Document:

exv10w1

 

Exhibit 10.1

 

 

$60,000,000

AMENDED AND RESTATED

CREDIT AGREEMENT

among

PARKER DRILLING COMPANY,

as Borrower

The Several Lenders

from Time to Time Parties Hereto

LEHMAN BROTHERS INC.,

as Sole Advisor, Sole Lead Arranger and Sole Bookrunner

BANK OF AMERICA, N.A.,

as Syndication Agent

and

LEHMAN COMMERCIAL PAPER INC.,

as Administrative Agent

Dated as of September 20, 2007

 

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	Page	 
	 
	 	 	 	 	 	 	 	 
	SECTION 1. DEFINITIONS	 	 	1	 
	 
	 	1.1	 	Defined Terms	 	 	1	 
	 
	 	1.2	 	Other Definitional Provisions	 	 	19	 
	 
	 	 	 	 	 	 	 	 
	SECTION 2. AMOUNT AND TERMS OF COMMITMENTS	 	 	20	 
	 
	 	2.1	 	Commitments	 	 	20	 
	 
	 	2.2	 	Procedure for Borrowing	 	 	20	 
	 
	 	2.3	 	Borrowing Base Calculations; Inclusion of Assets in Borrowing Base	 	 	20	 
	 
	 	2.4	 	Repayment of Loans; Evidence of Debt	 	 	21	 
	 
	 	2.5	 	Commitment Fees, etc.	 	 	22	 
	 
	 	2.6	 	Termination or Reduction of Credit Commitments	 	 	22	 
	 
	 	2.7	 	Optional Prepayments	 	 	22	 
	 
	 	2.8	 	Mandatory Prepayments	 	 	22	 
	 
	 	2.9	 	Conversion and Continuation Options	 	 	23	 
	 
	 	2.10	 	Minimum Amounts and Maximum Number of Eurodollar Tranches	 	 	23	 
	 
	 	2.11	 	Interest Rates and Payment Dates	 	 	23	 
	 
	 	2.12	 	Computation of Interest and Fees	 	 	24	 
	 
	 	2.13	 	Inability to Determine Interest Rate	 	 	24	 
	 
	 	2.14	 	Pro Rata Treatment and Payments	 	 	25	 
	 
	 	2.15	 	Requirements of Law	 	 	26	 
	 
	 	2.16	 	Taxes	 	 	27	 
	 
	 	2.17	 	Indemnity	 	 	29	 
	 
	 	2.18	 	Illegality	 	 	29	 
	 
	 	2.19	 	Change of Lending Office	 	 	29	 
	 
	 	2.21	 	Bank Products	 	 	30	 
	 
	 	 	 	 	 	 	 	 
	SECTION 3. LETTERS OF CREDIT	 	 	30	 
	 
	 	3.1	 	L/C Commitment	 	 	30	 
	 
	 	3.2	 	Procedure for Issuance of Letter of Credit	 	 	31	 
	 
	 	3.3	 	Fees and Other Charges	 	 	31	 
	 
	 	3.4	 	L/C Participations	 	 	32	 
	 
	 	3.5	 	Reimbursement Obligation of the Borrower	 	 	33	 
	 
	 	3.6	 	Obligations Absolute	 	 	33	 
	 
	 	3.7	 	Letter of Credit Payments	 	 	34	 
	 
	 	3.8	 	Applications	 	 	34	 
	 
	 	3.9	 	Indemnification; Exoneration; Power of Attorney	 	 	34	 
	 
	 	3.10	 	Supporting Letter of Credit; Cash Collateral	 	 	36	 
	 
	 	3.11	 	Letters of Credit Issued for Subsidiaries	 	 	37	 
	 
	 	3.12	 	Determination of Amount	 	 	37	 
	 
	 	 	 	 	 	 	 	 
	SECTION 4. REPRESENTATIONS AND WARRANTIES	 	 	37	 
	 
	 	4.1	 	Financial Condition	 	 	37	 

i

 

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	Page	 
	 
	 	 	 	 	 	 	 	 
	 
	 	4.2	 	No Change	 	 	38	 
	 
	 	4.3	 	Corporate Existence; Compliance with Law	 	 	38	 
	 
	 	4.4	 	Corporate Power; Authorization; Enforceable Obligations	 	 	38	 
	 
	 	4.5	 	No Legal Bar	 	 	38	 
	 
	 	4.6	 	No Material Litigation	 	 	38	 
	 
	 	4.7	 	No Default	 	 	39	 
	 
	 	4.8	 	Ownership of Property; Liens	 	 	39	 
	 
	 	4.9	 	Intellectual Property	 	 	39	 
	 
	 	4.10	 	Taxes	 	 	39	 
	 
	 	4.11	 	Federal Regulations	 	 	39	 
	 
	 	4.12	 	Labor Matters	 	 	39	 
	 
	 	4.13	 	ERISA	 	 	40	 
	 
	 	4.14	 	Investment Company Act; Other Regulations	 	 	40	 
	 
	 	4.15	 	Subsidiaries	 	 	40	 
	 
	 	4.16	 	Use of Proceeds	 	 	40	 
	 
	 	4.17	 	Environmental Matters	 	 	40	 
	 
	 	4.18	 	Accuracy of Information, etc.	 	 	41	 
	 
	 	4.19	 	Security Documents	 	 	42	 
	 
	 	4.20	 	Solvency	 	 	42	 
	 
	 	 	 	 	 	 	 	 
	SECTION 5. CONDITIONS PRECEDENT	 	 	42	 
	 
	 	5.1	 	Conditions to Initial Extension of Credit	 	 	42	 
	 
	 	5.2	 	Conditions to Each Extension of Credit	 	 	44	 
	 
	 	 	 	 	 	 	 	 
	SECTION 6. AFFIRMATIVE COVENANTS	 	 	44	 
	 
	 	6.1	 	Financial Statements	 	 	44	 
	 
	 	6.2	 	Certificates; Other Information	 	 	45	 
	 
	 	6.3	 	Conduct of Business and Maintenance
of Existence, etc.	 	 	46	 
	 
	 	6.4	 	Maintenance of Property; Insurance	 	 	46	 
	 
	 	6.5	 	Inspection of Property; Books and Records; Discussions	 	 	47	 
	 
	 	6.6	 	Notices	 	 	47	 
	 
	 	6.7	 	Environmental Laws	 	 	47	 
	 
	 	6.8	 	Additional Collateral, etc.	 	 	48	 
	 
	 	6.9	 	Borrowing Base Certificate	 	 	48	 
	 
	 	6.10	 	Cash Management Systems	 	 	49	 
	 
	 	6.11	 	Inspection of Collateral	 	 	50	 
	 
	 	6.12	 	Further Assurances	 	 	50	 
	 
	 	 	 	 	 	 	 	 
	SECTION 7. NEGATIVE COVENANTS	 	 	50	 
	 
	 	7.1	 	Financial Condition Covenants	 	 	50	 
	 
	 	7.2	 	Limitation on Indebtedness	 	 	51	 
	 
	 	7.3	 	Limitation on Liens	 	 	52	 
	 
	 	7.4	 	Limitation on Fundamental Changes	 	 	53	 
	 
	 	7.5	 	Limitation on Disposition of Property	 	 	53	 
	 
	 	7.6	 	Limitation on Restricted Payments	 	 	54	 
	 
	 	7.7	 	Limitation on Modifications of Debt
Instruments, etc.	 	 	55	 
	 
	 	7.8	 	Limitation on Transactions with Affiliates	 	 	55	 

ii

 

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	Page	 
	 
	 	 	 	 	 	 	 	 
	 
	 	7.9	 	Limitation on Changes in Fiscal Periods	 	 	56	 
	 
	 	7.10	 	Limitation on Negative Pledge Clauses	 	 	56	 
	 
	 	7.11	 	Limitation on Restrictions on Subsidiary Distributions	 	 	56	 
	 
	 	7.12	 	Limitation on Lines of Business	 	 	56	 
	 
	 	7.13	 	Limitation on Hedge Agreements	 	 	57	 
	 
	 	 	 	 	 	 	 	 
	SECTION 8. EVENTS OF DEFAULT	 	 	57	 
	 
	 	 	 	 	 	 	 	 
	SECTION 9. THE ADMINISTRATIVE AGENT	 	 	60	 
	 
	 	9.1	 	Appointment	 	 	60	 
	 
	 	9.2	 	Delegation of Duties	 	 	60	 
	 
	 	9.3	 	Exculpatory Provisions	 	 	60	 
	 
	 	9.4	 	Reliance by Administrative Agent	 	 	61	 
	 
	 	9.5	 	Notice of Default	 	 	61	 
	 
	 	9.6	 	Non-Reliance on Administrative Agent and Other Lenders	 	 	61	 
	 
	 	9.7	 	Indemnification	 	 	62	 
	 
	 	9.8	 	Agent in Its Individual Capacity	 	 	62	 
	 
	 	9.9	 	Successor Administrative Agent	 	 	62	 
	 
	 	9.10	 	Authorization to Release Liens and Guarantees	 	 	63	 
	 
	 	9.11	 	The Arrangers; the Syndication Agent	 	 	63	 
	 
	 	 	 	 	 	 	 	 
	SECTION 10. MISCELLANEOUS	 	 	63	 
	 
	 	10.1	 	Amendments and Waivers	 	 	63	 
	 
	 	10.2	 	Notices	 	 	65	 
	 
	 	10.3	 	No Waiver; Cumulative Remedies	 	 	66	 
	 
	 	10.4	 	Survival of Representations and Warranties	 	 	66	 
	 
	 	10.5	 	Payment of Expenses	 	 	66	 
	 
	 	10.6	 	Successors and Assigns; Participations and Assignments	 	 	67	 
	 
	 	10.7	 	Adjustments; Set-off	 	 	69	 
	 
	 	10.8	 	Counterparts	 	 	70	 
	 
	 	10.9	 	Severability	 	 	70	 
	 
	 	10.10	 	Integration	 	 	70	 
	 
	 	10.11	 	GOVERNING LAW	 	 	70	 
	 
	 	10.12	 	Submission To Jurisdiction; Waivers	 	 	71	 
	 
	 	10.13	 	Acknowledgments	 	 	71	 
	 
	 	10.14	 	Confidentiality	 	 	71	 
	 
	 	10.15	 	Release of Guarantees and Liens	 	 	72	 
	 
	 	10.16	 	Accounting Changes	 	 	73	 
	 
	 	10.17	 	Delivery of Lender Addenda	 	 	73	 
	 
	 	10.18	 	Usury Not Intended	 	 	73	 
	 
	 	10.19	 	WAIVERS OF JURY TRIAL	 	 	74	 
	 
	 	10.20	 	USA PATRIOT Act Notice	 	 	74	 

iii

 

ANNEXES:

	 	 	 
	A

	 	Pricing Grid
	B

	 	Existing Letters of Credit
	C

	 	Existing Control Agreements

SCHEDULES:

	 	 	 
	1.1

	 	Borrowing Base Provisions
	4.4

	 	Consents, Authorizations, Filings and Notices
	4.15

	 	Subsidiaries; Capital Stock
	4.17

	 	Environmental Matters
	4.19

	 	UCC Filing Jurisdictions
	7.2(d)

	 	Existing Indebtedness
	7.3(f)

	 	Existing Liens
	7.5(j)

	 	Dispositions

EXHIBITS:

	 	 	 
	A

	 	Form of Acknowledgment and Confirmation of Security Documents
	B

	 	Form of Compliance Certificate
	C

	 	Form of Closing Certificate
	D

	 	Form of Assignment and Acceptance
	E-1

	 	Form of Legal Opinion of Bracewell & Giuliani LLP
	E-2

	 	Form of Legal Opinion of General Counsel of the Borrower
	F

	 	Form of Note
	G

	 	Form of Borrowing Base Certificate
	H

	 	Form of Exemption Certificate
	I

	 	Form of Lender Addendum
	J

	 	Form of Borrowing Notice

iv

 

          CREDIT AGREEMENT, dated as of September 20, 2007, among PARKER DRILLING COMPANY, a
Delaware corporation (the “Borrower”), the several banks and other financial institutions
or entities from time to time parties to this Agreement (the “Lenders”), LEHMAN BROTHERS
INC., as sole advisor, sole lead arranger and sole bookrunner (in such capacity, the
“Arranger”), BANK OF AMERICA, N.A., as syndication agent (in such capacity, the
“Syndication Agent”), and LEHMAN COMMERCIAL PAPER INC., as administrative agent (in such
capacity, the “Administrative Agent”).

