,
without regard to the minimum and multiples specified therein for the principal
amount of Base Rate Loans, but subject to the unutilized portion of the Total
Commitments and the conditions set forth in Section 3.2.  Swing Line Lender shall furnish Borrower with
a copy of the applicable Notice of Borrowing promptly after delivering such
notice to Administrative Agent.  Each
Lender shall make an amount equal to its Commitment Percentage of the amount
specified in such Notice of Borrowing available to Administrative Agent in
immediately available funds for the account of Swing Line Lender not later than
1:00 p.m. on the day specified in such Notice of Borrowing, whereupon, subject
to Section 2.12(c)(ii),
each Lender that so makes funds available shall be deemed to have made a Base
Rate Committed Loan to Borrower in such amount. 
Administrative

 

51

 

Agent
shall remit the funds so received to Swing Line Lender.

 

(ii)           If for any reason any Swing Line Loan cannot
be refinanced by such a Committed Loan in accordance with Section 2.12(c)(i),
the request for Base Rate Committed Loans submitted by Swing Line Lender as set
forth herein shall be deemed to be a request by Swing Line Lender that each of
the Lenders fund its risk participation in the relevant Swing Line Loan and
each Lender’s payment to the Administrative Agent for the account of Swing Line
Lender pursuant to Section 2.12(c)(i) shall be deemed payment in respect of such
participation.

 

(iii)         If any Lender fails to make available to
Administrative Agent for the account of Swing Line Lender any amount required
to be paid by such Lender pursuant to the foregoing provisions of this Section 2.12(c)
by the time specified in Section 2.12(c)(i),
Swing Line Lender shall be entitled to recover from such Lender (acting through
Administrative Agent), on demand, such amount with interest thereon for the
period from the date such payment is required to the date on which such payment
is immediately available to Swing Line Lender at a rate per annum equal to the
greater of the Federal Funds Rate and a rate determined by Swing Line Lender in
accordance with banking industry rules on interbank compensation.  A certificate of Swing Line Lender submitted
to any Lender (through Administrative Agent) with respect to any amounts owing
under this clause (iii)
shall be conclusive absent manifest error.

 

(iv)          Each Lender’s obligation to make Committed
Loans or to purchase and fund risk participations in Swing Line Loans pursuant
to this Section 2.12(c)
shall be absolute and unconditional and shall not be affected by any
circumstance, including (A) any setoff, counterclaim, recoupment, defense or
other right which such Lender may have against Swing Line Lender, Borrower or
any other Person for any reason whatsoever, (B) the occurrence or continuance
of an Event of Default, or (C) any other occurrence, event or condition,
whether or not similar to any of the foregoing; provided, however, that each Lender’s obligation to make
Committed Loans pursuant to this Section 2.12(c) is subject to the
conditions set forth in Section 3.2.  No such funding of risk participations shall
relieve or otherwise impair the obligation of Borrower to repay Swing Line
Loans, together with interest as provided herein.

 

(d)           Repayment of Participations.

 

(i)            At any time after any Lender has purchased
and funded a risk participation in a Swing Line Loan, if Swing Line Lender
receives any payment on account of such Swing Line Loan, Swing Line Lender will
distribute to such Lender its Commitment Percentage of such payment
(appropriately adjusted, in the case of interest payments, to reflect the
period of time during which such Lender’s risk participation was funded) in the
same funds as those received by Swing Line Lender.

 

(ii)           If any payment received by Swing Line Lender
in respect of principal or interest on any Swing Line Loan is required to be
returned by Swing Line Lender under any of the circumstances described in Section 9.9
(including pursuant to any settlement entered into by Swing Line Lender in its
discretion), each Lender shall pay to Swing Line Lender its Commitment
Percentage thereof on demand of Administrative Agent, plus interest thereon
from the date of such demand to the date such amount is returned, at a rate per
annum equal to the Federal Funds Rate. 
Administrative Agent will make such demand upon the request of Swing
Line Lender.  The obligations of the
Lenders under this clause shall survive the payment in full of the Obligations
and the termination of this Agreement.

 

52

 

(e)           Interest for Account of
Swing Line Lender.  Swing Line Lender shall be responsible for
invoicing Borrower for interest on the Swing Line Loans.  Until each Lender funds its Base Rate
Committed Loan or risk participation pursuant to this Section 2.12 to
refinance such Lender’s Commitment Percentage of any Swing Line Loan, interest
in respect of such Commitment Percentage shall be solely for the account of
Swing Line Lender.

 

(f)            Payments Directly to Swing
Line Lender.  Borrower shall make all payments of principal
and interest in respect of the Swing Line Loans directly to Swing Line Lender.

 

SECTION 3

CONDITIONS PRECEDENT

 

3.1          Conditions
to Initial Loans on the Closing Date. 
The obligations of Lenders to fund the initial Committed Loans, Swing
Line Lender to fund the initial Swing Line Loan, and of Issuing Bank to issue
any Letters of Credit to be made or issued on the Closing Date are subject to
satisfaction of the following conditions precedent on or before the Closing
Date:

 

(a)           Borrower Documents.  Borrower shall deliver or cause to be
delivered to Administrative Agent the following, each, unless otherwise noted,
dated as of the Closing Date:

 

(i)            Certified
copies of its Certificate of Incorporation, together with a good standing
certificate from the Secretary of State of the State of Delaware and each other
state in which it is qualified as a foreign corporation to do business and, to
the extent generally available, a certificate or other evidence of good
standing as to payment of any applicable franchise or similar Taxes from the
appropriate taxing authority of each of such states, each dated a recent date
prior to the Closing Date;

 

(ii)           An
Officer’s Certificate of Borrower certifying (A) its Constituent
Documents, (B) resolutions of its Board of Directors approving and
authorizing the execution, delivery, and performance of this Agreement and the
other Loan Documents, certified as of the Closing Date as being in full force
and effect without modification or amendment, and (C) signatures and
incumbency of its officers executing this Agreement and the other Loan
Documents;

 

(iii)         Executed originals of this Agreement, the
Notes, the Borrower Pledge Agreement, and the other Loan Documents; and

 

(iv)          Such
other documents as Administrative Agent may reasonably request.

 

(b)           Borrower’s Significant Subsidiaries Documents.  Borrower shall deliver or cause to be
delivered to Administrative Agent the following with respect to each of
Borrower’s Significant Subsidiaries, each, unless otherwise noted, dated as of
the Closing Date:

 

(i)            Certified
copies of its charter, together with a good standing certificate from its
jurisdiction of incorporation and of its principal place of business, dated a
recent date prior to the Closing Date;

 

53

 

(ii)           Officer’s
Certificate of Significant Subsidiary certifying (A) its Constituent
Documents, (B) resolutions of its Board of Directors approving and
authorizing the execution, delivery, and performance of the Loan Documents to
which it is a party, certified as of the Closing Date as being in full force
and effect without modification or amendment, and (C) signatures and
incumbency of its officers executing the Loan Documents to which it is a party;

 

(iii)         Executed originals of the Loan Documents
to which it is a party; and

 

(iv)          Such
other documents as Administrative Agent may reasonably request.

 

(c)           Opinions of Counsel for Borrower and Borrower’s
Subsidiaries.  The Credit
Parties and their respective counsel shall have received originally executed
copies of a favorable written opinion of Vinson & Elkins L.L.P., counsel
for the Companies, in form and substance reasonably satisfactory to
Administrative Agent and their counsel, dated as of the Closing Date, and
setting forth substantially the matters in the opinions designated in Exhibit J
and as to such other matters as Administrative Agent, acting on behalf of the
Credit Parties, may reasonably request.

 

(d)           Collateral Documents.  Borrower shall have taken or caused to be
taken such actions in such a manner so that Administrative Agent has a valid
and perfected first priority security interest in the entire Collateral
(subject to Liens consented to in writing by Administrative Agent and Requisite
Lenders with respect to such Collateral and other Liens permitted by Section 6.2)
granted by the Collateral Documents. 
Such actions shall include, without limitation, the delivery pursuant to
the applicable Collateral Documents of such certificates (which certificates
shall be registered in the name of Administrative Agent or properly endorsed in
blank for transfer or accompanied by irrevocable undated stock powers duly
endorsed in blank, all in form and substance satisfactory to Administrative
Agent) representing all of the shares of Stock required to be pledged.

 

(e)           Fees.  Borrower shall have paid to Administrative
Agent, for distribution (as appropriate) to the Credit Parties, the fees
payable on the Closing Date referred to in Section 2.4.

 

(f)            Completion of Proceedings.  All corporate and other proceedings taken or
to be taken in connection with the transactions contemplated hereby and all
documents incidental thereto not previously found acceptable by Administrative
Agent, acting on behalf of Lenders, and its counsel shall be satisfactory in
form and substance to Administrative Agent and such counsel, and Administrative
Agent and such counsel shall have received all such counterpart originals or
certified copies of such documents as Administrative Agent may reasonably
request.

 

54

 

(g)           Termination of Existing Agreements.

 

(i)            The
Existing Credit Agreement shall have terminated by written notice from Borrower
to Administrative Agent.  Each of the
Lenders hereunder that is a Lender under the Existing Credit Agreement hereby
waives the requirement set forth in Section 2.5
of the Existing Credit Agreement that Borrower provide three (3) Business Days
prior to prepayment of the Loans thereunder. 
The waiver set forth herein is limited as provided herein and shall not
be deemed to be a waiver or consent to any deviation from the terms of this
Agreement or the other Loan Documents.

 

(ii)           Borrower
shall have terminated, by written notice from Borrower to Bank of America,
Borrower’s uncommitted line of credit held at Bank of America.

 

3.2          Conditions
to all Loans.  The obligations of
Lenders to make all Committed Loans on each Funding Date (the initial Loans on
the Closing Date), of Swing Line Lender to make any Swing Line Loans (including
on the Closing Date, if any), and of Issuing Bank to issue any Letter of Credit
on each Issuance Date (including the initial issuance of a Letter of Credit, if
any, on the Closing Date) are subject to the following conditions precedent:

 

(a)           Notice of Borrowing.  Administrative Agent, and, in the case of a
Letter of Credit, Issuing Bank, and, in the case of a Swing Line Loan, Swing
Line Lender, shall have received, (i) in accordance with the provisions of Section 2.1(c),
an originally executed Notice of Borrowing or telephonic notice of Borrowing
or, (ii) in accordance with the provisions of Section 2.1(f)(i), an originally
executed Letter of Credit Application, or (iii) in accordance with the
provisions of Section 2.12(b),
an originally executed Swing Line Loan Notice, in each case signed by the chief
executive officer, the chief financial officer, the treasurer, chief accounting
officer, or secretary of Borrower or by any executive officer of Borrower
designated by any of the above-described officers on behalf of Borrower in a
writing delivered to Administrative Agent.

 

(b)           Representations and Warranties; Performance of
Agreements.  The
representations and warranties in Section 4
hereof are true, correct, and complete in all material respects on and as of
the Funding Date or the Issuance Date, as the case may be, to the same extent
as though made on and as of that date (unless such representations and
warranties are, by their express terms, limited to a specific date) and that
Borrower shall have performed in all material respects all agreements and
satisfied all conditions which this Agreement provides shall be performed or
satisfied by it on or before such Funding Date or Issuance Date, except as
otherwise disclosed to and agreed to in writing by Administrative Agent and
Requisite Lenders.

 

(c)           No Default.  No Potential Default or Event of Default
shall have occurred or be caused by the making of such Loans or the Issuance of
any Letter of Credit.

 

(d)           No Injunction or Restraining Order.  No order, judgment, or decree of any
Governmental Authority shall purport to enjoin or restrain any Lender from
making the Loans to be made by it or Issuing Bank from issuing the Letter of
Credit to be issued by it on the Closing Date.

 

55

 

(e)           No Violation.  The making of the Loans requested on such
Funding Date or issuance of the Letter of Credit requested on such Issuance
Date shall not violate any Legal Requirement, including, without limitation, Regulation T, Regulation U, or Regulation X of the Board of Governors of
the Federal Reserve System.

 

SECTION 4

BORROWER’S REPRESENTATIONS AND WARRANTIES

 

In
order to induce Lenders to enter into this Agreement and to induce other
Lenders to purchase participations therein, Borrower represents and warrants to
each Lender that the following statements are true, correct, and complete:

 

4.1          Organization,
Powers, Qualification, Good Standing, Business and Subsidiaries.

 

(a)           Organization and Powers.  Borrower is a corporation duly organized,
validly existing, and in good standing under the laws of the State of
Delaware.  Borrower has all requisite
corporate power and authority to own and operate its properties, to carry on
its business as now conducted and as proposed to be conducted, to enter into
the Loan Documents, and to carry out the transactions contemplated thereby.

 

(b)           Qualification and Good Standing.  Borrower is qualified to do business and is
in good standing in every jurisdiction where its assets are located and
wherever necessary to carry out its business and operations, except in
jurisdictions where the failure to be so qualified or in good standing has not
had and will not have a Material Adverse Effect.

 

(c)           Conduct of Business.  The Companies are engaged only in the
businesses permitted to be engaged in pursuant to Section 6.8.

 

(d)           Subsidiaries.  All of the Subsidiaries of Borrower are
identified in Schedule 4.1-1
(as such Schedule 4.1-1
may be supplemented from time to time pursuant to the provisions of Section 5.1(k)).  The Stock of each of the Subsidiaries of
Borrower identified in Schedule 4.1-1
(as so supplemented) are duly authorized, validly issued, fully paid, and
nonassessable (except for mandatory capital calls in respect of joint venture
interests), as applicable, and none of such Stock constitutes Margin Stock.  Each of the Subsidiaries of Borrower
identified in Schedule 4.1-1 (as
so supplemented) is a corporation duly organized, or a general partnership or
limited partnership or a limited liability company duly formed, and is validly
existing and is in good standing under the laws of its respective jurisdiction
of incorporation or formation set forth therein, has all requisite corporate or
partnership power and authority to own and operate its properties and to carry
on its business as now conducted and as proposed to be conducted, and is
qualified to do business and is in good standing in every jurisdiction where
its assets are located and wherever necessary to carry out its business and
operations, in each case except where the failure to be so qualified or in good
standing or a lack of such corporate or partnership power and authority has not
had and will not have a Material Adverse Effect.  Schedule 4.1-1
(as so supplemented) correctly sets forth the ownership interest of Borrower
and each of its Subsidiaries in each of the Subsidiaries of Borrower identified
therein.

 

56

 

(e)           Significant Subsidiaries.  All of the Significant Subsidiaries of
Borrower are identified in Schedule 4.1-2
(as such Schedule 4.1-2
may be supplemented from time to time pursuant to the provisions of Section 5.1(l)).

 

4.2          Authorization
of Borrowing, Etc.

 

(a)           Authorization of Borrowing.  The execution, delivery, and performance of
the Loan Documents have been duly authorized by all necessary corporate action
on the part of each Obligor.

 

(b)           No Conflict.  The execution, delivery, and performance by
Obligors of the Loan Documents and the consummation of the transactions
contemplated by the Loan Documents do not and will not (i) except as would
not have a Material Adverse Effect, violate any provision of any Legal
Requirement applicable to any Company, the Constituent Documents of any
Company, or any order, judgment, or decree of any Governmental Authority
binding on any Company, (ii) except as would not have a Material Adverse
Effect, conflict with, result in a breach of, or constitute (with due notice or
lapse of time or both) a default under any Contractual Obligation of any
Company, (iii) result in or require the creation or imposition of any Lien
upon any of the properties or assets of any Company (other than any Liens
created under any of the Loan Documents in favor of Administrative Agent, for
the benefit of the Credit Parties), or (iv) require any approval of
stockholders or any approval or consent of any Person under any Contractual
Obligation of any Company, except for such approvals or consents which will be
obtained on or before the Closing Date and disclosed in writing to Lenders.

 

(c)           Governmental Consents.  The execution, delivery, and performance by
Obligors of the Loan Documents and the consummation of the transactions
contemplated by the Loan Documents do not and will not require any registration
with, consent or approval of, or notice to, or other action to, with, or by,
any Governmental Authority except for customary UCC filings and annual,
quarterly and special reports, proxy statements and other information with the
Securities and Exchange Commission pursuant to the Securities Exchange Act of
1934.

 

(d)           Binding Obligation.  Each of the Loan Documents has been duly
executed and delivered by Obligors and is the legally valid and binding
obligation of Obligors, enforceable against Obligors in accordance with its
respective terms, except as may be limited by bankruptcy, insolvency, reorganization,
moratorium, or similar laws relating to or limiting creditors’ rights generally
or by equitable principles relating to enforceability.

 

4.3          Financial
Condition.  Borrower has
heretofore delivered to Lenders, at Lenders’ request, the following financial
statements and information: (a) the audited consolidated balance sheet of
the Consolidated Companies as of December 31, 2004, audited by a certified
public accountant acceptable to Administrative Agent and the related
consolidated statements of income, stockholders’ equity, and cash flows of the
Consolidated Companies for the Fiscal Year then ended, and (b) the
unaudited consolidated balance sheets of the Consolidated Companies as of March 31,
2005, and the related unaudited consolidated statements of income, stockholders’
equity, and cash flows of the Consolidated Companies for the fiscal period then
ended.  All such statements were prepared
in conformity with GAAP and fairly present the financial position (on a
consolidated and, where applicable, consolidating basis) of the entities
described in such financial statements as of the respective dates thereof and
the results of operations and annual cash flows (on a consolidated and, where
applicable, consolidating basis) of the entities described therein for each of
the periods then ended, subject, in the case of any such unaudited financial
statements, to changes resulting from audit and normal year-end adjustments and
the absence of full footnotes.  Quarterly
statements will not reflect audit adjustments. 
As of the Closing Date, Borrower does not (and

 

57

 

will not following the funding of the Loans) have any Contingent
Obligation, contingent liability, or liability for Taxes, long-term lease, or
unusual forward or long-term commitment that is not reflected in the foregoing
financial statements described in clauses (a) and (b) above or the notes thereto or in
Borrower’s periodic reports filed with the Securities and Exchange Commission
and which in any such case is material in relation to the business, operations,
properties, assets, condition (financial or otherwise), or prospects of any
Company.

 

4.4          No
Material Adverse Change; No Restricted Junior Payments.  Since December 31, 2004, (a) no event or
change has occurred that has caused or evidences, either in any case or in the
aggregate, a Material Adverse Effect and (b) no Company has directly or
indirectly declared, ordered, paid, or made, or set apart any sum or property
for, any Restricted Junior Payment or agreed to do so except as permitted by Section 6.3.

 

4.5          Title
to Properties; Liens.  The
Companies have (a) good, sufficient, and legal title to (in the case of
fee interests in real property), (b) valid leasehold interests in (in the
case of leasehold interests in real or personal property), or (c) good
title to (in the case of all other personal property), all of their respective
properties and assets reflected in the financial statements referred to in Section 4.3
or in the most recent financial statements delivered pursuant to Section 5.1,
in each case except for assets disposed of since the date of such financial
statements in the ordinary course of business or as otherwise permitted under Section 6.6.  Except for the Permitted Encumbrances and as
otherwise permitted by this Agreement (including, without limitation, Section 4.17),
all such properties and assets are free and clear of any Liens.

 

4.6          Litigation;
Adverse Facts.  Except as set
forth in Schedule 4.6,
there are no actions, suits, proceedings, arbitrations, or governmental
investigations (whether or not purportedly on behalf of any Company) at law or
in equity or before or by any Governmental Authority, domestic or foreign,
pending or, to the knowledge of Borrower, threatened against or affecting any
Company or any property of any Company that, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect.  No Company is (a) in violation of any
applicable Legal Requirements that, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect, or (b) subject
to or in default with respect to any final judgments, writs, injunctions,
decrees, rules, or regulations of any Governmental Authority, domestic or
foreign, that, individually or in the aggregate, could reasonably be expected
to have a Material Adverse Effect.

 

4.7          Payment
of Taxes.  Except to the extent
permitted by Section 5.3,
all tax returns and reports of the Companies required to be filed by any of
them have been timely filed, and all Taxes, assessments, fees, and other
governmental charges upon the Companies and upon their respective properties,
assets, income, businesses, and franchises which are due and payable have been
paid when due and payable, and Borrower knows of no proposed tax assessment
against any Company, in each case which is not being actively contested by such
Company in good faith and by appropriate proceedings and in which reserves or
other appropriate provisions, if any, as shall be required in conformity with
GAAP, have been made or provided therefor.

 

4.8          Performance
of Agreements; Materially Adverse Agreements.

 

(a)           No
Company is in default in the performance, observance, or fulfillment of any of
the obligations, covenants, or conditions contained in any of its Contractual
Obligations, and no condition or event exists that, with the giving of notice
or the lapse of time or both, would constitute such a default,

 

58

 

except where the consequences, direct or indirect, of such default or
defaults, if any, would not have a Material Adverse Effect.

 

(b)           No
Company is a party to or is otherwise subject to any agreements or instruments
or any charter or other internal restrictions which, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.

 

4.9          Governmental
Regulation.  No Company is
subject to regulation under the Public
Utility Holding Company Act of 1935, the Federal Power Act, or the Investment
Company Act of 1940 or under any other Legal Requirement which may
limit its ability to incur Indebtedness or which may otherwise render all or
any portion of the Obligations unenforceable.

 

4.10        Securities
Activities.  No Company is
engaged principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying any Margin Stock.

 

4.11        Employee
Benefit Plans.

 

(a)           Borrower
and each of its ERISA Affiliates are in compliance in all material respects
with all applicable provisions and requirements of ERISA and the regulations
and published interpretations thereunder with respect to each Employee Benefit
Plan, and have performed all of their obligations in all material respects
under each Employee Benefit Plan.

 

(b)           No
ERISA Event has occurred or is reasonably expected to occur.

 

(c)           Except
to the extent required under Section 4980B
of the Internal Revenue Code or state law conversion right or except as set
forth in Schedule 4.11,
no Employee Benefit Plan provides health or welfare benefits (through the
purchase of insurance or otherwise) for any retired or former employees of
Borrower or any of its ERISA Affiliates (other than health or welfare benefits
that are not material in the aggregate).

 

(d)           As
of the most recent valuation date for any Pension Plan, the amount of unfunded
benefit liabilities (as defined in Section 4001(a)(18)
of ERISA), individually or in the aggregate for all Pension Plans (excluding
for purposes of such computation any Pension Plans with respect to which assets
exceed benefit liabilities), does not exceed $1,000,000.

 

4.12        Certain
Fees.  Except for fees payable
pursuant to the Fee Letter between Borrower and Administrative Agent, no broker’s
or finder’s fee or commission will be payable with respect to this Agreement,
the other Loan Documents, or any of the transactions contemplated hereby, and
Borrower hereby indemnifies the Credit Parties against, and agrees that it will
hold the Credit Parties harmless from, any claim, demand, or liability for any
such broker’s or finder’s fees alleged to have been incurred in connection
herewith or therewith and any expenses (including reasonable fees, expenses,
and disbursements of counsel) arising in connection with any such claim,
demand, or liability.

 

59

 

4.13        Environmental
Protection.  Except as set forth
in Schedule 4.13:

 

(a)           To
the best of Borrower’s knowledge, the operations of each Company (including,
without limitation, all operations and conditions at or in any Real Estate
Investment) comply with all Environmental Laws except to the extent a failure
to comply could not reasonably be expected to have a Material Adverse Effect;

 

(b)           None
of the operations of any Company is subject to any judicial or administrative
proceeding alleging the violation of or liability under any Environmental Laws
which, if adversely determined, could reasonably be expected to have a Material
Adverse Effect; and

 

(c)           No
Company nor any of its Real Estate Investments or operations are subject to any
outstanding written order or agreement with any Governmental Authority or
private party relating to (i) administrative or judicial proceedings
relating to the violation by such Company of any Environmental Laws, or
(ii) any Environmental Claims, in each case which could reasonably be
expected to have a Material Adverse Effect.

 

4.14        Employee
Matters.  There is no strike or
work stoppage in existence or threatened involving any Company that could
reasonably be expected to have a Material Adverse Effect.

 

4.15        Solvency.  Borrower and each of its Significant
Subsidiaries are and, upon the incurrence of any Obligations by Borrower on any
date on which this representation is made, will be, Solvent.

 

4.16        Disclosure.  No representation or warranty of any Company
contained in any Loan Document or in any other document, certificate, or
written statement furnished to the Credit Parties by or on behalf of any
Company for use in connection with the transactions contemplated by this
Agreement contains any untrue statement of a material fact or omits to state a
material fact (known to Borrower, in the case of any document not furnished by
it) necessary in order to make the statements contained herein or therein not
misleading in light of the circumstances in which the same were made.  Any projections and pro forma financial
information contained in such materials are based upon good faith estimates and
assumptions believed by Borrower to be reasonable at the time made, it being
recognized by the Credit Parties that such projections as to future events are
not to be viewed as facts and that actual results during the period or periods
covered by any such projections may differ from the projected results.  There are no facts known (or which should
upon the reasonable exercise of diligence be known) to Borrower (other than
matters of a general economic nature) that, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect and that have
not been disclosed herein or in such other documents, certificates and
statements furnished to the Credit Parties for use in connection with the
transactions contemplated hereby.

 

4.17        Security
Interests.  Upon the filing of
the relevant financing statements with the Secretary of State of the State in
which the party pledging the Collateral is incorporated or formed, as
applicable, and the delivery of the Collateral to Administrative Agent that may
not be perfected by the filing of a financing statement pursuant to Article 9
of the Uniform Commercial Code of the applicable state, the Liens granted to
Administrative Agent, for the benefit of the Credit Parties, by the Obligors
pursuant to the Collateral Documents are perfected, first priority Liens
(except for Permitted Encumbrances) in the Collateral described therein,
including the proceeds and products thereof.

 

60

 

SECTION 5

BORROWER’S AFFIRMATIVE COVENANTS

 

Borrower
covenants and agrees that, so long as any of the Commitments hereunder shall
remain in effect and until payment in full of all of the Loans and the other
Obligations, unless Requisite Lenders shall otherwise give prior written
consent, Borrower shall perform all of the covenants in this Section 5.

 

5.1          Financial
Statements and Other Reports. 
Borrower shall, and shall cause each of its Subsidiaries to, maintain a
system of accounting established and administered in accordance with sound
business practices sufficient to permit preparation of financial statements in
conformity with GAAP.  Borrower shall
deliver to Administrative Agent and Lenders:

 

(a)           Quarterly Financials.  As soon as available and in any event within
forty-five (45) days after the end of each Fiscal Quarter (other than the last
Fiscal Quarter of each Fiscal Year), with respect to the Consolidated Companies
(i) the consolidated balance sheets thereof as of the end of such Fiscal
Quarter and the related consolidated statements of income, stockholders’
equity, and cash flows thereof for such Fiscal Quarter and for the period from
the beginning of the then current Fiscal Year to the end of such Fiscal
Quarter, setting forth in each case in comparative form the corresponding
figures for the corresponding periods of the previous Fiscal Year and the
corresponding figures from the financial plan for the current Fiscal Year, all
in reasonable detail and certified by the chief financial officer of Borrower
that they fairly present the financial condition of the Consolidated Companies,
as of the dates indicated and the results of their operations and their cash
flows for the periods indicated, subject to changes resulting from audit and
normal year-end adjustments, and (ii) a narrative report describing the
operations thereof in the form prepared for presentation to senior management
for such Fiscal Quarter and for the period from the beginning of the then
current Fiscal Year to the end of such Fiscal Quarter;

 

(b)           Year-End Financials.  As soon as available and in any event
within ninety (90) days after the end of each Fiscal Year, with respect to the
Consolidated Companies, (i) the consolidated and consolidating balance
sheets thereof as of the end of such Fiscal Year and the related consolidated
and consolidating statements of income, stockholders’ equity, and cash flows
thereof for such Fiscal Year, setting forth in each case in comparative form
the corresponding figures for the previous Fiscal Year, all in reasonable
detail and certified by the chief financial officer of Borrower that they
fairly present the financial condition of the Companies and as of the dates
indicated and the results of their operations and their cash flows for the
periods indicated, (ii) a narrative report describing the operations
thereof in the form prepared for presentation to senior management for such Fiscal
Year, and (iii) in the case of such consolidated financial statements, a
report thereon of Ernst & Young LLP or other independent certified public
accountants of recognized national standing selected by Borrower which report
shall be unqualified, shall express no doubts about the ability of the
Companies to continue as a going concern, and shall state that such
consolidated financial statements fairly present, in all material respects, the
consolidated financial position of the Companies, as of the dates indicated and
the results of their operations and their cash flows for the periods indicated,
in conformity with GAAP (except as otherwise disclosed in such financial
statements) and that the audit by such accountants in connection with such
consolidated financial statements has been made in accordance with auditing
standards generally accepted in the United States;

 

(c)           Officers’ and Compliance Certificates.  Together with each delivery of financial
statements of the Consolidated Companies pursuant to Sections 5.1(a) and 5.1(b), (i) an Officers’ Certificate of
Borrower stating that the signers have reviewed the terms of this Agreement and
have

 

61

 

made, or caused to be made under their supervision, a review in
reasonable detail of the transactions and condition of the Companies during the
accounting period covered by such financial statements and that such review has
not disclosed the existence during or at the end of such accounting period, and
that the signers do not have knowledge of the existence as of the date of such
Officers’ Certificate, of any condition or event that constitutes a Potential
Default or Event of Default, or, if any such condition or event existed or
exists, specifying the nature and period of existence thereof and what action
Borrower has taken, is taking, and proposes to take with respect thereto,
(ii) a Compliance Certificate demonstrating in reasonable detail
compliance during and at the end of the applicable accounting periods with the
restrictions contained in Sections 5.11, 6.3, and 6.4, and
(iii) a summary in form and detail acceptable to Administrative Agent showing
the status and performance of each of Borrower’s Real Estate Investments during
and at the end of the applicable accounting periods;

 

(d)           Accountants’ Certification.  Together with each delivery of
consolidated financial statements of the Consolidated Companies pursuant to Section 5.1(b),
a written statement by the independent certified public accountants giving the
report thereon (i) stating that their audit has included a review of the
terms of this Agreement and the other Loan Documents as they relate to
accounting matters, (ii) stating whether, in connection with their audit,
any condition or event that constitutes a Potential Default or an Event of
Default has come to their attention and, if such a condition or event has come
to their attention, specifying the nature and period of existence thereof (provided that such accountants shall not
be liable by reason of any failure to obtain knowledge of any such Potential
Default or Event of Default that would not be disclosed in the course of their
audit), and (iii) stating that based on their audit nothing has come to
their attention that causes them to believe either or both that the information
contained in the certificates delivered therewith pursuant to Section 5.1(c)(i)
is not correct or that the matters set forth in the Compliance Certificates
delivered therewith pursuant to Section 5.1(c)(ii)
for the applicable Fiscal Year are not stated in accordance with the terms of
this Agreement;

 

(e)           Accountants’ Reports.  Promptly upon receipt thereof (unless
restricted by applicable professional standards), copies of all reports
submitted to Borrower by independent certified public accountants in connection
with each annual, interim, or special audit of the financial statements of the
Companies made by such accountants, including, without limitation, any comment
letter submitted by such accountants to management in connection with their
annual audit;

 

(f)            Events of Default, etc.  Promptly upon any officer of Borrower
obtaining knowledge (i) of any condition or event that constitutes a
Potential Default or an Event of Default, or becoming aware that any Lender has
given any notice (other than to Administrative Agent) or taken any other action
with respect to a claimed Potential Default or Event of Default, (ii) that
any Person has given any notice to any Company or taken any other action with
respect to a claimed default or event or condition of the type referred to in Section 7.2,
(iii) of the occurrence of any event or change that has caused or
evidences, either in any case or in the aggregate, a Material Adverse Effect,
an Officers’ Certificate specifying the nature and period of existence of such
condition, event, or change, or specifying the notice given or action taken by
any such Person and the nature of such claimed Potential Default, Event of
Default, default, event, or condition, and what action Borrower has taken, is taking,
and proposes to take with respect thereto;

 

62

 

(g)           Litigation or Other Proceedings.  Promptly upon any officer of Borrower
obtaining knowledge of (i) the institution of, or non-frivolous threat of, any
action, suit, proceeding (whether administrative, judicial or otherwise),
governmental investigation, or arbitration against or affecting any Company or
any property of any Company (collectively, “Proceedings”) not previously disclosed in
writing by Borrower to Lenders, or (ii) any material development in any
Proceeding that, in any case:

 

(A)          could reasonably be
expected to have a Material Adverse Effect; or

 

(B)          seeks to enjoin or
otherwise prevent the consummation of, or to recover any damages or obtain
relief as a result of, the transactions contemplated hereby;

 

written
notice thereof together with such other information as may be reasonably
available to Borrower to enable Lenders and their counsel to evaluate such
matters, and promptly after request by Administrative Agent, such other
information as may be reasonably requested by Administrative Agent to enable
Administrative Agent and its counsel to evaluate any of such Proceedings;

 

(h)           ERISA Events.  Promptly upon becoming aware of the
occurrence of or forthcoming occurrence of any ERISA Event, a written notice
specifying the nature thereof, what action Borrower or any of its ERISA
Affiliates has taken, is taking, or proposes to take with respect thereto, and,
when known, any action taken or threatened by the Internal Revenue Service, the
Department of Labor, or the PBGC with respect thereto;

 

(i)            ERISA Notices.  With reasonable promptness, copies of: (i)
all notices received by Borrower or any of its ERISA Affiliates from a
Multiemployer Plan sponsor concerning an ERISA Event; and (ii) such other
documents or governmental reports or filings relating to any Employee Benefit
Plan as Administrative Agent shall reasonably request;

 

(j)            Level Determination Certificate.  Not later than concurrently with the delivery
of the financial statements required under Sections 5.1(a)
and 5.1(b), a Level
Determination Certificate relating to the Fiscal Quarter most recently ended;

 

(k)           Subsidiaries.  Not later than concurrently with the delivery
of the financial statements required under Sections
5.1(b), a written notice setting forth with respect to each
Person becoming a Subsidiary of Borrower (other than a Significant Subsidiary)
(i) the date on which such Person became a Subsidiary of Borrower, and
(ii) all of the data required to be set forth in Schedule 4.1-1 with respect to all
Subsidiaries of Borrower (it being understood that such written notice shall be
deemed to supplement Schedule 4.1-1
for all purposes of this Agreement);

 

(l)            Significant Subsidiaries.  Promptly upon any Person becoming a
Significant Subsidiary of Borrower, a written notice setting forth with respect
to such Person (i) the date on which such Person became a Significant
Subsidiary of Borrower, and (ii) all of the data required to be set forth
in Schedule 4.1-2
with respect to all Significant Subsidiaries of Borrower (it being understood
that such written notice shall be deemed to amend Schedule 4.1-2 for all purposes of this
Agreement);

 

63

 

(m)          Press Releases; SEC Reporting.  Promptly upon its becoming available, each
press release and each regular or periodic report, any registration statement
or prospectus in respect thereof filed by Borrower with, or received by
Borrower in connection therewith from, any securities exchange or the
Securities and Exchange Commission, or any successor agency thereof, including,
without limitation, each Form 10-K,
10-Q, and S-8 filed with the Securities and Exchange
Commission;

 

(n)           Shareholder Reports.  Promptly after the mailing or delivery
thereof, copies of all material reports or other information from Borrower to
its shareholders; and

 

(o)           Other Information.  Promptly upon the reasonable request by
Administrative Agent or any Lender, such other information and data with
respect to the business, affairs, assets, or liabilities of any Company.

 

Borrower hereby acknowledges that (a) Administrative Agent and/or
the Arranger will make available to the Lenders and Issuing Bank materials
and/or information provided by or on behalf of Borrower hereunder
(collectively, “Borrower
Materials”) by posting the Borrower Materials on IntraLinks or
another similar electronic system (the “Platform”) and (b) certain of the
Lenders may be “public-side” Lenders (i.e.,
Lenders that do not wish to receive material non-public information with
respect to Borrower or its securities) (each, a “Public Lender”).  Borrower hereby agrees that (w) all
Borrower Materials that are to be made available to Public Lenders shall be
clearly and conspicuously marked “PUBLIC” which, at a minimum, shall mean that
the word “PUBLIC” shall appear prominently on the first page thereof;
(x) by marking Borrower Materials “PUBLIC,” Borrower shall be deemed to
have authorized Administrative Agent, the Arranger, Issuing Bank, and the
Lenders to treat such Borrower Materials as either publicly available
information or not material information (although it may be sensitive and
proprietary) with respect to Borrower or its securities for purposes of United
States Federal and state securities laws; (y) all Borrower Materials
marked “PUBLIC” are permitted to be made available through a portion of the
Platform designated “Public Investor;” and (z) Administrative Agent and
the Arranger shall be entitled to treat any Borrower Materials that are not
marked “PUBLIC” as being suitable only for posting on a portion of the Platform
not designated “Public Investor.”

 

5.2          Corporate
Existence, etc.  Except as
permitted under Section 6.6,
Borrower shall, and shall cause each of its Significant Subsidiaries to, at all
times preserve and keep in full force and effect its corporate, partnership, or
limited liability company existence and all rights and franchises material to
its business.