WITNESSETH:

          WHEREAS, the Borrower entered into a Credit Agreement, dated as of December 20, 2004 (as
previously amended, the “Existing Credit Agreement”), with Lehman Commercial Paper Inc., as
administrative agent, the financial institutions parties thereto as lenders and certain other
parties;

          WHEREAS, the parties hereto have agreed to amend and restate the Existing Credit Agreement as
provided in this Agreement, which Agreement shall become effective upon the satisfaction of the
conditions precedent set forth in Section 5.1 hereof; and

          WHEREAS, it is the intent of the parties hereto that this Agreement not constitute a novation
of the obligations and liabilities existing under the Existing Credit Agreement or evidence
repayment of any of such obligations and liabilities and that this Agreement amend and restate in
its entirety the Existing Credit Agreement and re-evidence the obligations of the Borrower
outstanding thereunder;

          NOW, THEREFORE, in consideration of the above premises, the parties hereto hereby agree that
on the Restatement Effective Date (as defined below) the Existing Credit Agreement shall be amended
and restated in its entirety as follows:

SECTION 1. DEFINITIONS

          1.1 Defined Terms. As used in this Agreement, the terms listed in this Section 1.1 shall have the respective
meanings set forth in this Section 1.1.

          “Accounts”: as defined in Schedule 1.1.

          “ACH Transactions”: any cash management or related services including controlled
disbursement accounts and the automated clearinghouse transfer of funds by any Lender for the
account of the Borrower or any of its Subsidiaries pursuant to agreement or overdrafts.

          “Acknowledgment and Confirmation”: the Acknowledgment and Confirmation of Security
Documents to be executed and delivered by the Borrower and each Subsidiary Guarantor, substantially
in the form of Exhibit A, as the same may be amended, supplemented or otherwise modified from time
to time.

 

2

          “Adjustment Date”: as defined in the Pricing Grid.

          “Administrative Agent”: as defined in the preamble hereto.

          “Advance Rate”: as defined in Schedule 1.1.

          “Affiliate”: as to any Person, any other Person that, directly or indirectly, is in
control of, is controlled by, or is under common control with, such Person. For purposes of this
definition, “control” of a Person means the power, directly or indirectly, either to (a) vote 10%
or more of the securities having ordinary voting power for the election of directors (or persons
performing similar functions) of such Person or (b) direct or cause the direction of the management
and policies of such Person, whether by contract or otherwise.

          “Agents”: the collective reference to the Syndication Agent and the Administrative
Agent.

          “Agreement”: this Credit Agreement, as amended, supplemented or otherwise modified
from time to time.

          “Applicable Margin”: (a) in the case of Base Rate Loans, 1.50%, and (b) in the case
of Eurodollar Loans, 2.50%; provided, that on and after the first Adjustment Date occurring
after the completion of one full fiscal quarter of the Borrower after the Closing Date, the
Applicable Margin for each Type of Loan will be determined pursuant to the Pricing Grid.

          “Application”: an application, in such form as the relevant Issuing Lender may
specify from time to time, requesting such Issuing Lender to issue a Letter of Credit.

          “Arranger”: as defined in the preamble hereto.

          “Assignee”: as defined in Section 10.6(c).

          “Assignor”: as defined in Section 10.6(c).

          “Available Commitment”: with respect to any Lender at any time, an amount equal to
the excess, if any, of (a) such Lender’s Commitment then in effect over (b) such Lender’s
Extensions of Credit then outstanding.

          “Bank Products”: all (a) ACH Transactions and credit card facilities extended to the
Borrower or any of its Subsidiaries by any Lender (or any Affiliate of any Lender in reliance on
such Lender’s agreement to indemnify such Affiliate), and any instruments governing any of the
foregoing and (b) Specified Hedge Agreements.

          “Base Rate”: for any day, a rate per annum (rounded upwards, if necessary, to the
next 1/16 of 1%) equal to the greater of (a) the Prime Rate in effect on such day and (b) the
Federal Funds Effective Rate in effect on such day plus 1/2 of 1%. For purposes hereof: “Prime
Rate” shall mean the prime lending rate as set forth on the British Banking Association
Telerate Page 5 (or such other comparable publicly available page as may, in the reasonable opinion
of the Administrative Agent after notice to the Borrower, replace such page for the purpose of

 

3

displaying such rate if such rate no longer appears on the British Bankers Association
Telerate Page 5), as in effect from time to time. The Prime Rate is a reference rate and does not
necessarily represent the lowest or best rate actually available. Any change in the Base Rate due
to a change in the Prime Rate or the Federal Funds Effective Rate shall be effective as of the
opening of business on the effective day of such change in the Prime Rate or the Federal Funds
Effective Rate, respectively.

          “Base Rate Loans”: Loans for which the applicable rate of interest is based upon the
Base Rate.

          “Benefitted Lender”: as defined in Section 10.7.

          “Board”: the Board of Governors of the Federal Reserve System of the United States
(or any successor).

          “Borrower”: as defined in the preamble hereto.

          “Borrowing Base”: as defined in Schedule 1.1.

          “Borrowing Base Certificate”: a borrowing base certificate substantially in the form
of Exhibit G, as the same may be modified from time to time as agreed by the Borrower and the
Administrative Agent.

          “Borrowing Date”: any Business Day specified by the Borrower as a date on which the
Borrower requests the relevant Lenders to make Loans hereunder.

          “Borrowing Notice”: with respect to any request for borrowing of Loans hereunder, a
notice from the Borrower, substantially in the form of, and containing the information prescribed
by, Exhibit J, delivered to the Administrative Agent.

          “Business Day”: (a) for all purposes other than as covered by clause (b) below, a day
other than a Saturday, Sunday or other day on which commercial banks in New York City are
authorized or required by law to close and (b) with respect to all notices and determinations in
connection with, and payments of principal and interest on, Eurodollar Loans, any day which is a
Business Day described in clause (a) and which is also a day for trading by and between banks in
Dollar deposits in the interbank eurodollar market.

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

          “Capital Stock”: any and all shares, interests, participations or other equivalents
(however designated) of capital stock of a corporation, any and all equivalent ownership interests
in a Person (other than a corporation) and any and all warrants, rights or options to purchase any
of the foregoing.

 

4

          “Cash Equivalents”: (a) marketable direct obligations issued by, or unconditionally
guaranteed by, the United States government or issued by any agency thereof and backed by the full
faith and credit of the United States, in each case maturing within one year from the date of
acquisition; (b) certificates of deposit, time deposits, eurodollar time deposits or overnight bank
deposits having maturities of six months or less from the date of acquisition issued by any Lender
or by any commercial bank organized under the laws of the United States of America or any state
thereof having combined capital and surplus of not less than $500,000,000; (c) commercial paper of
an issuer rated at least A-2 by Standard & Poor’s Ratings Services (“S&P”) or P-2 by
Moody’s Investors Service, Inc. (“Moody’s”), or carrying an equivalent rating by a
nationally recognized rating agency if both of the two named rating agencies cease publishing
ratings of commercial paper issuers generally, and maturing within six months from the date of
acquisition; (d) repurchase obligations of any Lender or of any commercial bank satisfying the
requirements of clause (b) of this definition, having a term of not more than 30 days with respect
to securities issued or fully guaranteed or insured by the United States government; (e) securities
with maturities of one year or less from the date of acquisition issued or fully guaranteed by any
state, commonwealth or territory of the United States, by any political subdivision or taxing
authority of any such state, commonwealth or territory or by any foreign government, the securities
of which state, commonwealth, territory, political subdivision, taxing authority or foreign
government (as the case may be) are rated at least A by S&P or A by Moody’s; (f) securities with
maturities of six months or less from the date of acquisition backed by standby letters of credit
issued by any Lender or any commercial bank satisfying the requirements of clause (b) of this
definition; (g) shares of money market mutual or similar funds which invest exclusively in assets
satisfying the requirements of clauses (a) through (f) of this definition; and (h) shares of the
Nations Cash Reserves fund for which an affiliate of Bank of America, N.A. provides investment
advisory services.

          “Change of Control”: the occurrence of any of the following events: (a) any “person”
or “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of
1934, as amended (the “Exchange Act”)) shall become, or obtain rights (whether by means or
warrants, options or otherwise) to become, the “beneficial owner” (as defined in Rules 13(d)-3 and
13(d)-5 under the Exchange Act), directly or indirectly, of more than 35% of the outstanding common
stock of the Borrower; (b) the board of directors of the Borrower shall cease to consist of a
majority of Continuing Directors; or (c) a Specified Change of Control.

          “Closing Date”: the date on which the conditions precedent set forth in Section 5.1
shall have been satisfied, which date shall be not later than September 20, 2007.

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

          “Collateral”: all Property of the Loan Parties, now owned or hereafter acquired, upon
which a Lien is purported to be created by any Security Document.

          “Commitment”: as to any Lender, the obligation of such Lender to make Loans and
participate in Letters of Credit in an aggregate principal and/or face amount not to exceed the
amount set forth on Schedule 1 to the Lender Addendum delivered by such Lender, or, as the case may
be, in the Assignment and Acceptance pursuant to which such Lender became a party

 

5

hereto, as the same may be changed from time to time pursuant to the terms hereof. The
aggregate amount of the Total Commitments is $60,000,000.

          “Commitment Fee Rate”: 1/2 of 1% per annum.

          “Commitment Period”: the period from and including the Closing Date to the
Termination Date.

          “Commonly Controlled Entity”: an entity, whether or not incorporated, that is under
common control with the Borrower within the meaning of Section 4001 of ERISA or is part of a group
that includes the Borrower and that is treated as a single employer under Section 414 of the Code.

          “Compliance Certificate”: a certificate duly executed by a Responsible Officer,
substantially in the form of Exhibit B.

          “Concentration Account”: one or more bank accounts maintained by the Administrative
Agent, over which the Administrative Agent shall have sole dominion and control, into which
proceeds of Collateral shall be transferred from other accounts maintained by the Borrower and the
Subsidiary Guarantors, in the event that the Administrative Agent requires such transfer during the
existence of an Event of Default.

          “Consolidated Current Assets”: of any Person at any date, all amounts (other than
cash and Cash Equivalents) that would, in conformity with GAAP, be set forth opposite the caption
“total current assets” (or any like caption) on a consolidated balance sheet of such Person and its
Subsidiaries at such date.

          “Consolidated Current Liabilities”: of any Person at any date, all amounts that
would, in conformity with GAAP, be set forth opposite the caption “total current liabilities” (or
any like caption) on a consolidated balance sheet of such Person and its Subsidiaries at such date,
but excluding, with respect to the Borrower, (a) the current portion of any Funded Debt of the
Borrower and its Subsidiaries and (b), without duplication, all Indebtedness consisting of Loans,
to the extent otherwise included therein.

          “Consolidated EBITDA”: of any Person for any period, Consolidated Net Income of such
Person and its Subsidiaries for such period plus, without duplication and to the extent
reflected as a charge in the statement of such Consolidated Net Income for such period, the sum of
(a) income tax expense, (b) Consolidated Interest Expense of such Person and its Subsidiaries,
amortization or writeoff of debt discount and debt issuance costs and commissions, discounts and
other fees and charges associated with Indebtedness, (c) depreciation and amortization expense, (d)
amortization of intangibles (including, but not limited to, goodwill) and organization costs, (e)
any extraordinary, unusual or non-recurring expenses or losses (including, whether or not otherwise
includable as a separate item in the statement of such Consolidated Net Income for such period,
losses on sales of assets outside of the ordinary course of business), to the extent such additions
are found to be acceptable by the Administrative Agent, acting reasonably, and (f) any other
non-cash charges, and minus, to the extent included in the statement of such Consolidated
Net Income for such period, the sum of (a) interest income (except to the extent deducted in
determining Consolidated Interest Expense), (b) any extraordinary, unusual or non-

 

6

recurring income or gains (including, whether or not otherwise includable as a separate item
in the statement of such Consolidated Net Income for such period, gains on the sales of assets
outside of the ordinary course of business), to the extent such deductions are found to be
acceptable by the Administrative Agent, acting reasonably, (c) any other non-cash income, all as
determined on a consolidated basis and (d) the amount of any cash expenditures during such period
in respect of items that were added as non-cash charges in determining Consolidated EBITDA for a
prior period.

          “Consolidated Interest Coverage Ratio”: for any period, the ratio of (a) Consolidated
EBITDA of the Borrower and its Subsidiaries for such period to (b) Consolidated Interest Expense of
the Borrower and its Subsidiaries for such period.

          “Consolidated Interest Expense”: of any Person for any period, total interest expense
(including that attributable to Capital Lease Obligations) of such Person and its Subsidiaries for
such period with respect to all outstanding Indebtedness of such Person and its Subsidiaries
(including, without limitation, all commissions, discounts and other fees and charges owed by such
Person with respect to letters of credit and bankers’ acceptance financing and net costs of such
Person under Hedge Agreements in respect of interest rates to the extent such net costs are
allocable to such period in accordance with GAAP).

          “Consolidated Leverage Ratio”: as at the last day of any period of four consecutive
fiscal quarters of the Borrower, the ratio of (a) Consolidated Total Debt on such day to (b)
Consolidated EBITDA of the Borrower and its Subsidiaries for such period; provided that for
purposes of calculating Consolidated EBITDA of the Borrower and its Subsidiaries for any period,
(i) the Consolidated EBITDA of any Person acquired by the Borrower or its Subsidiaries during such
period shall be included on a pro forma basis for such period (assuming the consummation of such
acquisition and the incurrence or assumption of any Indebtedness in connection therewith occurred
on the first day of such period) if the consolidated balance sheet of such acquired Person and its
consolidated Subsidiaries as at the end of the period preceding the acquisition of such Person and
the related consolidated statements of income and stockholders’ equity and of cash flows for the
period in respect of which Consolidated EBITDA is to be calculated (x) have been previously
provided to the Administrative Agent and the Lenders and (y) either (1) have been reported on
without a qualification arising out of the scope of the audit by independent certified public
accountants of nationally recognized standing or (2) have been found acceptable by the
Administrative Agent and (ii) the Consolidated EBITDA of any Person Disposed of by the Borrower or
its Subsidiaries during such period shall be excluded for such period (assuming the consummation of
such Disposition and the repayment of any Indebtedness in connection therewith occurred on the
first day of such period).

          “Consolidated Net Income”: of any Person for any period, the consolidated net income
(or loss) of such Person and its Subsidiaries for such period, determined on a consolidated basis
in accordance with GAAP; provided, that in calculating Consolidated Net Income of the
Borrower and its consolidated Subsidiaries for any period, there shall be excluded (a) the income
(or deficit) of any Person accrued prior to the date it becomes a Subsidiary of the Borrower or is
merged into or consolidated with the Borrower or any of its Subsidiaries, (b) the income (or
deficit) of any Person (other than a Subsidiary of the Borrower) in which the Borrower or any of
its Subsidiaries has an ownership interest, except to the extent that any such

 

7

income is actually received by the Borrower or such Subsidiary in the form of cash dividends
or similar cash distributions and (c) the undistributed earnings of any Subsidiary of the Borrower
to the extent that the declaration or payment of dividends or similar distributions by such
Subsidiary is not at the time permitted by the terms of any Contractual Obligation (other than
under any Loan Document) or Requirement of Law applicable to such Subsidiary.

          “Consolidated Senior Secured Debt”: all Consolidated Total Debt that is secured by a
Lien on any Property.

          “Consolidated Senior Secured Leverage Ratio”: as of the last day of any period of
four consecutive fiscal quarters, the ratio of (a) Consolidated Senior Secured Debt on such day to
(b) Consolidated EBITDA of the Borrower and its Subsidiaries for such period.

          “Consolidated Total Debt”: at any date, the aggregate principal amount of all
Indebtedness of the Borrower and its Subsidiaries at such date (other than Indebtedness of the type
described in clause (f) of the definition of “Indebtedness”), determined on a consolidated basis in
accordance with GAAP.

          “Consolidated Working Capital”: at any date, the difference of (a) Consolidated
Current Assets of the Borrower on such date less (b) Consolidated Current Liabilities of the
Borrower on such date.

          “Continuing Directors”: the directors of the Borrower on the Closing Date and each
other director of the Borrower, if, in each case, such other director’s nomination for election to
the board of directors of the Borrower is recommended by at least a majority of the then Continuing
Directors.

          “Contractual Obligation”: as to any Person, any provision of any security issued by
such Person or of any agreement, instrument or other undertaking to which such Person is a party or
by which it or any of its Property is bound.

          “Control Agreement”: (i) the Existing Control Agreements listed on Annex C hereto and
(ii) in respect of each account identified as provided in Section 6.10(a), a Control Agreement, in
form and substance reasonably satisfactory to the Administrative Agent and the Borrower, pursuant
to which (a) the Borrower or the Subsidiary Guarantor, as the case may be, that is the owner of
such account irrevocably instructs the bank or securities intermediary that maintains such account
that such bank or securities intermediary shall follow the instructions or entitlement orders, as
the case may be, of the Administrative Agent without further consent of the Borrower or such
Subsidiary Guarantor and (b) the Administrative Agent agrees that it will not give any instructions
or entitlement orders, as the case may be, in respect of such account unless an Event of Default
has occurred and is continuing. Each Control Agreement shall contain such other terms as shall be
customary for agreements of such type.

          “Control Investment Affiliate”: as to any Person, any other Person that (a) directly
or indirectly, is in control of, is controlled by, or is under common control with, such Person and
(b) is organized by such Person primarily for the purpose of making equity or debt investments in
one or more companies. For purposes of this definition, “control” of a Person

 

8

means the power, directly or indirectly, to direct or cause the direction of the management
and policies of such Person, whether by contract or otherwise.

          “Convertible Notes”: the $125,000,000 aggregate principal amount of convertible notes
of the Borrower issued pursuant to the Convertible Notes Indenture.

          “Convertible Notes Indenture”: the Indenture, dated as of July 5, 2007, in respect of
the Convertible Notes, together with all instruments and other agreements entered into by the
Borrower or its Subsidiaries in connection therewith, as the same may be amended, supplemented or
otherwise modified from time to time in accordance with Section 7.7.

          “Default”: any of the events specified in Section 8, whether or not any requirement
for the giving of notice, the lapse of time, or both, has been satisfied.

          “Derivatives Counterparty”: as defined in Section 7.6.

          “Disposition”: with respect to any Property, any sale, sale and leaseback,
assignment, conveyance, transfer or other disposition thereof; and the terms “Dispose” and
“Disposed of” shall have correlative meanings.

          “Dollars” and “$”: lawful currency of the United States of America.

          “Domestic Subsidiary”: any Subsidiary of the Borrower organized under the laws of any
jurisdiction within the United States of America.

          “Eligible Accounts Receivable”: as defined in Schedule 1.1.

          “Eligible Rental Equipment”: as defined in Schedule 1.1.

          “Environmental Laws”: any and all laws, rules, orders, regulations, statutes,
ordinances, guidelines, codes, decrees, or other legally enforceable requirements (including,
without limitation, common law) of any international authority, foreign government, the United
States, or any state, local, municipal or other governmental authority, regulating, relating to or
imposing liability or standards of conduct concerning protection of the environment or of human
health, or employee health and safety, as has been, is now, or may at any time hereafter be, in
effect.

          “Environmental Permits”: any and all permits, licenses, approvals, registrations,
notifications, exemptions and other authorizations required under any Environmental Law.

          “ERISA”: the Employee Retirement Income Security Act of 1974, as amended from time to
time.

          “Eurocurrency Reserve Requirements”: for any day, the aggregate (without
duplication) of the maximum rates (expressed as a decimal fraction) of reserve requirements in
effect on such day (including, without limitation, basic, supplemental, marginal and emergency
reserves) under any regulations of the Board or other Governmental Authority having jurisdiction
with respect thereto dealing with reserve requirements prescribed for eurocurrency

 

9

funding (currently referred to as “Eurocurrency Liabilities” in Regulation D of the Board)
maintained by a member bank of the Federal Reserve System.

          “Eurodollar Base Rate”: with respect to each day during each Interest Period, the
rate per annum determined on the basis of the rate for deposits in Dollars for a period equal to
such Interest Period commencing on the first day of such Interest Period appearing on Reuters
Screen LIBOR01 Page as of 11:00 A.M., London time, two Business Days prior to the beginning of such
Interest Period. In the event that such rate does not appear on Reuters Screen LIBOR01 Page (or
otherwise on such screen), the “Eurodollar Base Rate” for purposes of this definition shall
be determined by reference to such other comparable publicly available service for displaying
eurodollar rates as may be selected by the Administrative Agent.

          “Eurodollar Loans”: Loans for which the applicable rate of interest is based upon the
Eurodollar Rate.

          “Eurodollar Rate”: with respect to each day during each Interest Period, a rate per
annum determined for such day in accordance with the following formula (rounded upward to the
nearest 1/100th of 1%):

Eurodollar
Base Rate 
1.00 - Eurocurrency Reserve Requirements

          “Eurodollar Tranche”: the collective reference to Eurodollar Loans the then current
Interest Periods with respect to all of which begin on the same date and end on the same later date
(whether or not such Loans shall originally have been made on the same day).

          “Event of Default”: any of the events specified in Section 8, provided that
any requirement for the giving of notice, the lapse of time, or both, has been satisfied.

          “Excess Credit Availability”: at any time, the amount, determined by the
Administrative Agent at such time, equal to the lesser of (a) the Borrowing Base minus the
Total Extensions of Credit and (b) the Total Commitments minus the Total Extensions of
Credit.

          “Excluded Subsidiaries”: (a) Parker Drilling Investment Company, an Oklahoma
corporation, (b) PKD Sales Corporation, an Oklahoma corporation, (b) any Foreign Subsidiary and (c)
any Domestic Subsidiary owned by any Foreign Subsidiary; provided, that a Subsidiary shall
cease to be an Excluded Subsidiary if either (y) it provides a guaranty of the obligations under
any Indenture or (z) in the case of each of Parker Drilling Investment Company and PKD Sales
Corporation, it ceases to be an “Unrestricted Subsidiary” under the Indentures.

          “Existing Credit Agreement”: as defined in the recitals hereto.

          “Existing Issuing Lender”: Bank of America, N.A.

          “Existing Letters of Credit”: the letters of credit described in Annex B.

 

10

          “Extensions of Credit”: as to any Lender at any time, an amount equal to the sum of
(a) the aggregate principal amount of all Loans made by such Lender then outstanding and (b) such
Lender’s Percentage of the L/C Obligations then outstanding.

          “Facility”: the Commitments and the Loans made thereunder.

          “Federal Funds Effective Rate”: for any day, the weighted average of the rates on
overnight federal funds transactions with members of the Federal Reserve System arranged by federal
funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New
York, or, if such rate is not so published for any day which is a Business Day, the average of the
quotations for the day of such transactions received by the Administrative Agent from three federal
funds brokers of recognized standing selected by it.

          “Foreign Subsidiary”: any Subsidiary of the Borrower that is not a Domestic
Subsidiary.

          “FQ1”, “FQ2”, “FQ3”, and “FQ4”: when used with a numerical
year designation, means the first, second, third or fourth fiscal quarters, respectively, of such
fiscal year of the Borrower. (e.g., FQ4 2007 means the fourth fiscal quarter of the Borrower’s 2007
fiscal year, which ends December 31, 2007).

          “Funded Debt”: with respect to any Person, all Indebtedness of such Person of the
types described in clauses (a) through (e) of the definition of “Indebtedness” in this Section.

          “Funding Office”: the office specified from time to time by the Administrative Agent
as its funding office by notice to the Borrower and the Lenders.

          “GAAP”: generally accepted accounting principles in the United States of America as
in effect from time to time.

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

          “Guarantee and Collateral Agreement”: the Guarantee and Collateral Agreement, dated
as of December 20, 2004, entered into by the Borrower and each Subsidiary Guarantor in favor of the
Administrative Agent for the benefit of the Secured Parties, as the same may be amended,
supplemented or otherwise modified from time to time.