 

5.3          Payment
of Taxes and Claims; Tax Consolidation.

 

(a)           Borrower
shall, and shall cause each of its Significant Subsidiaries to, pay all Taxes,
assessments, and other governmental charges imposed upon it or any of its
properties or assets or in respect of any of its income, businesses, or
franchises before any penalty accrues thereon, and all claims (including,
without limitation, claims for labor, services, materials, and supplies) for
sums that have become due and payable and that by law have or may become a Lien
upon any of its properties or assets, prior to the time when any penalty or
fine shall be incurred with respect thereto; provided
that no such charge or claim need be paid if being contested in good
faith by appropriate proceedings promptly instituted and diligently conducted
and if such reserve or other appropriate provision, if any, as shall be
required in conformity with GAAP shall have been made therefor.

 

64

 

(b)           Borrower
shall not, nor shall it permit any of its Significant Subsidiaries to, file or
consent to the filing of any consolidated income tax return with any Person
(other than any Company).

 

5.4          Maintenance
of Properties; Insurance. 
Borrower shall, and shall cause each of its Significant Subsidiaries to,
maintain or cause to be maintained in good repair, working order, and
condition, ordinary wear and tear excepted, all material properties used in the
business of the Companies (including, without limitation, all patents,
trademarks, tradenames (including, without limitation, rights in the name “Trammell Crow”), copyrights, technology,
know-how, and processes used in or necessary for the conduct of the business of
the Companies as currently conducted that are material to the condition
(financial or otherwise), business, or operations of the Companies, taken as a
whole) and from time to time will make or cause to be made all appropriate
repairs, renewals, and replacements thereof. 
Borrower shall, and shall cause each of its Significant Subsidiaries to,
maintain or cause to be maintained, with financially sound and reputable
insurers, insurance with respect to its properties and business against loss or
damage of the kinds customarily carried or maintained under similar
circumstances by Persons of established reputation engaged in similar businesses.

 

5.5          Inspection;
Lender Meeting.  Borrower shall,
and shall cause each of its Subsidiaries to, permit any authorized
representatives designated by any Lender to visit and inspect any of the
properties of any Company, including its and their financial and accounting
records, and to make copies and take extracts therefrom, and to discuss its and
their affairs, finances, and accounts with its and their officers and
independent public accountants (provided
that Borrower may, if it so chooses, be present at or participate in
any such discussion), all upon reasonable notice and at such reasonable times
during normal business hours and as often as may be reasonably requested.  Without in any way limiting the foregoing,
Borrower shall, upon the request of Administrative Agent or Requisite Lenders,
participate in a meeting of Administrative Agent and Lenders once during each
Fiscal Year to be held at Borrower’s corporate offices (or such other location
as may be agreed to by Borrower and Administrative Agent) at such time as may
be agreed to by Borrower and Administrative Agent.

 

5.6          Compliance
with Laws etc.  Borrower shall,
and shall cause each of its Subsidiaries to, comply with all applicable Legal
Requirements of any Governmental Authority, non-compliance with which could
reasonably be expected to have a Material Adverse Effect.

 

5.7          Environmental
Disclosure and Inspection.

 

(a)           Borrower
shall, and shall cause each of its Subsidiaries to, exercise all due diligence
to comply and cause (i) all tenants under any leases or occupancy
agreements affecting any portion of any Real Estate Investment, and
(ii) all other Persons on or occupying such property, to comply with all
Environmental Laws except to the extent that failure to comply could not
reasonably be expected to have a Material Adverse Effect.

 

(b)           Borrower
shall promptly advise Lenders in writing and in reasonable detail of
(i) any remedial action taken by Borrower or any other Person in response
to (A) any Hazardous Materials on, under, or about any Real Estate
Investment, the existence of which has a reasonable possibility of resulting in
an Environmental Claim having a Material Adverse Effect, or (B) any
Environmental Claim that could have a Material Adverse Effect, and
(ii) any request for information from any Governmental Authority that
suggests such Governmental Authority is investigating whether any Company may
be potentially responsible for a Release of Hazardous Materials.

 

65

 

(c)           Borrower
shall promptly notify Lenders of (i) any proposed acquisition of Stock,
assets, or property by any Company that could reasonably be expected to expose
any Company to, or result in, Environmental Claims that could have a Material
Adverse Effect or that could reasonably be expected to have a material adverse
effect on any Governmental Authorization then held by any Company, and
(ii) any proposed action to be taken by any Company to commence
manufacturing, industrial, or other operations (other than the construction or
renovation of Real Estate Investments in the ordinary course of business) that
could reasonably be expected to subject any Company to additional Legal
Requirements, including, without limitation, Legal Requirements requiring
additional environmental Governmental Authorizations.

 

(d)           Borrower
shall, at its own expense, provide copies of such documents or information as
Administrative Agent may reasonably request in relation to any matters
disclosed pursuant to this Section 5.7.

 

5.8          Borrower’s Remedial Action Regarding Hazardous
Materials.  Borrower
shall, and shall cause each of its Subsidiaries to, promptly take any and all
necessary remedial action in connection with the presence, storage, use,
disposal, transportation, or Release of any Hazardous Materials on, under, or
about any Real Estate Investment in order to comply with all applicable
Environmental Laws and Governmental Authorizations except (a) when, and
only to the extent that, such Company’s liability for such presence, storage,
use, disposal, transportation, or Release of any Hazardous Materials is being
contested in good faith by such Company, or (b) when the failure to take
such action could not reasonably be expected to have a Material Adverse
Effect.  In the event any Company
undertakes any remedial action with respect to any Hazardous Materials on,
under, or about any Real Estate Investment, such Company shall conduct and
complete such remedial action in compliance with all applicable Environmental
Laws, and in accordance with the policies, orders, and directives of all
Governmental Authorities except when, and only to the extent that, such Company’s
liability for such presence, storage, use, disposal, transportation, or Release
of any Hazardous Materials is being contested in good faith by such Company.

 

5.9          Collateral Documents; Further Assurances.  Borrower from time to time shall or shall
cause Borrower’s Subsidiaries to execute, deliver, and file all such notices,
statements, and other documents and take such other steps, including but not
limited to the amendment of the Collateral Documents and any financing
statements prepared thereunder, as may be reasonably necessary or advisable, or
that Administrative Agent may reasonably request, to render fully valid and
enforceable under all applicable laws, the rights, liens, and priorities of
Administrative Agent, for the benefit of the Credit Parties, with respect to
all security from time to time furnished under this Agreement or the Collateral
Documents or intended to be so furnished in each case in such form and at such
times as shall be reasonably satisfactory to Administrative Agent.

 

5.10        New Subsidiaries.  Borrower shall notify Lenders promptly if it
or any of its wholly-owned Subsidiaries hereafter acquires or forms a new
Significant Subsidiary and shall pledge or cause to be pledged all of the Stock
in each such Significant Subsidiary (if wholly-owned by Borrower, any
Subsidiary of Borrower, or any combination thereof) pursuant to the Borrower
Pledge Agreement or the Subsidiary Pledge Agreement.  Borrower shall also cause each such
Significant Subsidiary to guaranty the Obligations pursuant to the Subsidiary
Guaranty or other documentation in form and substance satisfactory to
Administrative Agent.

 

5.11        Interest Rate Agreements; Currency Agreements.  If Borrower’s Interest Coverage Ratio is at
any time less than 3.5 to 1.0, then beginning the thirtieth (30th)
day following the date of delivery of financial statements to Administrative
Agent reflecting an Interest Coverage Ratio of less than

 

66

 

3.5 to 1.0 and continuing until delivery of financial statements to
Administrative Agent reflecting that such condition no longer exists, Borrower
shall cause each $5,000,000 increment of the Companies’ floating rate
Indebtedness (other than Indebtedness arising from Real Estate Investments for
which interest is being capitalized in accordance with GAAP and for which
Borrower has obtained construction loan financing pursuant to which
construction loan advances are (or can be) made in the amount of such interest
expense) in excess of $30,000,000 to be subject to one or more Interest Rate
Agreements with a Lender or other Person reasonably acceptable to
Administrative Agent, assuring that the net interest cost on such Indebtedness
is fixed, capped, or hedged, in form and substance reasonably acceptable to
Administrative Agent.

 

SECTION 6

BORROWER’S NEGATIVE COVENANTS

 

Borrower
covenants and agrees that, so long as any of the Commitments hereunder shall remain
in effect and until payment in full of all of the Loans and the other
Obligations, unless Requisite Lenders shall otherwise give prior written
consent, Borrower shall perform all covenants in this Section 6.

 

6.1          Liens and Related Matters.

 

(a)           No Further Negative Pledges.  Except with respect to specific property
encumbered to secure payment of particular Indebtedness or Contingent
Obligation permitted hereunder or to be sold pursuant to an executed agreement
with respect to an asset sale, Borrower shall not, and shall not permit any of
its Significant Subsidiaries to, enter into any agreement prohibiting the
creation or assumption of any Lien securing the Obligations upon any of its
properties or assets, whether now owned or hereafter acquired.

 

(b)           No Restrictions on Subsidiary Distributions to
Borrower or Other Subsidiaries. 
Borrower shall not, and shall not permit any of its Significant
Subsidiaries to, create or otherwise cause or suffer to exist or become
effective any consensual encumbrance or restriction of any kind on the ability
of any such Significant Subsidiary to (i) pay dividends or make any other
distributions on any of such Significant Subsidiary’s Stock owned by any
Company, (ii) repay or prepay any Indebtedness owed by such Significant
Subsidiary to any Company, (iii) make loans or advances to any Company, or
(iv) transfer any of its property or assets to any Company.

 

(c)           International Subsidiaries.  Borrower shall not, and shall not permit any
other Company to, grant, create, or permit to exist any Lien on the Stock of
any International Subsidiary other than Liens securing Indebtedness of
International Subsidiaries permitted by Section 6.5(b).

 

6.2          Investments; Unconsolidated Entities.  Borrower shall not, and shall not permit any
of its Subsidiaries to, directly or indirectly, make any Investment in any
Person, including any Unconsolidated Entity, except:

 

(a)           the
Companies may make Investments existing on the Closing Date;

 

(b)           the
Companies may make Investments in Cash Equivalents;

 

67

 

(c)           the
Companies may make Investments in Subsidiaries (i) existing on the Closing
Date, (ii) acquired pursuant to a Permitted Acquisition, or (iii) formed
by a Company, provided that such
Company complies with Section 5.10,
if applicable;

 

(d)           the
Companies may make Investments in Unconsolidated Entities (other than Savills)
not constituting Real Estate Investments, so
long as, at the time each such Investment is made, the aggregate
amount of all such Investments after the Closing Date does not exceed
$5,000,000;

 

(e)           the
Companies may make Real Estate Investments;

 

(f)            the
Companies may make other Investments (in addition to those contemplated by the
other clauses of this Section 6.2)
so long as, at the time each such
Investment is made, the ratio of (i) the aggregate amount of all such
other Investments made in reliance on this Section 6.2(e)
after the Closing Date to (ii) Gross EBITDA for the four (4) most recent
Fiscal Quarters for which Borrower has provided the financial statements
required by Section 5.1(a)
or 5.1(b), as the
case may be, does not exceed 1.0 to 1.0;

 

(g)           the
Companies may make loans and advances to employees for moving, arrival or
promotion incentives, entertainment, and travel expenses, drawing accounts, and
similar expenditures in the ordinary course of business; and

 

(h)           the Companies may enter into Interest Rate
Agreements pursuant to which the Companies may hedge interest rate exposure.

 

6.3          Restricted Junior Payments.  Borrower shall not, and shall not permit any
of its Subsidiaries to, directly or indirectly, declare, order, pay, make, or
set apart any sum for any Restricted Junior Payment, except for, so long as no Event of Default exists or
would result therefrom, Permitted Distributions.

 

6.4          Financial Covenants.

 

(a)           Minimum Interest Coverage Ratio.  Borrower shall not permit the Interest
Coverage Ratio, as of the last day of any Fiscal Quarter, to be less than 3.0
to 1.0.

 

(b)           Minimum Fixed Charge Coverage Ratio.  Borrower shall not permit the Fixed Charge
Coverage Ratio, as of the last day of any Fiscal Quarter, to be less than 1.75
to 1.0.

 

(c)           Minimum Net Worth.  Borrower shall not permit Net Worth, as of
the last day of any Fiscal Quarter to be less than the Minimum Net Worth.

 

(d)           Minimum Revenues.  Borrower shall not permit Total Revenues for
any Fiscal Quarter to be less than $125,000,000.

 

(e)           Minimum Liquidity.  Borrower shall not permit Liquid Assets, as
of the last day of any Fiscal Quarter, to be less than $30,000,000.

 

68

 

(f)            Current Ratio.  Borrower shall not permit the ratio of
Current Assets to Current Liabilities, as of the last day of any Fiscal
Quarter, to be less than 1.10 to 1.0. 
For purposes of the calculation of this ratio, “Current Liabilities” shall not include
current maturities under this Agreement.

 

(g)           Maximum Total Leverage Ratio.  Borrower shall not permit the Total Leverage
Ratio, as of the last day of any Fiscal Quarter, to exceed 5.0 to 1.0.

 

(h)           Maximum Investment in
Unconsolidated Entities and Funds.  Borrower shall not permit the
total amount of Investments in Stock of Unconsolidated Entities formed
primarily for real property development and/or ownership, and Investments in
Funds (whether or not such Fund Investments are treated as Consolidated
Subsidiaries) to exceed $150,000,000 at any time.

 

(i)            Maximum Recourse Leverage
Ratio. 
Borrower shall not permit the Recourse Leverage Ratio, as of the last
day of any Fiscal Quarter, to exceed 3.25 to 1.0.

 

6.5          Recourse Obligations.

 

(a)           Borrower
shall not permit the Companies, individually or on a consolidated basis, to
incur, guaranty, or otherwise be or become, directly or indirectly, liable in
respect of any Recourse Obligations other than Permitted Recourse Obligations.

 

(b)           Borrower shall not permit any Company (other
than Borrower and Mortgaged Real Estate Subsidiaries) that is not a Guarantor
to incur, guaranty, or otherwise be or become, directly or indirectly, liable
in respect of any Indebtedness other than (i) Non-Recourse Obligations and
(ii) Recourse Obligations of International Subsidiaries otherwise
permitted pursuant to the terms of this Agreement not to exceed $15,000,000 in
the aggregate at any time outstanding. 
For purposes of this Section 6.5(b), Non-Recourse Obligations of a
Company (other than Borrower) shall be deemed to be Non-Recourse Obligations of
such Company notwithstanding the fact that Borrower has guaranteed such
Non-Recourse Obligations.

 

6.6          Restriction on Fundamental Changes, Asset Sales,
and Acquisitions. 
Borrower shall not, and shall not permit any of its Subsidiaries to,
enter into any transaction of merger or consolidation, or liquidate, wind-up,
or dissolve itself (or suffer any liquidation or dissolution), or convey, sell,
lease, sub-lease, transfer, or otherwise dispose of, in one transaction or a
series of transactions, all or any part of its business, property, or fixed
assets, whether now owned or hereafter acquired, or acquire by purchase or
otherwise all or substantially all the business, property, or fixed assets of,
or Stock of, any Person or any division or line of business of any Person,
except that:

 

(a)           any
Subsidiary of Borrower may be merged with or into Borrower or any wholly-owned
Subsidiary of Borrower, or be liquidated, wound up or dissolved, or all or any
part of its business, property, or assets may be conveyed, sold, leased,
transferred, or otherwise disposed of, in one transaction or a series of
transactions, to Borrower or any wholly-owned Subsidiary of Borrower; provided that, in the case of such a
merger, Borrower or such wholly-owned Subsidiary shall be the continuing or
surviving corporation;

 

(b)           Borrower
may merge with or into another Person so
long as no Default or Event of Default exists or would result
therefrom and so long as Borrower
shall be the continuing or surviving corporation;

 

69

 

(c)           the
Companies may sell or otherwise dispose of (i) assets that are obsolete or
no longer used or usable in the Companies’ business, (ii) the Stock or
assets of any Subsidiary that is not a Significant Subsidiary, (iii) Stock
of any Person that does not constitute a Subsidiary, and (iv) other assets
so long as, in the case of sales
of assets under this clause (iv),
the aggregate consideration during any period of four (4) consecutive Fiscal
Quarters (A) for any single sale or disposition (or series of related
sales or dispositions) does not exceed five percent (5%) of Gross EBITDA for
such four (4) Fiscal Quarters, and (B) for all such sales or dispositions
does not exceed ten percent (10%) of Gross EBITDA for such four (4) Fiscal
Quarters; provided that the
consideration received for all such assets shall be in an amount at least equal
to the fair market value thereof;

 

(d)           the
Companies may sell or otherwise dispose of their Real Estate Investments;

 

(e)           the
Companies may make Investments permitted by Section 6.2;

 

(f)            the
Companies may make Permitted Acquisitions and acquisitions which constitute
Real Estate Investments; and

 

(g)           the
Companies may make Permitted Distributions.

 

6.7          Transactions with
Shareholders and Affiliates. 
Borrower shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, enter into or permit to exist any transaction
(including, without limitation, the purchase, sale, lease, or exchange of any
property or the rendering of any service) with any holder of five percent (5%)
or more of any class of equity Stock of Borrower or with any Affiliate of
Borrower or of any such holder, on terms that are less favorable to such
Company than those that might be obtained at the time from Persons who are not
such a holder or Affiliate; provided that
the foregoing restriction shall not apply to (a) any transaction between
Borrower and any of its wholly-owned Subsidiaries or between any of its
wholly-owned Subsidiaries, (b) reasonable and customary fees paid to
members of the Boards of Directors of the Companies, (c) Restricted Junior
Payments permitted by Section 6.3,
and (d) arrangements described on Schedule 6.7.

 

6.8          Conduct of Business.  Borrower shall not, and shall not permit any
of its Subsidiaries to, engage in any business other than (a) the
businesses engaged in by the Companies on the Closing Date and similar or related
businesses, including, without limitation, multi-family commercial real estate
development, management, and investment sales and (b) such other lines of
business as may be consented to by Requisite Lenders, such consent not to be
unreasonably withheld.

 

70

 

SECTION 7

EVENTS OF DEFAULT

 

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

 

7.1          Failure to Make
Payment.

 

Failure by
Borrower to pay any installment of, or principal of, any Loan when due, whether
at stated maturity, by acceleration, by notice of voluntary prepayment, by
mandatory prepayment, or otherwise; or failure by Borrower to pay any interest
on any Loan or any fee or any other amount due under this Agreement within five
(5) days after the date due; or

 

7.2          Default in Other
Agreements. 

 

(a)           Failure
of Borrower or any Significant Subsidiary to pay when due any principal of or
interest on any Indebtedness (other than the Obligations and Non-Recourse
Obligations) or any Contingent Obligation, in each case in an individual
principal amount of $5,000,000 or more or in an aggregate principal amount of
$10,000,000 or more, and in each case beyond the end of any grace period
provided therefor; or

 

(b)           Breach
or default by Borrower or any Significant Subsidiary beyond the end of any
grace period provided therefor with respect to any other material term of
(i) any evidence of any Indebtedness (other than the Obligations and
Non-Recourse Obligations) or any Contingent Obligation, in each case in an
individual principal amount of $5,000,000 or more or in an aggregate principal
amount of $10,000,000 or more, or (ii) any loan agreement, mortgage,
indenture, or other agreement relating to such Indebtedness or Contingent Obligations,
if the effect of such breach or default is to cause, or to permit the holder or
holders of such Indebtedness or Contingent Obligations (or a trustee on behalf
of such holder or holders) to cause, such Indebtedness or Contingent
Obligations to become or be declared due and payable prior to its stated
maturity or the stated maturity of any underlying obligation, as the case may
be (upon the giving or receiving of notice, lapse of time, both, or otherwise);
or

 

7.3          Breach of Certain Covenants.  Failure of Borrower or, if applicable, any
other Company to perform or comply with any term or condition contained in Sections 2.6,
5.1, or 5.2 or Section 6;
or

 

7.4          Breach of Warranty.  Any representation, warranty, certification,
or other statement made by any Company in any Loan Document or in any statement
or certificate at any time given by any Company in writing pursuant hereto or
thereto or in connection herewith or therewith shall be false in any material
respect on the date as of which made; or

 

7.5          Other Defaults Under
Loan Documents.  Any Company
shall default in the performance of or compliance with any term contained in
this Agreement or any of the other Loan Documents, other than any such term
referred to in any other section of this Section 7 and such default shall not
have been remedied or waived within thirty (30) days after the earlier of an
officer of Borrower becoming aware of such default, or receipt by Borrower of
notice from Administrative Agent or any other Credit Party of such default; or

 

71

 

7.6          Involuntary Bankruptcy, Appointment of Receiver,
etc.

 

(a)           A
court having jurisdiction in the premises shall enter a decree or order for
relief in respect of Borrower or any Significant Subsidiary in an involuntary
case under the Bankruptcy Code or under any other applicable bankruptcy,
insolvency, or similar law now or hereafter in effect, which decree or order is
not stayed; or any other similar relief shall be granted under any applicable
Legal Requirement; or

 

(b)           An
involuntary case shall be commenced against Borrower or any Significant
Subsidiary under the Bankruptcy Code or under any other applicable bankruptcy,
insolvency, or similar law now or hereafter in effect; or a decree or order of
a court having jurisdiction in the premises for the appointment of a receiver,
liquidator, sequestrator, trustee, custodian, or other officer having similar
powers over Borrower or any Significant Subsidiary, or over all or a
substantial part of its property, shall have been entered; or there shall have
occurred the involuntary appointment of an interim receiver, trustee, or other
custodian of Borrower or any Significant Subsidiary for all or a substantial
part of its property; or a warrant of attachment, execution, or similar process
shall have been issued against any substantial part of the property of Borrower
or any Significant Subsidiary, and any such event described in this clause (b) shall
continue for sixty (60) days unless dismissed, bonded, or discharged; or

 

7.7          Voluntary Bankruptcy; Appointment of Receiver, etc.

 

(a)           Borrower
or any Significant Subsidiary shall have an order for relief entered with
respect to it or commence a voluntary case under the Bankruptcy Code or under
any other applicable bankruptcy, insolvency, or similar law now or hereafter in
effect, or shall consent to the entry of an order for relief in an involuntary
case, or to the conversion of an involuntary case to a voluntary case, under
any such law, or shall consent to the appointment of or taking possession by a
receiver, trustee, or other custodian for all or a substantial part of its
property; or Borrower or any Significant Subsidiary shall make any assignment
for the benefit of creditors; or

 

(b)           Borrower
or any Significant Subsidiary shall be unable, or shall fail generally, or
shall admit in writing its inability, to pay its debts as such debts become
due; or the Board of Directors of Borrower or any Significant Subsidiary (or
any committee) thereof shall adopt any resolution or otherwise authorize any
action to approve any of the actions referred to in clause (a) above or
this clause (b);
or

 

7.8          Judgments and
Attachments.  Any money judgment,
writ or warrant of attachment, or similar process involving in any individual
case an amount in excess of $1,000,000, or in the aggregate at any time an
amount in excess of $5,000,000 (in either case not adequately covered by
insurance as to which a solvent and unaffiliated insurance company has
acknowledged coverage) shall be entered or filed against Borrower or any
Significant Subsidiary or any of its or their respective assets and shall
remain undischarged, unvacated, unbonded, or unstayed for a period of sixty
(60) days (or in any event later than five (5) days prior to the date of any
proposed sale thereunder); or

 

7.9          Dissolution.  Any order, judgment, or decree shall be
entered against Borrower or any Significant Subsidiary decreeing the
dissolution or split up of Borrower or such Significant Subsidiary and such
order shall remain undischarged or unstayed for a period in excess of thirty
(30) days; or

 

72

 

7.10        Employee Benefit Plans.  There shall occur one or more ERISA Events
which individually or in the aggregate results in or might reasonably be
expected to result in liability of Borrower or any of its ERISA Affiliates in
excess of $5,000,000 during the term of this Agreement; or

 

7.11        Change in Control.  A Change of Control shall have occurred; or

 

7.12        Invalidity of Guaranty.  The Subsidiary Guaranty for any reason, other
than the satisfaction in full of all Obligations, is declared by a court of
competent jurisdiction to be null and void, or any Subsidiary of Borrower
denies that it has any further liability, including without limitation with
respect to future advances by Lenders, under the Subsidiary Guaranty or gives
notice to such effect; or

 

7.13        Failure of Security.  From and after the execution, acknowledgment,
and filing of any Collateral Document by any Obligor, any such Collateral Document
shall be revoked by such Obligor or shall be declared by a court of competent
jurisdiction to be null and void or shall cease to be in full force and effect
as a result of any change in any Legal Requirement; or Lenders shall fail to
have a valid, perfected, and enforceable first priority Lien (subject to
Permitted Encumbrances) on any Obligor’s right, title, and interest in all the
Collateral as a result of any change in any Legal Requirements, the expiration
of any required filings or recordations with respect to the Collateral
Documents, the declaration by a court of competent jurisdiction that such Lien
is null and void, or the imposition of any priming Lien under applicable Legal
Requirement; or any Obligor shall contest in any manner that such Collateral
Document constitutes its valid and enforceable agreement or shall assert in any
manner that it has no further obligation or liability under such Collateral
Documents;

 

THEN
(a) upon the occurrence of any Event of Default described in Section 7.6 or 7.7, each of
(i) the unpaid principal amount of and accrued interest on the Loans, and
(ii) all other Obligations shall automatically become immediately due and
payable, without presentment, demand, protest, notice of acceleration, notice
of intention to accelerate, or other requirements of any kind, all of which are
hereby expressly waived by Borrower, and the obligation of each Lender to make
any Loan, shall thereupon terminate, and (b) upon the occurrence and
during the continuation of any other Event of Default, Administrative Agent
shall, upon the written request or with the written consent of Requisite
Lenders, by written notice to Borrower, declare all or any portion of the
amounts described in clauses
(i) and (ii)
above to be, and the same shall forthwith become, immediately due and payable,
and the obligation of each Lender to make any Loan, thereupon shall terminate.

 

SECTION 8

ADMINISTRATIVE AGENT

 

8.1          Administrative Agent.

 

(a)           Each
Lender hereby irrevocably appoints, designates and authorizes Administrative
Agent to take such action on its behalf under the provisions of this Agreement
and each other Loan Document and to exercise such powers and perform such
duties as are expressly delegated to it by the terms of this Agreement or any
other Loan Document, together with such powers as are reasonably incidental
thereto.  Notwithstanding any provision
to the contrary contained elsewhere herein or in any other Loan Document,
Administrative Agent shall not have any duties or responsibilities, except those
expressly set forth herein, nor shall Administrative Agent have or be deemed to
have any fiduciary relationship with any Lender or participant, and no implied
covenants, functions, responsibilities, duties,

 

73

 

obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against Administrative Agent. 
Without limiting the generality of the foregoing sentence, the use of
the term “agent” herein and in the other Loan Documents with reference to
Administrative Agent is not intended to connote any fiduciary or other implied
(or express) obligations arising under agency doctrine of any applicable
Law.  Instead, such term is used merely
as a matter of market custom, and is intended to create or reflect only an
administrative relationship between independent contracting parties.

 

(b)           Issuing
Bank shall act on behalf of Lenders with respect to any Letter of Credit issued
by it and the documents associated therewith, and Issuing Bank shall have all
of the benefits and immunities (i) provided to Administrative Agent in
this Section 8
with respect to any acts taken or omissions suffered by Issuing Bank in
connection with any Letter of Credit issued by it or proposed to be issued by
it and the applications and agreements for letters of credit pertaining to such
Letter of Credit as fully as if the term “Administrative Agent” as used in this
Section 8
and in the definition of “Agent-Related Person” included Issuing Bank with respect
to such acts or omissions, and (ii) as additionally provided herein with
respect to Issuing Bank.

 

8.2          Delegation of Duties.  Administrative Agent may execute any of its
duties under this Agreement or any other Loan Document by or through agents, employees,
or attorneys-in-fact and shall be entitled to advice of counsel and other
consultants or experts concerning all matters pertaining to such duties.  Administrative Agent shall not be responsible
for the negligence or misconduct of any agent or attorney-in-fact that it
selects in the absence of gross negligence or willful misconduct.

 

8.3          Liability of
Administrative Agent.  No
Agent-Related Person shall (a) be liable for any action taken or omitted to be
taken by any of them under or in connection with this Agreement or any other
Loan Document or the transactions contemplated hereby (except for its own gross
negligence or willful misconduct in connection with its duties expressly set
forth herein), or (b) be responsible in any manner to any Lender or participant
for any recital, statement, representation, or warranty made by any Company or
any officer thereof, contained herein or in any other Loan Document, or in any
certificate, report, statement, or other document referred to or provided for
in, or received by Administrative Agent under or in connection with, this
Agreement or any other Loan Document, or the validity, effectiveness,
genuineness, enforceability, or sufficiency of this Agreement or any other Loan
Document, or for any failure of any Company or any other party to any Loan
Document to perform its obligations hereunder or thereunder.  No Agent-Related Person shall be under any
obligation to any Lender or participant to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, this Agreement or any other Loan Document, or to inspect the properties,
books, or records of any Company or any Affiliate thereof.

 

8.4          Reliance by
Administrative Agent.

 

(a)           Administrative
Agent shall be entitled to rely, and shall be fully protected in relying, upon
any writing, communication, signature, resolution, representation, notice,
consent, certificate, affidavit, letter, telegram, facsimile, telex or
telephone message, electronic mail message, statement, or other document or
conversation believed by it to be genuine and correct and to have been signed,
sent, or made by the proper Person or Persons, and upon advice and statements
of legal counsel (including counsel to any Company), independent accountants
and other experts selected by Administrative Agent.  Administrative Agent shall be fully justified
in failing or refusing to take any action under any Loan Document unless it
shall first receive such advice or concurrence of the Requisite Lenders as it deems
appropriate and, if it so requests, it shall first be indemnified to its
satisfaction by Lenders against any and all liability and expense which may be
incurred by it by reason of taking or continuing to take any such

 

74

 

action.  Administrative Agent shall in all cases be
fully protected in acting, or in refraining from acting, under this Agreement
or any other Loan Document in accordance with a request or consent of Requisite
Lenders (or such greater number of Lenders as may be expressly required hereby
in any instance) and such request and any action taken or failure to act
pursuant thereto shall be binding upon all Lenders.

 

(b)           For
purposes of determining compliance with the conditions specified in Section 3.1,
each Lender that has signed this Agreement shall be deemed to have consented
to, approved or accepted or to be satisfied with, each document or other matter
required thereunder to be consented to or approved by or acceptable or
satisfactory to a Lender unless Administrative Agent shall have received notice
from such Lender prior to the proposed Closing Date specifying its objection
thereto.

 

8.5          Notice of Event of
Default.  Administrative Agent
shall not be deemed to have knowledge or notice of the occurrence of any Event
of Default, except with respect to defaults in the payment of principal,
interest, and fees required to be paid to Administrative Agent for the account
of Lenders, unless Administrative Agent shall have received written notice from
a Lender or Borrower referring to this Agreement, describing such Event of
Default and stating that such notice is a “notice of default.”  Administrative Agent will notify Lenders of
its receipt of any such notice. 
Administrative Agent shall take such action with respect to such Event
of Default as may be directed by Requisite Lenders in accordance with Section 7; provided,
however, that unless and until Administrative Agent has received any
such direction, Administrative Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Event of
Default as it shall deem advisable or in the best interest of Lenders.

 

8.6          Credit Decision;
Disclosure of Information by Administrative Agent.  Each Lender acknowledges that no
Agent-Related Person has made any representation or warranty to it, and that no
act by Administrative Agent hereafter taken, including any consent to and
acceptance of any assignment or review of the affairs of any Company or any
Affiliate thereof, shall be deemed to constitute any representation or warranty
by any Agent-Related Person to any Lender as to any matter, including whether
Agent-Related Persons have disclosed material information in their possession.  Each Lender represents to Administrative
Agent that it has, independently and without reliance upon any Agent-Related
Person and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
prospects, operations, property, financial and other condition, and
creditworthiness of each Company, and all applicable bank or other regulatory
Legal Requirements relating to the transactions contemplated hereby, and made
its own decision to enter into this Agreement and to extend credit to Borrower
hereunder.  Each Lender also represents
that it will, independently and without reliance upon any Agent-Related Person
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals, and decisions in
taking or not taking action under this Agreement and the other Loan Documents,
and to make such investigations as it deems necessary to inform itself as to
the business, prospects, operations, property, financial and other condition,
and creditworthiness of Borrower.  Except
for notices, reports and other documents expressly required to be furnished to
Lenders by Administrative Agent herein, Administrative Agent shall not have any
duty or responsibility to provide any Lender with any credit or other
information concerning the business, prospects, operations, property, financial
and other condition, or creditworthiness of any of the Companies or any of
their respective Affiliates which may come into the possession of any
Agent-Related Person.

 

8.7          Indemnification of
Administrative Agent.  Whether or
not the transactions contemplated hereby are consummated, Lenders shall
indemnify upon demand each Agent-Related Person (to the extent not reimbursed
by or on behalf of the Companies and without limiting the obligation

 

75

 

of any Company
to do so), pro rata, and hold harmless each Agent-Related Person from and
against any and all Indemnified Liabilities incurred by it, INCLUDING THOSE
RESULTING FROM EACH AGENT-RELATED PERSON’S OWN ORDINARY NEGLIGENCE; provided, however, that no Lender shall be
liable for the payment to any Agent-Related Person of any portion of such
Indemnified Liabilities to the extent determined in a final, nonappealable
judgment by a court of competent jurisdiction to have resulted from such
Agent-Related Person’s own gross negligence or willful misconduct; provided, however, that no action taken in
accordance with the directions of Required Lenders shall be deemed to
constitute gross negligence or willful misconduct for purposes of this Section 8.7.  Without limitation of the foregoing, each
Lender shall reimburse Administrative Agent upon demand for its ratable share
of any costs or out-of-pocket expenses (including attorney costs) incurred by
Administrative Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement, any other Loan Document, or
any document contemplated by or referred to herein, to the extent that
Administrative Agent is not reimbursed for such expenses by or on behalf of
Borrower.  The undertaking in this Section 8.7
shall survive termination of the Total Commitment, the payment of all other
Obligations, and the resignation of Administrative Agent.

 

8.8          Administrative Agent
in its Individual Capacity.  Bank
of America and its Affiliates may make loans to, issue letters of credit for
the account of, accept deposits from, acquire equity interests in, and
generally engage in any kind of banking, trust, financial advisory,
underwriting, or other business with each of the Companies and their respective
Affiliates as though Bank of America were not Administrative Agent or Issuing
Bank hereunder and without notice to or consent of Lenders.  Lenders acknowledge that, pursuant to such
activities, Bank of America or its Affiliates may receive information regarding
any Company or its Affiliates (including information that may be subject to
confidentiality obligations in favor of such Company or such Affiliate) and
acknowledge that Administrative Agent shall be under no obligation to provide
such information to them.  With respect
to its Loans, Bank of America shall have the same rights and powers under this
Agreement as any other Lender and may exercise such rights and powers as though
it were not Administrative Agent or Issuing Bank, and the terms “Lender” and “Lenders”
include Bank of America in its individual capacity.

 

8.9          Successor
Administrative Agent. 
Administrative Agent may resign as Administrative Agent upon thirty (30)
days’ notice to Lenders; provided that
any such resignation by Bank of America shall also constitute its resignation
as Issuing Bank and Swing Line Lender. 
If Administrative Agent resigns under this Agreement, then Requisite
Lenders shall appoint from among Lenders a successor administrative agent for
Lenders, which successor administrative agent shall be consented to by Borrower
at all times other than during the existence of an Event of Default (which
consent of Borrower shall not be unreasonably withheld or delayed).  If no successor administrative agent is
appointed prior to the effective date of the resignation of Administrative
Agent, then Administrative Agent may appoint, after consulting with Lenders and
Borrower, a successor administrative agent from among Lenders.  Upon the acceptance of its appointment as
successor administrative agent hereunder, the Person acting as such successor
administrative agent shall succeed to all the rights, powers and duties of the
retiring Administrative Agent, Issuing Bank, and Swing Line Lender and the
respective terms “Administrative Agent,” “Issuing Bank,” and “Swing Line Lender”
shall mean such successor Administrative Agent, Issuing Bank, and Swing Line
Lender and the retiring Administrative Agent’s appointment, powers, and duties
as Administrative Agent shall be terminated, the retiring Issuing Bank’s
rights, powers, and duties as such shall be terminated, and the retiring Swing
Line Lender’s rights, powers, and duties as such shall be terminated, without
any other or further act or deed on the part of such retiring Administrative
Agent, Issuing Bank, Swing Line Lender, or any other Lender, other than the
obligation of the successor Issuing Bank to issue letters of credit in
substitution for the Letters of Credit, if any, outstanding at the time of

 

76

 

such
succession or to make other arrangements satisfactory to the retiring Issuing
Bank to effectively assume the obligations of the retiring Issuing Bank with
respect to such Letters of Credit.  After
any retiring Administrative Agent’s resignation hereunder as Administrative
Agent, the provisions of this Section 8 and Sections 9.2 and 9.3 shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Administrative Agent
under this Agreement.  If no successor administrative
agent has accepted appointment as Administrative Agent by the date which is
thirty (30) days following a retiring Administrative Agent’s notice of
resignation, the retiring Administrative Agent’s resignation shall nevertheless
thereupon become effective and Lenders shall perform all of the duties of
Administrative Agent hereunder until such time, if any, as Requisite Lenders
appoint a successor agent as provided for above.  Bank of America agrees that, for so long as
Bank of America remains Administrative Agent and so long as no Event of Default
has occurred and is continuing, Bank of America, together with its Affiliates,
will hold a Commitment aggregating no less than the amount equal to the
smallest Commitment held by any Lender (without giving effect to any mergers
thereof other than Bank of America).