          “Guarantee Obligation”: as to any Person (the “guaranteeing person”), any
obligation of (a) the guaranteeing person or (b) another Person (including, without limitation, any
bank under any letter of credit), if to induce the creation of such obligation of such other Person
the guaranteeing person has issued a reimbursement, counterindemnity or similar obligation, in
either case guaranteeing or in effect guaranteeing any Indebtedness (the “primary
obligations”) of any other third Person (the “primary obligor”) in any manner, whether
directly or indirectly, including, without limitation, any obligation of the guaranteeing person,
whether or not contingent, (i) to purchase any such primary obligation or any Property constituting
direct or indirect security therefor, (ii) to advance or supply funds (1) for the purchase or
payment of any

 

11

such primary obligation or (2) to maintain working capital or equity capital of the primary
obligor or otherwise to maintain the net worth or solvency of the primary obligor, (iii) to
purchase Property, securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment of such primary
obligation or (iv) otherwise to assure or hold harmless the owner of any such primary obligation
against loss in respect thereof; provided, however, that the term Guarantee
Obligation shall not include endorsements of instruments for deposit or collection in the ordinary
course of business. The amount of any Guarantee Obligation of any guaranteeing person shall be
deemed to be the lower of (a) an amount equal to the stated or determinable amount of the primary
obligation in respect of which such Guarantee Obligation is made and (b) the maximum amount for
which such guaranteeing person may be liable pursuant to the terms of the instrument embodying such
Guarantee Obligation, unless such primary obligation and the maximum amount for which such
guaranteeing person may be liable are not stated or determinable, in which case the amount of such
Guarantee Obligation shall be such guaranteeing person’s maximum reasonably anticipated liability
in respect thereof as determined by the Borrower in good faith.

          “Hedge Agreements”: all interest rate or currency swaps, caps or collar agreements,
foreign exchange agreements, commodity contracts or similar arrangements entered into by the
Borrower or its Subsidiaries providing for protection against fluctuations in interest rates,
currency exchange rates, commodity prices or the exchange of nominal interest obligations, either
generally or under specific contingencies. For avoidance of doubt, Hedge Agreements shall include
any interest rate swap or similar agreement that provides for the payment by the Borrower or any of
its Subsidiaries of (i) amounts based upon a floating rate in exchange for receipt by the Borrower
or such Subsidiary of amounts based upon a fixed rate or (ii) amounts based upon a fixed rate in
exchange for receipt the Borrower or such Subsidiary of amounts based upon a floating rate.

          “High Strikes Agreements”: as defined on Schedule 4.15.

          “Immaterial Account”: any account in which the aggregate amount on deposit (or, in
the case of any securities account, the total fair market value of all securities held in such
account) does not at any time exceed $25,000.

          “Immaterial Subsidiary”: any Subsidiary designated by the Borrower, by written notice
to the Administrative Agent, as an “Immaterial Subsidiary”; provided, that (a) no
Subsidiary may be so designated unless such Subsidiary (i) had assets having an aggregate book
value, as of the end of the fiscal year most recently ended, not exceeding $1,000,000 and (ii) had
Consolidated Net Income not exceeding $1,000,000 for such fiscal year and (b) any Subsidiary shall
automatically cease to be an Immaterial Subsidiary if at the end of any subsequent fiscal year such
Subsidiary would not meet the requirements set forth in the foregoing clause (a).

          “Indebtedness”: of any Person at any date, without duplication, (a) all indebtedness
of such Person for borrowed money, (b) all obligations of such Person for the deferred purchase
price of Property or services (other than trade payables incurred in the ordinary course of such
Person’s business), (c) all obligations of such Person evidenced by notes, bonds, debentures or
other similar instruments, (d) all indebtedness created or arising under any conditional sale or
other title retention agreement with respect to Property acquired by such

 

12

Person (even though the rights and remedies of the seller or lender under such agreement in
the event of default are limited to repossession or sale of such Property), (e) all Capital Lease
Obligations of such Person, (f) all obligations of such Person, contingent or otherwise, as an
account party or applicant under acceptance, letter of credit or similar facilities, (g) all
obligations of such Person, contingent or otherwise, to purchase, redeem, retire or otherwise
acquire for value (other than through the issuance of common stock of such Person) any Capital
Stock of such Person, other than any such obligations the payment of which would be permitted by
Section 7.6(c) or (d), (h) all Guarantee Obligations of such Person in respect of obligations of
the kind referred to in clauses (a) through (g) above; (i) all obligations of the kind referred to
in clauses (a) through (h) above secured by (or for which the holder of such obligation has an
existing right, contingent or otherwise, to be secured by) any Lien on Property (including, without
limitation, accounts and contract rights) owned by such Person, whether or not such Person has
assumed or become liable for the payment of such obligation and (j) for the purposes of Section
8(e) only, all obligations of such Person in respect of Hedge Agreements.

          “Indemnified Liabilities”: as defined in Section 10.5.

          “Indemnitee”: as defined in Section 10.5.

          “Indentures”: the collective reference to the Convertible Notes Indenture, the Senior
Notes Indenture and the Senior Floating Rate Notes Indenture.

          “Insolvency”: with respect to any Multiemployer Plan, the condition that such Plan is
insolvent within the meaning of Section 4245 of ERISA.

          “Insolvent”: pertaining to a condition of Insolvency.

          “Intellectual Property”: the collective reference to all rights, priorities and
privileges relating to intellectual property, whether arising under United States, multinational or
foreign laws or otherwise, including, without limitation, copyrights, copyright licenses, patents,
patent licenses, trademarks, trademark licenses, technology, know-how and processes, and all rights
to sue at law or in equity for any infringement or other impairment thereof, including the right to
receive all proceeds and damages therefrom.

          “Interest Payment Date”: (a) as to any Base Rate Loan, the last day of each March,
June, September and December to occur while such Loan is outstanding and the final maturity date of
such Loan, (b) as to any Eurodollar Loan having an Interest Period of three months or shorter, the
last day of such Interest Period, (c) as to any Eurodollar Loan having an Interest Period longer
than three months, each day that is three months, or a whole multiple thereof, after the first day
of such Interest Period and the last day of such Interest Period and (d) as to any Eurodollar Loan,
the date of any repayment or prepayment made in respect thereof.

          “Interest Period”: as to any Eurodollar Loan, (a) initially, the period commencing on
the borrowing or conversion date, as the case may be, with respect to such Eurodollar Loan and
ending one, two, three or six months thereafter, as selected by the Borrower in its notice of
borrowing or notice of conversion, as the case may be, given with respect thereto; and (b)
thereafter, each period commencing on the last day of the next preceding Interest Period applicable
to such Eurodollar Loan and ending one, two, three or six months thereafter, as

 

13

selected by the Borrower by irrevocable notice to the Administrative Agent not less than three
Business Days prior to the last day of the then current Interest Period with respect thereto;
provided that, all of the foregoing provisions relating to Interest Periods are subject to
the following:

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

(2) any Interest Period that would otherwise extend beyond the Termination Date
shall end on the Termination Date; and

(3) 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 end on the last Business Day of the
calendar month at the end of such Interest Period.

          “Investment”: with respect to any Person, any advance, loan, extension of credit (by
way of guaranty or otherwise) or capital contribution to, or purchase of any Capital Stock, bonds,
notes, debentures or other debt securities of, or any assets constituting an ongoing business from,
or any other investment in, any other Person.

          “ISP”: 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 of such Letter of Credit).

          “Issuing Lender”: (a) in respect of the Existing Letters of Credit only, the Existing
Issuing Lender and (b) in respect of each Letter of Credit issued hereunder on or after the Closing
Date, Bank of America, N.A. and any Lender from time to time designated by the Borrower as an
Issuing Lender with the consent of such Lender and the Administrative Agent.

          “L/C Commitment”: $60,000,000.

          “L/C Fee Payment Date”: the last day of each March, June, September and December and
the last day of the Commitment Period.

          “L/C Obligations”: at any time, an amount equal to the sum of (a) the aggregate then
undrawn and unexpired amount of the then outstanding Letters of Credit and (b) the aggregate amount
of drawings under Letters of Credit that have not then been reimbursed pursuant to Section 3.5.
For purposes of computing the undrawn amount of any Letter of Credit, such amount shall be
determined in accordance with Section 3.12. 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 undrawn, unexpired and outstanding in the amount so remaining available to be drawn.

 

14

          “L/C Participants”: with respect to any Letter of Credit, the collective reference to
all Lenders other than the Issuing Lender that issued such letter of Credit.

          “Lehman Entity”: any of Lehman Commercial Paper Inc. or any of its affiliates
(including Syndicated Loan Funding Trust).

          “Lender Addendum”: with respect to any initial Lender, a Lender Addendum,
substantially in the form of Exhibit I, to be executed and delivered by such Lender on the Closing
Date as provided in Section 10.17.

          “Lenders”: as defined in the preamble hereto.

          “Letters of Credit”: as defined in Section 3.1(a).

          “Lien”: any mortgage, pledge, hypothecation, collateral assignment, encumbrance, lien
(statutory or other), charge or other security interest of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title retention agreement and any
capital lease having substantially the same economic effect as any of the foregoing).

          “Loan Documents”: this Agreement, the Security Documents, the Applications and the
Notes.

          “Loan”: as defined in Section 2.1.

          “Loan Parties”: the Borrower and each Subsidiary Guarantor.

          “Lockbox Agreement”: in respect of each lockbox account, and related lockbox and
collection account, an agreement, in form and substance reasonably satisfactory to the
Administrative Agent and the Borrower, pursuant to which the bank that maintains such account and
the Borrower or the Subsidiary Guarantor, as the case may be, that is the named owner of such
account shall agree with the Administrative Agent (a) that such lockbox and accounts shall be used
solely for the collection and deposit of proceeds of Collateral, (b) that, upon notice from the
Administrative Agent, such bank shall transfer at the end of each business day all collected funds
in any such account to a Concentration Account and (c) the Administrative Agent agrees that it will
not give the notice described in the foregoing clause (b) unless an Event of Default has occurred
and is continuing. Each Lockbox Agreement shall contain such other terms as shall be customary for
agreements of such type.

          “Material Adverse Effect”: a material adverse effect on (a) the business, assets,
property or financial condition of the Borrower and its Subsidiaries taken as a whole or (b) the
validity or enforceability of any material provision of this Agreement or any of the other Loan
Documents or the material rights or remedies of the Agents or the Lenders hereunder or thereunder.

          “Material Subsidiary”: each Domestic Subsidiary that is not an Immaterial Subsidiary.

 

15

          “Materials of Environmental Concern”: any gasoline or petroleum (including crude oil
or any fraction thereof) or petroleum products, polychlorinated biphenyls, urea-formaldehyde
insulation, asbestos, pollutants, contaminants, radioactivity, and any other substances or forces
of any kind, whether or not any such substance or force is defined as hazardous or toxic under any
Environmental Law, that is regulated pursuant to or could give rise to liability under any
Environmental Law.

          “Maximum Rate”: as defined in Section 10.18.

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

          “Net Cash Proceeds”: in connection with any issuance or sale of debt securities or
instruments or the incurrence of loans, the cash proceeds received from such issuance or
incurrence, net of attorneys’ fees, investment banking fees, accountants’ fees, underwriting
discounts and commissions and other customary fees and expenses actually incurred in connection
therewith.

          “Non-Excluded Taxes”: as defined in Section 2.16(a).

          “Non-U.S. Lender”: as defined in Section 2.16(d).

          “Note”: any promissory note evidencing any Loan.

          “Obligations”: the unpaid principal of and interest on (including, without
limitation, interest accruing after the maturity of the Loans and Reimbursement Obligations and
interest accruing after the filing of any petition in bankruptcy, or the commencement of any
insolvency, reorganization or like proceeding, relating to the Borrower, whether or not a claim for
post-filing or post-petition interest is allowed in such proceeding) the Loans, the Reimbursement
Obligations and all other obligations and liabilities of the Borrower to the Administrative Agent
or to any Lender or any Qualified Counterparty, whether direct or indirect, absolute or contingent,
due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in
connection with, this Agreement, any other Loan Document, the Letters of Credit, any Bank Products
or any other document made, delivered or given in connection herewith or therewith, whether on
account of principal, interest, reimbursement obligations, fees, indemnities, costs, expenses
(including, without limitation, all fees, charges and disbursements of counsel to the
Administrative Agent or to any Lender that are required to be paid by the Borrower pursuant hereto)
or otherwise; provided, that (i) obligations of the Borrower or any Subsidiary under any
Bank Products shall be secured and guaranteed pursuant to the Security Documents only to the extent
that, and for so long as, the other Obligations are so secured and guaranteed and (ii) any release
of Collateral or Subsidiary Guarantors effected in the manner permitted by this Agreement shall not
require the consent of holders of obligations under Bank Products.