 

8.10        Administrative Agent
May File Proofs of Claim.  In
case of the pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition, or other judicial
proceeding relative to any Company, Administrative Agent (irrespective of
whether the principal of any Loan or any Letter of Credit Exposure shall then
be due and payable as herein expressed or by declaration or otherwise and
irrespective of whether Administrative Agent shall have made any demand on
Borrower) shall be entitled and empowered, by intervention in such proceeding
or otherwise:

 

(a)           to
file and prove a claim for the whole amount of the principal and interest owing
and unpaid in respect of the Loans, any Letter of Credit Exposure, and all
other Obligations that are owing and unpaid and to file such other documents as
may be necessary or advisable in order to have the claims of Lenders and
Administrative Agent (including any claim for the reasonable compensation,
expenses, disbursements and advances of Lenders and Administrative Agent and
their respective agents and counsel) and all other amounts due Lenders and
Administrative Agent under Sections
2.4 and 9.2
allowed in such judicial proceeding; and

 

(b)           to
collect and receive any monies or other property payable or deliverable on any
such claims and to distribute the same;

 

and
any custodian, receiver, assignee, trustee, liquidator, sequestrator, or other
similar official in any such judicial proceeding is hereby authorized by each
Lender to make such payments to Administrative Agent and, in the event that
Administrative Agent shall consent to the making of such payments directly to
Lenders, to pay to Administrative Agent any amount due for the reasonable
compensation, expenses, disbursements, and advances of Administrative Agent and
its agents and counsel, and any other amounts due Administrative Agent under Sections 2.4 and 9.2.

 

Nothing
contained herein shall be deemed to authorize Administrative Agent to authorize
or consent to or accept or adopt on behalf of any Lender any plan of
reorganization, arrangement, adjustment, or composition affecting the
Obligations or the rights of any Lender or to authorize Administrative Agent to
vote in respect of the claim of any Lender in any such proceeding.

 

8.11        Collateral and Guaranty
Matters.  Lenders irrevocably
authorize Administrative Agent, at its option and in its discretion:

 

77

 

(a)           to
release any Lien on any property granted to or held by Administrative Agent
under any Loan Document (i) upon termination of the Total Commitments and
payment in full of all Obligations (other than contingent indemnification
obligations) and the expiration or termination of every Letter of Credit,
(ii) that is sold or to be sold as part of or in connection with any sale
permitted hereunder or under any other Loan Document, or (iii) if
approved, authorized or ratified, in writing by Requisite Lenders or all Lenders
(to the extent the approval of all Lenders is required pursuant to Section 9.4);

 

(b)           to
release any Guarantor from its obligations under the Subsidiary Guaranty if
such Person ceases to be a Significant Subsidiary as a result of a transaction
permitted hereunder; and

 

(c)           to
enter into Pari Passu Collateral Document Amendments and the Intercreditor
Agreement with respect to Pari Passu Indebtedness.

 

Upon
request by Administrative Agent at any time, Requisite Lenders will confirm in
writing Administrative Agent’s authority to release or subordinate its interest
in particular types or items of property, or to release any Guarantor from its
obligations under the Subsidiary Guaranty pursuant to this Section 8.11.

 

8.12        Other Agents; Arrangers
and Managers.  None of Lenders or
other Persons identified on the facing page or signature pages of this
Agreement as a “syndication agent,” “book manager,” “arranger,” “lead arranger,”
or “co-arranger” shall have any right, power, obligation, liability,
responsibility, or duty under this Agreement other than, in the case of such
Lenders, those applicable to all Lenders as such.  Without limiting the foregoing, no Lenders or
other Persons so identified shall have or be deemed to have any fiduciary
relationship with any Lender.  Each
Lender acknowledges that it has not relied, and will not rely, on any Lenders
or other Persons so identified in deciding to enter into this Agreement or in
taking or not taking action hereunder.

 

8.13        Approval of Lenders.  

 

(a)           All
communications from Administrative Agent to Lenders requesting Lenders’
determination, consent, approval, or disapproval (i) shall be given in the
form of a written notice to each Lender, (ii) shall be accompanied by a
description of the matter or thing as to which such determination, approval,
consent, or disapproval is requested, or shall advise each Lender where such
matter or thing may be inspected, or shall otherwise describe the matter or
issue to be resolved, (iii) shall include, if reasonably requested by a Lender
and to the extent not previously provided to such Lender, written materials and
a summary of all oral information provided to Administrative Agent by Borrower
in respect of the matter or issue to be resolved, and (iv) shall include
Administrative Agent’s recommended course of action or determination in respect
thereof.  Each Lender shall reply
promptly, but in any event (A) within thirty (30) days (or such lesser
period as may be required under the Loan Documents for Administrative Agent to
respond) for those matters requiring the consent by all Lenders, and
(B) within fifteen (15) Business Days (or such lesser period as may be
required under the Loan Documents for Administrative Agent to respond) for
those matters requiring the consent by Requisite Lenders, in each instance,
after receipt of the request therefore by Administrative Agent (in either
event, the “Lender Reply
Period”).

 

78

 

(b)           Unless
a Lender shall give written notice to Administrative Agent that it objects to
the recommendation or determination of Administrative Agent (together with a
written explanation of the reasons behind such objection) contained in a
request described in clause
(a) above that is marked “REQUEST
FOR APPROVAL” within the Lender Reply Period, such Lender shall be
deemed to have approved of or consented to such recommendation or
determination.

 

SECTION 9

MISCELLANEOUS

 

9.1          Assignments and
Participations in Loans.

 

(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, except that Borrower may not assign or otherwise transfer any of its
rights or obligations hereunder without the prior written consent of each Lender
and no Lender may assign or otherwise transfer any of its rights or obligations
hereunder except (i) to an Eligible Assignee in accordance with the provisions
of Section 9.1(b),
(ii) by way of participation in accordance with the provisions of Section 9.1(d),
or (iii) by way of pledge or assignment of a security interest subject to the
restrictions of Section 9.1(f)
(and any other attempted assignment or transfer by any party hereto shall be
null and void).  Nothing in this
Agreement, expressed or implied, shall be construed to confer upon any Person
(other than the parties hereto, their respective successors and assigns
permitted hereby, Participants to the extent provided in Section 9.1(b)
and, to the extent expressly contemplated hereby, the Indemnitees) any legal or
equitable right, remedy, or claim under or by reason of this Agreement.

 

(b)           Any
Lender may at any time assign to one or more Eligible Assignees all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans (including for purposes of this subsection (b),
participations in Letter of Credit Exposure and Swing Line Loans) at the time
owing to it); provided that (i)
except in the case of an assignment of the entire remaining amount of the
assigning Lender’s Commitment and the Loans at the time owing to it or in the
case of an assignment to a Lender or an Affiliate of a Lender or an Approved
Fund (as defined in Section 9.1(g))
with respect to a Lender, the aggregate amount of the Commitment (which for
this purpose includes Loans outstanding thereunder) subject to each such
assignment, determined as of the date the Assignment Agreement with respect to
such assignment is delivered to Administrative Agent or, if “Trade Date” is
specified in the Assignment Agreement, as of the Trade Date, shall not be less
than $5,000,000 unless each of
Administrative Agent and, so long as no Event of Default has occurred and is
continuing, Borrower otherwise consents (each such consent not to be unreasonably
withheld or delayed); (ii) 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 with respect to the Loans or the Commitment
assigned, except that this clause
(ii) shall not apply to rights in respect of Swing Line Loans;
(iii) any assignment of a Commitment must be approved by Administrative Agent,
Swing Line Lender, and Issuing Bank (each such approval not to be unreasonably
withheld or delayed) unless the Person that is the proposed assignee is itself
a Lender (whether or not the proposed assignee would otherwise qualify as an
Eligible Assignee); and (iv) the parties to each assignment shall execute and
deliver to Administrative Agent an Assignment Agreement, together with a
processing and recordation fee of $3,500. 
Subject to acceptance and recording thereof by Administrative Agent
pursuant to Section 9.1(c),
from and after the effective date specified in each Assignment Agreement, the
Eligible Assignee thereunder shall be a party to this Agreement and, to the
extent of the interest assigned by such Assignment Agreement, have the rights
and obligations of a Lender under this Agreement, and the assigning Lender
thereunder shall, to the

 

79

 

extent of the
interest assigned by such Assignment Agreement, be released from its
obligations under this Agreement (and, in the case of an Assignment Agreement
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 2.7, 2.8, and 9.2 with respect to facts and circumstances
occurring prior to the effective date of such assignment).  Upon request, Borrower (at its expense) shall
execute and deliver a Note to the assignee Lender.  Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this subsection 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 Section 9.1(d).

 

(c)           Administrative
Agent, acting solely for this purpose as an agent of Borrower, shall maintain
at Administrative Agent’s office a copy of each Assignment Agreement delivered
to it and a Register for the recordation of the names and addresses of Lenders,
and the Commitments of, and principal amounts of the Loans and Letter of Credit
Exposure owing to, each Lender pursuant to the terms hereof from time to
time.  The entries in the Register shall
be conclusive, and Borrower, Administrative Agent, and Lenders may treat each
Person whose name is recorded in the Register pursuant to the terms hereof as a
Lender hereunder for all purposes of this Agreement, notwithstanding notice to
the contrary.  The Register shall be
available for inspection by Borrower and any Lender, at any reasonable time and
from time to time upon reasonable prior notice.

 

(d)           Any
Lender may at any time, without the consent of, or notice to, Borrower or
Administrative Agent, sell participations to any Person (other than a natural
person or Borrower or any of Borrower’s Affiliates or Subsidiaries) (each, a “Participant”) in all
or a portion of such Lender’s rights and/or obligations under this Agreement
(including all or a portion of its Commitment and/or the Loans (including such
Lender’s participations in Letter of Credit Exposure and Swing Line Loans)
owing to it); provided that
(i) such Lender’s obligations under this Agreement shall remain unchanged,
(ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations and (iii) Borrower,
Administrative Agent, 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, waiver, or other
modification described in clauses (i), (ii), (iii), (iv), (v), (vi), (vii), (viii), (ix) or (x) of Section 9.4(a) that directly affects
such Participant.  Subject to Section 9.1(e),
Borrower agrees that each Participant shall be entitled to the benefits of Sections 2.7 and 2.8 to the same
extent as if it were a Lender and had acquired its interest by assignment
pursuant to Section 9.1(b).  Each Participant agrees to be subject to Section 9.3 as
though it were a Lender.

 

(e)           A
Participant shall not be entitled to receive any greater payment under Section 2.7 or 2.8 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 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 2.7
unless Borrower is notified of the participation sold to such Participant.

 

80

 

(f)            Any
Lender may at any time pledge or assign a security interest in all or any
portion of its rights under this Agreement (including under its Note, if any)
to secure obligations of such Lender, including any pledge or assignment to
secure obligations to a Federal Reserve Bank; provided
that no such pledge or assignment shall release such Lender from any
of its obligations hereunder or substitute any such pledgee or assignee for
such Lender as a party hereto.

 

(g)           As
used in this Section 9,
the following terms have the following meanings:

 

“Approved Fund”
means any Fund 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.

 

“Eligible
Assignee” means (a) a Lender; (b) an Affiliate of a Lender; (c)
an Approved Fund; and (d) any other Person (other than a natural person)
approved by (i) Administrative Agent, Issuing Bank, and Swing Line Lender, and
(ii) unless an Event of Default has occurred and is continuing, Borrower (each
such approval not to be unreasonably withheld or delayed); provided that notwithstanding the
foregoing, “Eligible Assignee” shall not include Borrower or any of Borrower’s
Affiliates or Subsidiaries.

 

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

 

(h)           Notwithstanding
anything to the contrary contained herein, if at any time Bank of America
assigns all of its Commitment and Loans pursuant to subsection (b)
above, Bank of America may, (i) upon thirty (30) days’ notice to Borrower and
Lenders, resign as Issuing Bank and/or (ii) upon thirty (30) days’ notice to
Borrower, resign as Swing Line Lender. 
In the event of any such resignation as Issuing Bank and Swing Line
Lender, Borrower shall be entitled to appoint from among Lenders a successor
Issuing Bank or Swing Line Lender hereunder; provided,
however, that no failure by Borrower to appoint any such successor
shall affect the resignation of Bank of America as Issuing Bank or Swing Line
Lender.  If Bank of America resigns as
Issuing Bank, then it shall retain all the rights and obligations of Issuing
Bank hereunder with respect to any Letter of Credit outstanding as of the
effective date of its resignation as Issuing Bank and all Letter of Credit
Exposure with respect thereto.  If Bank
of America resigns as Swing Line Lender, it shall retain all the rights of the
Swing Line Lender provided for hereunder with respect to Swing Line Loans made
by it and outstanding as of the effective date of such resignation, including
the right to require the Lenders to make Base Rate Committed Loans or fund risk
participations in outstanding Swing Line Loans pursuant to Section 2.12(c).

 

9.2          Expenses; Indemnity;
Damage Waiver.

 

(a)           Costs
and Expenses.  Borrower shall pay
(i) all reasonable out-of-pocket expenses incurred by Administrative Agent
and its Affiliates (including the reasonable fees, charges and disbursements of
counsel for Administrative Agent), in connection with the syndication of the
credit facilities provided for herein, the preparation, negotiation, execution,
delivery and administration of this Agreement and the other Loan Documents or
any amendments, modifications or waivers of the provisions hereof or 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 Administrative Agent, any Lender or the Issuing Bank

 

81

 

(including the fees, charges and disbursements of any counsel for
Administrative Agent, any Lender or the Issuing Bank), and shall pay all fees
and time charges for attorneys who may be employees of Administrative Agent,
any Lender or the Issuing Bank, in connection with the enforcement or
protection of its rights (A) in connection with this Agreement and the
other Loan Documents, including its rights under this Section, or (B) 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.

 

(b)           Indemnification
by Borrower.  Borrower shall
indemnify Administrative Agent (and any sub-agent thereof), each Lender and the
Issuing Bank, and each Agent-Related Person 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), and shall
indemnify and hold harmless each Indemnitee from all fees and time charges and
disbursements for attorneys who may be employees of any Indemnitee,
incurred by any Indemnitee or asserted against any Indemnitee by any third
party or by Borrower or any other Company arising out of, in connection with,
or as a result of (i) the execution or delivery of this Agreement, any
other Loan Document or any agreement or instrument contemplated hereby or
thereby, the performance by the parties hereto of their respective obligations
hereunder or thereunder or the consummation of the transactions contemplated
hereby or thereby, (ii) any Loan or Letter
of Credit or the use or proposed 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 property owned or operated by Borrower or any of its Subsidiaries,
or any Environmental Claim related in any way to 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, whether brought by a third party or by Borrower
or any other Loan Party, and regardless of whether any Indemnitee is a party
thereto, in all cases, whether or not caused
by or arising, in whole or in part, out of the comparative, contributory or
sole negligence of the Indemnitee; provided
that such indemnity shall not, as to any Indemnitee, be available to the extent
that such losses, claims, damages, liabilities or related expenses (x) are
determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of
such Indemnitee or (y) result from a claim brought by Borrower or any
other Company against an Indemnitee for breach in bad faith of such Indemnitee’s
obligations hereunder or under any other Loan Document, if Borrower or such
Company has obtained a final and nonappealable judgment in its favor on such
claim as determined by a court of competent jurisdiction.

 

(c)           Reimbursement
by Lenders.  To the extent that
Borrower for any reason fails to indefeasibly pay any amount required under Sections 9.2(a) or (b) to be paid by it
to Administrative Agent (or any sub-agent thereof), the Issuing Bank or any
Agent-Related Person of any of the foregoing, each Lender severally agrees to
pay to Administrative Agent (or any such sub-agent), the Issuing Bank or such
Agent-Related Person, 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 Administrative Agent (or any such sub-agent) or the
Issuing Bank in its capacity as such, or against any Agent-Related Person of any
of the foregoing acting for Administrative Agent (or any such sub-agent) or
Issuing Bank in connection with such capacity. 
The obligations of the Lenders under this subsection (c) are
subject to the provisions of Section 9.11.

 

82

 

(d)           Waiver
of Consequential Damages, Etc. 
To the fullest extent permitted by applicable law, Borrower shall not
assert, and hereby waives, any claim against any Indemnitee, on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed
to direct or actual damages) arising out of, in connection with, or as a result
of, this Agreement, any other Loan Document or any agreement or instrument
contemplated hereby, the transactions contemplated hereby or thereby, any Loan
or Letter of Credit or the use
of the proceeds thereof.  No Indemnitee
referred to in subsection (b)
above shall be liable for any damages arising from the use by unintended
recipients of any information or other materials distributed by it through
telecommunications, electronic or other information transmission systems in
connection with this Agreement or the other Loan Documents or the transactions
contemplated hereby or thereby.

 

(e)           Payments.  All amounts due under this Section 9.2
shall be payable not later than ten (10) Business Days after demand therefor.

 

(f)            Survival.  The agreements in this Section 9.2
shall survive the resignation of Administrative Agent and the Issuing Bank, the replacement of any Lender, the
termination of the Total Commitment and the repayment, satisfaction or
discharge of all the other Obligations.

 

9.3          Ratable Sharing.  Lenders hereby agree among themselves that if
any of them shall, whether by voluntary payment (other than a voluntary
prepayment of Loans made and applied in accordance with the terms of this
Agreement), by realization upon security, through the exercise of any right of
set-off or banker’s lien, by counterclaim or cross action or by the enforcement
of any right under the Loan Documents or otherwise, or as adequate protection
of a deposit treated as cash collateral under the Bankruptcy Code, receive
payment or reduction of a proportion of the aggregate amount of principal,
interest, fees, and other amounts then due and owing to such Lender hereunder
or under the other Loan Documents (collectively, the “Aggregate Amounts Due” to such Lender) which
is greater than the proportion received by any other Lender in respect of the
Aggregate Amounts Due to such other Lender, then the Lender receiving such
proportionately greater payment shall (a) notify Administrative Agent and
each other Lender of the receipt of such payment, and (b) apply a portion
of such payment to purchase participations (which it shall be deemed to have
purchased from each seller of a participation simultaneously upon the receipt
by such seller of its portion of such payment) in the Aggregate Amounts Due to
the other Lenders so that all such recoveries of Aggregate Amounts Due shall be
shared by all Lenders in proportion to the Aggregate Amounts Due to them; provided that if all or part of such
proportionately greater payment received by such purchasing Lender is
thereafter recovered from such Lender upon the bankruptcy or reorganization of
Borrower or otherwise, then those purchases shall be rescinded and the purchase
prices paid for such participations shall be returned to such purchasing Lender
ratably to the extent of such recovery, but without interest.

 

9.4          Amendments and
Waivers.

 

(a)           Except
as provided in Section 2.10(d),
no amendment, modification, termination, or waiver of any provision of this
Agreement, the Notes, or the other Loan Documents, and no consent to any
departure by Borrower therefrom, shall in any event be effective without the
written concurrence of Requisite Lenders; provided
that no such amendment,
modification, termination, waiver, or consent shall:

 

(i)            increase the Total Commitment to an amount in
excess of $250,000,000 (other than pursuant to Section 2.11) without written
consent of each Lender;

 

83

 

(ii)           increase the amount of any Lender’s
Commitment or reduce the principal amount of any of the Loans, in each case
without written consent of each Lender directly affected thereby;

 

(iii)         change in any manner the definitions of “Pro Rata Share,” “Commitment Percentage,”
or “Requisite Lenders,”
without the written consent of all Lenders;

 

(iv)          change in any manner any provision of this
Agreement, which, by its terms, expressly requires the approval or concurrence
of all Lenders, without the written consent of all Lenders;

 

(v)            postpone the scheduled final maturity date of
any of the Loans or change in any manner the provisions contained in Section 7.1
without the written consent of each Lender directly affected thereby;

 

(vi)          change the rate, amount, or scheduled date
for payment of any interest or fees payable hereunder without the written
consent of each Lender directly affected thereby;

 

(vii)         increases the maximum duration of Interest
Periods permitted hereunder without the written consent of each Lender directly
affected thereby;

 

(viii)        change in any manner the provisions contained
in this Section 9.4
without the written consent of all Lenders;

 

(ix)          except as provided below, release all or any
material portion of the Collateral (other than Collateral sold or otherwise
disposed of in transactions not prohibited by this Agreement) without the
written consent of all Lenders;

 

(x)           except as provided below, release or waive
the requirement of any guaranty without the written consent of all Lenders; or

 

(xi)          solely for purposes of determining the
Applicable Margin and not for purposes of determining compliance with any
financial covenant, change the manner of computation of any financial covenant
(including any defined terms with respect thereto) used in determining the
Applicable Margin that would result in a reduction of any interest rate on any
Loan without the written consent of each Lender affected thereby.

 

(b)           Any
amendment or supplement to, or waiver or consent under, any Loan Document that
purports to accomplish any of the following must be by a writing executed by
Borrower and executed (or approved in writing, as the case may be) by the
affected Agent, Swing Line Lender, or Issuing Bank, as the case may be (in
addition to the Requisite Lenders or all Lenders, as the case may be, as
required by this Section 9.4):
(i) extends the due date for, decreases the amount or rate of calculation
of, or waives the late or non-payment of, any fees payable to such Agent, Swing
Line Lender, or Issuing Bank under any Loan Document, except, in each case, any adjustments or
reductions that are contemplated by any Loan Document; (ii) increases such
Agent’s, Swing Line Lender’s, or Issuing Bank’s, as the case may be,
obligations beyond its commitments under any Loan Document; or
(iii) changes this clause (b)
or any other matter specifically requiring the consent of such Agent, Swing
Line Lender, or Issuing Bank, as the case may be, under any Loan Document.

 

84

 

(c)           Any
Letter of Credit may be renewed, extended, amended, replaced, or canceled
consistent with the terms of this Agreement by a writing executed by Issuing
Bank and Borrower if that writing is first approved in writing by Administrative
Agent.

 

(d)           Administrative
Agent may, but shall have no obligation to, with the concurrence of any Lender,
execute amendments, modifications, waivers, or consents on behalf of such
Lender.  Any waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
it was given.  No notice to or demand on
Borrower in any case shall entitle Borrower to any other or further notice or
demand in similar or other circumstances. 
Any amendment, modification, termination, waiver, or consent effected in
accordance with this Section 9.4
shall be binding upon each Lender at the time outstanding, each future Lender,
and, if signed by Borrower, on Borrower.

 

9.5          Independence of
Covenants.  All covenants
hereunder shall be given independent effect so that if a particular action or
condition is not permitted by any of such covenants, the fact that it would be
permitted by an exception to, or would otherwise be within the limitations of
another covenant shall not avoid the occurrence of a Potential Default or Event
of Default if such action is taken or condition exists.

 

9.6          Notices.  Unless otherwise specifically provided
herein, any notice or other communication herein required or permitted to be
given shall be in writing and may be personally served, telexed, or sent by
telefacsimile or United States mail or courier service and shall be deemed to
have been given when delivered in person or by courier service, upon receipt of
telefacsimile or telex, or three (3) Business Days after depositing it in the
United States mail with postage prepaid and properly addressed; provided that notices to Administrative
Agent shall not be effective until received. 
For the purposes hereof, the address of each party hereto shall be as
set forth on Schedule 2.1
or (a) as to Borrower and Administrative Agent, such other address as
shall be designated by such Person in a written notice delivered to the other
parties hereto, and (b) as to each other party, such other address as
shall be designated by such party in a written notice delivered to
Administrative Agent.

 

9.7          Survival of
Representations, Warranties, and Agreements.

 

(a)           All
representations and warranties made hereunder and in any other Loan Document or
other document delivered pursuant hereto or thereto or in connection herewith
or therewith shall survive the execution and delivery hereof and thereof.  Such representations and warranties have been
or will be relied upon by Administrative Agent and each Lender, regardless of
any investigation made by Administrative Agent or any Lender or on their behalf
and notwithstanding that Administrative Agent or any Lender may have had notice
or knowledge of any Event of Default at the time of any Loan, and shall
continue in full force and effect as long as any Loan or any other Obligation
hereunder shall remain unpaid or unsatisfied or any Letter of Credit shall
remain outstanding.

 

(b)           Notwithstanding
anything in this Agreement or implied by law to the contrary, the agreements of
Borrower set forth in Sections 2.7(d),
2.8, 9.2, and 9.3 and the
agreements of Lenders set forth in Sections 8.7 and 9.4 shall survive the
payment of the Loans and the termination of this Agreement.

 

9.8          Failure or Indulgence
Not Waiver; Remedies Cumulative. 
No failure or delay on the part of Administrative Agent or any Lender in
the exercise of any power, right, or privilege hereunder or under any other
Loan Document shall impair such power, right, or privilege or be construed to
be a waiver of any default or acquiescence therein, nor shall any single or
partial exercise of any such power,

 

85

 

right, or
privilege preclude other or further exercise thereof or of any other power,
right, or privilege.  All rights and
remedies existing under this Agreement and the other Loan Documents are
cumulative to, and not exclusive of, any rights or remedies otherwise
available.

 

9.9          Marshalling; Payments
Set Aside.  Neither
Administrative Agent nor any Lender shall be under any obligation to marshal
any assets in favor of Borrower or any other party or against or in payment of
any or all of the Obligations.  To the
extent that Borrower makes a payment or payments to Administrative Agent or
Lenders (or to Administrative Agent for the benefit of Lenders), or
Administrative Agent or Lenders enforce any security interests, and such
payment or payments or the proceeds of such enforcement or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside,
and/or required to be repaid to a trustee, receiver, or any other party under
any bankruptcy law, any other Legal Requirement, common law, or any equitable
cause, then, to the extent of such recovery, the obligation or part thereof
originally intended to be satisfied, and all Liens, rights, and remedies
therefor or related thereto, shall be revived and continued in full force and
effect as if such payment or payments had not been made or such enforcement or
setoff had not occurred.

 

9.10        Severability.  In case any provision in or obligation under
this Agreement or the Notes shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality, and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other jurisdiction,
shall not in any way be affected or impaired thereby.

 

9.11        Obligations Several;
Independent Nature of Lenders’ Rights. 
The obligations of Lenders hereunder are several and no Lender shall be
responsible for the obligations or Commitment of any other Lender
hereunder.  Nothing contained herein or
in any other Loan Document, and no action taken by Lenders pursuant hereto or
thereto, shall be deemed to constitute Lenders as a partnership, an
association, a joint venture, or any other kind of entity.  The amounts payable at any time hereunder to
each Lender shall be a separate and independent debt, and each Lender shall be
entitled to protect and enforce its rights arising out of this Agreement and it
shall not be necessary for any other Lender to be joined as an additional party
in any proceeding for such purpose.

 

9.12        Headings.  Section and section headings in
this Agreement are included herein for convenience of reference only and shall
not constitute a part of this Agreement for any other purpose or be given any
substantive effect.

 

9.13        Applicable Law.  THIS AGREEMENT SHALL BE GOVERNED BY, AND
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE
STATE OF TEXAS, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.

 

9.14        Successors and Assigns.  This Agreement shall be binding upon the
parties hereto and their respective successors and assigns and shall inure to
the benefit of the parties hereto and the successors and assigns of Lenders (it
being understood that Lenders’ rights of assignment are subject to Section 9.1).
Neither Borrower’s rights or obligations hereunder nor any interest therein may
be assigned or delegated by Borrower without the prior written consent of all
Lenders.

 

9.15        Consent to Jurisdiction
and Service of Process.  ALL
JUDICIAL PROCEEDINGS BROUGHT AGAINST BORROWER ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY OBLIGATION MAY BE BROUGHT IN
ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE OF TEXAS, AND
BY EXECUTION AND DELIVERY OF THIS AGREEMENT BORROWER ACCEPTS FOR ITSELF AND

 

86

 

IN CONNECTION
WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE EXCLUSIVE JURISDICTION
OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS AND
IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION
WITH THIS AGREEMENT, SUCH OTHER LOAN DOCUMENT OR SUCH OBLIGATION.  Borrower hereby agrees that service of all
process in any such proceeding in any such court may be made by registered or
certified mail, return receipt requested, to Borrower at its address provided
in Section 9.6,
such service being hereby acknowledged by Borrower to be sufficient for
personal jurisdiction in any action against Borrower in any such court and to
be otherwise effective and binding service in every respect.  Nothing herein shall affect the right to
serve process in any other manner permitted by law or shall limit the right of
any Lender to bring proceedings against Borrower in the courts of any other
jurisdiction.

 

9.16        Waiver of Jury Trial.
EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY
OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT
OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE
PARTIES HERETO OR ANY OF THEM WITH RESPECT TO ANY LOAN DOCUMENT, OR THE
TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY
HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO
THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH
ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE
WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

 

9.17        Confidentiality.  Each Lender shall hold all non-public
information obtained pursuant to the requirements of this Agreement which has
been identified as confidential by Borrower in accordance with such Lender’s
customary procedures for handling confidential information of this nature and
in accordance with safe and sound banking practices, it being understood and
agreed by Borrower that in any event a Lender may make disclosures to
Affiliates of such Lender or disclosures reasonably required by any bona fide
assignee, transferee or participant in connection with the contemplated
assignment or transfer by such Lender of its Loan or any participations therein
or disclosures required or requested by any Governmental Authority or
representative thereof or pursuant to legal process; provided that, unless specifically prohibited by applicable
law or court order, each Lender shall notify Borrower of any request by any
Governmental Authority or representative thereof (other than any such request
in connection with any examination of the financial condition of such Lender by
such Governmental Authority) for disclosure of any such non-public information
prior to disclosure of such information; and provided
further that in no event shall
any Lender be obligated or required to return any materials furnished by any
Company.

 

87

 

9.18        Counterparts; Effectiveness.  This Agreement and any amendments, waivers,
consents or supplements hereto or in connection herewith may be executed in any
number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument; signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages
are physically attached to the same document. 
This Agreement shall become effective upon the execution of a
counterpart hereof by each of the parties hereto and receipt by Borrower and
Administrative Agent of written or telephonic notification of such execution
and authorization of delivery thereof.

 

9.19        USA PATRIOT Act Notice.  Each Lender that is subject to the Act (as
hereinafter defined) and Administrative Agent (for itself and not on behalf of
any Lender) hereby notifies Borrower that pursuant to the requirements of the
USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)) (the “Act”), it is
required to obtain, verify and record information that identifies Borrower,
which information includes the name and address of Borrower and other
information that will allow such Lender or Administrative Agent, as applicable,
to identify Borrower in accordance with the Act.

 

9.20        Replacement of Lenders.  If any Lender requests compensation under Sections 2.8, or
if Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Sections 2.8, or
if any Lender is a Defaulting Lender, then Borrower may, at its sole expense
and effort, upon notice to such Lender and Administrative Agent, require such
Lender to assign and delegate, without recourse (in accordance with and subject
to the restrictions contained in, and consents required by, Section 9.1),
all of its interests, rights and obligations under this Agreement and the related
Loan Documents to an assignee that shall assume such obligations (which
assignee may be another Lender, if a Lender accepts such assignment), provided
that:.

 

88

 

(a)           Administrative
Agent shall have been paid the assignment fee specified in Section 9.1(b);

 

(b)           such
Lender shall have received payment of an amount equal to the outstanding
principal of its Loans and L/C Advances, accrued interest thereon, accrued fees
and all other amounts payable to it hereunder and under the other Loan
Documents from the assignee (to the extent of such outstanding principal and
accrued interest and fees) or Borrower (in the case of all other amounts);

 

(c)           in
the case of any such assignment resulting from a claim for compensation under Section 2.8
or payments required to be made pursuant to Section 2.8, such assignment will result
in a reduction in such compensation or payments thereafter; and

 

(d)           such
assignment does not conflict with applicable Legal Requirements.

 

A Lender shall
not be required to make any such assignment or delegation if, prior thereto, as
a result of a waiver by such Lender or otherwise, the circumstances entitling
Borrower to require such assignment and delegation cease to apply.

 

9.21        Entire Agreement.  THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. 
THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.

 

[Remainder of page intentionally left blank;

signature pages follow.]