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

 

16

          “Participant”: as defined in Section 10.6(b).

          “Participation Amount”: as defined in Section 3.4(b).

          “Paying Subsidiary”: as defined in Section 7.6(a).

          “Payment Office”: the office specified from time to time by the Administrative Agent
as its payment office by notice to the Borrower and the Lenders.

          “PBGC”: the Pension Benefit Guaranty Corporation established pursuant to Subtitle A
of Title IV of ERISA (or any successor).

          “Percentage”: as to any Lender at any time, the percentage which such Lender’s
Commitment then constitutes of the Total Commitments (or, at any time after the Commitments shall
have expired or terminated, the percentage which the aggregate amount of such Lender’s Extensions
of Credit then outstanding constitutes of the amount of the Total Extensions of Credit then
outstanding).

          “Permitted Liens”: any Liens permitted by paragraphs (a), (b), (c), (d) and (e) of
Section 7.3.

          “Person”: an individual, partnership, corporation, limited liability company,
business trust, joint stock company, trust, unincorporated association, joint venture, Governmental
Authority or other entity of whatever nature.

          “Plan”: at a particular time, any employee benefit plan that is covered by ERISA and
in respect of which the Borrower or a Commonly Controlled Entity is (or, if such plan were
terminated at such time, would under Section 4069 of ERISA be deemed to be) an “employer” as
defined in Section 3(5) of ERISA.

          “Pricing Grid”: the pricing grid attached hereto as Annex A.

          “Projections”: as defined in Section 6.2(c).

          “Property”: any right or interest in or to property of any kind whatsoever, whether
real, personal or mixed and whether tangible or intangible, including, without limitation, Capital
Stock.

          “Quail Tools”: Quail Tools, L.P. an Oklahoma limited partnership.

          “Qualified Counterparty”: with respect to any Specified Hedge Agreement, any
counterparty thereto that, at the time such Specified Hedge Agreement was entered into, was a
Lender or an affiliate of a Lender.

          “Refinancing Debt”: any Indebtedness permitted by clause (II) of Section 7.2(d).

          “Register”: as defined in Section 10.6(d).

          “Regulation U”: Regulation U of the Board as in effect from time to time.

 

17

          “Reimbursement Obligation”: the obligation of the Borrower to reimburse each Issuing
Lender pursuant to Section 3.5 for amounts drawn under Letters of Credit issued by such Issuing
Lender.

          “Related Fund”: with respect to any Lender, any fund that (x) invests in commercial
loans and (y) is managed or advised by the same investment advisor or an affiliate thereof as such
Lender, by such Lender or an Affiliate of such Lender.

          “Rental Equipment”: as defined in Schedule 1.1.

          “Reorganization”: with respect to any Multiemployer Plan, the condition that such
plan is in reorganization within the meaning of Section 4241 of ERISA.

          “Reportable Event”: any of the events set forth in Section 4043(c) of ERISA, other
than those events as to which the thirty day notice period is waived under subsections .27, .28,
..29, .30, .31, .32, .34 or .35 of PBGC Reg. § 4043.

          “Required Lenders”: at any time, the holders of more than 50% of the Total
Commitments then in effect or, if the Commitments have been terminated, the Total Extensions of
Credit then outstanding.

          “Requirement of Law”: as to any Person, the Certificate of Incorporation and By-Laws
or other organizational or governing documents of such Person, and any law, treaty, rule or
regulation or determination of an arbitrator or a court or other Governmental Authority, in each
case applicable to or binding upon such Person or any of its Property or to which such Person or
any of its Property is subject.

          “Responsible Officer”: the chief executive officer, president, chief financial
officer, controller or treasurer of the Borrower, but in any event, with respect to financial
matters, the chief financial officer of the Borrower.

          “Restricted Payments”: as defined in Section 7.6.

          “SEC”: the Securities and Exchange Commission (or successors thereto or an analogous
Governmental Authority).

          “Secured Parties”: as defined in the Guarantee and Collateral Agreement.

          “Security Documents”: the collective reference to the Guarantee and Collateral
Agreement, the Lockbox Agreements, the Control Agreements, the Acknowledgment and Confirmation and
all other security documents hereafter delivered to the Administrative Agent granting a Lien on any
Property of any Person to secure the obligations and liabilities of any Loan Party under any Loan
Document.

          “Senior Floating Rate Notes”: the $100,000,000 aggregate principal amount of senior
floating rate notes of the Borrower issued pursuant to the Senior Floating Rate Notes Indenture.

 

18

          “Senior Floating Rate Notes Indenture”: the Indenture, dated as of September 2, 2004,
in respect of the Senior Floating Rate Notes, together with all instruments and other agreements
entered into by the Borrower or its Subsidiaries in connection therewith, as the same may be
amended, supplemented or otherwise modified from time to time in accordance with Section 7.7.

          “Senior Notes”: the $225,000,000 aggregate principal amount of senior unsecured notes
of the Borrower issued pursuant to the Senior Notes Indenture.

          “Senior Notes Indenture”: the Indenture, dated as of October 10, 2003, in respect of
the Senior Notes, together with all instruments and other agreements entered into by the Borrower
or such Subsidiaries in connection therewith, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with Section 7.7.

          “Single Employer Plan”: any Plan that is covered by Title IV of ERISA, but which is
not a Multiemployer Plan.

          “Solvent”: with respect to any Person, as of any date of determination, (a) the
amount of the “present fair saleable value” of the assets of such Person will, as of such date,
exceed the amount of all “liabilities of such Person, contingent or otherwise”, as of such date, as
such quoted terms are determined in accordance with applicable federal and state laws governing
determinations of the insolvency of debtors, (b) the present fair saleable value of the assets of
such Person will, as of such date, be greater than the amount that will be required to pay the
probable liability of such Person on its debts as such debts become absolute and matured, (c) such
Person will not have, as of such date, an unreasonably small amount of capital with which to
conduct its business, and (d) such Person will be able to pay its debts as they mature. For
purposes of this definition, (i) “debt” means liability on a “claim”, and (ii) “claim” means any
(x) right to payment, whether or not such a right is reduced to judgment, liquidated, unliquidated,
fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured
or (y) right to an equitable remedy for breach of performance if such breach gives rise to a right
to payment, whether or not such right to an equitable remedy is reduced to judgment, fixed,
contingent, matured or unmatured, disputed, undisputed, secured or unsecured.

          “Specified Change of Control”: a “Change of Control”, or like event, as defined in
any of the Indentures.

          “Specified Hedge Agreement”: any Hedge Agreement entered into by the Borrower or any
Subsidiary Guarantor and any Qualified Counterparty which has been designated as a Specified Hedge
Agreement pursuant to a notice given by the Borrower and such Qualified Counterparty to the
Administrative Agent within 60 days after such Hedge Agreement is entered into.

          “Specified Personal Property”: any Property of a type in which a security interest is
purported to be granted pursuant to the Guarantee and Collateral Agreement.

          “Subsidiary”: as to any Person, a corporation, partnership, limited liability company
or other entity of which shares of stock or other ownership interests having ordinary voting power
(other than stock or such other ownership interests having such power only by

 

19

reason of the happening of a contingency) to elect a majority of the board of directors or
other managers of such corporation, partnership or other entity are at the time owned or otherwise
controlled, directly or indirectly through one or more intermediaries, or both, by such Person.
Unless otherwise qualified, all references to a “Subsidiary” or to “Subsidiaries” in this Agreement
shall refer to a Subsidiary or Subsidiaries of the Borrower.

          “Subsidiary Guarantor”: (i) each Material Subsidiary of the Borrower other than any
Excluded Subsidiary and (ii) Quail USA, LLC.

          “Supporting Letter of Credit”: as defined in Section 3.10.

          “Termination Date”: September 20, 2012.

          “Total Commitments”: at any time, the aggregate amount of the Commitments then in
effect.

          “Total Extensions of Credit”: at any time, the aggregate amount of the Extensions of
Credit of the Lenders outstanding at such time.

          “Transferee”: as defined in Section 10.15.

          “Type”: as to any Loan, its nature as a Base Rate Loan or a Eurodollar Loan.

          “Wholly Owned Subsidiary”: as to any Person, any other Person all of the Capital
Stock of which (other than directors’ qualifying shares required by law) is owned by such Person
directly and/or through other Wholly Owned Subsidiaries.

          “Wholly Owned Subsidiary Guarantor”: any Subsidiary Guarantor that is a Wholly Owned
Subsidiary of the Borrower.

          1.2 Other Definitional Provisions. (a) Unless otherwise specified therein, all terms defined in this Agreement shall have the
defined meanings when used in the other Loan Documents or any certificate or other document made or
delivered pursuant hereto or thereto.

          (b) As used herein and in the other Loan Documents, and any certificate or other document made
or delivered pursuant hereto or thereto, accounting terms relating to the Borrower and its
Subsidiaries not defined in Section 1.1 and accounting terms partly defined in Section 1.1, to the
extent not defined, shall have the respective meanings given to them under GAAP.

          (c) The words “hereof”, “herein” and “hereunder” and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular provision of this
Agreement, and Section, Schedule and Exhibit references are to this Agreement unless otherwise
specified.

          (d) The meanings given to terms defined herein shall be equally applicable to both the
singular and plural forms of such terms.

 

20

          (e) All calculations of financial ratios set forth in Section 7.1 and the calculation of the
Consolidated Leverage Ratio for purposes of determining the Applicable Margin shall be calculated
to the same number of decimal places as the relevant ratios are expressed in and shall be rounded
upward if the number in the decimal place immediately following the last calculated decimal place
is five or greater. For example, if the relevant ratio is to be calculated to the hundredth
decimal place and the calculation of the ratio is 5.126, the ratio will be rounded up to 5.13.

SECTION 2. AMOUNT AND TERMS OF COMMITMENTS

          2.1 Commitments. (a) Subject to the terms and conditions hereof, the Lenders severally agree to make
revolving credit loans (“Loans”) to the Borrower from time to time during the Commitment
Period in an aggregate principal amount at any one time outstanding for each Lender which, when
added to such Lender’s Percentage of the L/C Obligations then outstanding, does not exceed the
amount of such Lender’s Commitment; provided that after giving effect to the making of each
Loan and the immediate application of the proceeds thereof, the Total Extensions of Credit shall
not exceed the Borrowing Base at such time. During the Commitment Period the Borrower may use the
Commitments by borrowing, prepaying the Loans in whole or in part, and reborrowing, all in
accordance with the terms and conditions hereof. The Loans may from time to time be Eurodollar
Loans or Base Rate Loans, as determined by the Borrower and notified to the Administrative Agent in
accordance with Sections 2.2 and 2.9, provided that no Loan shall be made as a Eurodollar
Loan after the day that is one month prior to the Termination Date.

          (b) The Borrower shall repay all outstanding Loans on the Termination Date.

          2.2 Procedure for Borrowing. The Borrower may borrow under the Commitments on any Business Day during the Commitment
Period, provided that the Borrower shall deliver to the Administrative Agent a Borrowing
Notice (which Borrowing Notice must be received by the Administrative Agent prior to 12:00 Noon,
New York City time, (a) three Business Days prior to the requested Borrowing Date in the case of
Eurodollar Loans, or (b) one Business Day prior to the requested Borrowing Date in the case of Base
Rate Loans. Each borrowing of Loans that are Eurodollar Loans shall be in an amount equal to
$500,000 or a whole multiple of $100,000 in excess thereof. Upon receipt of any such Borrowing
Notice from the Borrower, the Administrative Agent shall promptly notify each Lender thereof. Each
Lender will make its Percentage of the amount of each borrowing of Loans available to the
Administrative Agent for the account of the Borrower at the Funding Office prior to 3:00 P.M., New
York City time, on the Borrowing Date requested by the Borrower in funds immediately available to
the Administrative Agent. Such borrowing will then be made available to the Borrower by the
Administrative Agent in like funds as received by the Administrative Agent.

          2.3 Borrowing Base Calculations; Inclusion of Assets in Borrowing Base.
(a) At any time when the Total Extensions of Credit equal or exceed $40,000,000, based on
the most recent Borrowing Base Certificate delivered by the Borrower to the Administrative Agent,
the Administrative Agent shall in its good faith credit judgment determine which Accounts and
Rental Equipment shall be “Eligible Accounts” and “Eligible Rental Equipment,” respectively, for
purposes of this Agreement, utilizing the criteria set forth on Schedule 1.1.

 

21

          (b)Concurrently with delivery by the Borrower to the Administrative Agent of (i) any notice
pursuant to the definition of “Specified Hedge Agreement” in Section 1.1 designating any Hedge
Agreement as a “Specified Hedge Agreement” and (ii) any Borrowing Base Certificate, the Borrower
will deliver to the Administrative Agent a report from the relevant counterparty setting forth the
“mark-to-market” value of such Hedge Agreement, determined in accordance with procedures customary
in the relevant market. The Administrative Agent will calculate from time to time the net amount
of the “mark-to-market” values of all Specified Hedge Agreements on the basis of such counterparty
report, and if such net amount is unfavorable to the Borrower (i.e., the Borrower would owe a net
amount under all Specified Hedge Agreements if all Specified Hedge Agreements were terminated on
such date), the Administrative Agent will establish a reserve for purposes of calculating the
Borrowing Base pursuant to Schedule 1.1 in an amount equal to such net unfavorable amount, and will
maintain such reserve until the next determination by the Administrative Agent pursuant to this
paragraph.

          2.4 Repayment of Loans; Evidence of Debt. (a) The Borrower hereby unconditionally
promises to pay to the Administrative Agent for the account of the appropriate Lender (i) the then
unpaid principal amount of each Loan of such Lender on the Termination Date (or on such earlier
date on which the Loans become due and payable pursuant to Section 8). The Borrower hereby further
agrees to pay interest on the unpaid principal amount of the Loans from time to time outstanding
from the date hereof until payment in full thereof at the rates per annum, and on the dates, set
forth in Section 2.11. The Borrower agrees that, if an Event of Default shall have occurred and is
continuing, the Administrative Agent may (and the Administrative Agent hereby agrees that it shall)
(i) cause each bank that maintains any account subject to a Control Agreement or a Lockbox
Agreement to transfer, on a daily basis, all collected funds in any such account to a Concentration
Account and (ii) apply any amounts on deposit in a Concentration Account to repay Loans whenever
any Loans are outstanding.

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

          (c) The Administrative Agent, on behalf of the Borrower, shall maintain the Register pursuant
to Section 10.6(d), and a subaccount therein for each Lender, in which shall be recorded (i) the
amount of each Loan made hereunder and any Note evidencing such Loan, the Type of such Loan and
each Interest Period applicable thereto, (ii) the amount of any principal or interest due and
payable or to become due and payable from the Borrower to each Lender hereunder and (iii) both the
amount of any sum received by the Administrative Agent hereunder from the Borrower and each
Lender’s share thereof.

          (d) The entries made in the Register and the accounts of each Lender maintained pursuant to
Section 2.4(b) shall, to the extent permitted by applicable law, be prima facie evidence of the
existence and amounts of the obligations of the Borrower therein recorded;
provided, however, that the failure of any Lender or the Administrative Agent to maintain the
Register or any such account, or any error therein, shall not in any manner affect the obligation
of the Borrower to repay (with applicable interest) the Loans made to the Borrower by such Lender
in accordance with the terms of this Agreement.

 

22

          (e) The Borrower agrees that, upon the request to the Administrative Agent by any Lender, the
Borrower will promptly execute and deliver to such Lender a promissory note of the Borrower
evidencing any Loans of such Lender, substantially in the form of Exhibit F (a “Note”), with
appropriate insertions as to date and principal amount; provided, that delivery of Notes
shall not be a condition precedent to the occurrence of the Closing Date or the making of the
extensions of credit on the Closing Date.

          2.5 Commitment Fees, etc. (a) The Borrower agrees to pay to the Administrative Agent for
the account of each Lender, a commitment fee for the period from and including the Closing Date to
the last day of the Commitment Period, computed at the Commitment Fee Rate on the average daily
amount of the Available Commitment of such Lender during the period for which payment is made.

          (b) The Borrower agrees to pay to the Administrative Agent the fees in the amounts and on the
dates from time to time agreed to in writing by the Borrower and the Administrative Agent.

          2.6 Termination or Reduction of Credit Commitments. The Borrower shall have the right,
upon not less than three Business Days’ notice to the Administrative Agent, to terminate the
Commitments or, from time to time, to reduce the aggregate amount of the Commitments;
provided that no such termination or reduction of Commitments shall be permitted if, after
giving effect thereto and to any prepayments of the Loans made on the effective date thereof, the
Total Extensions of Credit would exceed the Total Commitments. Any such reduction shall be in an
amount equal to $1,000,000, or a whole multiple thereof, and shall reduce permanently the
Commitments then in effect.

          2.7 Optional Prepayments. The Borrower may at any time and from time to time prepay the
Loans, in whole or in part, without premium or penalty (except as otherwise provided herein), upon
irrevocable notice delivered to the Administrative Agent at least three Business Days prior thereto
in the case of Eurodollar Loans and at least one Business Day prior thereto in the case of Base
Rate Loans, which notice shall specify the date and amount of such prepayment and whether such
prepayment is of Eurodollar Loans or Base Rate Loans; provided, that if a Eurodollar Loan
is prepaid on any day other than the last day of the Interest Period applicable thereto, the
Borrower shall also pay any amounts owing pursuant to Section 2.17. Upon receipt of any such
notice the Administrative Agent shall promptly notify each relevant Lender thereof. If any such
notice is given, the amount specified in such notice shall be due and payable on the date specified
therein, together with (except in the case of Base Rate Loans) accrued interest to
such date on the amount prepaid. Partial prepayments of Loans shall be in an aggregate
principal amount of $1,000,000 or a whole multiple thereof.

          2.8 Mandatory Prepayments. If, at any time during the Commitment Period, the amount of
the Total Extensions of Credit exceeds the lesser of (i) the Borrowing Base and (ii) the Total
Commitments then in effect (whether as a result of the sale of, or any casualty or condemnation
with respect to, assets included in the Borrowing Base or otherwise), the Borrower shall, without
notice or demand, prepay, in accordance with this Section, the Loans in an aggregate principal
amount equal to such excess, together (except in the case of Base Rate Loans) with interest accrued
to the date of such payment or prepayment; provided that if the

 

23

aggregate principal amount
of Loans then outstanding is less than the amount of such excess (because L/C Obligations
constitute a portion thereof), the Borrower shall, to the extent of the balance of such excess,
cash collateralize outstanding Letters of Credit in the manner described in Section 3.10(ii).

          2.9 Conversion and Continuation Options. (a) The Borrower may elect from time to time to
convert Eurodollar Loans to Base Rate Loans by giving the Administrative Agent at least two
Business Days’ prior irrevocable notice of such election, provided that any such conversion
of Eurodollar Loans may be made only on the last day of an Interest Period with respect thereto.
The Borrower may elect from time to time to convert Base Rate Loans to Eurodollar Loans by giving
the Administrative Agent at least three Business Days’ prior irrevocable notice of such election
(which notice shall specify the length of the initial Interest Period therefor), provided
that no Base Rate Loan may be converted into a Eurodollar Loan (i) when any Event of Default has
occurred and is continuing and the Administrative Agent has, or the Required Lenders have,
determined in its or their sole discretion not to permit such conversions or (ii) after the date
that is one month prior to the Termination Date. Upon receipt of any such notice the
Administrative Agent shall promptly notify each relevant Lender thereof.

          (b) The Borrower may elect to continue any Eurodollar Loan as such upon the expiration of the
then current Interest Period with respect thereto by giving irrevocable notice to the
Administrative Agent, in accordance with the applicable provisions of the term “Interest Period”
set forth in Section 1.1, of the length of the next Interest Period to be applicable to such Loans,
provided that no Eurodollar Loan may be continued as such (i) when any Event of Default has
occurred and is continuing and the Administrative Agent has, or the Required Lenders have,
determined in its or their sole discretion not to permit such continuations or (ii) after the date
that is one month prior to the Termination Date, and provided, further, that if the
Borrower shall fail to give any required notice as described above in this paragraph or if such
continuation is not permitted pursuant to the preceding proviso, such Loans shall be converted
automatically to Base Rate Loans on the last day of such then expiring Interest Period. Upon
receipt of any such notice the Administrative Agent shall promptly notify each relevant Lender
thereof.

          2.10
Minimum Amounts and Maximum Number of Eurodollar Tranches.
Notwithstanding anything to the contrary in this Agreement, all borrowings, conversions,
continuations and optional prepayments of Eurodollar Loans and all selections of Interest Periods
shall be in such amounts and be made pursuant to such elections so that, (a) after giving effect
thereto, the aggregate principal amount of the Eurodollar Loans comprising each Eurodollar Tranche
shall be equal to $5,000,000 or a whole multiple of $1,000,000 in excess thereof and (b) no more
than five Eurodollar Tranches shall be outstanding at any one time.

          2.11 Interest Rates and Payment Dates. (a) Each Eurodollar Loan shall bear interest for
each day during each Interest Period with respect thereto at a rate per annum equal to the
Eurodollar Rate determined for such day plus the Applicable Margin in effect for such day.

          (b) Each Base Rate Loan shall bear interest for each day on which it is outstanding at a rate
per annum equal to the Base Rate in effect for such day plus the Applicable Margin in effect for
such day.

 

24

          (c) (i) If all or a portion of the principal amount of any Loan or Reimbursement Obligation
shall not be paid when due (whether at the stated maturity, by acceleration or otherwise), all
outstanding Loans and Reimbursement Obligations (whether or not overdue) (to the extent legally
permitted) shall bear interest at a rate per annum that is equal to (x) in the case of the Loans,
the rate that would otherwise be applicable thereto pursuant to the foregoing provisions of this
Section plus 2% or (y) in the case of Reimbursement Obligations, the rate applicable to Base Rate
Loans plus 2%, and (ii) if all or a portion of any interest payable on any Loan or Reimbursement
Obligation or any commitment fee or other amount payable hereunder shall not be paid when due
(whether at the stated maturity, by acceleration or otherwise), such overdue amount shall bear
interest at a rate per annum equal to the rate then applicable to Base Rate Loans plus 2%, in each
case, with respect to clauses (i) and (ii) above, from the date of such non-payment until such
amount is paid in full (after as well as before judgment).

          (d) Interest shall be payable in arrears on each Interest Payment Date, provided that interest
accruing pursuant to paragraph (c) of this Section shall be payable from time to time on demand.

          2.12 Computation of Interest and Fees. (a) Interest, fees, commissions payable pursuant
hereto shall be calculated on the basis of a 360-day year for the actual days elapsed, except that,
with respect to Base Rate Loans on which interest is calculated on the basis of the Prime Rate, the
interest thereon shall be calculated on the basis of a 365- (or 366-, as the case may be) day year
for the actual days elapsed. The Administrative Agent shall as soon as practicable notify the
Borrower and the relevant Lenders of each determination of a Eurodollar Rate. Any change in the
interest rate on a Loan resulting from a change in the Base Rate or the Eurocurrency Reserve
Requirements shall become effective as of the opening of business on the day on which such change
becomes effective. The Administrative Agent shall as soon as practicable notify the Borrower and
the relevant Lenders of the effective date and the amount of each such change in interest rate.

          (b) Each determination of an interest rate by the Administrative Agent pursuant to any
provision of this Agreement shall be conclusive and binding on the Borrower and the Lenders in the
absence of manifest error. The Administrative Agent shall, at the request of the Borrower, deliver
to the Borrower a statement showing the quotations used by the Administrative Agent in determining
any interest rate pursuant to Section 2.12(a).