 

89

SIGNATURE
PAGE TO

CREDIT
AGREEMENT

EXECUTED
BY

TRAMMELL
CROW COMPANY, AS BORROWER,

BANK
OF AMERICA, N.A., AS ADMINISTRATIVE AGENT, SWING LINE LENDER, AND ISSUING BANK,

AND THE
LENDERS DEFINED THEREIN

 

 

 

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

 

TRAMMELL CROW COMPANY,

a Delaware corporation, as Borrower

 

 

	
  By:

  	
  /s/
  DEREK R. MCCLAIN

  
	
  Name:

  	
  DEREK
  R. MCCLAIN

  
	
  Title: 

  	
  EXECUTIVE VICE PRESIDENT AND CHIEF
  FINANCIAL OFFICE

  

 

 

 

SIGNATURE
PAGE TO

CREDIT
AGREEMENT

EXECUTED
BY

TRAMMELL
CROW COMPANY, AS BORROWER,

BANK
OF AMERICA, N.A., AS ADMINISTRATIVE AGENT, SWING LINE LENDER, AND ISSUING BANK,

AND THE
LENDERS DEFINED THEREIN

 

 

 

BANK OF AMERICA, N.A.,

as Administrative Agent

 

 

	
  By:

  	
  /s/
  RONALD ODLOZIL

  
	
  Name:
  

  	
  RONALD
  ODLOZIL

  
	
  Title:
  

  	
  SENIOR
  VICE PRESIDENT

  

 

 

 

SIGNATURE
PAGE TO

CREDIT
AGREEMENT

EXECUTED
BY

TRAMMELL
CROW COMPANY, AS BORROWER,

BANK
OF AMERICA, N.A., AS ADMINISTRATIVE AGENT, SWING LINE LENDER, AND ISSUING BANK,

AND THE
LENDERS DEFINED THEREIN

 

 

 

BANK OF AMERICA, N.A.,

as Issuing Bank, Swing Line Lender, and a Lender

 

 

	
  By:

  	
  /s/
  RONALD ODLOZIL

  
	
  Name:
  

  	
  RONALD
  ODLOZIL

  
	
  Title:
  

  	
  SENIOR
  VICE PRESIDENT

  

 

 

 

SIGNATURE
PAGE TO

CREDIT
AGREEMENT

EXECUTED
BY

TRAMMELL
CROW COMPANY, AS BORROWER,

BANK
OF AMERICA, N.A., AS ADMINISTRATIVE AGENT, SWING LINE LENDER, AND ISSUING BANK,

AND THE
LENDERS DEFINED THEREIN

 

 

 

FIRST TENNESSEE BANK, N.A.

as a Lender

 

 

	
  By:

  	
  /s/
  SAM JENKINS

  
	
  Name:
  

  	
  SAM
  JENKINS

  
	
  Title:
  

  	
  EXECUTIVE
  VICE PRESIDENT

  

 

 

 

SIGNATURE
PAGE TO

CREDIT
AGREEMENT

EXECUTED
BY

TRAMMELL
CROW COMPANY, AS BORROWER,

BANK
OF AMERICA, N.A., AS ADMINISTRATIVE AGENT, SWING LINE LENDER, AND ISSUING BANK,

AND THE
LENDERS DEFINED THEREIN

 

 

 

U.S. BANK, N.A.,

as a Lender

 

 

	
  By:

  	
  /s/
  STEWART J. WILSON

  
	
  Name:
  

  	
  STEWART
  J. WILSON

  
	
  Title:
  

  	
  SENIOR
  VICE PRESIDENT

  

 

 

 

SIGNATURE
PAGE TO

CREDIT
AGREEMENT

EXECUTED
BY

TRAMMELL
CROW COMPANY, AS BORROWER,

BANK
OF AMERICA, N.A., AS ADMINISTRATIVE AGENT, SWING LINE LENDER, AND ISSUING BANK,

AND THE
LENDERS DEFINED THEREIN

 

 

 

THE BANK OF NOVA SCOTIA,

as a Lender

 

 

	
  By:

  	
  /s/
  CHRIS OSBORN

  
	
  Name:
  

  	
  CHRIS
  OSBORN

  
	
  Title:
  

  	
  MANAGING
  DIRECTOR

  

 

 

 

SIGNATURE
PAGE TO

CREDIT
AGREEMENT

EXECUTED
BY

TRAMMELL
CROW COMPANY, AS BORROWER,

BANK
OF AMERICA, N.A., AS ADMINISTRATIVE AGENT, SWING LINE LENDER, AND ISSUING BANK,

AND THE
LENDERS DEFINED THEREIN

 

 

 

UNION BANK OF CALIFORNIA, N.A.

as a Lender

 

 

	
  By:

  	
  /s/
  PATRICK TROWBRIDGE

  
	
  Name:
  

  	
  PATRICK
  TROWBRIDGE

  
	
  Title:
  

  	
  VICE
  PRESDIENT

  

 

 

 

SIGNATURE
PAGE TO

CREDIT
AGREEMENT

EXECUTED
BY

TRAMMELL
CROW COMPANY, AS BORROWER,

BANK
OF AMERICA, N.A., AS ADMINISTRATIVE AGENT, SWING LINE LENDER, AND ISSUING BANK,

AND THE
LENDERS DEFINED THEREIN

 

 

 

LASALLE BANK NATIONAL ASSOCIATION,

as a Lender

 

 

	
  By:

  	
  /s/
  JOSHUA A. PROCTOR

  
	
  Name:
  

  	
  JOSHUA
  A. PROCTOR

  
	
  Title:
  

  	
  ASSISTANT
  VICE PRESIDENT

  

 

 

 

SIGNATURE
PAGE TO

CREDIT
AGREEMENT

EXECUTED
BY

TRAMMELL
CROW COMPANY, AS BORROWER,

BANK
OF AMERICA, N.A., AS ADMINISTRATIVE AGENT, SWING LINE LENDER, AND ISSUING BANK,

AND THE
LENDERS DEFINED THEREIN

 

 

 

AMEGY BANK NATIONAL ASSOCIATION,

as a Lender

 

 

	
  By:

  	
  /s/
  BRANDON BLEDSOE

  
	
  Name:
  

  	
  BRANDON
  BLEDSOE

  
	
  Title:
  

  	
  SENIOR
  VICE PRESIDENT

  

 

 

 

SIGNATURE
PAGE TO

CREDIT
AGREEMENT

EXECUTED
BY

TRAMMELL
CROW COMPANY, AS BORROWER,

BANK
OF AMERICA, N.A., AS ADMINISTRATIVE AGENT, SWING LINE LENDER, AND ISSUING BANK,

AND THE
LENDERS DEFINED THEREIN

 

 

 

PNC BANK, NATIONAL ASSOCIATION,

as a Lender

 

 

	
  By:

  	
  /s/
  JAMES A. HARMANN

  
	
  Name:
  

  	
  JAMES
  A. HARMANN

  
	
  Title:
  

  	
  VICE
  PRESIDENT

  

 

 

 

SIGNATURE
PAGE TO

CREDIT
AGREEMENT

EXECUTED
BY

TRAMMELL
CROW COMPANY, AS BORROWER,

BANK
OF AMERICA, N.A., AS ADMINISTRATIVE AGENT, SWING LINE LENDER, AND ISSUING BANK,

AND THE
LENDERS DEFINED THEREIN

 

 

 

CALIFORNIA BANK & TRUST, a California banking corporation, as a Lender

 

 

	
  By:

  	
  /s/
  KIRK K. MONROE

  
	
  Name:
  

  	
  KIRK
  K. MONROE

  
	
  Title:
  

  	
  SENIOR
  VICE PRESIDENT

  

 

 

 

SIGNATURE
PAGE TO

CREDIT
AGREEMENT

EXECUTED
BY

TRAMMELL
CROW COMPANY, AS BORROWER,

BANK
OF AMERICA, N.A., AS ADMINISTRATIVE AGENT, SWING LINE LENDER, AND ISSUING BANK,

AND THE
LENDERS DEFINED THEREIN

 

 

 

COMERICA BANK,

as a Lender

 

 

	
  By:

  	
  /s/
  KEVIN E. CRAYTON

  
	
  Name:
  

  	
  KEVIN
  E. CRAYTON

  
	
  Title:
  

  	
  VICE
  PRESIDENT — TEXAS DIVISION

  

 

 

 

SIGNATURE
PAGE TO

CREDIT
AGREEMENT

EXECUTED
BY

TRAMMELL
CROW COMPANY, AS BORROWER,

BANK
OF AMERICA, N.A., AS ADMINISTRATIVE AGENT, SWING LINE LENDER, AND ISSUING BANK,

AND THE
LENDERS DEFINED THEREIN

 

 

 

BANK MIDWEST, N.A.,

as a Lender

 

 

	
  By:

  	
  /s/
  JOHN E. BAXTER

  
	
  Name:
  

  	
  JOHN
  E. BAXTER

  
	
  Title:
  

  	
  SENIOR
  VICE PRESIDENT

  

 

 

 

 

 

EXHIBIT A

 

FORM OF ASSIGNMENT AND ACCEPTANCE

 

This
Assignment and Assumption (this “Assignment and Assumption”) is dated as of
the Effective Date set forth below and is entered into by and between [Insert name of Assignor] (the “Assignor”) and [Insert name of Assignee] (the “Assignee”).  Capitalized terms used but not defined herein
shall have the meanings given to them in the Credit Agreement identified below
(as modified, amended, renewed, extended, and restated from time to time, the “Credit Agreement”),
receipt of a copy of which is hereby acknowledged by the Assignee.  The Standard Terms and Conditions set forth
in Annex 1 attached
hereto are hereby agreed to and incorporated herein by reference and made a
part of this Assignment and Assumption as if set forth herein in full.

 

For
an agreed consideration, the Assignor hereby irrevocably sells and assigns to
the Assignee, and the Assignee hereby irrevocably purchases and assumes from
the Assignor, subject to and in accordance with the Standard Terms and Conditions
and the Credit Agreement, as of the Effective Date inserted by Administrative
Agent as contemplated below (i) all of the Assignor’s rights and
obligations as a Lender under the Credit Agreement and any other documents or
instruments delivered pursuant thereto to the extent related to the amount and
percentage interest identified below of all of such outstanding rights and
obligations of the Assignor under the respective facilities identified below
(including, without limitation, any LC or Guaranty included in such facilities)
and (ii) to the extent permitted to be assigned under applicable law, all
claims, suits, causes of action and any other right of the Assignor (in its
capacity as a Lender) against any Person, whether known or unknown, arising
under or in connection with the Credit Agreement, any other documents or
instruments delivered pursuant thereto or the loan transactions governed
thereby or in any way based on or related to any of the foregoing, including,
but not limited to, contract claims, tort claims, malpractice claims, statutory
claims and all other claims at law or in equity related to the rights and
obligations sold and assigned pursuant to clause (i) above (the rights and
obligations sold and assigned pursuant to clauses (i) and (ii) above
being referred to herein collectively as, the “Assigned Interest”).  Such sale and assignment is without recourse
to the Assignor and, except as expressly provided in this Assignment and
Assumption, without representation or warranty by the Assignor.

 

	
  1.

  	
  Assignor:

  	
   

  
	
   

  	
   

  	
   

  
	
  2.

  	
  Assignee:

  	
                                                                             [and
  is an Affiliate/Approved Fund of [identify
  Lender]]

  
	
   

  	
   

  	
   

  
	
  3.

  	
  Borrower(s):

  	
  Trammell
  Crow Company, a Delaware corporation

  
	
   

  	
   

  	
   

  
	
  4.

  	
  Administrative
  Agent:

  	
  Bank
  of America, N.A., as the administrative agent under the Credit Agreement

  
	
   

  	
   

  	
   

  
	
  5.

  	
  Credit
  Agreement:

  	
  The
  Credit Agreement dated as of June 28, 2005 among Trammell Crow Company,
  Bank of America, N.A., as Administrative Agent and as Issuing Bank, and the
  Lenders defined therein.

  

 

 

6.             Assigned Interest:

 

	
  Facility
  Assigned

  	
   

  	
  Aggregate Total

  Commitment for all Lenders*

  	
   

  	
  Amount of

  Commitment Assigned*

  	
   

  	
  Percentage Assigned of

  Total Commitment(1)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
                   (2)

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
   

  	
  %

  
	
   

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
   

  	
  %

  
	
   

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
  ______________

  	
  %

  

 

[7.            Trade Date:                                        ](3)

 

Effective
Date:                                ,
20     [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH
SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER
THEREFOR.]

 

The
terms set forth in this Assignment and Assumption are hereby agreed to:

 

	
   

  	
  ASSIGNOR

  
	
   

  	
   

  
	
   

  	
  [NAME
  OF ASSIGNOR]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  ASSIGNEE

  
	
   

  	
  [NAME
  OF ASSIGNEE]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

*                                         Amount to be adjusted by the counterparties
to take into account any payments or prepayments made between the Trade Date
and the Effective Date.

 

(1)                                  Set forth, to at least 9 decimals, as a
percentage of the Commitment of all Lenders thereunder.

 

(2)                                  Fill in the appropriate terminology for the
types of facilities under the Credit Agreement that are being assigned under
this Assignment (e.g. “Revolving Credit Commitment,” “Term Loan Commitment,”
etc.).

 

(3)                                  To be completed if the Assignor and the
Assignee intend that the minimum assignment amount is to be determined as of
the Trade Date.

 

2

 

Consented
to and Accepted:

 

BANK
OF AMERICA, N.A.,

as
Administrative Agent and Issuing Bank

 

 

	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
					

 

Consented
to:

 

TRAMMELL
CROW COMPANY, a Delaware corporation

 

 

	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
					

 

3

 

ANNEX 1

 

STANDARD TERMS AND CONDITIONS FOR

 

ASSIGNMENT AND ASSUMPTION

 

1.             Representations and Warranties.

 

1.1.          Assignor.  The Assignor: (a) represents and
warrants that (i) it is the legal and beneficial owner of the Assigned
Interest, (ii) the Assigned Interest is free and clear of any lien,
encumbrance, or other adverse claim, and (iii) it has full power and
authority, and has taken all action necessary, to execute and deliver this
Assignment and Assumption and to consummate the transactions contemplated
hereby; and (b) assumes no responsibility with respect to (i) any
statements, warranties, or representations made in or in connection with the
Credit Agreement or any other Loan Document, (ii) the execution, legality,
validity, enforceability, genuineness, sufficiency, or value of the Loan
Documents or any collateral thereunder, (iii) the financial condition of
Borrower, any of its Subsidiaries or Affiliates, or any other Person obligated
in respect of any Loan Document, or (iv) the performance or observance by
Borrower, any of its Subsidiaries or Affiliates, or any other Person of any of
their respective obligations under any Loan Document.

 

1.2.          Assignee.  The Assignee: (a) represents and
warrants that (i) it has full power and authority, and has taken all
action necessary, to execute and deliver this Assignment and Assumption and to
consummate the transactions contemplated hereby and to become a Lender under
the Credit Agreement, (ii) it meets all requirements of an Eligible
Assignee under the Credit Agreement (subject to receipt of such consents as may
be required under the Credit Agreement), (iii) from and after the
Effective Date, it shall be bound by the provisions of the Credit Agreement as
a Lender thereunder and, to the extent of the Assigned Interest, shall have the
obligations of a Lender thereunder, (iv) it has received a copy of the
Credit Agreement, together with copies of the most recent financial statements
delivered pursuant to Section 5.1
thereof, as applicable, and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
this Assignment and Assumption and to purchase the Assigned Interest on the
basis of which it has made such analysis and decision independently and without
reliance on Administrative Agent or any other Lender, and (v) if it is a
foreign Lender, attached hereto is any documentation required to be delivered
by it pursuant to the terms of the Credit Agreement, duly completed and
executed by the Assignee; and (b) agrees with Assignor for the benefit of
Administrative Agent and Borrower that (i) it will, independently and
without reliance on Administrative Agent, the Assignor, or any other Lender,
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under the Loan Documents, and (ii) it will perform in accordance with
their terms all of the obligations which by the terms of the Loan Documents are
required to be performed by it as a Lender.

 

2.             Payments.  From and after the Effective Date,
Administrative Agent shall make all payments in respect of the Assigned
interest (including payments of principal, interest, fees, and other amounts)
to the Assignee whether such amounts have accrued prior to or on or after the
Effective Date. The Assignor and the Assignee shall make all appropriate
adjustments in payments by Administrative Agent for periods prior to the
Effective Date or with respect to the making of this assignment directly
between themselves.

 

3.             General Provisions.  This Assignment and Assumption shall be
binding upon, and inure to the benefit of, the parties hereto and their
respective successors and assigns.  This
Assignment and Assumption may be

 

4

 

executed
in any number of counterparts, which together shall constitute one
instrument.  Delivery of an executed
counterpart of a signature page of this Assignment and Assumption by
telecopy shall be effective as delivery of a manually executed counterpart of
this Assignment and Assumption.  This
Assignment and Assumption shall be governed by, and construed in accordance
with, the law of the State of Texas.

 

5

 

EXHIBIT B

 

FORM OF BORROWER PLEDGE AGREEMENT

 

THIS
BORROWER PLEDGE AGREEMENT (this “Agreement”) is dated as of June 28, 2005
and entered into by and between TRAMMELL CROW COMPANY, a Delaware
corporation (“Pledgor”),
and BANK OF AMERICA, N.A., a national banking association, as agent for
and representative of (in such capacity herein called “Secured Party”) the
Credit Parties defined in the Credit Agreement defined below.

 

R E  C  I  T  A  L
S

 

1.             Reference is hereby made to that
certain Credit Agreement dated of even date herewith, executed by Pledgor,
Secured Party, as Administrative Agent and as Issuing Bank, and the Lenders
defined therein (as modified, amended, renewed, extended, restated, or
supplemented from time to time, the “Credit Agreement”), pursuant to which Lenders
have made certain Commitments, subject to the terms and conditions set forth in
the Credit Agreement, to make Loans to Pledgor.

 

2.             Capitalized terms used herein
shall, unless otherwise indicated, have the respective meanings set forth in
the Credit Agreement.

 

3.             Pledgor is the legal and beneficial
owner of (a) the shares of stock (the “Pledged Shares”) described in Part A of Schedule 1
attached hereto and issued by the corporations named therein, and (b) the
partnership interests in limited partnerships or general partnerships, as the
case may be, and membership interests in limited liability companies, if any,
described in Part B
of Schedule 1
attached hereto (collectively, the “Pledged Interests”).

 

4.             It is a condition precedent to the
making of the Loans by Lenders under the Credit Agreement that Pledgor shall
have granted the security interests and undertaken the obligations contemplated
by this Agreement.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Pledgor hereby agrees with Secured Party, for
the benefit of the Credit Parties, as follows:

 

1.             Pledge of Security.  Pledgor hereby pledges and assigns to Secured
Party, for the ratable benefit of the Credit Parties, and hereby grants to
Secured Party, for the ratable benefit of the Credit Parties, a security
interest in, all of Pledgor’s right, title, and interest in and to the
following (the “Collateral”):

 

(a)           the Pledged Shares and the
certificates representing the Pledged Shares and any interest of Pledgor in the
entries on the books of any financial intermediary pertaining to the Pledged
Shares, and all dividends, cash, warrants, rights, instruments, and other
property or proceeds from time to time received, receivable, or otherwise
distributable in respect of or in exchange for any or all of the Pledged
Shares;

 

(b)           the Pledged Interests, including
without limitation all of Pledgor’s right, title, and interest as a partner in
any partnership or as a member of any limited liability company, whether such
right, title, and interest arises under any partnership agreement or limited
liability company agreement (any such agreement being a “Formation Agreement”)
or otherwise, including, without limitation, all of Pledgor’s right to vote,
together with all other rights, interest, claims, and other property of Pledgor
in any manner arising out of or

 

 

relating
to its partnership or membership interests, whatever their respective kind or
character, whether they are tangible or intangible property, and wheresoever
they may exist or be located, and further including, without limitation: (i) all
rights of Pledgor to receive distributions of any kind, in cash or otherwise,
due or to become due under or pursuant to any Formation Agreement or otherwise
in respect of any partnership or limited liability company; (ii) all
rights of Pledgor to receive proceeds of any insurance, indemnity, warranty, or
guaranty with respect to any partnership or limited liability company; (iii) all
claims of Pledgor for damages arising out of, or for the breach of, or default
under, any Formation Agreement; and (iv) any certificated or uncertificated
security evidencing any of the foregoing issued by any partnership or limited
liability company;

 

(c)           all additional shares of, and all
securities convertible into and warrants, options, and other rights to purchase
or otherwise acquire, stock of any issuer of the Pledged Shares from time to
time acquired by Pledgor in any manner (which shares shall be deemed to be part
of the Pledged Shares), the certificates or other instruments representing such
additional shares, securities, warrants, options, or other rights and any
interest of Pledgor in the entries on the books of any financial intermediary
pertaining to such additional shares, and all dividends, cash, warrants,
rights, instruments, and other property or proceeds from time to time received,
receivable, or otherwise distributed in respect of or in exchange for any or
all of such additional shares, securities, warrants, options, or other rights;

 

(d)           all shares of, and all securities
convertible into and warrants, options, and other rights to purchase or
otherwise acquire, stock of any Person that, after the date of this Agreement,
becomes, as a result of any occurrence, a Significant Subsidiary of Pledgor
(which shares shall be deemed to be part of the Pledged Shares), the
certificates or other instruments representing such shares, securities,
warrants, options, or other rights and any interest of Pledgor in the entries
on the books of any financial intermediary pertaining to such shares, and all
dividends, cash, warrants, rights, instruments, and other property or proceeds
from time to time received, receivable, or otherwise distributed in respect of
or in exchange for any or all of such shares, securities, warrants, options, or
other rights;

 

(e)           to the extent not included in any
other paragraph of this Section 1,
all other general intangibles (including without limitation, tax refunds and
rights to demand issuance of a certificate evidencing the Collateral), arising
out of or in connection with rights to payment or performance, choses in action, and judgments taken on
any rights or claims included in the Collateral described in clauses  (a) through (d) above;

 

(f)            all of Pledgor’s right, title, and
interest in and to all books, records, ledger cards, files, correspondence,
computer programs, tapes, disks, and related data processing software that at
any time evidence or contain information relating to any of the Collateral or
are otherwise necessary or helpful in the collection thereof or realization
thereupon; and

 

(g)           to the extent not covered by clauses (a) through
(f) above,
all proceeds of any or all of the foregoing Collateral.  For purposes of this Agreement, the term “proceeds” includes
whatever is receivable or received when Collateral or proceeds are sold,
exchanged, collected, or otherwise disposed of, whether such disposition is
voluntary or involuntary, and includes, without limitation, proceeds of any
indemnity or guaranty payable to Pledgor or Secured Party from time to time
with respect to any of the Collateral.

 

2.             Security for Obligations.  This Agreement secures, and the Collateral is
collateral security for, the prompt payment or performance in full when due,
whether at stated maturity, by required prepayment, declaration, acceleration,
demand, or otherwise (including the payment of amounts that would become due
but for the operation of the automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. § 362(a)),
of all obligations and liabilities of every nature of Pledgor now or hereafter
existing under or arising out of or in connection with the Credit Agreement and
the other Loan Documents and all renewals or extensions thereof, 

 

2

 

whether for principal, interest (including without limitation interest
that, but for the filing of a petition in bankruptcy with respect to Pledgor,
would accrue on such obligations), fees, expenses, indemnities, or otherwise,
whether voluntary or involuntary, direct or indirect, absolute or contingent,
liquidated or unliquidated, whether or not jointly owed with others, and
whether or not from time to time decreased or extinguished and later increased,
created, or incurred, and all or any portion of such obligations or liabilities
that are paid, to the extent all or any part of such payment is avoided or
recovered directly or indirectly from Secured Party or any Lender as a
preference, fraudulent transfer, or otherwise (all such obligations and
liabilities being the “Underlying
Debt”), and all obligations of every nature of Pledgor now or
hereafter existing under this Agreement (all such obligations of Pledgor,
together with the Underlying Debt, being the “Secured Obligations”).

 

3.             Delivery of Collateral.  All certificates or instruments representing
or evidencing the Collateral shall be delivered to and held by or on behalf of
Secured Party pursuant hereto and shall be in suitable form for transfer by
delivery or, as applicable, shall be accompanied by Pledgor’s endorsement,
where necessary, or duly executed instruments of transfer or assignment in
blank, all in form and substance satisfactory to Secured Party.  Secured Party shall have the right, at any
time in its discretion and without notice to Pledgor, to transfer to or to
register in the name of Secured Party or any of its nominees any or all of the
Collateral, subject only to the revocable rights specified in Section 6(a).  In addition, Secured Party shall have the
right at any time to exchange certificates or instruments representing or
evidencing Collateral for certificates or instruments of smaller or larger
denominations.

 

4.             Representations and Warranties.  Pledgor represents and warrants as follows:

 

(a)           Due
Authorization, etc. of Collateral.  All of the Pledged Shares have been duly
authorized and validly issued and are fully paid and nonassessable.

 

(b)           Description
of Collateral.  The
Pledged Shares constitute all of the issued and outstanding shares of stock of
each of the Significant Subsidiaries of Pledgor and there are no outstanding
warrants, options, or other rights to purchase, or other agreements outstanding
with respect to, or property that is now or hereafter convertible into, or that
requires the issuance or sale of, any Pledged Shares.  The Pledged Interests constitute all of the
partnership interests and limited liability interests of each of the
Significant Subsidiaries of Pledgor in the partnerships or limited liability
companies listed in Schedule 1.

 

(c)           Ownership
of Collateral.  Pledgor is
the legal, record, and beneficial owner of the Collateral free and clear of any
Lien except for the security interest created by this Agreement.

 

(d)           Governmental
Authorizations.  No
authorization, approval, or other action by, and no notice to or filing with,
any Governmental Authority is required for either (i) the pledge by
Pledgor of the Collateral pursuant to this Agreement and the grant by Pledgor
of the security interest granted hereby, (ii) the execution, delivery, or
performance of this Agreement by Pledgor, or (iii) the exercise by Secured
Party of the voting or other rights, or the remedies in respect of the
Collateral, provided for in this Agreement (except as may be required in
connection with a disposition of Collateral by laws affecting the offering and
sale of securities generally).

 

(e)           Perfection.
 With respect to Collateral in which
the security interest may be perfected by the filing of financing statements,
once those financing statements have been properly filed in the appropriate
state for such filing, the security interest in that Collateral will be fully
perfected and the security interest will constitute a first-priority Lien on
such Collateral, securing payment of the Secured Obligations.  With respect

 

3

 

to
Collateral consisting of investment property, deposit accounts, electronic
chattel paper, letter-of-credit rights, and instruments, upon the delivery of
such Collateral to Secured Party or delivery of an executed control agreement
with respect to such Collateral, the security interest in that Collateral will
be fully perfected and the security interest will constitute a first-priority
Lien on such Collateral, securing payment of the Secured Obligations.  None of the Collateral has been delivered nor
control with respect thereto given to any other Person.

 

(f)            Margin
Regulations.  The pledge
of the Collateral pursuant to this Agreement does not violate Regulation T, U, or X of the Board of Governors of the Federal
Reserve System.

 

(g)           Other
Information.  All written,
factual information heretofore, herein or hereafter supplied to Secured Party
by or on behalf of Pledgor with respect to the Collateral is accurate and
complete in all material respects.

 

5.             Assurances and Covenants of Pledgor.

 

(a)           Transfers
and Other Liens.  Except
as permitted by the terms of the Credit Agreement, Pledgor shall not:

 

(i)            except as expressly permitted by the Credit
Agreement, sell, assign (by operation of law or otherwise), pledge, or
hypothecate or otherwise dispose of, or grant any option with respect to, any
of the Collateral;

 

(ii)           create or suffer to exist any Lien upon or
with respect to any of the Collateral, except for Permitted Encumbrances;

 

(iii)         permit any issuer of Pledged Shares to merge
or consolidate unless all the outstanding capital stock of the surviving or
resulting corporation is, upon such merger or consolidation, pledged hereunder
and no cash, securities, or other property is distributed in respect of the
outstanding shares of any other constituent corporation;

 

(iv)          permit any issuer of Pledged Interests in a
partnership to merge or consolidate unless all the outstanding partnership
interests of the surviving or resulting entity is, upon such merger or
consolidation, pledged hereunder and no cash, securities, or other property is
distributed in respect of the outstanding interests of any other constituent
partnership;

 

(v)            permit any issuer of Pledged Interests in a
limited liability company to merge or consolidate unless all the outstanding
limited liability company interests of the surviving or resulting entity is,
upon such merger or consolidation, pledged hereunder and no cash, securities,
or other property is distributed in respect of the outstanding interests of any
other constituent limited liability company.

 

(b)           Additional
Collateral.  Pledgor shall
(i) cause each (A) corporation that is an issuer of Pledged Shares
not to issue any stock or other securities in addition to or in substitution
for the Pledged Shares issued by such issuer, except to Pledgor, or (B) partnership
or limited liability company that is an issuer of Pledged Interests not to
issue partnership or limited liability company interests in addition to or in
substitution for the Pledged Interests issued by such partnership or limited
liability company, except to Pledgor, (ii) pledge hereunder, immediately
upon its acquisition (directly or indirectly) thereof, any and all additional
shares of

 

4

 

stock
or other securities of each issuer of Pledged Shares, and (iii) pledge
hereunder, immediately upon its acquisition (directly or indirectly) thereof,
any and all shares of stock of any Person that, after the date of this
Agreement, becomes, as a result of any occurrence, a Significant Subsidiary of
Pledgor.

 

(c)           Pledge
Amendments.  Pledgor
shall, upon obtaining any additional shares of stock or other securities
required to be pledged hereunder as provided in Section 5(b), promptly (and in any
event within five (5) Business Days) deliver to Secured Party a Pledge and
Security Amendment, duly executed by Pledgor, in substantially the form of Exhibit A
attached hereto (a “Pledge
and Security Amendment”), in respect of the additional Pledged
Shares to be pledged pursuant to this Agreement.  Pledgor hereby authorizes Secured Party to
attach each Pledge and Security Amendment to this Agreement and agrees that all
Pledged Shares listed on any Pledge and Security Amendment delivered to Secured
Party shall for all purposes hereunder be considered Collateral; provided that the failure of Pledgor to
execute a Pledge and Security Amendment with respect to any additional Pledged
Shares pledged pursuant to this Agreement shall not impair the security
interest of Secured Party therein or otherwise adversely affect the rights and
remedies of Secured Party hereunder with respect thereto.

 

(d)           Loss
or Depreciation of Collateral.  Pledgor shall promptly notify Secured Party of
any event of which it becomes aware that causes any loss or depreciation in the
value of any portion of the Collateral that could result in a Material Adverse
Effect.

 

(e)           Written
Notices.  Pledgor shall
promptly deliver to Secured Party all written notices received by it with
respect to the Collateral.

 

(f)            Taxes
and Assessments.  Pledgor
shall pay promptly when due all taxes, assessments, and governmental charges or
levies imposed upon, and all claims against, the Collateral, except to the
extent the validity thereof is being contested in good faith and by appropriate
proceedings and in which reserves or other appropriate provisions, if any, as
shall be required in conformity with GAAP, have been made or provided therefor;
provided that Pledgor shall in
any event pay such taxes, assessments, charges, levies, or claims not later
than five (5) days prior to the date of any proposed sale under any
judgement, writ, or warrant of attachment entered or filed against Pledgor or
any of the Collateral as a result of the failure to make such payment.

 

(g)           Further
Assurances Perfection. 
Pledgor shall from time to time, at the expense of Pledgor, promptly
execute and deliver all further instruments and documents, and take all further
action, that may be necessary or desirable, or that Secured Party may
reasonably request, in order to perfect and protect any security interest
granted or purported to be granted hereby or to enable Secured Party to
exercise and enforce its rights and remedies hereunder with respect to any
Collateral.  Without limiting the
generality of the foregoing, Pledgor will:

 

(i)            at the request of Secured Party, mark
conspicuously each item of its records pertaining to the Collateral with a
legend in form and substance satisfactory to Secured Party, indicating that
such Collateral is subject to the security interest granted hereby;

 

(ii)           execute and file such financing or
continuation statements, or amendments thereto, and such other instruments or
notices, as may be necessary or desirable, or as Secured Party may reasonably
request, in order to perfect and preserve the security interests granted or
purported to be granted hereby;

 

5

 

(iii)         at Secured Party’s request, appear in and
defend any action or proceeding that may affect Pledgor’s title to or Secured
Party’s security interest in all or any part of the Collateral; and

 

(iv)          take any and all action that may be necessary
or appropriate to cause any partnership or limited liability company to which
Pledgor is a partner or member, respectively, and which constitute Pledged
Interests, to register the security interest of Secured Party in the Pledged
Interests, including, without limitation, to deliver to such partnership or
limited liability company, as the case may be, instructions to register pledge
substantially in the form of Exhibit B attached hereto and, to this end, cause
such partnership or limited liability company to register the security interest
granted hereby upon the books of such partnership or limited liability company,
as the case may be, in accordance with Article 8
of the Uniform Commercial Code,
as adopted in the State of Texas (the “Code”).

 

(h)           Authorization
to File Financing Statements. 
Pledgor hereby authorizes Secured Party to file one or more
financing or continuation statements, and amendments thereto, relative to all
or any part of the Collateral, with or without the signature of Pledgor, in
such filing offices as Secured Party shall deem appropriate, and, shall pay
Secured Party’s reasonable costs and expenses incurred in connection therewith.

 

(i)            Formation
Agreements.  Pledgor
shall, at its expense: (i) perform and comply in all material respects
with all terms and provisions of any applicable Formation Agreement required to
be performed or complied with by such agreement; (ii) maintain such
Formation Agreement in full force and effect, without any cancellation or
termination thereof, or any amendment, supplement, or other modification
thereto (if such action could adversely affect the rights and remedies of the
Credit Parties under the Loan Documents), except as explicitly required or
contemplated by its terms (as in effect on the date hereof) or as permitted
under the Credit Agreement, without the prior written consent of Secured Party;
(iii) enforce such Formation Agreement in accordance with its terms,
without waiving any default under or breach of such Formation Agreement or waiving,
failing to enforce, forgiving, or releasing any material right, interest, or
entitlement of any kind, howsoever arising, under or in respect of such
Formation Agreement; and (iv) take all such action to that end as from
time to time may be reasonably requested by Secured Party.

 

6.             Voting Rights; Dividends; Etc.

 

(a)           So long as no Event of Default shall
have occurred and be continuing:

 

(i)            Pledgor shall be entitled to exercise any and
all voting and other consensual rights pertaining to the Collateral or any part
thereof for any purpose not inconsistent with the terms of this Agreement or
the Credit Agreement;

 

(ii)           Pledgor shall be entitled to receive and
retain, and to utilize free and clear of the lien of this Agreement, any and
all dividends and interest paid in respect of the Collateral; and

 

(iii)         Secured Party shall promptly execute and
deliver (or cause to be executed and delivered) to Pledgor all such proxies,
dividend payment orders, and other instruments as Pledgor may from time to time
reasonably request for the purpose of enabling Pledgor to exercise the voting
and other consensual rights which it is entitled to exercise pursuant to paragraph (i) above
and to receive the dividends, principal, or interest payments which it is
authorized to receive and retain pursuant to paragraph (ii) above.

 

6

 

(b)           Upon the occurrence and during the
continuation of an Event of Default:

 

(i)            upon written notice from Secured Party to
Pledgor, all rights of Pledgor to exercise the voting and other consensual
rights which it would otherwise be entitled to exercise pursuant to Section 6(a)(i) shall
cease, and all such rights shall thereupon become vested in Secured Party who
shall thereupon have the sole right to exercise such voting and other
consensual rights;

 

(ii)           all rights of Pledgor to receive the
dividends which it would otherwise be authorized to receive and retain pursuant
to Section 6(a)(ii) shall
cease, and all such rights shall thereupon become vested in Secured Party who
shall thereupon have the sole right to receive and hold as Collateral such
dividends; and

 

(iii)         all dividends which are received by Pledgor
contrary to the provisions of paragraph (ii) of this Section 6(b) shall
be received in trust for the benefit of Secured Party, shall be segregated from
other funds of Pledgor and shall forthwith be paid over to Secured Party as
Collateral in the same form as so received (with any necessary endorsements).

 

(c)           In order to permit Secured Party to
exercise the voting and other consensual rights which it may be entitled to
exercise pursuant to Section 6(b)(i) and
to receive all dividends and other distributions which it may be entitled to
receive under Section 6(a)(ii) or
Section 6(b)(ii),
(i) Pledgor shall promptly execute and deliver (or cause to be executed
and delivered) to Secured Party all such proxies, dividend payment orders, and
other instruments as Secured Party may from time to time reasonably request,
and (ii) without limiting the effect of the immediately preceding clause (i), Pledgor
hereby grants to Secured Party an irrevocable proxy to vote the Pledged Shares
and to exercise all other rights, powers, privileges, and remedies to which a
holder of the Pledged Shares would be entitled (including, without limitation,
giving or withholding written consents of shareholders, calling special
meetings of shareholders, and voting at such meetings), which proxy shall be
effective, automatically and without the necessity of any action (including any
transfer of any Pledged Shares on the record books of the issuer thereof) by
any other Person (including the issuer of the Pledged Shares or any officer or
agent thereof), upon the occurrence of an Event of Default and which proxy
shall only terminate upon the payment in full of the Secured Obligations.

 

(d)           Notwithstanding any of the foregoing,
Pledgor agrees that this Agreement shall not in any way be deemed to obligate
Secured Party or any Lender to assume any of Pledgor’s obligations, duties,
expenses, or liabilities arising out of this Agreement (including, without
limitation, Pledgor’s obligations as the holder of the Pledged Shares and as
holder of the Pledged Interests) or under any and all other agreements now
existing or hereafter drafted or executed (collectively, the “Pledgor
Obligations”) unless Secured Party or Lender otherwise
expressly agrees to assume any or all of said Pledgor Obligations in
writing.  Without limiting the generality
of the foregoing, neither the grant of the security interest in the Collateral
in favor of Secured Party as provided herein nor the exercise by Secured Party
of any of its rights hereunder nor any action by Secured Party in connection
with a foreclosure on the Collateral shall be deemed to constitute Secured
Party as a partner of any partnership or a member of any limited liability
company; provided, however, that
in the event Secured Party or any Lender elects to become a substituted partner
of any partnership or a member of any limited liability company in place of Pledgor,
Secured Party or such Lender, as the case may be, shall be entitled to and
shall become such a substitute partner or member, to the extent permitted by
the terms of such partnership or limited liability company agreement.

 

7.             Secured Party Appointed Attorney-in-Fact.  Pledgor hereby irrevocably appoints Secured
Party as Pledgor’s attorney-in-fact, with full authority in the place and stead
of Pledgor and in the name of

 

7

 

Pledgor, Secured Party or otherwise, from time to time in Secured Party’s
discretion to take any action and to execute any instrument that Secured Party
may deem necessary or advisable to accomplish the purposes of this Agreement,
including without limitation:

 

(a)           to file one or more financing or
continuation statements, or amendments thereto, relative to all or any part of
the Collateral without the signature of Pledgor;

 

(b)           upon the occurrence and during the
continuance of an Event of Default, to ask, demand, collect, sue for, recover,
compound, receive, and give acquittance and receipts for moneys due and to
become due under or in respect of any of the Collateral;

 

(c)           upon the occurrence and during the
continuance of an Event of Default, to receive, endorse, and collect any instruments
made payable to Pledgor representing any dividend or other distribution in
respect of the Collateral or any part thereof and to give full discharge for
the same; and

 

(d)           upon the occurrence and during the
continuance of an Event of Default, to file any claims or take any action or
institute any proceedings that Secured Party may deem necessary or desirable
for the collection of any of the Collateral or otherwise to enforce the rights
of Secured Party with respect to any of the Collateral.

 

8.             Secured Party May Perform.  If Pledgor fails to perform any agreement
contained herein, then Secured Party may itself perform, or cause performance
of, such agreement, and the expenses of Secured Party incurred in connection
therewith shall be payable by Pledgor under Section 12(b).

 

9.             Standard of Care.  The powers conferred on Secured Party
hereunder are solely to protect its interest in the Collateral and shall not
impose any duty upon it to exercise any such powers.  Except for the exercise of reasonable care in
the custody of any Collateral in its possession and the accounting for moneys
actually received by it hereunder, Secured Party shall have no duty as to any
Collateral, it being understood that Secured Party shall have no responsibility
for (a) ascertaining or taking action with respect to calls, conversions,
exchanges, maturities, tenders, or other matters relating to any Collateral,
whether or not Secured Party has or is deemed to have knowledge of such
matters, (b) taking any necessary steps (other than steps taken in
accordance with the standard of care set forth above to maintain possession of
the Collateral) to preserve rights against any parties with respect to any
Collateral, (c) taking any necessary steps to collect or realize upon the
Secured Obligations or any guarantee therefor, or any part thereof, or any of
the Collateral, or (d) initiating any action to protect the Collateral
against the possibility of a decline in market value.  Secured Party shall be deemed to have
exercised reasonable care in the custody and preservation of Collateral in its
possession if such Collateral is accorded treatment substantially equal to that
which Secured Party accords its own property consisting of negotiable
securities.