          2.13 Inability to Determine Interest Rate. If prior to the first day of any Interest
Period:

          (a) the Administrative Agent shall have determined (which determination shall be conclusive
and binding upon the Borrower) that, by reason of circumstances affecting the relevant market,
adequate and reasonable means do not exist for ascertaining the Eurodollar Rate for such Interest
Period, or

          (b) the Administrative Agent shall have received notice from the Required Lenders that the
Eurodollar Rate determined or to be determined for such Interest Period will not adequately and
fairly reflect the cost to such Lenders (as conclusively certified by such Lenders) of making or
maintaining their affected Loans during such Interest Period,

 

25

the Administrative Agent shall give telecopy or telephonic notice thereof to the Borrower and the
relevant Lenders as soon as practicable thereafter. If such notice is given (x) any Eurodollar
Loans requested to be made on the first day of such Interest Period shall be made as Base Rate
Loans, (y) any Loans that were to have been converted on the first day of such Interest Period to
Eurodollar Loans shall be continued as Base Rate Loans and (z) any outstanding Eurodollar Loans
shall be converted, on the last day of the then current Interest Period with respect thereto, to
Base Rate Loans. Until such notice has been withdrawn by the Administrative Agent, no further
Eurodollar Loans shall be made or continued as such, nor shall the Borrower have the right to
convert Loans to Eurodollar Loans.

          2.14 Pro Rata Treatment and Payments. (a) Each borrowing by the Borrower from the Lenders
hereunder, each payment by the Borrower on account of any commitment fee or Letter of Credit fee,
and any reduction of the Commitments of the Lenders, shall be made pro rata
according to the respective Percentages of the Lenders.

          (b) Each payment (including each prepayment) by the Borrower on account of principal of and
interest on the Loans shall be made pro rata according to the respective
outstanding principal amounts of the Loans then held by the Lenders. Each payment in respect of
Reimbursement Obligations in respect of any Letter of Credit shall be made to the Issuing Lender
that issued such Letters of Credit.

          (c) The application of any payment of Loans (including optional and mandatory prepayments)
shall be made, first, to Base Rate Loans and, second, to Eurodollar Loans. Each
payment of the Loans (except in the case of Base Rate Loans) shall be accompanied by accrued
interest to the date of such payment on the amount paid.

          (d) All payments (including prepayments) to be made by the Borrower hereunder, whether on
account of principal, interest, fees or otherwise, shall be made without setoff or counterclaim and
shall be made prior to 12:00 Noon, New York City time, on the due date thereof to the
Administrative Agent, for the account of the relevant Lenders, at the Payment Office, in Dollars
and in immediately available funds. Any payment made by the Borrower after 12:00 Noon, New York
City time, on any Business Day shall be deemed to have been on the next following Business Day. The
Administrative Agent shall distribute such payments to the Lenders promptly upon receipt in like
funds as received. If any payment hereunder (other than payments on the Eurodollar Loans) becomes
due and payable on a day other than a Business Day, such payment shall be extended to the next
succeeding Business Day. If any payment on a Eurodollar Loan becomes due and payable on a day
other than a Business Day, the maturity thereof shall be extended to the next succeeding Business
Day unless the result of such extension would be to extend such payment into another calendar
month, in which event such payment shall be made on the immediately preceding Business Day. In the
case of any extension of any payment of principal pursuant to the preceding two sentences, interest
thereon shall be payable at the then applicable rate during such extension.

          (e) Unless the Administrative Agent shall have been notified in writing by any Lender prior to
a borrowing that such Lender will not make the amount that would constitute its share of such
borrowing available to the Administrative Agent, the Administrative Agent may assume that such
Lender is making such amount available to the Administrative Agent, and the

 

26

Administrative Agent
may, in reliance upon such assumption, make available to the Borrower a corresponding amount. If
such amount is not made available to the Administrative Agent by the required time on the Borrowing
Date therefor, such Lender shall pay to the Administrative Agent, on demand, such amount with
interest thereon at a rate equal to the daily average Federal Funds Effective Rate for the period
until such Lender makes such amount immediately available to the Administrative Agent. A
certificate of the Administrative Agent submitted to any Lender with respect to any amounts owing
under this paragraph shall be conclusive in the absence of manifest error. If such Lender’s share
of such borrowing is not made available to the Administrative Agent by such Lender within three
Business Days after such Borrowing Date, the Administrative Agent shall also be entitled to recover
such amount with interest thereon at the rate per annum applicable to Base Rate Loans, on demand,
from the Borrower.

          (f) Unless the Administrative Agent shall have been notified in writing by the Borrower prior
to the date of any payment due to be made by the Borrower hereunder that the Borrower will not make
such payment to the Administrative Agent, the Administrative Agent may assume that the Borrower is
making such payment, and the Administrative Agent may, but shall not be required to, in reliance
upon such assumption, make available to the Lenders their respective pro rata
shares of a corresponding amount. If such payment is not made to the Administrative Agent by the
Borrower within three Business Days after such due date, the Administrative Agent shall be entitled
to recover, on demand, from each Lender to which any amount which was made available pursuant to
the preceding sentence, such amount with interest thereon at the rate per annum equal to the daily
average Federal Funds Effective Rate. Nothing herein shall be deemed to limit the rights of the
Administrative Agent or any Lender against the Borrower.

          (g) Notwithstanding any other provision of this Agreement or any other Loan Document, any
proceeds of any foreclosure or other realization by the Administrative Agent in respect of any
Collateral shall be applied as provided in the Guarantee and Collateral Agreement.

          2.15 Requirements of Law. (a) If the adoption of or any change in any Requirement of Law
or in the interpretation or application thereof or compliance by any Lender with any request or
directive (whether or not having the force of law) from any central bank or other Governmental
Authority made subsequent to the date hereof:

	 	(i)	 	shall subject any Lender to any tax of any kind
whatsoever with respect to this Agreement, any Letter of Credit, any
Application or any Eurodollar Loan made by it, or change the basis of
taxation of payments to such Lender in respect thereof (except for
Non-Excluded Taxes covered by Section 2.16 and changes in the rate of
tax on the overall net income of such Lender);
	 
	 	(ii)	 	shall impose, modify or hold applicable any
reserve, special deposit, compulsory loan or similar requirement
against assets held by, deposits or other liabilities in or for the
account of, advances, loans or other extensions of credit by, or any
other acquisition of funds by, any office of such Lender that is not
otherwise included in the determination of the Eurodollar Rate
hereunder; or

 

27

	 	(iii)	 	shall impose on such Lender any other
condition;

and the result of any of the foregoing is to increase the cost to such Lender, by an amount which
such Lender deems to be material, of making, converting into, continuing or maintaining Eurodollar
Loans or issuing or participating in Letters of Credit, or to reduce any amount receivable
hereunder in respect thereof, then, in any such case, the Borrower shall promptly pay such Lender,
upon its demand, any additional amounts necessary to compensate such Lender for such increased cost
or reduced amount receivable. If any Lender becomes entitled to claim any additional amounts
pursuant to this Section, it shall promptly notify the Borrower (with a copy to the Administrative
Agent) of the event by reason of which it has become so entitled.

          (b) If any Lender shall have determined that the adoption of or any change in any Requirement
of Law regarding capital adequacy or in the interpretation or application thereof or compliance by
such Lender or any corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental Authority made
subsequent to the date hereof shall have the effect of reducing the rate of return on such Lender’s
or such corporation’s capital as a consequence of its obligations hereunder or under or in respect
of any Letter of Credit to a level below that which such Lender or such corporation could have
achieved but for such adoption, change or compliance (taking into consideration such Lender’s or
such corporation’s policies with respect to capital adequacy) by an amount deemed by such Lender to
be material, then from time to time, after submission by such Lender to the Borrower (with a copy
to the Administrative Agent) of a written request
therefor, the Borrower shall pay to such Lender such additional amount or amounts as will
compensate such Lender or such corporation for such reduction.

          (c) A certificate as to any additional amounts payable pursuant to this Section submitted by
any Lender to the Borrower (with a copy to the Administrative Agent) shall be conclusive in the
absence of manifest error. The obligations of the Borrower pursuant to this Section shall survive
the termination of this Agreement and the payment of the Loans and all other amounts payable
hereunder.

          2.16 Taxes. (a) All payments made by the Borrower under this Agreement shall be made free
and clear of, and without deduction or withholding for or on account of, any present or future
income, stamp or other taxes, levies, imposts, duties, charges, fees, deductions or withholdings,
now or hereafter imposed, levied, collected, withheld or assessed by any Governmental Authority,
excluding net income taxes and franchise taxes imposed on any Agent or any Lender as a result of a
present or former connection between such Agent or such Lender and the jurisdiction of the
Governmental Authority imposing such tax or any political subdivision or taxing authority thereof
or therein (other than any such connection arising solely from such Agent’s or such Lender’s having
executed, delivered or performed its obligations or received a payment under, or enforced, this
Agreement or any other Loan Document). If any such non-excluded taxes, levies, imposts, duties,
charges, fees, deductions or withholdings (“Non-Excluded Taxes”) or any Other Taxes are
required to be withheld from any amounts payable to any Agent or any Lender hereunder, the amounts
so payable to such Agent or such Lender shall be increased to the extent necessary to yield to such
Agent or such Lender (after payment of all Non-Excluded Taxes and Other Taxes) interest or any such
other amounts payable hereunder at the rates or in the amounts specified in this Agreement;
provided, however,

 

28

that the Borrower shall not be required to increase any such
amounts payable to any Lender with respect to any Non-Excluded Taxes (i) that are attributable to
such Lender’s failure to comply with the requirements of paragraph (d) or (e) of this Section or
(ii) that are United States withholding taxes imposed on amounts payable to such Lender at the time
such Lender becomes a party to this Agreement, except to the extent that such Lender’s assignor (if
any) was entitled, at the time of assignment, to receive additional amounts from the Borrower with
respect to such Non-Excluded Taxes pursuant to this paragraph (a).

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

          (c) Whenever any Non-Excluded Taxes or Other Taxes are payable by the Borrower, as promptly as
possible thereafter the Borrower shall send to the Administrative Agent for the account of the
relevant Agent or Lender, as the case may be, a certified copy of an original official receipt
received by the Borrower showing payment thereof. If the Borrower fails to pay any Non-Excluded
Taxes or Other Taxes when due to the appropriate taxing authority or fails to remit to the
Administrative Agent the required receipts or other required documentary evidence, the Borrower
shall indemnify the Administrative Agent and the Lenders for any incremental taxes, interest or
penalties that may become payable by the Administrative Agent or any Lender as a result of any such
failure. The agreements in this Section shall survive
the termination of this Agreement and the payment of the Loans and all other amounts payable
hereunder.

          (d) Each Lender (or Transferee) that is not a citizen or resident of the United States of
America, a corporation, partnership or other entity created or organized in or under the laws of
the United States of America (or any jurisdiction thereof), or any estate or trust that is subject
to federal income taxation regardless of the source of its income (a “Non-U.S. Lender”)
shall deliver to the Borrower and the Administrative Agent (or, in the case of a Participant, to
the Lender from which the related participation shall have been purchased) two copies of either
U.S. Internal Revenue Service Form W-8BEN or Form W-8ECI, or, in the case of a Non-U.S. Lender
claiming exemption from U.S. federal withholding tax under Section 871(h) or 881(c) of the Code
with respect to payments of “portfolio interest” a statement substantially in the form of Exhibit H
and a Form W-8BEN, or any subsequent versions thereof or successors thereto properly completed and
duly executed by such Non-U.S. Lender claiming complete exemption from, or a reduced rate of, U.S.
federal withholding tax on all payments by the Borrower under this Agreement and the other Loan
Documents. Such forms shall be delivered by each Non-U.S. Lender on or before the date it becomes
a party to this Agreement (or, in the case of any Participant, on or before the date such
Participant purchases the related participation). In addition, each Non-U.S. Lender shall deliver
such forms promptly upon the obsolescence or invalidity of any form previously delivered by such
Non-U.S. Lender. Each Non-U.S. Lender shall promptly notify the Borrower at any time it determines
that it is no longer in a position to provide any previously delivered certificate to the Borrower
(or any other form of certification adopted by the U.S. taxing authorities for such purpose).
Notwithstanding any other provision of this paragraph, a Non-U.S. Lender shall not be required to
deliver any form pursuant to this paragraph that such Non-U.S. Lender is not legally able to
deliver.

 

29

          (e) A Lender that is entitled to an exemption from or reduction of non-U.S. withholding tax
under the law of the jurisdiction in which the Borrower is located, or any treaty to which such
jurisdiction is a party, with respect to payments under this Agreement shall deliver to the
Borrower (with a copy to the Administrative Agent), at the time or times prescribed by applicable
law or reasonably requested by the Borrower, such properly completed and executed documentation
prescribed by applicable law as will permit such payments to be made without withholding or at a
reduced rate, provided that such Lender is legally entitled to complete, execute and
deliver such documentation and in such Lender’s reasonable judgment such completion, execution or
submission would not materially prejudice the legal position of such Lender.