 

10.           Remedies.

 

(a)           If any Event of Default shall have
occurred and be continuing, then Secured Party may exercise in respect of the
Collateral, in addition to all other rights and remedies provided for herein or
otherwise available to it, all the rights and remedies of a secured party on
default under the Code (whether or not the Code applies to the affected
Collateral), and Secured Party may also in its sole discretion, without notice
except as specified below, sell the Collateral or any part thereof in one or
more parcels at public or private sale, at any exchange or broker’s board or at
any of Secured Party’s offices or elsewhere, for cash, on credit, or for future
delivery, at such time or times and at such price or prices and upon such other
terms as

 

8

 

Secured
Party may deem commercially reasonable, irrespective of the impact of any such
sales on the market price of the Collateral. 
Secured Party or any Lender may be the purchaser of any or all of the
Collateral at any such sale and Secured Party, as agent for and representative
of Lenders (but not any Lender or Lenders in its or their respective individual
capacities unless Requisite Lenders shall otherwise agree in writing), shall be
entitled, for the purpose of bidding and making settlement or payment of the
purchase price for all or any portion of the Collateral sold at any such public
sale, to use and apply any of the Secured Obligations as a credit on account of
the purchase price for any Collateral payable by Secured Party at such sale.  Each purchaser at any such sale shall hold the
property sold absolutely free from any claim or right on the part of Pledgor,
and Pledgor hereby waives (to the extent permitted by applicable law) all
rights of redemption, stay, and/or appraisal which it now has or may at any
time in the future have under any rule of law or statute now existing or
hereafter enacted.  Pledgor agrees that,
to the extent notice of sale shall be required by law, at least ten (10) days’
notice to Pledgor of the time and place of any public sale or the time after
which any private sale is to be made shall constitute reasonable
notification.  Secured Party shall not be
obligated to make any sale of Collateral regardless of notice of sale having
been given.  Secured Party may adjourn
any public or private sale from time to time by announcement at the time and
place fixed therefor, and such sale may, without further notice, be made at the
time and place to which it was so adjourned. 
Pledgor hereby waives any claims against Secured Party arising by reason
of the fact that the price at which any Collateral may have been sold at such a
private sale was less than the price which might have been obtained at a public
sale, even if Secured Party accepts the first offer received and does not offer
such Collateral to more than one offeree. 
If the proceeds of any sale or other disposition of the Collateral are
insufficient to pay all the Secured Obligations, then Pledgor shall be liable
for the deficiency and the fees of any attorneys employed by Secured Party to
collect such deficiency.

 

(b)           Pledgor recognizes that, by reason of
certain prohibitions contained in the Securities Act of 1933, as from time to
time amended (the “Securities
Act”), and applicable state securities laws, Secured Party may
be compelled, with respect to any sale of all or any part of the Collateral
conducted without prior registration or qualification of such Collateral under
the Securities Act and/or such state securities laws, to limit purchasers to
those who will agree, among other things, to acquire the Collateral for their
own account, for investment and not with a view to the distribution or resale
thereof.  Pledgor acknowledges that any
such private sales may be at prices and on terms less favorable than those
obtainable through a public sale without such restrictions (including, without
limitation, a public offering made pursuant to a registration statement under
the Securities Act) and, notwithstanding such circumstances, Pledgor agrees
that any such private sale shall be deemed to have been made in a commercially
reasonable manner and that Secured Party shall have no obligation to engage in
public sales and no obligation to delay the sale of any Collateral for the
period of time necessary to permit the issuer thereof to register it for a form
of public sale requiring registration under the Securities Act or under
applicable state securities laws, even if such issuer would, or should, agree
to so register it.

 

(c)           If Secured Party determines to
exercise its right to sell any or all of the Collateral, then upon Secured
Party’s written request, Pledgor shall and shall cause each issuer of any
Pledged Shares to be sold hereunder from time to time to furnish to Secured
Party all such information as Secured Party may request in order to determine
the number of shares and other instruments included in the Collateral which may
be sold by Secured Party in exempt transactions under the Securities Act and
the rules and regulations of the Securities and Exchange Commission
thereunder, as the same are from time to time in effect.

 

11.           Application of Proceeds.  Except as expressly provided elsewhere in
this Agreement, all proceeds received by Secured Party in respect of any sale
of, collection from, or other realization upon all or any part of the
Collateral may, in the discretion of Secured Party, be held by Secured Party as
Collateral for,

 

9

 

and/or then, or at any time thereafter, applied in full or in part by
Secured Party against, the Secured Obligations in the following order of
priority:

 

FIRST:  To the payment of all
costs and expenses of such sale, collection, or other realization, including
reasonable compensation to Secured Party and its agents and counsel, and all
other expenses, liabilities, and advances made or incurred by Secured Party in
connection therewith, and all amounts for which Secured Party is entitled to
indemnification hereunder and all advances made by Secured Party hereunder for
the account of Pledgor, and to the payment of all costs and expenses paid or
incurred by Secured Party in connection with the exercise of any right or
remedy hereunder, all in accordance with Section 12;

 

SECOND:  To the payment of all
other Secured Obligations (for the ratable benefit of the Credit Parties) and
as cash collateral to secure any outstanding Letter of Credit Exposure; and

 

THIRD:  To the payment to or upon
the order of Pledgor, or to whosoever may be lawfully entitled to receive the
same or as a court of competent jurisdiction may direct, of any surplus then
remaining from such proceeds.

 

12.           Indemnity and Expenses.

 

(a)           Pledgor agrees to indemnify each
Credit Party from and against any and all claims, losses, and liabilities in
any way relating to, growing out of, or resulting from this Agreement and the
transactions contemplated hereby (including, without limitation, enforcement of
this Agreement), except to the extent such claims, losses, or liabilities
result solely from such Credit Party’s gross negligence or willful misconduct
as finally determined by a court of competent jurisdiction.

 

(b)           Pledgor shall pay to Secured Party
upon demand the amount of any and all costs and expenses, including the
reasonable fees and expenses of its counsel and of any experts and agents, that
Secured Party may incur in connection with (i) the administration of this
Agreement, (ii) the custody or preservation of, or the sale of, collection
from, or other realization upon, any of the Collateral, (iii) the exercise
or enforcement of any of the rights of Secured Party hereunder, or (iv) the
failure by Pledgor to perform or observe any of the provisions hereof.

 

13.           Continuing Security Interest; Transfer of Loans.  This Agreement shall create a continuing
security interest in the Collateral and shall (a) remain in full force and
effect until the payment in full of all Secured Obligations and the
cancellation or termination of the Total Commitment, (b) be binding upon
Pledgor, its successors and assigns, and (c) inure, together with the
rights and remedies of Secured Party hereunder, to the benefit of Secured Party
and its successors, transferees, and assigns. 
Without limiting the generality of the foregoing clause (c), but
subject to the provisions of Section 9.1 of the Credit Agreement, any Lender
may assign or otherwise transfer any Loans held by it to any other Person, and
such other Person shall thereupon become vested with all the benefits in
respect thereof granted to Lenders herein or otherwise.  Upon the indefeasible payment in full of all
Secured Obligations and the cancellation or termination of the Total
Commitment, the security interest granted hereby shall terminate and all rights
to the Collateral shall revert to Pledgor. 
Upon any such termination Secured Party will, at Pledgor’s expense,
execute and deliver to Pledgor such documents as Pledgor shall reasonably
request to evidence such termination and Pledgor shall be entitled to the
return, upon its request and at its expense, against receipt and without
recourse to Secured Party, of such of the Collateral as shall not have been
sold or otherwise applied pursuant to the terms hereof.

 

10

 

14.           Secured Party as Agent.

 

(a)           Secured Party has been appointed to act as
Secured Party hereunder by Lenders. 
Secured Party shall be obligated, and shall have the right hereunder, to
make demands, to give notices, to exercise or refrain from exercising any
rights, and to take or refrain from taking any action (including, without
limitation, the release or substitution of Collateral), solely in accordance
with this Agreement and the Credit Agreement.

 

(b)           Secured Party shall at all times be the same
Person that is Administrative Agent under the Credit Agreement.  Written notice of resignation by Administrative
Agent pursuant to the Credit Agreement shall also constitute notice of
resignation as Secured Party under this Agreement; removal of Administrative
Agent pursuant to the Credit Agreement shall also constitute removal as Secured
Party under this Agreement; and appointment of a successor Administrative Agent
pursuant to the Credit Agreement shall also constitute appointment of a
successor Secured Party under this Agreement. 
Upon the acceptance of any appointment as Administrative Agent under Section 8.9 of
the Credit Agreement by a successor Administrative Agent, that successor
Administrative Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges, and duties of the retiring or removed Secured Party
under this Agreement, and the retiring or removed Secured Party under this
Agreement shall promptly (i) transfer to such successor Secured Party all
sums, securities and other items of Collateral held hereunder, together with
all records and other documents necessary or appropriate in connection with the
performance of the duties of the successor Secured Party under this Agreement,
and (ii) execute and deliver to such successor Secured Party such
amendments to financing statements, and take such other actions, as may be
necessary or appropriate in connection with the assignment to such successor
Secured Party of the security interests created hereunder, whereupon such
retiring or removed Secured Party shall be discharged from its duties and
obligations under this Agreement.  After
any resigning or removed Administrative Agent’s resignation or removal
hereunder as Secured Party, the provisions of this Agreement shall inure to its
benefit as to any actions taken or omitted to be taken by it under this
Agreement while it was Secured Party hereunder.

 

15.           Amendments; Etc.  No amendment, modification, termination, or
waiver of any provision of this Agreement, and no consent to any departure by
Pledgor from the terms and conditions hereof, shall in any event be effective
unless the same shall be in writing and signed by Secured Party and, in the
case of any such amendment or modification, by Pledgor.  Any such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which it was
given.

 

16.           Notices.  Any notice or other communication herein
required or permitted to be given shall be in writing and may be personally
served, telexed, or sent by telecopy or United States mail or courier service
to each such party at its address set forth in the Credit Agreement, on the
signature pages hereof or to such other addresses as each such party may
in writing hereafter indicate.  Such
notice or other communication shall be deemed to have been given when delivered
in person or by courier service, upon receipt of telecopy or telex, or three (3) Business
Days after depositing it in the United states mail with postage prepaid and
properly addressed; provided that any
notice, request, or demand to or upon Administrative Agent or Lenders shall not
be effective until received.

 

17.           Failure or Indulgence Not Waiver: Remedies Cumulative.  No failure or delay on the part of Secured
Party in the exercise of any power, right, or privilege hereunder shall impair
such power, right, or privilege or be construed to be a waiver of any default
or acquiescence therein, nor shall any single or partial exercise of any such
power, right, or privilege preclude any other or further exercise thereof or of
any other power, right, or privilege.  All
rights and remedies existing under this Agreement are cumulative to, and not
exclusive of, any rights or remedies otherwise available.

 

11

 

18.           Severability.  In case any provision in or obligation under
this Agreement shall be invalid, illegal, or unenforceable in any jurisdiction,
the validity, legality, and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction,
shall not in any way be affected or impaired thereby.

 

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

 

20.           Governing Law; Terms. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF TEXAS WITHOUT REGARD TO
CONFLICTS OF LAWS PRINCIPLES, EXCEPT TO THE EXTENT THAT THE CODE PROVIDES THAT
THE VALIDITY OR PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES
HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF
A JURISDICTION OTHER THAN THE STATE OF TEXAS.  Unless otherwise defined herein or in the
Credit Agreement, terms used in Articles 8
and 9 of the Code are used herein
as therein defined.

 

21.           Consent to Jurisdiction and Service of Process.  ALL
JUDICIAL PROCEEDINGS BROUGHT AGAINST PLEDGOR ARISING OUT OF OR RELATING TO THIS
AGREEMENT MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE STATE OF TEXAS, AND BY EXECUTION AND DELIVERY OF THIS
AGREEMENT PLEDGOR ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES,
GENERALLY AND UNCONDITIONALLY, THE EXCLUSIVE JURISDICTION OF THE AFORESAID
COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO
BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT.  Pledgor hereby agrees that service of all
process in any such proceeding in any such court may be made by registered or
certified mail, return receipt requested, to Pledgor at its address provided on
the signature page hereof, such service being hereby acknowledged by
Pledgor to be sufficient for personal jurisdiction in any action against
Pledgor in any such court and to be otherwise effective and binding service in
every respect.  Nothing herein shall
affect the right to serve process in any other manner permitted by law or shall
limit the right of Secured Party to bring proceedings against Pledgor in the
courts of any other jurisdiction.

 

22.           Waiver of Jury Trial. PLEDGOR AND SECURED PARTY HEREBY AGREE TO WAIVE THEIR
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT. 
The scope of this waiver is intended to be all-encompassing of any and
all disputes that may be filed in any court and that relate to the subject
matter of this transaction, including without limitation contract claims, tort
claims, breach of duty claims, and all other common law and statutory
claims.  Pledgor and Secured Party each
acknowledge that this waiver is a material inducement for Pledgor and Secured
Party to enter into a business relationship, that Pledgor and Secured Party
have already relied on this waiver in entering into this Agreement and that
each will continue to rely on this waiver in their related future
dealings.  Pledgor and Secured Party
further warrant and represent that each has reviewed this waiver with its legal
counsel, and that each knowingly and voluntarily waives its jury trial rights
following consultation with legal counsel. 
THIS WAIVER IS IRREVOCABLE, MEANING
THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING,

 

12

 

AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS RENEWALS, SUPPLEMENTS, OR MODIFICATIONS TO THIS AGREEMENT.  In
the event of litigation, this Agreement may be filed as a written consent to a
trial by the court.

 

23.           Counterparts.  This Agreement may be executed in one or more
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and
attached to a single counterpart so that all signature pages are
physically attached to the same document.

 

[Remainder
of page intentionally blank.

Signature page follows.]

 

13

 

IN WITNESS WHEREOF, Pledgor and Secured Party have caused this Agreement to be duly
executed and delivered by their respective officers thereunto duly authorized
as of the date first written above.

 

	
   

  	
  TRAMMELL CROW COMPANY,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Notice
  Address:

  
	
   

  	
   

  
	
   

  	
   

  	
  3400
  Trammell Crow Center

  
	
   

  	
   

  	
  2001
  Ross Avenue

  
	
   

  	
   

  	
  Dallas,
  Texas 75201

  
	
   

  	
   

  	
  Attention:
  Thomas McNearney

  
	
   

  	
   

  	
  Telecopy:
  (214) 863-4200

  

 

 

	
   

  	
  BANK OF AMERICA, N.A., a national banking

  association, individually and as Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	 

	
   

  	
   

  	
  Name:

  	
   

  	 

	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Notice
  Address:

  
	
   

  	
   

  
	
   

  	
   

  	
  Bank
  of America, N.A.

  
	
   

  	
   

  	
  901
  Main Street, 64th Floor

  
	
   

  	
   

  	
  Dallas,
  TX 75202

  
	
   

  	
   

  	
  Attn:
  

  	
   

  	
   

  
	
   

  	
   

  	
  Telecopy:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  With
  a copy to:

  
	
   

  	
   

  
	
   

  	
   

  	
  Banc
  of America Securities LLC

  
	
   

  	
   

  	
  100
  North Tryon Street, 15th Floor

  
	
   

  	
   

  	
  Charlotte,
  NC 28255

  
	
   

  	
   

  	
  Attn:
  Mr. Anthony Fertitta

  
	
   

  	
   

  	
  Telecopy:
  (704) 386-0255

  
										

 

 

SCHEDULE 1

 

PART A

 

	
  Stock
  Issuer

  	
   

  	
  Class of

  Stock

  	
   

  	
  Stock Certificate

  Nos.

  	
   

  	
  Par Value

  	
   

  	
  Number of Shares

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

PART B

 

Limited
Partnerships

 

	
  (lp
  or gp)

  	
   

  	
  Limited Partnership

  	
   

  	
  Percent Interest

  	
   

  
	
  None

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Limited
Liability Companies

 

	
  Limited
  Liability Company

  	
   

  	
  Percent Interest

  	
   

  
	
  None

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  

 

 

EXHIBIT A

to Borrower Pledge Agreement

 

PLEDGE AMENDMENT

 

This
Pledge Amendment, dated                            ,
200   , is delivered pursuant to Section 6(c) of the Pledge
Agreement referred to below.  The
undersigned hereby agrees that this Pledge Amendment may be attached to the
Borrower Pledge Agreement dated as of June 28, 2005, between the
undersigned and Bank of America, N.A., as Secured Party (the “Pledge Agreement”;
capitalized terms defined therein being used herein as therein defined), and
that the [Pledged Shares / Pledged Interests] listed on this Pledge Amendment
shall be deemed to be part of the [Pledged Shares] [Pledged Interests] and
shall become part of the Collateral and shall secure all Secured Obligations.

 

	
   

  	
  TRAMMELL CROW COMPANY,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
					

 

	
  Stock
  Issuer

  	
   

  	
  Class of

  Stock

  	
   

  	
  Stock Certificate

  Nos.

  	
   

  	
  Par Value

  	
   

  	
  Number of

  Shares

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Limited
Partnerships

 

	
  (lp
  or gp)

  	
   

  	
  Limited Partnership

  	
   

  	
  Percent Interest

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Limited
Liability Companies

 

	
  Limited
  Liability Company

  	
   

  	
  Percent Interest

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  

 

 

EXHIBIT B

to Borrower Pledge Agreement

 

FORM OF INSTRUCTION TO REGISTER PLEDGE

 

INSTRUCTION TO REGISTER PLEDGE

 

,
200       

[NAME
OF PARTNERSHIP/LLC]

 

Attention:

 

Ladies
and Gentlemen:

 

Trammell
Crow Company, a Delaware corporation (the “Registered Owner”), hereby instructs [NAME OF
PARTNERSHIP/LLC], a [STATE OF FORMATION] [TYPE OF ENTITY] (the “Issuer”), to register
the pledge of all of the Registered Owner’s rights, title, and interest in and
to the Registered Owner’s entire [limited/general partner] [membership]
interests in the Issuer (the “Interests”), in favor of Bank of America, N.A. as
Administrative Agent (the “Registered
Pledges”), pursuant to the Borrower Pledge Agreement dated as of
June 28, 2005, as it may be amended or restated from time to time, between
the Registered Owner and the Registered Pledges.

 

The
Issuer is further instructed by the Registered Owner to promptly inform the
Registered Pledges of the registration of this pledge by sending an initial
transaction statement to the Registered Pledges to its office located at                                                                                                             ,
Attention:                                                      .

 

The
Registered Owner hereby warrants that (a) it is an appropriate person to
originate this instruction, (b) it is entitled to effect the instruction
here given, and (c) its taxpayer identification number is                                                             .

 

	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  
	
   

  	
  TRAMMELL CROW COMPANY,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
					

 

2

 

CONSENT OF THE ISSUER

 

The
Issuer hereby consents and agrees to cause the pledge of the Partnership
Interest referenced above to be registered on the books and records of the
Issuer.

 

	
   

  	
  [NAME
  OF PARTNERSHIP/LLC],

  
	
   

  	
  a
  [STATE OF FORMATION] [TYPE OF ENTITY]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  its
  general partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
							

 

 

EXHIBIT C

 

FORM OF CERTIFICATE RE NON-BANK STATUS

 

Reference
is hereby made to that certain Credit Agreement dated as of June 28, 2005,
by and among Trammell Crow Company, a Delaware corporation, Bank of
America, N.A., as Administrative Agent and as Issuing Bank, and the
Lenders defined therein (as modified, amended, renewed, extended, restated, or
supplemented from time to time, the “Credit Agreement”).  Pursuant to Section 2.8(b)(iii) of the
Credit Agreement, the undersigned hereby certifies that it is not a “bank” or other Person described in Section 881(c)(3) of the Internal Revenue Code of 1986, as amended.

 

 

	
   

  	
  [LENDER]

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
					

 

 

EXHIBIT D

 

COMPLIANCE CERTIFICATE

 

Reference
is hereby made to that certain Credit Agreement dated as of June 28, 2005
(as modified, amended, renewed, restated or supplemented from time to time, the
“Credit Agreement”),
among Trammell Crow Company, a Delaware corporation, as Borrower (“Borrower”), the
Lenders from time to time party thereto, and Bank of America, N.A., a national
banking association, as Administrative Agent (in such capacity, together with
its successors and assigns, “Administrative Agent”) and as Issuing Bank (as defined
therein).  The undersigned, as                                                 
of Borrower, pursuant to Section 5.1(c) of the
Credit Agreement, hereby, certifies to Administrative Agent in such capacity on
behalf of Borrower and without individual liability as follows:

 

1.             A review of the activities of
Borrower during the most recently ended fiscal quarter of Borrower has been
made under my supervision.

 

2.             As of the date hereof, all of the
representations and warranties of Borrower contained in the Credit Agreement
and each of the Loan Documents (as defined in the Credit Agreement) are true
and correct in all material respects (unless such representations and
warranties are, by their express terms, limited to a specific date).

 

3.             No event has occurred and is continuing
which constitutes a Potential Default or Event of Default.

 

4.             The Companies’ floating rate Indebtedness
(other than Indebtedness arising from Real Estate Investments for which
interest is being capitalized in accordance with GAAP and for which Borrower
has obtained construction loan financing pursuant to which construction loan
advances are (or can be) made in the amount of such interest expense) in excess
of $30,000,000 (in $5,000,000 increments) is subject to one or more Interest
Rate Agreements with a Lender or other Person reasonably acceptable to
Administrative Agent.

 

5.             Borrower has not, and has not permitted any
of its Subsidiaries to, directly or indirectly, declare, order, pay, make, or
set apart any sum for any Restricted Junior Payment, except for Permitted
Distributions (so long as no Event of Default exists or would result
therefrom).

 

6.             The following covenant computations, together
with the supporting schedules attached hereto, are true and correct:

 

	
    (a)

  	
  Minimum Interest Coverage Ratio.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (i)

  	
   

  	
  Gross
  EBITDA (See Schedule 1
  attached hereto)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (ii)

  	
   

  	
  Interest
  Expense

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (iii)

  	
   

  	
  Ratio
  of (i) to (ii)

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (iv)

  	
   

  	
  Required
  Minimum

  	
   

  	
  3.0 to 1.0

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
    (b)

  	
  Minimum Fixed Charge Coverage Ratio.

  	
   

  	
   

  	
   

  

 

 

	
   

  	
  (i)

  	
   

  	
  Gross
  EBITDA

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (ii)

  	
   

  	
  Fixed
  Charges

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (iii)

  	
   

  	
  Ratio
  of (i) to (ii)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (iv)

  	
   

  	
  Required
  Minimum

  	
   

  	
  1.75 to 1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
    (c)

  	
  Minimum Net Worth.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (i)

  	
   

  	
  GAAP
  Net Worth

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (ii)

  	
   

  	
  Required
  Minimum

  	
   

  	
   

  	
  (1)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
    (d)

  	
  Minimum Revenues (for each Fiscal Quarter).

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (i)

  	
   

  	
  Total
  Revenues

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (ii)

  	
   

  	
  Required
  Minimum

  	
   

  	
  $

  	
  125,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
    (e)

  	
  Minimum Liquidity.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (i)

  	
   

  	
  Liquid
  Assets

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (ii)

  	
   

  	
  Required
  Minimum

  	
   

  	
  $

  	
  30,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
    (f)

  	
  Current Ratio.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (i)

  	
   

  	
  Current
  Assets

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (ii)

  	
   

  	
  Current
  Liabilities

  	
   

  	
  $

  	
   

  	
  (2)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (iii)

  	
   

  	
  Ratio
  of (i) to (ii)

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (iv)

  	
   

  	
  Required
  Minimum

  	
   

  	
  1.10 to 1.00

  	
   

  

 

(1)           See Section 6.4(c) of
the Credit Agreement. 

 

(2)           For purposes of the calculation of this ratio, “Current Liabilities” shall not
include current maturities under the Credit Agreement.

 

 

 

	
    (g)

  	
  Maximum Total Leverage Ratio.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (i)

  	
   

  	
  Total
  Debt

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (ii)

  	
   

  	
  Gross
  EBITDA

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (iii)

  	
   

  	
  Ratio
  of (i) to (ii)

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (iv)

  	
   

  	
  Maximum
  Permitted

  	
   

  	
  5.00 to 1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
    (h)   Maximum Investment in
  Unconsolidated Entities formed primarily for real property development and/or
  ownership, and Investments in Funds.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (i)

  	
   

  	
  Investments

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (ii)

  	
   

  	
  Maximum
  Permitted

  	
   

  	
  $

  	
  150,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (i)

  	
  Maximum Other Investment.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (i)

  	
   

  	
  Investments
  made after Closing Date (other than in Unconsolidated Entities, Funds, and
  Investments made pursuant to Sections (a), (b), (c), (d), (e), (g), and (h) of
  the Credit Agreement)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (ii)

  	
   

  	
  Gross
  EBITDA

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (iii)

  	
   

  	
  Ratio
  of (i) to (ii)

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Maximum
  Permitted

  	
   

  	
  1.0 to 1.0

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (j)

  	
  Maximum Recourse Leverage Ratio.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (i)

  	
   

  	
  Total
  Recourse Debt

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (ii)

  	
   

  	
  Gross
  EBITDA

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (iii)

  	
   

  	
  Ratio
  of (i) to (ii)

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Maximum
  Permitted

  	
   

  	
  3.25 to 1.0.

  	
   

  
									

 

 

	
  Date:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  ,

  
	
   

  	
   

  	
  of

  	
   

  
	
   

  	
  Trammell
  Crow Company,

  
	
   

  	
  a
  Delaware corporation

  
							

 

 

Schedule 1 to Exhibit D

 

 

EXHIBIT E

 

FORM OF SUBSIDIARY GUARANTY

 

THIS
GUARANTY AGREEMENT is executed as of June 28, 2005, by each of the direct
and indirect Subsidiaries of TRAMMELL CROW COMPANY, a Delaware corporation (“Borrower”), listed on
Schedule 1
attached hereto or who become a party hereto pursuant to Section 5.11  below (each a “Guarantor” and
collectively “Guarantors”)
for the benefit of the Loan Parties defined below.

 

W I  T  N  E  S  S
E  T  H:

 

1.             Borrower may from time to time be indebted to
the Loan Parties pursuant to that certain Credit Agreement dated as of June 28,
2005 (as modified, amended, renewed, restated or supplemented from time to
time, the “Credit
Agreement”), among Trammell Crow Company, a Delaware
corporation, as Borrower (“Borrower”),
the Lenders from time to time party thereto, and Bank of America, N.A., a
national banking association, as Administrative Agent (in such capacity,
together with its successors and assigns, “Administrative Agent”) and as Issuing Bank
(as defined therein).  (Administrative Agent, Issuing
Bank, and Lenders, together with their respective successors and assigns, are
herein called the “Loan
Parties”).

 

2.             Capitalized terms used herein shall, unless
otherwise indicated, have the respective meanings set forth in the Credit
Agreement.

 

3.             The Loan Parties are not willing to make
Loans under the Credit Agreement or otherwise extend credit to Borrower unless
Guarantors guarantee payment of all present and future indebtedness and
obligations of Borrower to the Loan Parties under the Credit Agreement and the
Loan Documents.

 

4.             Each Guarantor will benefit,
directly and indirectly, from the Loan Parties’ extension of credit to
Borrower.

 

NOW,
THEREFORE, as an inducement to the Loan Parties to enter into the Credit
Agreement and to make Loans and issue Letters of Credit to Borrower thereunder,
and to extend such credit to Borrower as the Loan Parties may from time to time
agree to extend, and for other good and valuable consideration, the receipt and
legal sufficiency of which are hereby acknowledged, Guarantors hereby jointly
and severally guarantee payment of the Guaranteed Debt (hereinafter defined) as
more specifically described herein below in Section 1.3 and hereby agree as
follows:

 

SECTION 1

 

NATURE AND SCOPE OF GUARANTY

 

1.1          Definition
of Guaranteed Debt.  As used herein, the term “Guaranteed Debt”
means:

 

(a)           All principal,
interest, fees, reasonable attorneys’ fees, commitment fees, liabilities for
costs and expenses, and other indebtedness, obligations, and liabilities of
Borrower to the Loan Parties at any time created or arising in connection with
the Credit Agreement, including, but not limited to, all indebtedness,
obligations, and liabilities of Borrower to the Loan Parties arising under the
Notes and the other Loan Documents; and

 

 

(b)           All costs, expenses,
and fees, including, but not limited to court costs and reasonable attorneys’
fees, arising in connection with the collection of any or all amounts,
indebtedness, obligations, and liabilities of Borrower to the Loan Parties described
in item (a) of
this Section 1.1.

 

1.2          Guaranteed
Debt Not Reduced by Offset.  The indebtedness, liabilities,
obligations, and other Guaranteed Debt guaranteed hereby, and the liabilities
and obligations of Guarantors to the Loan Parties hereunder, shall not be
reduced, discharged, or released because or by reason of any existing or future
offset, claim, or defense of Borrower or any other party against any Loan Party
or against payment of the Guaranteed Debt, whether such offset, claim, or
defense arises in connection with the Guaranteed Debt (or the transactions
creating the Guaranteed Debt) or otherwise. 
Without limiting the foregoing or Guarantors’ liability hereunder, to
the extent that any Loan Party advances funds or extends credit to Borrower,
and does not receive payments or benefits thereon in the amounts and at the
times required or provided by applicable agreements or laws, Guarantors are
absolutely liable, jointly and severally, to make such payments to (and confer
such benefits on) such Loan Party, on a timely basis.

 

1.3          Guaranty of
Obligation.  Guarantors hereby irrevocably guarantee,
jointly and severally, to the Loan Parties (a) the due and punctual
payment of the Guaranteed Debt, and (b) the timely performance of all
other obligations now or hereafter owed by Borrower to the Loan Parties under
the Credit Agreement. Each Guarantor hereby irrevocably covenants and agrees
that it is liable for the Guaranteed Debt as primary obligor.

 

1.4          Nature of
Guaranty.  This Guaranty Agreement is intended to be an
irrevocable, absolute, continuing guaranty of payment and is not a guaranty of
collection.  This Guaranty Agreement may
not be revoked by any Guarantor; provided,
however, if, according to applicable Legal Requirements, it shall
ever be determined or held that a guarantor under a continuing guaranty such as
this Guaranty Agreement shall have the absolute right, notwithstanding the
express agreement of such a guarantor otherwise, to revoke such guaranty as to
Guaranteed Debt which has then not yet arisen, then any Guarantor may deliver
to Administrative Agent written notice, in addition to giving such notice as
provided in Section 5.2
hereof, that such Guarantor will not be liable hereunder for any Guaranteed
Debt created, incurred, or arising after the giving of such notice, and such
notice will be effective as to such Guarantor from and after (but not before)
such times as said written notice is actually delivered to, in addition to
giving such notice as provided in Section 5.2 hereof, and received by and
receipted for in writing by Administrative Agent; provided that such notice shall not in anywise affect,
impair, or limit the liability and responsibility of any other person or entity
with respect to any Guaranteed Debt theretofore existing or thereafter
existing, arising, renewed, extended, or modified; provided, further, that such notice shall not affect,
impair, or release the liability and responsibility of any such Guarantor with
respect to Guaranteed Debt created, incurred, or arising (or in respect of any
Guaranteed Debt agreed or contemplated, in any respect, to be created, whether
advanced or not and whether committed to by the Loan Parties or not, including,
without limitation, any discretionary advances or extensions of credit which may
be made by any Loan Party at its option in the future under any type of loan or
credit agreement, arrangement, or undertaking) prior to the receipt of such
notice by Administrative Agent as aforesaid, or in respect of any renewals,
extensions, or modifications of such Guaranteed Debt, or in respect of interest
or costs of collection thereafter accruing on or with respect to such
Guaranteed Debt, or with respect to attorneys’ fees thereafter becoming payable
hereunder with respect to such Guaranteed Debt, and shall continue to be
effective with respect to any Guaranteed Debt arising or created after any
attempted revocation by any Guarantor. 
The fact that at any time or from time to time the Guaranteed Debt may
be increased, reduced, or paid in full shall not release, discharge, or reduce
the obligation of Guarantors with respect to indebtedness or obligations of
Borrower to the Loan Parties thereafter incurred (or other Guaranteed Debt
thereafter arising) under the Credit Agreement, the Notes, or otherwise.  This Guaranty Agreement may be enforced by
the Loan Parties and any subsequent holder of the Guaranteed Debt and shall not
be discharged by the assignment or negotiation of all or part of the Guaranteed
Debt.

 

2

 

1.5          Payment by
Guarantors.  If all or any part of the Guaranteed Debt
shall not be punctually paid when due, whether at maturity or earlier by
acceleration or otherwise, then Guarantors shall, immediately upon demand by
Administrative Agent, and without presentment, protest, notice of protest,
notice of nonpayment, notice of intention to accelerate or acceleration, or any
other notice whatsoever, pay in lawful money of the United States of America,
the amount due on the Guaranteed Debt to Administrative Agent, for the benefit
of the Loan Parties, at Administrative Agent’s principal office in Dallas,
Texas.  Such demand(s) may be made at any
time coincident with or after the time for payment of all or part of the
Guaranteed Debt, and may be made from time to time with respect to the same or
different items of Guaranteed Debt.  Such
demand shall be deemed made, given, and received in accordance with Section 5.2
hereof.

 

1.6          Payment of
Expenses.  In the event that any Guarantor should breach
or fail to timely perform any provisions of this Guaranty Agreement, then
Guarantors shall, immediately upon demand by Administrative Agent, pay to
Administrative Agent, for the benefit of the Loan Parties, all costs and
expenses (including court costs and reasonable attorneys’ fees) incurred by the
Loan Parties in the enforcement hereof or the preservation of the Loan Parties’
rights hereunder.  The covenant contained
in this Section 1.6
shall survive the payment of the Guaranteed Debt.

 

1.7          No Duty to
Pursue Others.  It shall not be necessary for any Loan Party
(and Guarantors hereby waive any rights which Guarantors may have to require
any Loan Party), in order to enforce such payment by any Guarantor, first to (a) institute
suit or exhaust its remedies against Borrower or others liable on the
Guaranteed Debt or any other person, (b) enforce the Loan Parties’ rights
against any security which shall ever have been given to secure the Guaranteed
Debt, (c) enforce the Loan Parties’s rights against any other Guarantor or
any other guarantors of the Guaranteed Debt, (d) join Borrower, any other
Guarantor, or any others liable on the Guaranteed Debt in any action seeking to
enforce this Guaranty Agreement, (e) exhaust any remedies available to the
Loan Parties against any security which shall ever have been given to secure
the Guaranteed Debt, or (e) resort to any other means of obtaining payment
of the Guaranteed Debt.  The Loan Parties
shall not be required to mitigate damages or take any other action to reduce,
collect, or enforce the Guaranteed Debt. 
Further, each Guarantor expressly waives each and every right to which
any it may be entitled by virtue of the suretyship law of the State of Texas,
including without limitation, any rights pursuant to Rule 31, Texas Rules of Civil Procedure, Articles 1986
and 1987, Revised Civil Statutes of Texas
and Chapter 34 of the Texas Business and
Commerce Code.

 

3

 

1.8          Waiver of
Notices, etc.  Each Guarantor agrees to the provisions of
the Credit Agreement, the Notes, and the other Loan Documents, and hereby
waives notice of (a) any loans or advances made by any Loan Party to
Borrower, (b) acceptance of this Guaranty Agreement, (c) any
amendment or extension of the Credit Agreement, the Notes, the other Loan
Documents, or any other instrument or document pertaining to all or any part of
the Guaranteed Debt, (d) the execution and delivery by Borrower and any
Loan Party of any other loan or credit agreement or of Borrower’s execution and
delivery of any promissory notes or other documents in connection therewith, (e) the
occurrence of any Potential Default or Event of Default, (f) any Loan
Party’s transfer or disposition of the Guaranteed Debt, or any part thereof, (g) sale
or foreclosure (or posting or advertising for sale or foreclosure) of any
collateral for the Guaranteed Debt, (h) protest, proof of nonpayment, or
default by Borrower, (i) the release of any other Guarantor, or
(j) any other action at any time taken or omitted by any Loan Party, and,
generally, all demands and notices of every kind in connection with this
Guaranty Agreement, the Credit Agreement, the Notes, the other Loan Documents,
and any documents or agreements evidencing, securing, or relating to any of the
Guaranteed Debt and the obligations hereby guaranteed.

 

1.9          Effect of
Bankruptcy, Other Matters.  In the event that, pursuant to
any insolvency, bankruptcy, reorganization, receivership, or other debtor
relief law, or any judgment, order, or decision thereunder, or for any other
reason, (a) any Loan Party must rescind or restore any payment, or any
part thereof, received by such Loan Party in satisfaction of the Guaranteed
Debt, as set forth herein, any prior release or discharge from the terms of
this Guaranty Agreement given to any Guarantor by such Loan Party shall be
without effect, and this Guaranty Agreement shall remain in full force and
effect, or (b) Borrower shall cease to be liable to the Loan Parties for
any of the Guaranteed Debt (other than by reason of the indefeasible payment in
full thereof by Borrower), then the obligations of each Guarantor under this
Guaranty Agreement shall remain in full force and effect.  It is the intention of the Loan Parties and
Guarantors that Guarantors’ obligations hereunder shall not be discharged
except by Guarantors’ performance of such obligations and then only to the
extent of such performance.  Without
limiting the generality of the foregoing, it is the intention of the Loan
Parties and Guarantors that the filing of any bankruptcy or similar proceeding
by or against Borrower or any other person or party obligated on any portion of
the Guaranteed Debt shall not affect the obligations of Guarantors under this
Guaranty Agreement or the rights of the Loan Parties under this Guaranty
Agreement, including, without limitation, the right or ability of the Loan
Parties to pursue or institute suit against Guarantors for the entire
Guaranteed Debt.

 

1.10  Limitation.  It is
the intention of Guarantors and the Loan Parties that the amount of the
Guaranteed Debt shall be in, but not in excess of, the maximum amount permitted
by fraudulent conveyance, fraudulent transfer, or similar Legal Requirements
applicable to Guarantors.  Accordingly,
notwithstanding anything to the contrary contained in this Guaranty Agreement
or any other agreement or instrument executed in connection with the payment of
any of the Guaranteed Debt, the amount of the Guaranteed Debt shall be limited
to that amount which after giving effect thereto would not (a) render any
Guarantor insolvent, (b) result in the fair saleable value of the assets
of any Guarantor being less than the amount required to pay its debts and other
liabilities (including contingent liabilities) as they mature, or (c) leave
any Guarantor with unreasonably small capital to carry out its business as now
conducted and as proposed to be conducted, including its capital needs, as such
concepts described in (a),
(b), and (c) herein
are determined under applicable Legal Requirements, if the obligations of such
Guarantor hereunder would otherwise be set aside, terminated, annulled, or
avoided for such reason by a court of competent jurisdiction in a proceeding
actually pending before such court.

 

SECTION 2

 

ADDITIONAL EVENTS AND CIRCUMSTANCES NOT REDUCING

OR DISCHARGING GUARANTOR’S OBLIGATIONS

 

Guarantors
hereby consent and agree to each of the following, and agree that Guarantors’
obligations under this Guaranty Agreement shall not be released, diminished,
impaired, reduced, or adversely affected by any of the following, and waives
any common law, equitable, statutory, or other rights (including without
limitation rights to notice) which Guarantors might otherwise have as a result
of or in connection with any of the following:

 

2.1          Modifications,
etc.  Any renewal, extension, increase,
modification, alteration, or rearrangement of all or any part of the Guaranteed
Debt, the Credit Agreement, the Notes, or any other Loan Document.

 

2.2          Adjustment,
etc.  Any adjustment, indulgence, forbearance, or
compromise that might be granted or given by any Loan Party to Borrower or any
Guarantor.

 

4

 

2.3          Condition,
Composition, or Structure of Borrower or Guarantors.  The
insolvency, bankruptcy, arrangement, adjustment, composition, structure,
liquidation, disability, dissolution, or lack of power of Borrower or any other
party at any time liable for the payment of all or part of the Guaranteed Debt;
or any dissolution of Borrower or any Guarantor, or any sale, lease, or
transfer of any or all of the assets of Borrower or any Guarantor, or any
changes in name, business, location, composition, structure, or changes in the
shareholders, partners, or members (whether by accession, secession, cessation,
death, dissolution, transfer of assets, or other matter) of Borrower or any
Guarantor; or any reorganization of Borrower or any Guarantor.

 

2.4          Invalidity
of Guaranteed Debt.  The invalidity, illegality, or
unenforceability of all or any part of the Guaranteed Debt, or any document or
agreement executed in connection with the Guaranteed Debt, for any reason
whatsoever, including without limitation the fact that (a) the Guaranteed
Debt, or any part thereof, exceeds the amount permitted by applicable Legal
Requirements, (b) the act of creating the Guaranteed Debt or any part
thereof is ultra vires, (c) the
officers or representatives executing the Credit Agreement, the Notes, the
other Loan Documents, or other documents or otherwise creating the Guaranteed
Debt acted in excess of their authority, (d) the Guaranteed Debt violates
applicable usury laws, (e) Borrower has valid defenses, claims, or offsets
(whether at law, in equity, or by agreement) which render the Guaranteed Debt
wholly or partially uncollectible from Borrower, (f) the creation,
performance, or repayment of the Guaranteed Debt (or the execution, delivery,
and performance of any document or instrument representing part of the
Guaranteed Debt or executed in connection with the Guaranteed Debt, or given to
secure the repayment of the Guaranteed Debt) is illegal, uncollectible, or
unenforceable, or (g) the Credit Agreement, the Notes, the other Loan
Documents, or other documents or instruments pertaining to the Guaranteed Debt
have been forged or otherwise are irregular or not genuine or authentic.

 

2.5          Release of
Obligors.  Any full or partial release of the liability
of Borrower on the Guaranteed Debt or any part thereof, or of any co-guarantors,
or any other person or entity now or hereafter liable, whether directly or indirectly,
jointly, severally, or jointly and severally, to pay, perform, guarantee, or
assure the payment of the Guaranteed Debt or any part thereof, it being
recognized, acknowledged, and agreed by Guarantors that Guarantors may be
required to pay the Guaranteed Debt in full without assistance or support of
any other party, and Guarantors have not been induced to enter into this
Guaranty Agreement on the basis of a contemplation, belief, understanding, or
agreement that other parties will be liable to perform the Guaranteed Debt, or
that the Loan Parties will look to other parties to perform the Guaranteed
Debt; notwithstanding the foregoing, Guarantors do not waive or release
(expressly or impliedly) any rights of subrogation, reimbursement, or contribution
which they may have, after payment in full of the Guaranteed Debt, against
others liable on the Guaranteed Debt; Guarantors’ rights of subrogation and
reimbursement are, however, subordinate to the rights and claims of the Loan
Parties.

 

2.6          Other Security. The taking or accepting of any other
security, collateral, or guaranty, or other assurance of payment, for all or
any part of the Guaranteed Debt.

 

2.7          Release of
Collateral, etc.  Any release, surrender, exchange,
subordination, deterioration, waste, loss, or impairment (including without
limitation negligent, willful, unreasonable, or unjustifiable impairment) of
any collateral, property, or security, at any time existing in connection with,
or assuring or securing payment of, all or any part of the Guaranteed Debt.

 

2.8          Care and
Diligence.  The failure of any Loan Party or any other
party to exercise diligence or reasonable care or act, fail to act, or comply
with any duty in the administration, preservation, protection, enforcement,
sale application, disposal, or other handling or treatment of all or any part
of Guaranteed Debt or any collateral, property, or security at any time
securing any portion thereof, including, without limiting the generality of the
foregoing, the failure to conduct any foreclosure or other remedy fairly, in a
commercially

 

5

 

reasonable
manner, or in such a way so as to obtain the best possible price or a favorable
price or otherwise act or fail to act.

 

2.9          Status of
Liens.  The fact that any collateral, security,
security interest, or lien contemplated or intended to be given, created, or
granted as security for the repayment of the Guaranteed Debt shall not be
properly perfected or created, or shall prove to be unenforceable or
subordinate to any other security interest or lien, it being recognized and
agreed by Guarantors that Guarantors are not entering into this Guaranty
Agreement in reliance on, or in contemplation of the benefits of, the validity,
enforceability, collectibility, or value of any of the collateral for the
Guaranteed Debt.

 

2.10        Offset.  Any
existing or future right of offset, claim, or defense of Borrower against the
Loan Parties, or any other party, or against payment of the Guaranteed Debt,
whether such right of offset, claim, or defense arises in connection with the
Guaranteed Debt (or the transactions creating the Guaranteed Debt) or
otherwise.

 

2.11        Merger.  The
reorganization, merger, or consolidation of Borrower or any Guarantor into or
with any other corporation or entity.

 

2.12        Preference.  Any
payment by Borrower to any Loan Party is held to constitute a preference under
bankruptcy laws, or for any reason any Loan Party is required to refund such
payment or pay such amount to Borrower or someone else.

 

2.13        Other
Actions Taken or Omitted.  Any other action taken or
omitted to be taken with respect to the Credit Agreement, the Guaranteed Debt,
or the security and collateral therefor, whether or not such action or omission
prejudices Guarantors or increases the likelihood or risk that Guarantors will
be required to pay the Guaranteed Debt pursuant to the terms hereof; it is the
unambiguous and unequivocal intention of Guarantors that Guarantors shall be
obligated to pay the Guaranteed Debt when due, notwithstanding any occurrence,
circumstance, event, action, or omission whatsoever, whether contemplated or
uncontemplated, and whether or not otherwise or particularly described herein,
except for the full and final payment and satisfaction of the Guaranteed Debt.

 

SECTION 3

 

REPRESENTATIONS AND WARRANTIES

 

To
induce the Loan Parties to enter into the Credit Agreement and extend credit to
Borrower, each Guarantor represents and warrants to the Loan Parties that:

 

3.1          Benefit.  Each
Guarantor has received, or will receive, direct or indirect benefit from the
making of this Guaranty and the Guaranteed Debt.

 

3.2          Familiarity
and Reliance.  Each Guarantor is familiar with, and has
independently reviewed books and records regarding, the financial condition of
Borrower and is familiar with the value of any and all collateral intended to
be created as security for the payment of the Guaranteed Debt; however, no
Guarantor is relying on such financial condition or the collateral as an
inducement to enter into this Guaranty Agreement.

 

3.3          No
Representation by the Loan Parties.  No Loan Party or any other
party has made any representation, warranty, or statement to any Guarantor in
order to induce any Guarantor to execute this Guaranty Agreement.

 

6

 

3.4          Guarantors’
Financial Condition.  As of the date hereof, and after giving
effect to this Guaranty Agreement and the contingent obligation evidenced
hereby, each Guarantor is, and will be, Solvent.

 

3.5          Determination
of Benefit.  The Board of Directors, partners, members, or
other managers and owners of each Guarantor have determined that this Guaranty
directly or indirectly benefits such Guarantor and is in the best interests of
such Guarantor.

 

3.6          Legality.  The
execution, delivery, and performance by each Guarantor of this Guaranty
Agreement and the consummation of the transactions contemplated hereunder (a) have
been duly authorized by all necessary action of each Guarantor, and (b) do
not, and will not, contravene or conflict with any Legal Requirement whatsoever
to which any Guarantor is subject or constitute a default (or an event which
with notice or lapse of time or both would constitute a default) under, or
result in the breach of, any Contractual Obligation to which any Guarantor is a
party or which may be applicable to any Guarantor or any of its assets, or
violate any provisions of its Constituent Documents; this Guaranty Agreement is
a legal and binding obligation of each Guarantor and is enforceable in
accordance with its terms, except as limited by bankruptcy, insolvency, or
other laws of general application relating to the enforcement of creditors’
rights.

 

3.7          Survival.  All
representations and warranties made by each Guarantor herein shall survive the
execution hereof.

 

SECTION 4

 

SUBORDINATION OF CERTAIN INDEBTEDNESS

 

4.1          Subordination
of Guarantor Claims.  As used herein, the term “Guarantor Claims”
shall mean all debts and liabilities of Borrower to any Guarantor, whether such
debts and liabilities now exist or are hereafter incurred or arise, or whether
the obligations of Borrower thereon be direct, contingent, primary, secondary,
several, joint and several, or otherwise, and irrespective of whether such
debts or liabilities be evidenced by note, contract, open account, or
otherwise, and irrespective of the person or persons in whose favor such debts
or liabilities may, at their inception, have been, or may hereafter be created,
or the manner in which they have been or may hereafter be acquired by any
Guarantor.  The Guarantor Claims shall
include without limitation all rights and claims of each Guarantor against
Borrower (arising as a result of subrogation or otherwise) as a result of any
Guarantor’s payment of all or a portion of the Guaranteed Debt.  Until the Guaranteed Debt shall be paid and
satisfied in full and Guarantors shall have performed all of their obligations
hereunder, if a Potential Default or Event of Default exists, then Guarantors
shall not receive or collect, directly or indirectly, from Borrower or any
other party any amount upon the Guarantor Claims.

 

4.2          Claims in
Bankruptcy.  In the event of receivership, bankruptcy,
reorganization, arrangement, debtor’s relief, or other insolvency proceedings
involving Borrower as debtor, the Loan Parties shall have the right to prove
its claim in any such proceeding so as to establish its rights hereunder and
receive directly from the receiver, trustee, or other court custodian dividends
and payments which would otherwise be payable upon Guarantor Claims.  Each Guarantor hereby assigns such dividends
and payments to the Loan Parties.  Should
any Loan Party receive, for application upon the Guaranteed Debt, any such
dividend or payment which is otherwise payable to any Guarantor, and which, as
between Borrower and such Guarantor, shall constitute a credit upon the
Guarantor Claims, then upon payment to the Loan Parties in full of the
Guaranteed Debt, such Guarantor shall become subrogated to the rights of the
Loan Parties to the extent that such payments to the Loan Parties on the
Guarantor Claims have contributed toward the liquidation of the Guaranteed
Debt, and such subrogation shall be with respect to that proportion of the
Guaranteed Debt which

 

7

 

would
have been unpaid if the Loan Parties had not received dividends or payments
upon the Guarantor Claims.

 

4.3          Payments
Held in Trust.  In the event that, notwithstanding Sections 4.1 and
4.2
above, any Guarantor should receive any funds, payment, claim, or distribution
which is prohibited by such Sections, such Guarantor agrees to hold in trust
for the Loan Parties, in kind, all funds, payments, claims, or distributions so
received, and agrees that he shall have absolutely no dominion over such funds,
payments, claims, or distributions so received except to pay them promptly to
Administrative Agent, for the benefit of the Loan Parties, and such Guarantor
covenants promptly to pay the same to Administrative Agent, for the benefit of
the Loan Parties.

 

4.4          Liens Subordinate.  Each
Guarantor agrees that any liens, security interests, judgment liens, charges,
or other encumbrances upon Borrower’s assets securing payment of the Guarantor
Claims shall be and remain inferior and subordinate to any liens, security
interests, judgment liens, charges, or other encumbrances upon Borrower’s
assets securing payment of the Guaranteed Debt, regardless of whether such
encumbrances in favor of such Guarantor or the Loan Parties presently exist or
are hereafter created or attach.  Without
the prior written consent of Administrative Agent, no Guarantor shall (a) exercise
or enforce any creditor’s right it may have against Borrower, or (b) foreclose,
repossess, sequester, or otherwise take steps or institute any action or
proceedings (judicial or otherwise, including, without limitation, the
commencement of, or joinder in, any liquidation, bankruptcy, rearrangement,
debtor’s relief, or insolvency proceeding) to enforce any liens, mortgages,
deeds of trust, security interest, collateral rights, judgments, or other
encumbrances on assets of Borrower held by any Guarantor.

 

4.5          Notation of
Records.  All promissory notes, accounts receivable
ledgers, or other evidences of the Guarantor Claims accepted by or held by each
Guarantor shall contain a specific written notice thereon that the indebtedness
evidenced thereby is subordinated under the terms of this Guaranty Agreement.

 

SECTION 5

 

MISCELLANEOUS

 

5.1          Waiver.  No
failure to exercise, and no delay in exercising, on the part of any Loan Party,
any right hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right.  The rights
of the Loan Parties hereunder shall be in addition to all other rights provided
by applicable Legal Requirements.  No
modification or waiver of any provision of this Guaranty Agreement, nor consent
to departure therefrom, shall be effective unless in writing and no such
consent or waiver shall extend beyond the particular case and purpose
involved.  No notice or demand given in
any case shall constitute a waiver of the right to take other action in the
same, similar or other instances without such notice or demand.

 

5.2          Notices.  Any
notices or other communications required or permitted to be given by this
Guaranty Agreement must be (a) given in writing and personally delivered
or mailed by prepaid certified or registered mail, return receipt requested, or
(b) made by tested telex delivered or transmitted, to the party to whom
such notice or communication is directed, to in the case of any Guarantor, the
address of such Guarantor set forth on the signature pages hereof, and in
the case of the Credit Parties, as follows:

 

8

 

	
   

  	
  Loan Parties:

  
	
   

  	
   

  
	
   

  	
  Bank
  of America, N.A., as Administrative Agent

  
	
   

  	
  901
  Main Street, 64th Floor

  
	
   

  	
  Dallas,
  TX 75202

  
	
   

  	
  Attn:

  
	
   

  	
  Telecopy:
  

  
	
   

  	
   

  
	
   

  	
  With
  a copy to:

  
	
   

  	
   

  
	
   

  	
  Banc
  of America Securities LLC

  
	
   

  	
  100
  North Tryon Street, 15th Floor

  
	
   

  	
  Charlotte,
  NC 28255

  
	
   

  	
  Attn:
  Mr. Anthony Fertitta

  
	
   

  	
  Telecopy:
  (704) 386-0255

  

 

Any
such notice or other communication shall be deemed to have been given (whether
actually received or not) on the day it is personally delivered as aforesaid
or, if mailed, on the day it is mailed as aforesaid, or, if transmitted by
telex, on the day that such notice is transmitted as aforesaid.  Any party may change its address for purposes
of this Guaranty Agreement by giving notice of such change to the other party
pursuant to this Section 5.2.

 

5.3          Governing
Law.  This Guaranty Agreement has been prepared,
and is intended to be performed in the State of Texas, and the substantive
Legal Requirements of such state shall govern the validity, construction,
enforcement, and interpretation of this Guaranty Agreement.  For purposes of this Guaranty Agreement and
the resolution of disputes hereunder, each Guarantor hereby irrevocably submits
and consents to, and waives any objection to, the non-exclusive jurisdiction of
the courts of the State of Texas located in Dallas County, Texas and of the
federal court located in the Northern Judicial District of Texas.

 

5.4          Invalid
Provisions.  If any provision of this Guaranty Agreement
is held to be illegal, invalid, or unenforceable under present or future Legal
Requirements effective during the term of this Guaranty Agreement, such
provision shall be fully severable and this Guaranty Agreement shall be
construed and enforced as if such illegal, invalid, or unenforceable provision
had never comprised a part of this Guaranty Agreement, and the remaining
provisions of this Guaranty Agreement shall remain in full force and effect and
shall not be affected by the illegal, invalid or unenforceable provision or by
its severance from this Guaranty Agreement, unless such continued effectiveness
of this Guaranty Agreement, as modified, would be contrary to the basic
understandings and intentions of the parties as expressed herein.

 

5.5          Entirety
and Amendments.  This Guaranty Agreement embodies the entire
agreement between the parties and supersedes all prior agreements and
understandings, if any, relating to the subject matter hereof, and this
Guaranty Agreement may be amended only by an instrument in writing executed by
an authorized officer of the party against whom such amendment is sought to be
enforced.

 

5.6          Parties
Bound; Assignment.  This Guaranty Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors,
assigns and legal representatives; provided,
however, that no Guarantor may, without the prior written consent of
Administrative Agent, assign any of its rights, powers, duties, or obligations
hereunder.

 

9

 

5.7          Headings.  Section headings
are for convenience of reference only and shall in no way affect the
interpretation of this Guaranty Agreement.

 

5.8          Multiple
Counterparts.  This Guaranty Agreement may be executed in
any number of counterparts, all of which taken together shall constitute one
and the same agreement, and any of the parties hereto may execute this Guaranty
Agreement by signing any such counterpart.

 

5.9          Rights and
Remedies.  If any Guarantor becomes liable for any
indebtedness owing by Borrower to the Loan Parties, by endorsement or
otherwise, other than under this Guaranty Agreement, such liability shall not
be in any manner impaired or affected hereby and the rights of the Loan Parties
hereunder shall be cumulative of any and all other rights that the Loan Parties
(or any of them) may ever have against such Guarantor.  The exercise by the Loan Parties of any right
or remedy hereunder or under any other instrument, or at law or in equity,
shall not preclude the concurrent or subsequent exercise of any other right or
remedy.

 

5.10        WAIVER OF
TRIAL BY JURY.  EACH GUARANTOR HEREBY WAIVES ITS RESPECTIVE
RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING
OUT OF THIS GUARANTY AGREEMENT.  THIS
WAIVER IS IRREVOCABLE AND SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
MODIFICATIONS, RENEWALS, EXTENSIONS, OR SUPPLEMENTS TO THIS GUARANTY
AGREEMENT.  IN THE EVENT OF LITIGATION,
THIS GUARANTY AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO TRIAL BY THE
COURT.

 

5.11        Additional
Guarantors.  The initial Guarantors hereunder shall be
each of the Subsidiaries of Borrower that are signatories hereto and that are
listed on Schedule 1
attached hereto.  From time to time
subsequent to the time hereof, additional Subsidiaries of Borrower may, as
required under the Credit Agreement, become parties hereto as additional
Guarantors (each an “Additional
Guarantor”) by executing a counterpart of this Guaranty
Agreement in the form of Exhibit A
attached hereto.  Upon delivery of any
such counterpart to Administrative Agent, notice of which is hereby waived by
Guarantors, each such Additional Guarantor shall be a Guarantor and shall be a
party hereto as if such Additional Guarantor were an original signatory
hereof.  Each Guarantor expressly agrees
that its obligations arising hereunder shall not be affected or diminished by
the addition or release of any other Guarantor hereunder, or by any election by
Administrative Agent not to cause any Subsidiary of Borrower to become an
Additional Guarantor hereunder.  This
Guaranty Agreement shall be fully effective as to any Guarantor that is or
becomes a party hereto regardless of whether any such person becomes or fails
to become or ceases to be a Guarantor hereunder.

 

5.12        Release
of Guarantors.  If any
Guarantor which is a Significant Subsidiary is re-designated as not a
Significant Subsidiary pursuant to the definition of Significant Subsidiary in the Credit Agreement, such
Guarantor may be released from its obligations under this Guaranty Agreement by
Administrative Agent’s execution of a Release of Guarantor in the form of Exhibit B
attached hereto.  Each Guarantor
expressly agrees that its obligations arising hereunder shall not be affected
or diminished by the release of any other Guarantor hereunder.

 

10

 

 

	
   

  	
   

  	
  [GUARANTORS]

  	 

	
   

  	
   

  	 

	
   

  	
   

  	 

	
   

  	
  By:

  	
   

  	 

	
   

  	
   

  	
  Name:

  	
   

  	 

	
   

  	
   

  	
  Title:

  	
   

  
						

 

11

 

SCHEDULE 1

 

INITIAL GUARANTORS

 

[To be provided by Borrower]

 

 

 

EXHIBIT A

 

to Subsidiary Guaranty

 

COUNTERPART TO SUBSIDIARY GUARANTY

 

In
witness whereof, the undersigned Additional Guarantor has caused this Guaranty
to be executed by delivered by its officer thereunto duly authorized as of                                                                ,
200     .

 

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [NAME OF ADDITIONAL GUARANTOR]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
					

 

Address
for Notice:

 

 

EXHIBIT B

 

to Subsidiary Guaranty

 

FORM OF RELEASE OF GUARANTOR

 

In witness
whereof, the undersigned Administrative Agent, for itself and on behalf of each
of the Loan Parties, hereby releases and discharges                                                                                              
from any and all obligations and liabilities of                                                                     
to the Loan Parties under that certain Subsidiary Guaranty dated as of June 28,
2005, executed by the Subsidiaries of Trammell Crow Company, described therein
in favor of the Loan Parties defined therein.

 

 

	
   

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

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
					

 

 

EXHIBIT F

 

FORM OF NOTE

 

	
  $

  	
  Dallas,
  Texas

  	
  As of                   ,
  2004

  

 

1.             FOR VALUE RECEIVED,
TRAMMELL CROW COMPANY, a Delaware corporation (“Maker”), hereby unconditionally promises
to pay to the order of                          
(“Payee”),
at the Funding and Payment Office of Administrative Agent defined in the Credit
Agreement defined below, the sum of                          Dollars
($                          )
(or, if less, so much thereof as may be advanced), in lawful money of the
United States of America.  Capitalized
terms not defined herein shall have the meaning assigned to those terms in the
Credit Agreement defined below.

 

2.             The unpaid principal
amount of, and accrued unpaid interest on, this Note is payable in accordance
with the Credit Agreement (as defined in Section 5 below).

 

3.             The unpaid principal
balance advanced and outstanding hereunder shall bear interest from the date of
advance until the Maturity Date at the rate per annum provided in the Credit
Agreement that is selected by Maker pursuant to the Credit Agreement.  The interest rate specified in this section is
subject to adjustment under the circumstances described in the Credit
Agreement.  Interest shall be computed in
the manner provided in the Credit Agreement.

 

4.             Notwithstanding any
provision contained in this Note or any other document executed or delivered in
connection with this Note or in connection with the Credit Agreement, Payee
shall never be deemed to have contracted for or be entitled to receive, collect
or apply as interest on this Note, any amount in excess of the maximum rate of
interest permitted to be charged by applicable law, and, if Payee ever
receives, collects or applies as interest any such excess, then the amount that
would be excessive interest shall be applied to reduce the unpaid principal
balance of this Note, and, if the principal balance of this Note is paid in
full by that application, then any remaining excess shall promptly be paid to
Maker.  In determining whether the
interest paid or payable under any specific contingency exceeds the highest
lawful rate, Maker and Payee shall, to the maximum extent permitted under
applicable law, (a) characterize any non-principal payment (other than
payments expressly designated as interest payments hereunder) as an expense or
fee rather than as interest, (b) exclude voluntary prepayments and the
effect thereof, and (c) spread the total amount of interest throughout the
entire contemplated term of this Note so that the interest rate is uniform
throughout that term.

 

5.             This Note has been
executed and delivered pursuant to an Credit Agreement dated as of June 28,
2005 (as renewed, extended, amended, or restated from time to time, the “Credit Agreement”),
among Maker, the Lenders from time to time party thereto, Bank of America,
N.A., a national banking association, as Administrative Agent (in such
capacity, together with its successors and assigns, “Administrative Agent”)
and as Issuing Bank (as defined therein), and is one of the “Notes” referred to therein, and the holder
of this Note is entitled to the benefits provided in the Credit Agreement.  Reference is hereby made to the Credit
Agreement for a statement of (a) the obligation of Payee to advance funds
hereunder, (b) the prepayment rights and obligations of Maker, and (c) the
events upon which the maturity of this Note may be accelerated.

 

6.             If the principal of,
or any installment of interest on, this Note becomes due and payable on a day
other than a Business Day, then the maturity thereof shall be extended to the
next succeeding Business Day. If this Note, or any installment or payment due
hereunder, is not paid when due, whether at

 

 

maturity
or by acceleration, or if it is collected through a bankruptcy, probate or
other court, whether before or after maturity, then Maker shall pay all costs
of collection, including, but not limited to, reasonable attorney’s fees
incurred by the holder of this Note.  All
past due principal of, and to the extent permitted by applicable law, interest
on this Note shall bear interest until paid at the rate provided in the Credit
Agreement.

 

7.             Maker and all sureties, endorsers,
guarantors, and other parties ever liable for payment of any sums payable
pursuant to the terms of this Note, jointly and severally waive demand, presentment
for payment, protest, notice of protest, notice of acceleration, notice of
intent to accelerate, diligence in collection, the bringing of any suit against
any party, and any notice of or defense on account of any extensions, renewals,
partial payments, or changes in any manner of or in this Note or in any of its
terms, provisions, and covenants, or any releases or substitutions of any
security, or any delay, indulgence, or other act of any trustee or any holder
hereof, whether before or after maturity.

 

8.             All Loans made by
Payee, the respective Interest Periods thereof (if applicable), and all
repayments of the principal thereof may be recorded by Payee and, before any
transfer hereof, endorsed by Payee on the schedule attached hereto, or on
a continuation of the schedule attached to and a part hereof; provided that the failure of Payee to
record any endorsement shall not affect the obligation of Maker hereunder or
under the Credit Agreement.

 

9.             This Note is being
executed and delivered, and is intended to be performed in the State of
Texas.  Except to the extent that the
laws of the United States may apply to the terms hereof, the substantive laws
of the State of Texas shall govern the validity, construction, enforcement, and
interpretation of this Note.

 

	
   

  	
  TRAMMELL CROW COMPANY,

  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
					

 

2

 

EXHIBIT G

 

FORM OF NOTICE OF BORROWING

 

1.             Submission
Pursuant To Credit Agreement.  This Notice of Borrowing is executed
and delivered by Trammell Crow Company, a Delaware corporation (“Borrower”), to Bank
of America, N.A., as Administrative Agent (“Administrative Agent”), pursuant to Section 2.1(b) of
the Credit Agreement dated as of June 28, 2005, between Borrower, Administrative
Agent, the Issuing Bank defined therein, and the Lenders defined therein (as
renewed, extended, amended, or restated from time to time, the “Credit Agreement”).  Capitalized terms used herein shall, unless
otherwise indicated, have the respective meanings set forth in the Credit
Agreement.

 

2.             Request
For Loan.  Borrower hereby requests that Lenders make a
Loan to Borrower pursuant to the Credit Agreement as follows:

 

(a)           Base
Rate Loan.

(i)                                    Amount of Base Rate Loan:

($1,000,000
or a greater integral multiple of $250,000)

 

(ii)                                Date of Loan:

 

(b)           Eurodollar
Rate Loan.

 

(i)            Amount
of Eurodollar Rate Loan:

($5,000,000
or a greater integral multiple of $1,000,000)

 

(ii)                                Date of Loan:

 

(iii)                            Interest Period:                         months
(one, two, three, or six months).

 

3.             Representations,
Warranties, and Certifications.  Borrower hereby represents,
warrants, and certifies to the Credit Parties that, as of the date of the Loan
requested herein:

 

(a)           There
exists no Potential Default or Event of Default.

 

(b)           Each
Company has performed and complied with all agreements and conditions contained
in the Credit Agreement that are required to be performed or complied with by
each Company.

 

(c)           The
representations and warranties contained in the Credit Agreement and each of
the other Loan Documents are true and correct in all material respects, with
the same force and effect as though made on and as of the date of the Loan
(unless such representations and warranties are, by their express terms,
limited to a specific date).

 

4.             Proceeds
of Loan.  Administrative Agent is authorized to deposit
the proceeds of the Loan requested hereby to:                                                                                                                             .

 

 

5.             Execution
Authorized.  This Notice of Borrowing is executed on                                ,
200     , by an authorized officer of Borrower.  The undersigned, in such capacity, hereby
certifies each and every matter contained herein to be true and correct.

 

 

	
   

  	
   

  	
  ,

  
	
   

  	
   

  
	
   

  	
  of
  Trammell Crow Company, a Delaware

  corporation

  

 

 

EXHIBIT H

 

FORM OF NOTICE OF CONVERSION/CONTINUATION

 

1.             Submission
Pursuant To Credit Agreement.  This Notice of
Conversion/Continuation is executed and delivered by Trammell Crow Company, a
Delaware corporation (“Borrower”),
to Bank of America, N.A., as Administrative Agent (“Administrative Agent”),
pursuant to Section 2.2(d) of
the Credit Agreement dated as of June 28, 2005, between Borrower,
Administrative Agent, the Issuing Bank defined therein, and the Lenders defined
therein (as renewed, extended, amended, or restated from time to time, the “Credit Agreement”).  Capitalized terms used herein shall, unless
otherwise indicated, have the respective meanings set forth in the Credit
Agreement.

 

2.             Request
For Conversion/Continuation.  Borrower presently has a
[Eurodollar Rate Loan/Base Rate Loan] Loan (the “Existing Loan”) in the amount of $                      
(which, if a Eurodollar Rate Loan, has an Interest Period of                                             
month(s) ending on                                        ,
200    ).  On                                ,  200      (the “Conversion Date”),
Borrower desires to (check applicable box):

 

o            Pay
$                        
of the Existing Loan and continue the balance of $                             as
a Eurodollar Rate Loan with a new Interest Period of                         .

 

o            Pay
$                           
of the Existing Loan and convert the balance of $                              
from a Eurodollar Rate Loan to a Base Rate Loan.

 

o            Continue
the entire Existing Loan as a Eurodollar Rate Loan with a new Interest Period
of                                               .

 

o            Continue
the Existing Loan, plus convert an additional $                              ,
as a Eurodollar Rate Loan with a new Interest Period of                                               .

 

o            Convert
the entire Existing Loan from a Eurodollar Rate Loan to a Base Rate Loan.

 

o            Convert
the entire Existing Loan from a Base Rate Loan to a Eurodollar Rate Loan with
an Interest Period of                                       .

 

3.             Representations,
Warranties and Certifications.  Borrower hereby represents,
warrants, and certifies to the Credit Parties that, as of the date of the Loan
requested herein:

 

(a)           There exists no
Potential Default or Event of Default.

 

(b)           Each Company has
performed and complied with all agreements and conditions contained in the
Credit Agreement that are required to be performed or complied with by each
Company.

 

(c)           The representations and
warranties contained in the Credit Agreement and each of the other Loan
Documents are true and correct in all material respects, with the same force
and effect as 

 

 

though made on and as of the date of the Loan (unless such
representations and warranties are, by their express terms, limited to a
specific date).

 

4.             Execution
Authorized.  This Notice of Conversion/Continuation is
executed on                                      ,
200    , by
an authorized officer of Borrower.  The
undersigned, in such capacity, hereby certifies each and every matter contained
herein to be true and correct.

 

	
   

  	
  Date:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ,

  
	
   

  	
   

  
	
   

  	
  of
  Trammell Crow Company, a Delaware

  corporation

  

 

 

EXHIBIT I

 

FORM OF PLEDGE AGREEMENT - SUBSIDIARIES

 

SUBSIDIARY PLEDGE AGREEMENT

 

THIS
SUBSIDIARY PLEDGE AGREEMENT (this “Agreement”) is dated as of June 28,
2005, and entered into by and between EACH OF THE SUBSIDIARIES OF TRAMMELL CROW
COMPANY, A DELAWARE CORPORATION (“Borrower”) LISTED ON SCHEDULE 1
ATTACHED HERETO (each a “Pledgor”
and collectively, “Pledgors”),
and BANK OF AMERICA, N.A., a national banking association, as agent for and
representative of (in such capacity herein called “Secured Party”) the
Credit Parties defined in the Credit Agreement defined below.

 

R E C I T A
L S

 

1.             Reference is hereby
made to that certain Credit Agreement dated of even date herewith, executed by
Borrower, Secured Party, as Administrative Agent and as Issuing Bank, and the
Lenders defined therein (as modified, amended, renewed, extended, restated, or
supplemented from time to time, the “Credit Agreement”), pursuant to which Lenders
have made certain Commitments, subject to the terms and conditions set forth in
the Credit Agreement, to make Loans to Borrower.

 

2.             Capitalized terms
used herein shall, unless otherwise indicated, have the respective meanings set
forth in the Credit Agreement.

 

3.             Pursuant to the
Credit Agreement, each Pledgor has executed that certain Guaranty Agreement dated
of even date herewith in favor of the Credit Parties (as modified, amended,
renewed, extended, restated, or supplemented from time to time, the “Guaranty”), pursuant
to which each Pledgor has guaranteed the prompt payment and performance when
due of all obligations of Borrower under the Credit Agreement.

 

4.             Each Pledgor (a) is
the legal and beneficial owner of (i) the shares of common stock (par
value $0.01 per share) (the “Pledged Shares”) listed across such Pledgor’s name in Part A of Schedule 2 attached
hereto and issued by the corporations named therein, and (ii) the
partnership interests in limited partnerships or general partnerships, as the
case may be, and membership interests in limited liability companies, if any,
listed across such Pledgor’s name in Part B of Schedule 2 attached hereto
(collectively, the “Pledged
Interests”), or (b) may in the future become the owner of
Pledged Shares, Pledged Interests, and/or other Collateral (defined below).

 

5.             It is a condition
precedent to the making of the Loans by Lenders under the Credit Agreement that
Pledgors shall have granted the security interests and undertaken the
obligations contemplated by this Agreement.

 

NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, each Pledgor hereby
agrees with Secured Party, for the benefit of the Credit Parties, as follows:

 

1.             Pledge of Security.  Each Pledgor hereby pledges and assigns to
Secured Party, for the ratable benefit of the Credit Parties, and hereby grants
to Secured Party, for the ratable benefit of the Credit

 

 

Parties, a security interest in, all of each Pledgor’s right, title,
and interest in and to the following (the “Collateral”):

 

(a)           the
Pledged Shares and the certificates representing the Pledged Shares and any
interest of any Pledgor in the entries on the books of any financial
intermediary pertaining to the Pledged Shares, and all dividends, cash,
warrants, rights, instruments, and other property or proceeds from time to time
received, receivable, or otherwise distributable in respect of or in exchange
for any or all of the Pledged Shares;

 

(b)           the
Pledged Interests, including without limitation all of any Pledgor’s right,
title, and interest as a partner in any partnership or as a member of any
limited liability company, whether such right, title, and interest arises under
any partnership agreement or limited liability company agreement (any such
agreement being a “Formation
Agreement”) or otherwise, including, without limitation, all of
any Pledgor’s right to vote, together with all other rights, interest, claims,
and other property of any Pledgor in any manner arising out of or relating to
its partnership or membership interests, whatever their respective kind or
character, whether they are tangible or intangible property, and wheresoever
they may exist or be located, and further including, without limitation: (i) all
rights of any Pledgor to receive distributions of any kind, in cash or
otherwise, due or to become due under or pursuant to any Formation Agreement or
otherwise in respect of any partnership or limited liability company; (ii) all
rights of any Pledgor to receive proceeds of any insurance, indemnity,
warranty, or guaranty with respect to any partnership or limited liability
company; (iii) all claims of any Pledgor for damages arising out of, or
for the breach of, or default under, any Formation Agreement; and (iv) any
certificated or uncertificated security evidencing any of the foregoing issued
by any partnership or limited liability company;

 

(c)           all
additional shares of, and all securities convertible into and warrants,
options, and other rights to purchase or otherwise acquire, stock of any issuer
of the Pledged Shares from time to time acquired by any Pledgor in any manner
(which shares shall be deemed to be part of the Pledged Shares), the
certificates or other instruments representing such additional shares,
securities, warrants, options, or other rights and any interest of any Pledgor
in the entries on the books of any financial intermediary pertaining to such
additional shares, and all dividends, cash, warrants, rights, instruments, and
other property or proceeds from time to time received, receivable, or otherwise
distributed in respect of or in exchange for any or all of such additional
shares, securities, warrants, options, or other rights;

 

(d)           all
shares of, and all securities convertible into and warrants, options, and other
rights to purchase or otherwise acquire, stock of any Person that, after the
date of this Agreement, becomes, as a result of any occurrence, a Significant
Subsidiary (which shares shall be deemed to be part of the Pledged Shares), the
certificates or other instruments representing such shares, securities,
warrants, options, or other rights and any interest of any Pledgor in the
entries on the books of any financial intermediary pertaining to such shares,
and all dividends, cash, warrants, rights, instruments, and other property or
proceeds from time to time received, receivable, or otherwise distributed in
respect of or in exchange for any or all of such shares, securities, warrants,
options, or other rights;

 

(e)           to
the extent not included in any other paragraph of this Section 1, all
other general intangibles (including without limitation, tax refunds and rights
to demand issuance of a certificate evidencing the Collateral), arising out of
or in connection with rights to payment or performance, choses in action, and judgments taken on
any rights or claims included in the Collateral described in clauses (a) through
(d) above;

 

(f)            all
of any Pledgor’s right, title, and interest in and to all books, records,
ledger cards, files, correspondence, computer programs, tapes, disks, and
related data processing software that at any time

 

2

 

evidence or contain information relating to any of the Collateral or
are otherwise necessary or helpful in the collection thereof or realization
thereupon; and

 

(g)           to
the extent not covered by clauses
(a) through (f) above, all proceeds of any or all of the
foregoing Collateral.  For purposes of
this Agreement, the term “proceeds”
includes whatever is receivable or received when Collateral or proceeds are
sold, exchanged, collected, or otherwise disposed of, whether such disposition
is voluntary or involuntary, and includes, without limitation, proceeds of any
indemnity or guaranty payable to any Pledgor or Secured Party from time to time
with respect to any of the Collateral.

 

2.             Security for Obligations.  This Agreement secures, and the Collateral is
collateral security for, the prompt payment or performance in full when due,
whether at stated maturity, by required prepayment, declaration, acceleration,
demand, or otherwise (including the payment of amounts that would become due
but for the operation of the automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. § 362(a)),
of all obligations and liabilities of every nature of Borrower now or hereafter
existing under or arising out of or in connection with the Credit Agreement and
the other Loan Documents and all renewals or extensions thereof, whether for
principal, interest (including without limitation interest that, but for the
filing of a petition in bankruptcy with respect to any Pledgor, would accrue on
such obligations), fees, expenses, indemnities, or otherwise, whether voluntary
or involuntary, direct or indirect, absolute or contingent, liquidated or
unliquidated, whether or not jointly owed with others, and whether or not from
time to time decreased or extinguished and later increased, created, or
incurred, and all or any portion of such obligations or liabilities that are
paid, to the extent all or any part of such payment is avoided or recovered
directly or indirectly from Secured Party or any Lender as a preference,
fraudulent transfer, or otherwise and of each Pledgor now or hereafter existing
under or arising out of or in connection with the Guaranty (all such
obligations and liabilities being the “Underlying Debt”), and all obligations of
every nature of each Pledgor now or hereafter existing under this Agreement
(all such obligations of Pledgors, together with the Underlying Debt, being the
“Secured Obligations”).

 

3.             Delivery of Collateral.  All certificates or instruments representing or
evidencing the Collateral shall be delivered to and held by or on behalf of
Secured Party pursuant hereto and shall be in suitable form for transfer by
delivery or, as applicable, shall be accompanied by any necessary endorsement,
where necessary, or duly executed instruments of transfer or assignment in
blank, all in form and substance satisfactory to Secured Party.  Secured Party shall have the right, at any
time in its discretion and without notice to any Pledgor, to transfer to or to
register in the name of Secured Party or any of its nominees any or all of the
Collateral, subject only to the revocable rights specified in Section 6(a).  In addition, Secured Party shall have the
right at any time to exchange certificates or instruments representing or evidencing
Collateral for certificates or instruments of smaller or larger denominations.

 

4.             Representations and Warranties.  Each Pledgor represents and warrants as
follows:

 

(a)           Chief Executive Office;
Organization; Authorization.  Each Pledgor that is a
corporation is duly organized, validly existing, and in good standing under the
laws of its state of its incorporation and has all requisite corporate power
and authority to carry on its business as now conducted and proposed to be
conducted and to enter into this Agreement and carry out the transactions
contemplated hereby.  Each Pledgor that
is a partnership is duly organized, validly existing, and in good standing
under the laws of the state of its formation and has all requisite power and
authority to carry on its business as now conducted and proposed to be
conducted and to enter into this Agreement and carry out the transactions
contemplated hereby.  The execution,
delivery, and performance of this Agreement have been duly authorized by all
necessary corporate or partnership action by each Pledgor.

 

3

 

(b)           Good Standing.  Each
Pledgor is qualified to do business and is in good standing wherever necessary
to carry on its present business and operations, except where the failure to so
qualify or be in good standing could not have a Material Adverse Effect.

 

(c)           No Conflict.  The
execution, delivery, and performance by each Pledgor of this Agreement will not
(i) violate the Constituent Documents of such Pledgor, (ii) violate
any provision of any Legal Requirement applicable to such Pledgor, or any
order, judgment, or decree of any Governmental Authority binding on such
Pledgor, (iii) result in a breach of, or constitute with due notice or
lapse of time or both, a default under any Contractual Obligation of such
Pledgor where such breach or default could have a Material Adverse Effect, (iv) result
in or require the creation or imposition of any Lien upon any of its properties
or assets, or (v) require the approval or consent of any Person under any
Contractual Obligation of such Pledgor.

 

(d)           Binding Obligation.  This
Agreement is the legally valid and binding obligation of each Pledgor,
enforceable against each Pledgor in accordance with its terms, except as enforcement
may be limited by a bankruptcy, insolvency, reorganization, moratorium, or
similar laws or equitable principles relating to or limiting creditors’ rights
generally.

 

(e)           Due Authorization, etc. of
Collateral.  All of the Pledged Shares have been duly
authorized and validly issued and are fully paid and nonassessable.

 

(f)            Description of Collateral.  The
Pledged Shares constitute all of the issued and outstanding shares of stock of
each of the Significant Subsidiaries of Pledgor and there are no outstanding
warrants, options, or other rights to purchase, or other agreements outstanding
with respect to, or property that is now or hereafter convertible into, or that
requires the issuance or sale of, any Pledged Shares.  The Pledged Interests constitute all of the
partnership interests and limited liability interests of each of the
Significant Subsidiaries of Pledgor in the partnerships or limited liability
companies listed in Schedule 1.

 

(g)           Ownership of Collateral.  Each
Pledgor is the legal, record, and beneficial owner of the Collateral described
on Schedule 2
free and clear of any Lien except for the security interest created by this
Agreement.

 

(h)           Governmental Authorizations.  No
authorization, approval, or other action by, and no notice to or filing with,
any Governmental Authority is required for either (i) the pledge by any
Pledgor of the Collateral pursuant to this Agreement and the grant by any
Pledgor of the security interest granted hereby, (ii) the execution,
delivery, or performance of this Agreement by any Pledgor, or (iii) the
exercise by Secured Party of the voting or other rights, or the remedies in
respect of the Collateral, provided for in this Agreement (except as may be
required in connection with a disposition of Collateral by laws affecting the
offering and sale of securities generally).

 

(i)            Perfection.  With
respect to Collateral in which the security interest may be perfected by the
filing of financing statements, once those financing statements have been
properly filed in the appropriate state for such filing, the security interest
in that Collateral will be fully perfected and the security interest will
constitute a first-priority Lien on such Collateral, securing payment of the
Secured Obligations.  With respect to
Collateral consisting of investment property, deposit accounts, electronic
chattel paper, letter-of-credit rights, and instruments, upon the delivery of
such Collateral to Secured Party or delivery of an executed control agreement
with respect to such Collateral, the security interest in that Collateral will
be fully perfected and the security interest will constitute a first-priority
Lien on such Collateral, securing payment of the Secured Obligations.  None of the Collateral has been delivered nor
control with respect thereto given to any other Person.

 

4

 

(j)            Margin Regulations.  The
pledge of the Collateral pursuant to this Agreement does not violate Regulation T, U, or X of the Board of Governors of the Federal
Reserve System.

 

(k)           Other Information.  All
information heretofore, herein or hereafter supplied to Secured Party by or on
behalf of Pledgors with respect to the Collateral is accurate and complete in
all material respects.

 

5.             Assurances and Covenants of Pledgors.

 

(a)           Transfers and Other Liens. 
Except as permitted by the terms of the Credit Agreement, no Pledgor
shall:

 

(i)            except as expressly permitted by the Credit Agreement,
sell, assign (by operation of law or otherwise), pledge, or hypothecate or
otherwise dispose of, or grant any option with respect to, any of the
Collateral;

 

(ii)           create or suffer to exist any Lien upon or with respect to
any of the Collateral, except for Permitted Encumbrances;

 

(iii)          permit any issuer of Pledged Shares to merge or consolidate
unless all the outstanding capital stock of the surviving or resulting
corporation is, upon such merger or consolidation, pledged hereunder and no
cash, securities, or other property is distributed in respect of the
outstanding shares of any other constituent corporation.

 

(iv)          permit any issuer of Pledged Interests in a partnership to
merge or consolidate unless all the outstanding partnership interests of the
surviving or resulting entity is, upon such merger or consolidation, pledged
hereunder and no cash, securities, or other property is distributed in respect
of the outstanding interests of any other constituent partnership; or

 

(v)           permit any issuer of Pledged Interests in a limited
liability company to merge or consolidate unless all the outstanding limited
liability company interests of the surviving or resulting entity is, upon such
merger or consolidation, pledged hereunder and no cash, securities, or other
property is distributed in respect of the outstanding interests of any other
constituent limited liability company.

 

(b)           Additional Collateral.  Each
Pledgor shall (i) cause (A) each corporation that is an issuer of
Pledged Shares not to issue any stock or other securities in addition to or in
substitution for the Pledged Shares issued by such issuer, except to such
Pledgor, or (B) each partnership or limited liability company that is an
issuer of Pledged Interests not to issue partnership or limited liability
company interests in addition to or in substitution for the Pledged Interests issued
by such partnership or limited liability company, except to such Pledgor, (ii) pledge
hereunder, immediately upon its acquisition (directly or indirectly) thereof,
any and all additional shares of stock or other securities of each issuer of
Pledged Shares, and (iii) pledge hereunder, immediately upon its
acquisition (directly or indirectly) thereof, any and all shares of stock of
any Person that, after the date of this Agreement, becomes, as a result of any
occurrence, a Significant Subsidiary of such Pledgor.

 

(c)           Pledge Amendments.  Each
Pledgor shall, upon obtaining any additional shares of stock or other
securities required to be pledged hereunder as provided in Section 5(b),
promptly (and in any event within five (5) Business Days) deliver to Secured
Party a Pledge and Security Amendment, duly executed by

 

5

 

such Pledgor, in substantially the form of Exhibit A attached hereto (a “Pledge and Security Amendment”),
in respect of the additional Pledged Shares to be pledged pursuant to this
Agreement.  Each Pledgor hereby
authorizes Secured Party to attach each Pledge and Security Amendment to this
Agreement and agrees that all Pledged Shares listed on any Pledge and Security
Amendment delivered to Secured Party shall for all purposes hereunder be
considered Collateral; provided, that
the failure of any Pledgor to execute a Pledge and Security Amendment with
respect to any additional Pledged Shares pledged pursuant to this Agreement
shall not impair the security interest of Secured Party therein or otherwise
adversely affect the rights and remedies of Secured Party hereunder with
respect thereto.

 

(d)           Loss or Depreciation of Collateral.  Each
Pledgor shall promptly notify Secured Party of any event of which such Pledgor
becomes aware that causes any loss or depreciation in the value of any portion
of the Collateral resulting in a Material Adverse Effect.

 

(e)           Written Notices.  Each
Pledgor shall promptly deliver to Secured Party (i) all written notices
received by it with respect to the Collateral, and (ii) written notice of
any change in such Pledgor’s name, identity, chief executive office, or
principal place of business.

 

(f)            Taxes and Assessments.  Each
Pledgor shall pay promptly when due all taxes, assessments, and governmental
charges or levies imposed upon, and all claims against, the Collateral, except
to the extent the validity thereof is being contested in good faith and by
appropriate proceedings and in which reserves or other appropriate provisions,
if any, as shall be required in conformity with GAAP, have been made or
provided therefor; provided that
each Pledgor shall in any event pay such taxes, assessments, charges, levies,
or claims not later than five (5) days prior to the date of any proposed
sale under any judgement, writ, or warrant of attachment entered or filed
against such Pledgor or any of the Collateral as a result of the failure to
make such payment.

 

(g)           Further Assurances Perfection.  Each
Pledgor shall from time to time, at the expense of such Pledgor, promptly
execute and deliver all further instruments and documents, and take all further
action, that may be necessary or desirable, or that Secured Party may
reasonably request, in order to perfect and protect any security interest granted
or purported to be granted hereby or to enable Secured Party to exercise and
enforce its rights and remedies hereunder with respect to any Collateral.  Without limiting the generality of the
foregoing, each Pledgor will:

 

(i)            at the request of Secured Party, mark conspicuously each
item of its records pertaining to the Collateral with a legend in form and
substance satisfactory to Secured Party, indicating that such Collateral is
subject to the security interest granted hereby;

 

(ii)           execute and file such financing or continuation
statements, or amendments thereto, and such other instruments or notices, as
may be necessary or desirable, or as Secured Party may reasonably request, in
order to perfect and preserve the security interests granted or purported to be
granted hereby;

 

(iii)          at Secured Party’s request, appear in and defend any action
or proceeding that may affect such Pledgor’s title to or Secured Party’s
security interest in all or any part of the Collateral; and

 

(iv)          take any and all action that may be necessary or
appropriate to cause any partnership or limited liability company to which such
Pledgor is a partner or member, respectively, and which constitute Pledged
Interests, to register the security interest of Secured Party in the Pledged
Interests, including, without limitation, to deliver to such partnership or
limited liability company, as the case

 

6

 

may be, instructions to
register pledge substantially in the form of Exhibit B attached hereto and, to
this end, cause such partnership or limited liability company to register the
security interest granted hereby upon the books of such partnership or limited
liability company, as the case may be, in accordance with Article 8 of the Uniform Commercial Code, as adopted in the
State of Texas (the “Code”).

 

(h)           Authorization to File Financing
Statements.  Each Pledgor hereby authorizes Secured Party
to file one or more financing or continuation statements, and amendments
thereto, relative to all or any part of the Collateral, with or without
signature, in such filing offices as Secured Party shall deem appropriate, and,
shall pay Secured Party’s reasonable costs and expenses incurred in connection
therewith.

 

(i)            Formation Agreements.  Each
Pledgor shall, at its expense: (i) perform and comply in all material
respects with all terms and provisions of any applicable Formation Agreement
required to be performed or complied with by such agreement; (ii) maintain
such Formation Agreement in full force and effect, without any cancellation or
termination thereof, or amendment, supplement, or other modification thereto
(if such action could adversely affect the rights and remedies of the Credit
Parties under the Loan Documents), except as explicitly required or
contemplated by its terms (as in effect on the date hereof) or as permitted
under the Credit Agreement, without the prior written consent of Secured Party;
(iii) enforce such Formation Agreement in accordance with its terms,
without waiving any default under or breach of such Formation Agreement or
waiving, failing to enforce, forgiving, or releasing any material right,
interest, or entitlement of any kind, howsoever arising, under or in respect of
such Formation Agreement; and (iv) take all such action to that end as
from time to time may be reasonably requested by Secured Party.

 

6.             Voting Rights; Dividends; Etc.

 

(a)           So
long as no Event of Default shall have occurred and be continuing:

 

(i)            Each Pledgor shall be entitled to exercise any and all
voting and other consensual rights pertaining to the Collateral or any part
thereof for any purpose not inconsistent with the terms of this Agreement or
the Credit Agreement;

 

(ii)           Each Pledgor shall be entitled to receive and retain, and
to utilize free and clear of the lien of this Agreement, any and all dividends
and interest paid in respect of the Collateral; and

 

(iii)          Secured Party shall promptly execute and deliver (or cause
to be executed and delivered) to any Pledgor all such proxies, dividend payment
orders, and other instruments as such Pledgor may from time to time reasonably
request for the purpose of enabling such Pledgor to exercise the voting and
other consensual rights which it is entitled to exercise pursuant to paragraph (i) above
and to receive the dividends, principal, or interest payments which it is
authorized to receive and retain pursuant to paragraph (ii) above.

 

(b)           Upon
the occurrence and during the continuation of an Event of Default:

 

(i)            upon written notice from Secured Party to any Pledgor,
all rights of such Pledgor to exercise the voting and other consensual rights
which it would otherwise be entitled to exercise pursuant to Section 6(a)(i) shall
cease, and all such rights shall thereupon become vested in Secured Party who
shall thereupon have the sole right to exercise such voting and other
consensual rights;

 

7

 

(ii)           all rights of any Pledgor to receive the dividends which
it would otherwise be authorized to receive and retain pursuant to Section 6(a)(ii) shall
cease, and all such rights shall thereupon become vested in Secured Party who
shall thereupon have the sole right to receive and hold as Collateral such
dividends; and

 

(iii)          all dividends which are received by any Pledgor contrary to
the provisions of paragraph (ii) of
this Section 6(b) shall
be received in trust for the benefit of Secured Party, shall be segregated from
other funds of such Pledgor and shall forthwith be paid over to Secured Party
as Collateral in the same form as so received (with any necessary
endorsements).

 

(c)           In
order to permit Secured Party to exercise the voting and other consensual
rights which it may be entitled to exercise pursuant to Section 6(b)(i) and
to receive all dividends and other distributions which it may be entitled to
receive under Section 6(a)(ii) or
Section 6(b)(ii),
(i) each Pledgor shall promptly execute and deliver (or cause to be
executed and delivered) to Secured Party all such proxies, dividend payment
orders, and other instruments as Secured Party may from time to time reasonably
request, and (ii) without limiting the effect of the immediately preceding
clause (i),
each Pledgor hereby grants to Secured Party an irrevocable proxy to vote the
Pledged Shares and to exercise all other rights, powers, privileges, and
remedies to which a holder of the Pledged Shares would be entitled (including,
without limitation, giving or withholding written consents of shareholders,
calling special meetings of shareholders, and voting at such meetings), which
proxy shall be effective, automatically and without the necessity of any action
(including any transfer of any Pledged Shares on the record books of the issuer
thereof) by any other Person (including the issuer of the Pledged Shares or any
officer or agent thereof), upon the occurrence of an Event of Default and which
proxy shall only terminate upon the payment in full of the Secured Obligations.

 

(d)           Notwithstanding
any of the foregoing, each Pledgor agrees that this Agreement shall not in any
way be deemed to obligate Secured Party or any Lender to assume any of any
Pledgor’s obligations, duties, expenses, or liabilities arising out of this
Agreement (including, without limitation, any Pledgor’s obligations as the
holder of the Pledged Shares and as holder of the Pledged Interests) or under
any and all other agreements now existing or hereafter drafted or executed
(collectively, the “Pledgor Obligations”) unless
Secured Party or Lender otherwise expressly agrees to assume any or all of said
Pledgor Obligations in writing.  Without
limiting the generality of the foregoing, neither the grant of the security
interest in the Collateral in favor of Secured Party as provided herein nor the
exercise by Secured Party of any of its rights hereunder nor any action by
Secured Party in connection with a foreclosure on the Collateral shall be
deemed to constitute Secured Party as a partner of any partnership or a member
of any limited liability company; provided,
however, that in the event Secured Party or any Lender elects to
become a substituted partner of any partnership or a member of any limited
liability company in place of any Pledgor, Secured Party or such Lender, as the
case may be, shall be entitled to and shall become such a substitute partner or
member, to the extent permitted by the terms of such partnership or limited
liability company agreement.

 

7.             Secured Party Appointed Attorney-in-Fact.  Each Pledgor hereby irrevocably appoints
Secured Party as such Pledgor’s attorney-in-fact, with full authority in the
place and stead of such Pledgor and in the name of such Pledgor, Secured Party
or otherwise, from time to time in Secured Party’s discretion to take any
action and to execute any instrument that Secured Party may deem necessary or
advisable to accomplish the purposes of this Agreement, including without
limitation:

 

(a)           to
file one or more financing or continuation statements, or amendments thereto,
relative to all or any part of the Collateral without the signature of such
Pledgor;

 

8

 

(b)           upon
the occurrence and continuance of an
Event of Default, to ask, demand, collect, sue for, recover, compound, receive,
and give acquittance and receipts for moneys due and to become due under or in
respect of any of the Collateral;

 

(c)           upon
the occurrence and continuance of an Event of Default, to receive, endorse, and
collect any instruments made payable to such Pledgor representing any dividend
or other distribution in respect of the Collateral or any part thereof and to
give full discharge for the same; and

 

(d)           upon
the occurrence and continuance of an Event of Default, to file any claims or
take any action or institute any proceedings that Secured Party may deem
necessary or desirable for the collection of any of the Collateral or otherwise
to enforce the rights of Secured Party with respect to any of the Collateral.

 

8.             Secured Party May Perform.  If any Pledgor fails to perform any agreement
contained herein, then Secured Party may itself perform, or cause performance
of, such agreement, and the expenses of Secured Party incurred in connection
therewith shall be payable by Pledgors under Section 12(b).

 

9.             Standard of Care.  The powers conferred on Secured Party
hereunder are solely to protect its interest in the Collateral and shall not
impose any duty upon it to exercise any such powers.  Except for the exercise of reasonable care in
the custody of any Collateral in its possession and the accounting for moneys
actually received by it hereunder, Secured Party shall have no duty as to any
Collateral, it being understood that Secured Party shall have no responsibility
for (a) ascertaining or taking action with respect to calls, conversions,
exchanges, maturities, tenders, or other matters relating to any Collateral,
whether or not Secured Party has or is deemed to have knowledge of such
matters, (b) taking any necessary steps (other than steps taken in
accordance with the standard of care set forth above to maintain possession of
the Collateral) to preserve rights against any parties with respect to any
Collateral, (c) taking any necessary steps to collect or realize upon the
Secured Obligations or any guarantee therefor, or any part thereof, or any of
the Collateral, or (d) initiating any action to protect the Collateral
against the possibility of a decline in market value.  Secured Party shall be deemed to have
exercised reasonable care in the custody and preservation of Collateral in its
possession if such Collateral is accorded treatment substantially equal to that
which Secured Party accords its own property consisting of negotiable
securities.

 

10.           Remedies.

 

(a)           If
any Event of Default shall have occurred and be continuing, then Secured Party
may exercise in respect of the Collateral, in addition to all other rights and
remedies provided for herein or otherwise available to it, all the rights and
remedies of a secured party on default under the Code (whether or not the Code
applies to the affected Collateral), and Secured Party may also in its sole
discretion, without notice except as specified below, sell the Collateral or
any part thereof in one or more parcels at public or private sale, at any
exchange or broker’s board or at any of Secured Party’s offices or elsewhere,
for cash, on credit, or for future delivery, at such time or times and at such
price or prices and upon such other terms as Secured Party may deem
commercially reasonable, irrespective of the impact of any such sales on the
market price of the Collateral.  Secured
Party or any Lender may be the purchaser of any or all of the Collateral at any
such sale and Secured Party, as agent for and representative of Lenders (but
not any Lender or Lenders in its or their respective individual capacities
unless Requisite Lenders shall otherwise agree in writing), shall be entitled,
for the purpose of bidding and making settlement or payment of the purchase
price for all or any portion of the Collateral sold at any such public sale, to
use and apply any of the Secured Obligations as a credit on account of the purchase
price for any Collateral payable by Secured Party at such sale.  Each purchaser at any such sale shall hold
the property sold absolutely free from any claim or right on the part of any
Pledgor, and each Pledgor hereby waives (to the extent permitted by applicable
law) all rights of redemption, 

 

9

 

stay, and/or appraisal which it now has or may at any time in the
future have under any rule of law or statute now existing or hereafter
enacted.  Each Pledgor agrees that, to
the extent notice of sale shall be required by law, at least ten (10) days’
notice to such Pledgor of the time and place of any public sale or the time
after which any private sale is to be made shall constitute reasonable
notification.  Secured Party shall not be
obligated to make any sale of Collateral regardless of notice of sale having
been given.  Secured Party may adjourn
any public or private sale from time to time by announcement at the time and
place fixed therefor, and such sale may, without further notice, be made at the
time and place to which it was so adjourned. 
Each Pledgor hereby waives any claims against Secured Party arising by
reason of the fact that the price at which any Collateral may have been sold at
such a private sale was less than the price which might have been obtained at a
public sale, even if Secured Party accepts the first offer received and does
not offer such Collateral to more than one offeree.  If the proceeds of any sale or other
disposition of the Collateral are insufficient to pay all the Secured
Obligations, then each Pledgor shall be jointly and severally liable for the
deficiency and the fees of any attorneys employed by Secured Party to collect
such deficiency.

 

(b)           Each
Pledgor recognizes that, by reason of certain prohibitions contained in the
Securities Act of 1933, as from time to time amended (the “Securities Act”), and
applicable state securities laws, Secured Party may be compelled, with respect
to any sale of all or any part of the Collateral conducted without prior
registration or qualification of such Collateral under the Securities Act
and/or such state securities laws, to limit purchasers to those who will agree,
among other things, to acquire the Collateral for their own account, for investment
and not with a view to the distribution or resale thereof.  Each Pledgor acknowledges that any such
private sales may be at prices and on terms less favorable than those
obtainable through a public sale without such restrictions (including, without
limitation, a public offering made pursuant to a registration statement under
the Securities Act) and, notwithstanding such circumstances, each Pledgor
agrees that any such private sale shall be deemed to have been made in a
commercially reasonable manner and that Secured Party shall have no obligation
to engage in public sales and no obligation to delay the sale of any Collateral
for the period of time necessary to permit the issuer thereof to register it
for a form of public sale requiring registration under the Securities Act or
under applicable state securities laws, even if such issuer would, or should,
agree to so register it.

 

(c)           If
Secured Party determines to exercise its right to sell any or all of the
Collateral, then upon Secured Party’s written request, the Pledgor or Pledgors
owning such Collateral shall and shall cause each issuer of any Pledged Shares
to be sold hereunder from time to time to furnish to Secured Party all such
information as Secured Party may request in order to determine the number of
shares and other instruments included in the Collateral which may be sold by
Secured Party in exempt transactions under the Securities Act and the rules and
regulations of the Securities and Exchange Commission thereunder, as the same
are from time to time in effect.

 

11.           Application of Proceeds.  Except as expressly provided elsewhere in
this Agreement, all proceeds received by Secured Party in respect of any sale
of, collection from, or other realization upon all or any part of the
Collateral may, in the discretion of Secured Party, be held by Secured Party as
Collateral for, and/or then, or at any time thereafter, applied in full or in
part by Secured Party against, the Secured Obligations in the following order
of priority:

 

FIRST: 
To the payment of all costs and expenses of such sale, collection, or
other realization, including reasonable compensation to Secured Party and its
agents and counsel, and all other expenses, liabilities, and advances made or
incurred by Secured Party in connection therewith, and all amounts for which
Secured Party is entitled to indemnification hereunder and all advances made by
Secured Party hereunder for the account of Pledgors, and to the payment of all
costs and expenses paid or incurred by Secured Party in connection with the
exercise of any right or remedy hereunder, all in accordance with Section 12;

 

10

 

SECOND: 
To the payment of all other Secured Obligations (for the ratable benefit
of the Credit Parties) and as cash collateral to secure any outstanding LC
Exposure; and

 

THIRD: 
To the payment to or upon the order of Pledgors, or to whosoever may be
lawfully entitled to receive the same or as a court of competent jurisdiction
may direct, of any surplus then remaining from such proceeds.

 

12.           Indemnity and Expenses.

 

(a)           Each
Pledgor agrees to indemnify each Credit Party from and against any and all
claims, losses, and liabilities in any way relating to, growing out of, or
resulting from this Agreement and the transactions contemplated hereby
(including, without limitation, enforcement of this Agreement), except to the
extent such claims, losses, or liabilities result solely from such Credit Party’s
gross negligence or willful misconduct as finally determined by a court of
competent jurisdiction.

 

(b)           Each
Pledgor shall pay to Secured Party upon demand the amount of any and all costs
and expenses, including the reasonable fees and expenses of its counsel and of
any experts and agents, that Secured Party may incur in connection with (i) the
administration of this Agreement, (ii) the custody or preservation of, or
the sale of, collection from, or other realization upon, any of the Collateral,
(iii) the exercise or enforcement of any of the rights of Secured Party
hereunder, or (iv) the failure by any Pledgor to perform or observe any of
the provisions hereof.

 

13.           Continuing Security Interest; Transfer of Loans.  This Agreement shall create a continuing
security interest in the Collateral and shall (a) remain in full force and
effect until the payment in full of all Secured Obligations and the
cancellation or termination of the Total Commitment, (b) be binding upon
each Pledgor, its successors and assigns, and (c) inure, together with the
rights and remedies of Secured Party hereunder, to the benefit of Secured Party
and its successors, transferees, and assigns. 
Without limiting the generality of the foregoing clause (c), but subject
to the provisions of Section 9.1
of the Credit Agreement, any Lender may assign or otherwise transfer any Loans
held by it to any other Person, and such other Person shall thereupon become
vested with all the benefits in respect thereof granted to Lenders herein or
otherwise.  Upon the indefeasible payment
in full of all Secured Obligations and the cancellation or termination of the
Total Commitment, the security interest granted hereby shall terminate and all
rights to the Collateral shall revert to Pledgors.  Upon any such termination Secured Party will,
at each Pledgor’s expense, execute and deliver to such Pledgor such documents
as such Pledgor shall reasonably request to evidence such termination and such
Pledgor shall be entitled to the return, upon its request and at its expense,
against receipt and without recourse to Secured Party, of such of the
Collateral as shall not have been sold or otherwise applied pursuant to the
terms hereof.

 

14.           Secured Party as Agent.

 

(a)         Secured Party has been appointed to act as
Secured Party hereunder by Lenders. 
Secured Party shall be obligated, and shall have the right hereunder, to
make demands, to give notices, to exercise or refrain from exercising any
rights, and to take or refrain from taking any action (including, without
limitation, the release or substitution of Collateral), solely in accordance
with this Agreement and the Credit Agreement.

 

(b)         Secured Party shall at all times be the same
Person that is Administrative Agent under the Credit Agreement.  Written notice of resignation by
Administrative Agent pursuant to the Credit Agreement shall also constitute
notice of resignation as Secured Party under this Agreement; removal of
Administrative

 

11

 

Agent
pursuant to the Credit Agreement shall also constitute removal as Secured Party
under this Agreement; and appointment of a successor Administrative Agent
pursuant to the Credit Agreement shall also constitute appointment of a
successor Secured Party under this Agreement. 
Upon the acceptance of any appointment as Administrative Agent under Section 8.5 of
the Credit Agreement by a successor Administrative Agent, that successor
Administrative Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges, and duties of the retiring or removed Secured Party
under this Agreement, and the retiring or removed Secured Party under this
Agreement shall promptly (i) transfer to such successor Secured Party all
sums, securities and other items of Collateral held hereunder, together with
all records and other documents necessary or appropriate in connection with the
performance of the duties of the successor Secured Party under this Agreement,
and (ii) execute and deliver to such successor Secured Party such
amendments to financing statements, and take such other actions, as may be
necessary or appropriate in connection with the assignment to such successor
Secured Party of the security interests created hereunder, whereupon such
retiring or removed Secured Party shall be discharged from its duties and
obligations under this Agreement.  After
any resigning or removed Administrative Agent’s resignation or removal
hereunder as Secured Party, the provisions of this Agreement shall inure to its
benefit as to any actions taken or omitted to be taken by it under this
Agreement while it was Secured Party hereunder.

 

15.         Amendments; Etc.  No amendment, modification, termination, or
waiver of any provision of this Agreement, and no consent to any departure by
any Pledgor from the terms and conditions hereof, shall in any event be
effective unless the same shall be in writing and signed by Secured Party and,
in the case of any such amendment or modification, by such Pledgor.  Any such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which it was
given.

 

16.         Notices.  Any notice or other communication herein
required or permitted to be given shall be in writing and may be personally
served, telexed, or sent by telecopy or United States mail or courier service
to each such party at its address set forth in the Credit Agreement, on the
signature pages hereof or to such other addresses as each such party may
in writing hereafter indicate.  Such
notice or other communication shall be deemed to have been given when delivered
in person or by courier service, upon receipt of telecopy or telex, or three (3) Business
Days after depositing it in the United states mail with postage prepaid and
properly addressed; provided that any
notice, request, or demand to or upon Administrative Agent or Lenders shall not
be effective until received.

 

17.         Failure or Indulgence Not Waiver: Remedies Cumulative.  No failure or delay on the part of Secured
Party in the exercise of any power, right, or privilege hereunder shall impair
such power, right, or privilege or be construed to be a waiver of any default
or acquiescence therein, nor shall any single or partial exercise of any such
power, right, or privilege preclude any other or further exercise thereof or of
any other power, right, or privilege. 
All rights and remedies existing under this Agreement are cumulative to,
and not exclusive of, any rights or remedies otherwise available.

 

18.         Severability.  In case any provision in or obligation under
this Agreement shall be invalid, illegal, or unenforceable in any jurisdiction,
the validity, legality, and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction,
shall not in any way be affected or impaired thereby.

 

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

 

12

 

20.         Governing Law; Terms. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF TEXAS WITHOUT REGARD TO
CONFLICTS OF LAWS PRINCIPLES, EXCEPT TO THE EXTENT THAT THE CODE PROVIDES THAT
THE VALIDITY OR PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES
HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF
A JURISDICTION OTHER THAN THE STATE OF TEXAS.  Unless otherwise defined herein or in the
Credit Agreement, terms used in Articles 8
and 9 of the Code are used herein
as therein defined.

 

21.         Consent to Jurisdiction and Service of Process.  ALL
JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY PLEDGOR ARISING OUT OF OR RELATING TO
THIS AGREEMENT MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE STATE OF TEXAS, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT
EACH PLEDGOR ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES,
GENERALLY AND UNCONDITIONALLY, THE EXCLUSIVE JURISDICTION OF THE AFORESAID
COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO
BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT.  Each Pledgor hereby agrees that service of
all process in any such proceeding in any such court may be made by registered
or certified mail, return receipt requested, to such Pledgor at its address provided
on the signature page hereof, such service being hereby acknowledged by
such Pledgor to be sufficient for personal jurisdiction in any action against
such Pledgor in any such court and to be otherwise effective and binding
service in every respect.  Nothing herein
shall affect the right to serve process in any other manner permitted by law or
shall limit the right of Secured Party to bring proceedings against Pledgors in
the courts of any other jurisdiction.

 

22.         Waiver of Jury Trial. EACH PLEDGOR AND SECURED PARTY HEREBY AGREE TO WAIVE
THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING OUT OF THIS AGREEMENT.  The scope of this waiver is intended to be
all-encompassing of any and all disputes that may be filed in any court and
that relate to the subject matter of this transaction, including without
limitation contract claims, tort claims, breach of duty claims, and all other
common law and statutory claims.  Each
Pledgor and Secured Party each acknowledge that this waiver is a material
inducement for each Pledgor and Secured Party to enter into a business
relationship, that each Pledgor and Secured Party have already relied on this
waiver in entering into this Agreement and that each will continue to rely on this
waiver in their related future dealings. 
Each Pledgor and Secured Party further warrant and represent that each
has reviewed this waiver with its legal counsel, and that each knowingly and
voluntarily waives its jury trial rights following consultation with legal
counsel.  THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED
EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS RENEWALS, SUPPLEMENTS, OR MODIFICATIONS TO THIS AGREEMENT.  In the event of litigation, this Agreement
may be filed as a written consent to a trial by the court.

 

23.         Counterparts.  This Agreement may be executed in one or more
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and
attached to a single counterpart so that all signature pages are physically
attached to the same document.

 

13

 

24.         Obligations Absolute.  All rights and remedies of Secured Party
hereunder, and all obligations of each Pledgor hereunder, shall be absolute and
unconditional irrespective of:

 

(a)           any lack of validity or
enforceability of the Credit Agreement or any of the other Loan Documents or
any other agreement or instrument relating to any of the foregoing;

 

(b)           any change in the time, manner, or
place of payment of, or in any other term of, all or any of the Secured
Obligations, or any other amendment or waiver of or any consent to any
departure from the Credit Agreement or any of the other Loan Documents;

 

(c)           any exchange, release, or
nonperfection of any interest in any Collateral, or any release or amendment or
waiver of or consent to any departure from any guarantee, for all or any of the
Secured Obligations; or

 

(d)           any other circumstances (other than
payment in full of the Secured Indebtedness) that might otherwise constitute a
defense available to, or a discharge of, any Pledgor.

 

Remainder of Page Intentionally
Left Blank

Signature Pages to Follow

 

14

 

IN WITNESS WHEREOF, Pledgor and Secured Party have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.

 

	
   

  	
  [

  	
   

  	
  ,

  
	
   

  	
  a

  	
   

  	
  ]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Notice Address:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Attention:

  	
   

  
	
   

  	
  Telecopy:

  	
   

  
									

 

15

 

	
   

  	
  BANK OF AMERICA, N.A., a national banking association,
  individually and as Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	 

	
   

  	
   

  	
  Name:

  	
   

  	 

	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Notice
  Address:

  
	
   

  	
   

  
	
   

  	
   

  	
  Bank
  of America, N.A.

  
	
   

  	
   

  	
  901
  Main Street, 64th Floor

  
	
   

  	
   

  	
  Dallas,
  TX 75202

  
	
   

  	
   

  	
  Attn:
  

  	
   

  	
   

  
	
   

  	
   

  	
  Telecopy:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  With
  a copy to:

  
	
   

  	
   

  
	
   

  	
   

  	
  Banc
  of America Securities LLC

  
	
   

  	
   

  	
  100
  North Tryon Street, 15th Floor

  
	
   

  	
   

  	
  Charlotte,
  NC 28255

  
	
   

  	
   

  	
  Attn:
  Mr. Anthony Fertitta

  
	
   

  	
   

  	
  Telecopy:
  (704) 386-0255

  
									

 

16

 

SCHEDULE 1

 

INITIAL PLEDGORS

 

TC
Houston, Inc.

TCC
Risk Services, Inc.

TCCT
Real Estate, Inc.

TCDFW, Inc.

Trammell
Crow Services, Inc.

 

1

 

SCHEDULE 2

 

PART A

 

	
  Stock
  Issuer

  	
   

  	
  Class of Stock

  	
   

  	
  Stock Certificate Nos.

  	
   

  	
  Par Value

  	
   

  	
  Number of Shares

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

PART B

 

Limited
Partnerships

 

	
  (lp
  or gp)

  	
   

  	
  Limited Partnership

  	
   

  	
  Percent Interest

  	
   

  
	
  None

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Limited
Liability Companies

 

	
  Limited
  Liability Company

  	
   

  	
  Percent Interest

  	
   

  
	
  None

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  

 

1

 

EXHIBIT A

 

PLEDGE AMENDMENT

 

This
Pledge Amendment, dated                          ,
200   , is delivered pursuant to Section 6(c) of the Pledge
Agreement referred to below.  The
undersigned hereby agrees that this Pledge Amendment may be attached to the
Subsidiary Pledge Agreement dated as of June 28, 2005, between the
undersigned, as a Pledgor, and Bank of America, N.A., as Secured Party (the “Pledge Agreement;”
capitalized terms defined therein being used herein as therein defined), and
that the [Pledged Shares / Pledged Interests] listed on this Pledge Amendment
shall be deemed to be part of the [Pledged Shares] [Pledged Interests] and
shall become part of the Collateral and shall secure all Secured Obligations.

 

	
   

  	
   

  	 

	
   

  	
   

  	 

	
   

  	
  By:

  	
   

  	 

	
   

  	
   

  	
  Name:

  	
   

  	 

	
   

  	
   

  	
  Title:

  	
   

  
						

 

	
  Stock
  Issuer

  	
   

  	
  Class of Stock

  	
   

  	
  Stock Certificate Nos.

  	
   

  	
  Par Value

  	
   

  	
  Number of Shares

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Limited
Partnerships

 

	
  (lp
  or gp)

  	
   

  	
  Limited Partnership

  	
   

  	
  Percent Interest

  	
   

  
	
  None

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Limited
Liability Companies

 

	
  Limited
  Liability Company

  	
   

  	
  Percent Interest

  	
   

  
	
  None

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  

 

 

EXHIBIT B

 

FORM OF INSTRUCTION TO REGISTER PLEDGE

 

INSTRUCTION TO REGISTER PLEDGE

 

,
200

[NAME
OF PARTNERSHIP/LLC]

 

Attention:

 

Ladies
and Gentlemen:

 

                                                                     
(the “Registered Owner”)
hereby instructs [NAME OF PARTNERSHIP/LLC], a [STATE OF FORMATION] [TYPE OF
ENTITY] (the “Issuer”)
to register the pledge of all of the Registered Owner’s rights, title, and
interest in and to the Registered Owner’s entire [limited/general partner]
[membership] interests in the Issuer (the “Interests”), in favor of Bank of America,
N.A. as Administrative Agent (the “Registered Pledges”), pursuant to the
Subsidiary Pledge Agreement dated as of June 28, 2005, as it may be
amended or restated from time to time, between the Registered Owner, as a
Pledgor, and the Registered Pledges.

 

The
Issuer is further instructed by the Registered Owner to promptly inform the
Registered Pledges of the registration of this pledge by sending an initial
transaction statement to the Registered Pledges to its office located at                                                                                                                                                    ,

Attention:                                                            .

 

The
Registered Owner hereby warrants that (a) it is an appropriate person to
originate this instruction, (b) it is entitled to effect the instruction
here given, and (c) its taxpayer identification number is                                                             .

 

 

	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
					

 

1

 

CONSENT OF THE ISSUER

 

The
Issuer hereby consents and agrees to cause the pledge of the Partnership
Interest referenced above to be registered on the books and records of the
Issuer.

 

	
   

  	
  [NAME
  OF PARTNERSHIP/LLC],

  a [STATE OF FORMATION] [TYPE OF ENTITY]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  its
  general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  
						

 

 

EXHIBIT J

 

FORM OF OPINION OF VINSON & ELKINS
L.L.P.

 

June    , 2005

 

Bank of America,
N.A.,

as Administrative Agent, Swing Line Lender, and Issuing Bank

901 Main Street,
51st Floor

Dallas, Texas  75202

Attn:  Mr. Ron Odlozil

 

Each of the Lenders defined below

 

Re:                               Credit
Agreement dated as of June     , 2005 (the “Agreement”), among Trammell Crow
Company, a Delaware corporation (the “Company”),
Bank of America, N.A., a national banking association, as Administrative Agent
(herein so called), Swing Line Lender, and Issuing Bank, and the Lenders
(herein so called) defined therein

 

Ladies and Gentlemen:

 

We have acted as counsel for
the Company and its Significant Subsidiaries (as defined in the Agreement and
identified on Schedule I hereto) (the Company and the Significant
Subsidiaries identified on Schedule I hereto are collectively referred to
herein as the “Loan Parties”),
in connection with the transactions contemplated by the Agreement and the other
Loan Documents (as defined in the Agreement). 
This opinion letter is furnished to you pursuant to Section 3.1(c) of
the Agreement.  Unless otherwise defined
herein, capitalized terms used herein have the meanings assigned to such terms
in the Agreement.  Other terms that are
defined in the Uniform Commercial Code as adopted and in effect in the State of
Texas (the “Texas UCC”) and the State of Delaware (the “Delaware UCC”)
shall have the meaning assigned to such terms in the Texas UCC and Delaware UCC
(as applicable) unless otherwise indicated by the context in which such terms
are so used.  Unless otherwise indicated,
references to the “UCC” shall mean, (i) with respect to the validity,
creation and attachment of a security interest, the Texas UCC, and (ii) with
respect to the perfection of a security interest, the Delaware UCC.

 

In rendering the opinions set
forth below, we have reviewed an execution copy of the following documents and
instruments:

 

The Agreement;

 

The Notes delivered as of the
date hereof to each of the Lenders party to the Credit Agreement as of the date
hereof (the “Notes”);

 

The Subsidiary Guaranty;

 

The Borrower Pledge Agreement;

 

The Subsidiary Pledge Agreement
dated the date hereof executed by Trammell Crow Services, Inc. (“Services”) in favor of Administrative
Agent (and together with the Borrower Pledge Agreement, the “Pledge

 

2

 

Agreements”);

 

The Financing Statements
describing the Company and Services as Debtors and Administrative Agent as
Secured Party, copies of which have been delivered to us in final form prior to
the Closing Date;

 

The Certificates of
Incorporation of the Loan Parties, each as amended to date;

 

The bylaws of the Loan Parties,
each as amended to date; and

 

Copies of resolutions of the
Boards of Directors of the Loan Parties relating to the Agreement and other
Loan Documents and the transactions contemplated thereby.

 

The documents listed in clauses
(A) through (D) above are referred to herein as the “Transaction
Documents”.  Additionally, in
rendering the opinions set forth below, we have reviewed such other records,
certificates and documents as we have deemed appropriate for the purposes of
such opinions.  As to any facts material
to our opinions, we have made no independent investigation of such facts and
have relied, to the extent that we deem such reliance proper, upon statements
of public officials and officers or other representatives of the Company and on
the representations and warranties set forth in the Transaction Documents.

 

In rendering the opinions
expressed below, we have assumed the legal capacity of all natural persons, the
genuineness of all signatures (other than of the officers of the Loan Parties
with respect to the Transaction Documents), the authenticity of all documents
submitted to us as originals, and the conformity to authentic original
documents of all documents submitted to us as copies, which assumptions we have
not independently verified.  In addition
we have assumed that the Transaction Documents have been duly executed and
delivered by each party thereto (other than the Loan Parties) and
constitute valid, binding and enforceable obligations of such parties (other
than the Loan Parties) and that the laws of any jurisdiction
other than the jurisdictions that are the subject of this opinion letter do not
affect the terms of the Transaction Documents.

 

Based upon the foregoing, and
subject to the assumptions, qualifications, exceptions and limitations set
forth herein, it is our opinion that:

 

1.               Each Loan Party is
validly existing and is in good standing under the laws of its jurisdiction of
incorporation.

 

2.               Each Loan Party has
the corporate power and authority to execute and deliver each Transaction
Document to which it is a party and to perform its obligations thereunder.

 

3.               The execution and
delivery by each Loan Party of each Transaction Document to which it is a party
and the performance by each Loan Party of its obligations thereunder have been
duly authorized by all requisite corporate action on the
part of each Loan Party.

 

4.               Each Transaction
Document to which each Loan Party is a party has been duly executed and
delivered by such Loan Party.

 

5.               Each Transaction
Document constitutes the valid and binding obligation of each Loan Party which
is a party thereto enforceable against such Loan Party in accordance with its
terms.

 

6.               Neither the
execution and delivery by each Loan Party of the Transaction Documents to which
it is a party, nor the issuance and payment of the Notes by the Company, nor
the consummation of the transaction contemplated by the Agreement or other
Transaction Documents by the Loan Parties (a) violate the Certificate of
Incorporation or by-laws of any Loan Party, (b) result in any violation by
any Loan Party of any Applicable Law (as defined below), or (c) breach or
result in a default under any

 

3

 

agreement or
instrument listed in Part A of Schedule II hereto (“Applicable Contracts”), which
agreements and instruments have been identified to us by the Company as
material to the Loan Parties’ business or financial condition considered as a
whole, (d) result in any violation of any order, writ, judgment or decree
listed in Part B of Schedule II hereto (“Applicable Orders”), which order, writ,
judgment or decree has been identified to us by the Company as material to the
Loan Parties’ business or financial condition considered as a whole, or (e) result
in the creation or imposition of any lien on any properties of any Loan Party
pursuant to any Applicable Contract, other than as may be contemplated by the
Transaction Documents.

 

“Applicable Laws” means
those laws, rules and regulations of the State of Texas and the United
States of America and the rules and regulations adopted thereunder, that,
in our experience, are normally applicable to transactions of the type
contemplated by the Transaction Documents. 
However, the term “Applicable Laws” does not include, and we express no
opinion with regard to (i) any state or federal laws, rules or
regulations relating to: (A) pollution or protection of the environment; (B) zoning,
land use, building or construction; (C) occupational safety and health or
other similar matters; (D) labor, employee rights and benefits, including
the Employment Retirement Income Security Act of 1974, as amended; (E) the
regulation of utilities, the Public Utility Holding Company Act of 1935, as
amended, and the Public Utility Regulatory Policy Act of 1978, as amended; (F) antitrust
and trade regulation; (G) tax; (H) securities, including, without
limitation, federal and state securities laws, rules or regulations; and
the Investment Company Act of 1940, as amended; (I) corrupt practices,
including, without limitation, the Foreign Corrupt Practices Act of 1977; and
(J) copyrights, patents and trademarks, and (ii) any laws, rules or
regulations of any county, municipality or similar political subdivision or any
agency or instrumentality thereof.

 

7.               No Governmental
Approval (as defined below) which has not been obtained or taken and is not in
full force and effect, is required to be obtained or taken by a Loan Party to
authorize, or is required in connection with, the execution and delivery by a
Loan Party of each Transaction Document to which it is a party or the
performance by a Loan Party of its obligations thereunder, except the filing of
the Financing Statements in the appropriate government offices.

 

“Governmental Approvals”
means any consent, approval, license, authorization or validation of, or
filing, recording or registration with, any Governmental Authority pursuant
to any Applicable Laws (as defined in paragraph 7 above).

 

8.               The provisions of
the Pledge Agreements are effective to create in favor of Administrative Agent,
for the benefit of the Lenders, to secure the Obligations, a valid security
interest in all of the Company’s and Services’ right, title and interest in and
to that portion of the Collateral (as defined in each such Security Agreement)
in which a security interest may be created under Chapter 9 of the Texas UCC
(the “Article 9 Collateral”).

 

9.               To the extent that
the filing of a financing statement can be effective to perfect a security
interest in the Article 9 Collateral under the Delaware UCC, the security
interest in favor of Administrative Agent, for the benefit of the Lenders, in
that portion of the Article 9 Collateral described in the Financing
Statements will be perfected upon the proper filing of the Financing Statements
in the office of the Secretary of State of the State of Delaware.  For purposes of our opinion set forth in this
paragraph 9, we have based such opinion solely on our review of the generally
available compilations of Article 9 of the Delaware UCC as in effect on the
date hereof and we have not reviewed any other laws of the State of Delaware or
retained or relied on any opinion or advice of Delaware counsel.

 

10.         With respect to that
portion of the Article 9 Collateral consisting of Certified Securities
defined in the

 

4

 

Texas UCC,
upon Administrative Agent taking possession in the State of Texas of such
certificates which are indorsed in the name of Administrative Agent or in blank
by an effective indorsement or accompanied by undated stock powers with respect
thereto duly indorsed in blank by an effective endorsement, the security
interest of Administrative Agent, for the benefit of the Lenders, therein is
perfected by “control” (within the meaning of Section 8.106 of the Texas
UCC).

 

11.         No Loan Party is an “investment company” or a company “controlled” by an “investment company,” within the meaning of
the Investment Company Act of 1940, as amended.

 

In rendering
the foregoing opinions, we have also assumed, with your permission, and without
independent investigation on our part, the following:

 

A.            With respect to our opinions set
forth in paragraphs 8, 9 and 10 above, we have assumed that each of the
Company and Services has, or has the power to transfer, rights in the
properties in which it is purporting to grant a security interest sufficient
for attachment of such security interest within the meaning of Section 9.203
of the Texas UCC.

 

B.            With respect to our opinions set
forth in paragraphs 8, 9 and 10 above, we have assumed that Administrative
Agent has acquired its interests in the Article 9 Collateral for value
within the meaning of Section 9.203 of the Texas UCC.

 

C.            With respect to our opinions set
forth in paragraphs 8, 9 and 10 above, we have assumed the descriptions of
collateral contained in or attached as schedules to, the Pledge Agreements
(other than the Financing Statements) sufficiently describe (for the purposes
of the attachment and perfection of security interests) the collateral intended
to be covered thereby.

 

D.            With respect to our opinion set
forth in paragraph 9 above, we have relied on the Company’s and Services
Certificate of Incorporation and the certificates described in paragraph (a) of
the qualifications and exceptions below as the basis for determining that (i) TRAMMELL
CROW COMPANY is the correct legal name of the Company, (ii) Trammell Crow
Services, Inc. is the correct legal name of Services, (iii) the
correct organizational identification numbers of the Company and Services are
as set forth on the Financing Statements and (iv) the Company and Services
are solely organized under the laws of the State of Delaware.

 

E.             With respect to our opinion in
paragraph 10 above, we have assumed that such Certificated Securities will at
all times be held by Administrative Agent in the State of Texas.

 

The opinions
set forth above are subject to the following qualifications and exceptions:

 

(a)           With respect to our opinion set forth
in paragraph 1 above, we have relied solely on the certificates, dated                      ,
of the Secretary of State of the State of Delaware and, with respect to the
period from that date to the date of this opinion letter, a certificate of an
officer of the each Loan Party.

 

(b)           The enforceability of each
Transaction Document and the provisions thereof may be limited by bankruptcy,
insolvency, reorganization, fraudulent transfer, moratorium or other laws now
or hereafter in effect relating to or affecting enforcement of creditors’
rights generally and by general principles of equity (including, without
limitation, concepts of materiality, reasonableness, good faith and fair
dealing), regardless of whether such enforcement is considered in a proceeding
in equity or at law.

 

(c)           With respect to our opinion set forth
in paragraph 5 above, we express no opinion with respect

 

5

 

to the
validity or enforceability of the following provisions to the extent that they
are contained in the Transaction Documents: 
(i) provisions releasing, exculpating or exempting a party from, or
requiring indemnification or contribution of a party for, liability for its own
negligence or to the extent that the same are inconsistent with public policy; (ii) provisions
purporting to waive, subordinate or not give effect to rights to notice,
demands, legal defenses or other rights or benefits that cannot be waived,
subordinated or rendered ineffective under applicable law; (iii) provisions
purporting to provide remedies inconsistent with applicable law; (iv) provisions
purporting to render void and of no effect any transfers of the Company’s or
Services’ rights in any collateral in violation of the terms of the Transaction
Documents; (v) other than with respect to our opinions set forth in
paragraphs 8, 9 and 10 provisions relating to the creation, attachment,
perfection or enforceability of any security interest; (vi) provisions
relating to powers of attorney, or severability; (vii) provisions
stating that a guarantee will not be affected by a modification of the
obligation guaranteed in cases in which that modification materially changes
the nature or amount of such obligation; (viii) provisions restricting
access to courts or purporting to affect the jurisdiction or venue of courts; (ix) provisions
relating to waiver of jury trial; (x) provisions purporting to exclude all
conflicts-of-law rules; (xi) provisions pursuant to which a party agrees that a
judgment rendered by a court or other tribunal in one jurisdiction may be
enforced in any other jurisdiction; and (xii) provisions providing that
decisions by a party are conclusive or may be made in its sole discretion.  Additionally, with respect to our opinion set
forth in paragraph 5 above, such opinion is subject to possible judicial action
giving effect to governmental actions or foreign laws affecting creditors’
rights.

 

(e)           Insofar as our opinion set forth in
paragraph 5 above relates to the enforceability under Texas law of the provisions
of the Transaction Documents choosing Texas law as the governing law thereof,
such opinion is rendered solely in reliance upon Section 35.51 of the
Texas Business and Commerce Code, which applies to transactions in which a
party pays or receives, or is obligated to pay or entitled to receive,
consideration in excess of $1,000,000, and is subject to the qualifications
that such enforceability (i) as specified in Section 35.51, does not
apply to an issue that another Texas statute (such as Section 1.105(b) of
the Uniform Commercial Code as in effect on the date hereof in the State of
Texas), or a federal statute, provides is governed by the law of a particular
jurisdiction,  (ii) may be limited
by public policy considerations of any jurisdiction in which enforcement of
such provisions is sought, and (iii) is subject to any U.S. Constitutional
requirement under the Full Faith and Credit Clause or the Due Process Clause
thereof or the exercise of any applicable judicial discretion in favor of
another jurisdiction.

 

(f)            Certain of the remedial provisions
with respect to the Article 9 Collateral (including waivers with respect
to the exercise of remedies against the collateral) contained in the Pledge
Agreements may be unenforceable in whole or in part, but the inclusion of such
provisions does not affect the validity of the Pledge Agreements, taken as a
whole, and the Pledge Agreements, taken as a whole, together with applicable
law, contains adequate provisions for the practical realization of the benefits
intended to be provided thereby (it being understood that we express no opinion
as to the adequacy of such provisions to the extent it is necessary to seek
execution or enforcement of rights or remedies under the laws of any
jurisdiction outside the State of Texas). 
Additionally, we note that the remedies under the Pledge Agreements to
sell or offer for sale the Article 9 Collateral are subject to compliance
with applicable state and federal securities laws.

 

(g)           In the case of property which becomes
Article 9 Collateral after the date hereof, our opinion in paragraph 8
above, as to the creation and validity of the security interests therein
described, is subject to the effect of Section 552 of the Federal
Bankruptcy Code, which limits the extent to which property acquired by a debtor
after the commencement of a case under the Federal Bankruptcy Code may be
subject to such security interest arising from a security agreement entered
into by the debtor before the commencement of such case.

 

6

 

(k)           With respect to our opinions set
forth in paragraphs 8, 9 and 10, we express no opinion as to the priority of
any security interest.

 

(l)            We express no opinion herein
regarding the enforceability of any provision in a Transaction Document that
purports to prohibit, restrict or condition the assignment of such Transaction
Document to the extent that such restriction on assignability is governed by
Sections 9.406 through 9.409 of the Texas UCC.

 

(m)          With respect to our opinions set forth
in paragraphs 8, 9 and 10, the attachment and perfection of Administrative
Agent’s security interest in proceeds is limited to the extent set forth in Section 9.315
of the Texas UCC and the Delaware UCC.

 

(n)           We express no opinion as to any
actions that may be required to be taken periodically under the Delaware UCC or
under any other applicable law in order for the effectiveness of the Financing
Statements or perfection of any security interest to be maintained.

 

(o)           Our opinions are based solely
on our reading of the Transaction Documents. 
We note that the enforceability of the Agreement may be affected by the
parties’ course of dealing, or by waivers, modifications or amendments (whether
made in writing, orally, or by course of conduct), and we express no opinion on
the effect of the foregoing on the enforceability of the Agreement.

 

We express no
opinion as to the laws of any jurisdiction other than: (i) the laws of the
State of Texas; (ii) with respect to our opinions set forth in paragraphs
2, 3 and 4 above, the General Corporation Law of the State of Delaware; (iii) the
Delaware UCC; (iv) the federal laws of the United States of America; and (v) based
solely on the certificates of public officials previously identified, the laws
of the State of Delaware regarding our opinion with respect to each Loan Party’s
qualification to do business and good standing as a corporation in the State of
Delaware.

 

This opinion
letter is rendered as of the date set forth above.  We expressly disclaim any obligation to
update this letter after such date.

 

This opinion
letter is given solely for your benefit and the benefit of the Lenders (and
your and their respective successors and assigns as permitted under the
Agreement) in connection with the transactions contemplated by the Transaction
Documents and may not be relied upon by you for any other purpose, or relied
upon by, or furnished to, any other person, firm or corporation without our
prior written consent.

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Vinson & Elkins L.L.P.

  	
   

  

 

7

 

SCHEDULE I 

 

SIGNIFICANT SUBSIDIARIES

 

	
  NO.

  	
   

  	
  ENTITY NAME

  
	
  1.

  	
   

  	
  TC HOUSTON,
  INC.

  
	
  2.

  	
   

  	
  TCC RISK
  SERVICES, INC.

  
	
  3.

  	
   

  	
  TCCT REAL
  ESTATE, INC.

  
	
  4.

  	
   

  	
  TCDFW, INC.

  
	
  5.

  	
   

  	
  TRAMMELL
  CROW SERVICES, INC.

  

 

 

SCHEDULE II

 

Part A (Applicable Contracts)

 

 

Part B (Applicable Orders)

 

 

EXHIBIT K

 

FORM OF
SWING LINE LOAN NOTICE

 

Date:                 ,
           

 

To:                              Bank
of America, N.A., as Swing Line Lender

Bank of America, N.A., as Administrative Agent

 

Ladies and Gentlemen:

 

Reference is made to that certain Credit Agreement, dated as of June 28, 2005 (as amended,
restated, extended, supplemented or otherwise modified in writing from time to
time, the “Agreement;” the terms defined therein being used herein as
therein defined), among Trammell Crow Company, a Delaware corporation (“Borrower”), the
Lenders from time to time party thereto, and Bank of America, N.A., as
Administrative Agent, L/C Issuer, and Swing Line Lender.

 

The undersigned hereby requests a Swing Line Loan:

 

1.             On                                                                                                 (a
Business Day).

 

2.             In the amount of $                                                         (must
be in a minimum amount of $1,000,000 or additional integrals of $100,000).

 

3.             The Swing Line
Borrowing requested herein complies with the requirements of the provisos to
the first sentence of Section 2.12(a) of
the Agreement.

 

4.             This Notice of
Borrowing is executed on                                ,
200       , by an authorized officer of
Borrower.  The undersigned, in such
capacity, hereby certifies each and every matter contained herein to be true
and correct.

 

 

	
  By:

  	
   

  	
  ,

  	
   

  	
   

  
	
   

  	
  of Trammell Crow Company, a Delaware corporation

  	
   

  
	
   

  

 

 

SCHEDULE 1.1

 

APPROVED TAKEOUT PARTIES

 

Lion
Industrial Trust

 

 

SCHEDULE 2.1

 

LENDERS’ COMMITMENTS AND PRO RATA SHARES

 

	
  Lender

  	
   

  	
  Commitment

  	
   

  	
  Pro Rata Share

  	
   

  
	
  Bank of America, N.A.

  	
   

  	
  $

  	
  25,000,000

  	
   

  	
  14.285714286

  	
  %

  
	
  First Tennessee Bank

  	
   

  	
  $

  	
  20,000,000

  	
   

  	
  11.428571429

  	
  %

  
	
  US Bank, N.A.

  	
   

  	
  $

  	
  20,000,000

  	
   

  	
  11.428571429

  	
  %

  
	
  Bank of Nova Scotia

  	
   

  	
  $

  	
  20,000,000

  	
   

  	
  11.428571429

  	
  %

  
	
  Union Bank of California

  	
   

  	
  $

  	
  20,000,000

  	
   

  	
  11.428571429

  	
  %

  
	
  LaSalle National Bank

  	
   

  	
  $

  	
  15,000,000

  	
   

  	
  8.571428571

  	
  %

  
	
  Amegy Bank, National Association

  	
   

  	
  $

  	
  15,000,000

  	
   

  	
  8.571428571

  	
  %

  
	
  PNC Bank, National Association

  	
   

  	
  $

  	
  15,000,000

  	
   

  	
  8.571428571

  	
  %

  
	
  California Bank & Trust

  	
   

  	
  $

  	
  11,000,000

  	
   

  	
  6.285714286

  	
  %

  
	
  Comerica

  	
   

  	
  $

  	
  9,000,000

  	
   

  	
  5.142857143

  	
  %

  
	
  Bank Midwest, N.A.

  	
   

  	
  $

  	
  5,000,000

  	
   

  	
  2.857142857

  	
  %

  
	
  Total

  	
   

  	
  $

  	
  175,000,000

  	
   

  	
  100

  	
  %

  

 

NOTICE ADDRESSES:

 

BORROWER:

 

Trammell
Crow Company

3400
Trammell Crow Center

2001
Ross Avenue

Dallas,
Texas 75201

Attn:  Derek McClain

Fax:
214-863-3125

Phone:
214-863-3544

E-Mail:
dmcclain@trammellcrow.com

 

ADMINISTRATIVE AGENT:

 

Bank
of America, N.A.

Mail
Code:  TX1-492-14-06

Agency
Management

901
Main Street, 14th Floor

Dallas,
TX   75202-3714

Attn:  Jennifer Reeves

Fax: (214) 290-9507

Phone (214) 209-4125

E-Mail:jennifer.reeves@bankofamerica.com

 

 

LENDERS:

 

Bank of America, N.A.
TX1-492-64-01
901 Main St
Dallas, TX 75202
Attn: Ron Odlozil
Fax: 214-209-0085
Phone: 214-209-1512
E-mail: ron.odlozil@bankofamerica.com
 
First Tennessee Bank N.A.
10th Floor
165 Madison Ave.
Memphis, TN 38103
Attn: Sam Jenkins
Fax: 901-523-4235
Phone: 901-523-4263
E-mail: sjjenkins@ftb.com

 

U.S.
Bank, N.A.

14241
Dallas Parkway

Suite 490

Dallas,
TX 75254

Attn:
Stewart Wilson

Fax:
972-386-8370

Phone:
972-458-4500

E-mail:
stewart.Wilson @usbank.com

 

The Bank of Nova Scotia
580 California St, Ste 2100
San Francisco, CA 94104
Attn: Abid Gilani
Fax: 415-397-0791
Phone: 415-986-1100

E-mail: abid_gilani@scotiacapital.com

 

Union Bank of California N.A.
Suite 4200
500 N. Akard
Dallas, TX 75201
Attn: Patrick Trowbridge
Fax : 214-922-4210
Phone: 214-922-4221
E-mail: patrick.trowbridge@uboc.co

 

 

LaSalle Bank/ABN AMRO
135 South LaSalle, Ste 1211
Chicago, IL 60603
Attn: Josh Proctor
Fax: 312-904-5142
Phone: 312 904-5648
E-mail: josh.proctor@abnamro.com
 

Amegy
Bank, National Association

1807
Ross Ave.

Suite 400

Dallas,
TX  75201

Attn:
Brandon Bledsoe

Fax:
214-754-9505

Phone:
214-754-9503

E-mail:
Brandon.Bledsoe@amegybank.com

 

PNC
Bank, National Association

5th &
Main Street

Cincinnati,
OH  45202

Attn:
James A. Harmann

Fax:
513-651-8931

Phone:
513-651-8988

E-mail:
james.harmann@pnc.com

 

California
Bank & Trust

2000
S. Colorado Blvd.

#2-1200

Denver,
CO 80222

Attn:
Kirk Monroe

Fax:720-947-7761

Phone:720-947-7666

E-mail:
kmonroe@vectrabank.com

 

Comerica
Bank

P.O. Box
650282

M/C
– 6567

Dallas,
TX  75265

Attn:
Carter Stack

Fax:
214-969-6572

Phone:
214-969-6685

E-mail:
carterstack@Comerica.com

 

Bank
Midwest, N.A.

15500
Olive Blvd.

Chesterfield,
MO 63017

Attn:
Tim Kenney

Fax:
636-530-1567

Phone:
636-530-7355

E-mail:
tkenney@dfckc.com

 

 

SCHEDULE 2.2

 

EXISTING LCS

TRAMMELL CROW COMPANY

LETTERS OF CREDIT UNDER THE NATIONSBANK $150 MILLION
REVOLVING LINE OUTSTANDING

 

	
  Date of Issuance

  	
   

  	
  Expiration

  Date

  	
   

  	
  L/C

  Number

  	
   

  	
  Date

  Cancelled/Expired

  	
   

  	
  Beneficiary

  	
   

  	
  Business
  Unit - Property

  	
   

  	
  L/C
  Amount

  	
   

  	
  Amount

  Outstanding

  	
   

  
	
  5/16/2005

  	
   

  	
  5/23/2006

  	
   

  	
  3075021

  	
   

  	
   

  	
   

  	
  Board of county commissions of Arapahoe County

  	
   

  	
  Denver

  	
   

  	
  $

  	
  23,329.00

  	
   

  	
  $

  	
  23,329.00

  	
   

  
	
  4/5/2005

  	
   

  	
  6/23/2005

  	
   

  	
  3073046

  	
   

  	
   

  	
   

  	
  Houston Indep School District

  	
   

  	
  Houston

  	
   

  	
  $

  	
  500,000.00

  	
   

  	
  $

  	
   500,000.00

  	
   

  
	
  2/8/2005

  	
   

  	
  6/23/2005

  	
   

  	
  3073440

  	
   

  	
   

  	
   

  	
  City of Fort Worth

  	
   

  	
  DFW

  	
   

  	
  $

  	
  284,445.25

  	
   

  	
  $

  	
   284,445.25

  	
   

  
	
  11/17/2004

  	
   

  	
  6/23/2005

  	
   

  	
  3065941

  	
   

  	
   

  	
   

  	
  District of Columbia

  	
   

  	
  MidAtlantic

  	
   

  	
  $

  	
  50,000.00

  	
   

  	
  $

  	
   50,000.00

  	
  (Will not renew)

  
	
  11/17/2004

  	
   

  	
  6/23/2005

  	
   

  	
  3066258

  	
   

  	
   

  	
   

  	
  District of Columbia

  	
   

  	
  MidAtlantic

  	
   

  	
  $

  	
  25,000.00

  	
   

  	
  $

  	
   25,000.00

  	
  (Will not renew)

  
	
  12/2/2004

  	
   

  	
  6/23/2005

  	
   

  	
  3072011

  	
   

  	
   

  	
   

  	
  Lowe’s Home Centers, Inc

  	
   

  	
  Charlotte

  	
   

  	
  $

  	
  3,025,000.00

  	
   

  	
  $

  	
   3,025,000.00

  	
   

  
	
  7/12/2001

  	
   

  	
  6/23/2005

  	
   

  	
  3039168

  	
   

  	
   

  	
   

  	
  East Whiteland Township

  	
   

  	
  Northeast Metro

  	
   

  	
  $

  	
  706,621.02

  	
   

  	
  $

  	
   706,621.02

  	
   

  
	
  2/7/2003

  	
   

  	
  6/23/2005

  	
   

  	
  3053813

  	
   

  	
   

  	
   

  	
  Sithe Energies, Inc

  	
   

  	
  New York City

  	
   

  	
  $

  	
  76,720.24

  	
   

  	
  $

  	
   76,720.24

  	
   

  
	
  8/29/2003

  	
   

  	
  6/23/2005

  	
   

  	
  3058362

  	
   

  	
   

  	
   

  	
  General Service Administration

  	
   

  	
  Atlanta

  	
   

  	
  $

  	
  500,000.00

  	
   

  	
  $

  	
   500,000.00

  	
   

  
	
  6/28/2004

  	
   

  	
  6/24/2005

  	
   

  	
  3064019

  	
   

  	
   

  	
   

  	
  North Houston Bank

  	
   

  	
  Austin

  	
   

  	
  $

  	
  1,000,000.00

  	
   

  	
  $

  	
  1,000,000.00

  	
   

  
	
  9/14/2004

  	
   

  	
  6/24/2005

  	
   

  	
  3065513

  	
   

  	
   

  	
   

  	
  The Board of County

  	
   

  	
  Fund III - Denver

  	
   

  	
  $

  	
  29,482.59

  	
   

  	
  $

  	
  29,482.59

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Outstanding at 6/20/05

  	
   

  	
   

  	
   

  	
  6,220,598.10

  	
   

  	
  6,220,598.10

  	
  (B)

  

 

 

	
  Stand Alone Letters of Credit

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  5,043,601 

  	
   

  	
  $

  	
  5,043,601 

  	
   

  
	
  2/24/2000

  	
   

  	
  11/2/2005

  	
   

  	
  3023430

  	
   

  	
  ((CC))

  	
   

  	
  American Express

  	
   

  	
  TCCS

  	
   

  	
  $

  	
  5,043,601 

  	
   

  	
  $

  	
  5,043,601 

  	
   

  

 

((CC))                       Under the $150 million line of credit, the
stand alone letters of credit are not included for debt covenant purposes in
the calculation of availability under the line. 
However, Bank of America as issuer of the stand alone letters of credit,
will not allow TCC to exceed $150 million total borrowings (amt draw under the
line + letters of credit under the line + stand alone LOCs).

 

 

SCHEDULE 4.1-1

 

SUBSIDIARIES OF COMPANY

 

To be Provided

 

 

SCHEDULE 4.6

 

LITIGATION

 

The
Company and one of its subsidiaries are defendants in a lawsuit styled Bank One
Oklahoma, N.A., et al. (the “Bank”) v. Trammell Crow Services, Inc. and Trammell
Crow Company, No. 03 C 3624, pending in the US District Court for the
Northern District of Illinois, originally filed on April 2, 2003.  The claims asserted by the plaintiffs relate
to a sale/leaseback transaction involving a property in Oklahoma City
previously owned by the Bank.  The suit
alleges breach of contract, breach of fiduciary duty, negligent
misrepresentation, fraudulent misrepresentation and fraudulent concealment
against the Company and/or its subsidiary and alleges that the plaintiffs have
been damaged in an unspecified amount in excess of $15.0 million.  The plaintiffs seek to recover actual
damages, punitive damages and reasonable attorneys’ fees.  The suit is in the process of discovery, and
no trial date has been set.  The outcome
of the suit cannot be predicted with any certainty, and the Company cannot at
this time estimate an amount or range of potential loss in the event of an
unfavorable outcome.  While the Company
cannot predict with any certainty the outcome of this matter, the Company
currently believes the plaintiffs’ claims are without merit and is vigorously
defending the lawsuit.

 

 

SCHEDULE 4.11

 

CERTAIN EMPLOYEE BENEFIT PLANS

 

None.

 

 

SCHEDULE 4.13

 

ENVIRONMENTAL MATTERS

 

None.

 

 

SCHEDULE 6.7

 

CERTAIN AFFILIATE TRANSACTIONS

 

Employment
agreements, compensation arrangements and employee benefit plans approved by
the Board of Directors or a committee thereof.

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