          2.17 Indemnity. The Borrower agrees to indemnify each Lender for, and to hold each Lender
harmless from, any loss (other than loss of anticipated profits) or expense that such Lender may
sustain or incur as a consequence of (a) default by the Borrower in making a borrowing of,
conversion into or continuation of Eurodollar Loans after the Borrower has given a notice
requesting the same in accordance with the provisions of this Agreement, (b) default by the
Borrower in making any prepayment of Eurodollar Loans after the Borrower has given a notice thereof
in accordance with the provisions of this Agreement or (c) the making of a prepayment or conversion
of Eurodollar Loans on a day that is not the last day of an Interest Period with respect
thereto. A certificate as to any amounts payable pursuant to this Section submitted to the
Borrower by any Lender shall be conclusive in the absence of manifest error. This covenant shall
survive the termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.

          2.18 Illegality. Notwithstanding any other provision herein, if the adoption of or any
change in any Requirement of Law or in the interpretation or application thereof shall make it
unlawful for any Lender to make or maintain Eurodollar Loans as contemplated by this Agreement, (a)
the commitment of such Lender hereunder to make Eurodollar Loans, continue Eurodollar Loans as such
and convert Base Rate Loans to Eurodollar Loans shall forthwith be suspended for the duration of
such illegality and (b) such Lender’s Loans then outstanding as Eurodollar Loans, if any, 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, the Borrower shall pay to such Lender such amounts, if any,
as may be required pursuant to Section 2.17.

          2.19 Change of Lending Office. Each Lender agrees that, upon the occurrence of any event
giving rise to the operation of Section 2.15, 2.16(a) or 2.18 with respect to such Lender, it will,
if requested by the Borrower, use reasonable efforts (subject to overall policy considerations of
such Lender) to designate another lending office for any Loans affected by such event with the
object of avoiding the consequences of such event; provided, that such designation is made
on terms that, in the sole judgment of such Lender, cause such Lender and its lending office(s) to
suffer no economic, legal or regulatory disadvantage, and provided, further, that
nothing in this Section shall affect or postpone any of the obligations of any Borrower or the
rights of any Lender pursuant to Section 2.15, 2.16(a) or 2.18.

 

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          2.20 Replacement of Lenders under Certain Circumstances. The Borrower shall be
permitted to replace any Lender that (a) requests reimbursement for amounts owing pursuant to
Section 2.15 or 2.16 or gives a notice of illegality pursuant to Section 2.18 or (b) defaults in
its obligation to make Loans hereunder, with a replacement financial institution; provided
that (i) such replacement does not conflict with any Requirement of Law, (ii) no Event of Default
shall have occurred and be continuing at the time of such replacement, (iii) prior to any such
replacement, such Lender shall have taken no action under Section 2.19 so as to eliminate the
continued need for payment of amounts owing pursuant to Section 2.15 or 2.16 or to eliminate the
illegality referred to in such notice of illegality given pursuant to Section 2.18, (iv) the
replacement financial institution shall purchase, at par, all Loans and other amounts owing to such
replaced Lender on or prior to the date of replacement, (v) the Borrower shall be liable to such
replaced Lender under Section 2.17 (as though Section 2.17 were applicable) if any Eurodollar Loan
owing to such replaced Lender shall be purchased other than on the last day of the Interest Period
relating thereto, (vi) the replacement financial institution, if not already a Lender, shall be
reasonably satisfactory to the Administrative Agent, (vii) the replaced Lender shall be obligated
to make such replacement in accordance with the provisions of Section 10.6
(provided that the replacement financial institution shall be obligated to pay the
registration and processing fee referred to therein), (viii) the Borrower shall pay all additional
amounts (if any) required pursuant to Section 2.15 or 2.16, as the case may be, in respect of any
period prior to the date on which such replacement shall be consummated, (ix) in the event the
replaced Lender is an Issuing Lender, the outstanding Letters of Credit issued by such replaced
Lender shall be replaced and/or cash-collateralized in an amount and manner satisfactory to such
replaced Lender and (x) any such replacement shall not be deemed to be a waiver of any rights that
the Borrower, the Administrative Agent or any other Lender shall have against the replaced Lender.

          2.21 Bank Products. The Borrower may request and any Lender or Affiliate of any Lender
may, in its sole and absolute discretion, arrange for the Borrower to obtain from such Lender or
such Affiliate Bank Products (which shall be subject to all rules and regulations of such Lender or
such Affiliate) although the Borrower is not required to do so.

SECTION 3. LETTERS OF CREDIT

          3.1 L/C Commitment. (a) Prior to the date hereof, the Existing Issuing Lender has issued
the Existing Letters of Credit which, from and after the Closing Date, shall constitute Letters of
Credit hereunder. Subject to the terms and conditions hereof, each Issuing Lender, in reliance on
the agreements of the other Lenders set forth in Section 3.4(a), agrees to issue letters of credit
(the letters of credit issued on and after the Closing Date pursuant to this Section 3, together
with the Existing Letters of Credit collectively, “Letters of Credit”) for the account of
the Borrower or any Subsidiary on any Business Day during the Commitment Period in such form as may
be approved from time to time by such Issuing Lender; provided that no Issuing Lender shall
have any obligation to issue any Letter of Credit if, after giving effect to such issuance, (i) the
L/C Obligations would exceed the L/C Commitment (provided further that Bank of
America, N.A., in its capacity as Issuing Lender, shall have no obligation to issue any Letter of
Credit, if after giving effect to such issuance, the L/C obligations in respect of Letters of
Credit issued by it would exceed $40,000,000) or (ii) the aggregate amount of the Available
Commitments would be less than zero. Each Letter of Credit shall (i) be denominated in Dollars, or
any other currency deemed acceptable by the Administrative Agent and the Issuing Lender,

 

31

each in
its sole discretion and (ii) expire no later than the earlier of (x) the first anniversary of its
date of issuance and (y) the date which is five Business Days prior to the Termination Date;
provided that any Letter of Credit with a one-year term may provide for the renewal thereof
for additional one-year periods (which shall in no event extend beyond the date referred to in
clause (y) above). In the case of any Letter of Credit denominated in any currency other than
Dollars, it is understood and agreed that, for all purposes of this Agreement, the face amount and
drawable amount thereof at the time of issuance, and the amount of any unreimbursed drawing in
respect thereof at the end of each subsequent L/C Fee Payment Date or on any applicable date of
measurement hereunder, shall be deemed to be the equivalent in Dollars of such amount at such time,
in each case as reasonably determined by the Administrative Agent in a manner acceptable to the
Administrative Agent, the Borrower and the Issuing Lender in respect of such Letter of Credit.

          (b) No Issuing Lender shall at any time be obligated to issue any Letter of Credit hereunder
if such issuance would conflict with, or cause such Issuing Lender or any L/C Participant to exceed
any limits imposed by, any applicable Requirement of Law.

          3.2 Procedure for Issuance of Letter of Credit. The Borrower may from time to time
request that an Issuing Lender issue a Letter of Credit by delivering to such Issuing Lender at its
address for notices specified herein an Application therefor, completed to the satisfaction of such
Issuing Lender, and such other certificates, documents and other papers and information as such
Issuing Lender may request. Concurrently with the delivery of an Application to an Issuing Lender,
the Borrower shall deliver a copy thereof to the Administrative Agent. Upon receipt of any
Application, an Issuing Lender will process such Application and the certificates, documents and
other papers and information delivered to it in connection therewith in accordance with its
customary procedures and shall promptly issue the Letter of Credit requested thereby by issuing the
original of such Letter of Credit to the beneficiary thereof or as otherwise may be agreed to by
such Issuing Lender and the Borrower (but in no event shall any Issuing Lender be required to issue
any Letter of Credit earlier than two Business Days after its receipt of the Application therefor
and all such other certificates, documents and other papers and information relating thereto).
Promptly after issuance by an Issuing Lender of a Letter of Credit, such Issuing Lender shall
furnish a copy of such Letter of Credit to the Borrower. Each Issuing Lender shall promptly give
notice to the Administrative Agent of the issuance of each Letter of Credit issued by such Issuing
Lender (including the amount thereof), and shall provide a copy of such Letter of Credit to the
Administrative Agent as soon as possible after the date of issuance.

          3.3 Fees and Other Charges. (a) The Borrower will pay to the Administrative Agent for
distribution to the Lenders a fee on the aggregate drawable amount of all outstanding Letters of
Credit at a per annum rate equal to the Applicable Margin then in effect with respect to Eurodollar
Loans, to be shared ratably among the Lenders in accordance with their respective Percentages and
payable quarterly in arrears on each L/C Fee Payment Date after the issuance date. In addition,
the Borrower shall pay to the relevant Issuing Lender for its own account a fronting fee on the
aggregate drawable amount of all outstanding Letters of Credit issued by it at the rate per annum
agreed upon from time to time by the Borrower and such Issuing Lender, payable quarterly in arrears
on each L/C Fee Payment Date after the issuance date.

 

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          (b) In addition to the foregoing fees, the Borrower shall pay or reimburse each Issuing Lender
for such normal and customary costs and expenses as are incurred or charged by such Issuing Lender
in issuing, negotiating, effecting payment under, amending or otherwise administering any Letter of
Credit.

          3.4 L/C Participations. (a) Each Issuing Lender irrevocably agrees to grant and hereby
grants to each L/C Participant, and, to induce each Issuing Lender to issue Letters of Credit
hereunder, each L/C Participant irrevocably agrees to accept and purchase and hereby accepts and
purchases,
without recourse or warranty, from each Issuing Lender, on the terms and conditions
hereinafter stated, for such L/C Participant’s own account and risk, an undivided interest equal to
such L/C Participant’s Percentage in each Issuing Lender’s obligations and rights under each Letter
of Credit issued by such Issuing Lender hereunder and the amount of each draft paid by such Issuing
Lender thereunder. Each L/C Participant unconditionally and irrevocably agrees with each Issuing
Lender that, if a draft is paid under any Letter of Credit issued by such Issuing Lender for which
such Issuing Lender is not reimbursed in full by the Borrower in accordance with the terms of this
Agreement, such L/C Participant shall pay to the Administrative Agent for the account of such
Issuing Lender upon demand at such Issuing Lender’s address for notices specified herein (and
thereafter the Administrative Agent shall promptly pay to such Issuing Lender) an amount equal to
such L/C Participant’s Percentage of the amount of such draft, or any part thereof, that is not so
reimbursed.

          (b) If any amount (a “Participation Amount”) required to be paid by any L/C
Participant to an Issuing Lender pursuant to Section 3.4(a) in respect of any unreimbursed portion
of any payment made by such Issuing Lender under any Letter of Credit is paid to such Issuing
Lender within three Business Days after the date such payment is due, such Issuing Lender shall so
notify the Administrative Agent (which shall notify the L/C Participants), and each L/C Participant
shall pay to Administrative Agent, for the account of such Issuing Lender, on demand (and
thereafter the Administrative Agent shall promptly pay to such Issuing Lender) an amount equal to
the product of (i) such Participation Amount, times (ii) the daily average Federal Funds Effective
Rate during the period from and including the date such payment is required to the date on which
such payment is immediately available to such Issuing Lender, times (iii) a fraction the numerator
of which is the number of days that elapse during such period and the denominator of which is 360.
If any Participation Amount required to be paid by any L/C Participant pursuant to Section 3.4(a)
is not made available to the Administrative Agent for the account of the relevant Issuing Lender by
such L/C Participant within three Business Days after the date such payment is due, the
Administrative Agent on behalf of such Issuing Lender shall be entitled to recover from such L/C
Participant, on demand, such Participation Amount with interest thereon calculated from such due
date at the rate per annum applicable to Base Rate Loans. A certificate of the Administrative
Agent on behalf of an Issuing Lender submitted to any L/C Participant with respect to any amounts
owing under this Section shall be conclusive in the absence of manifest error.

          (c) Whenever, at any time after an Issuing Lender has made payment under any Letter of Credit
and has received from the Administrative Agent any L/C Participant’s its pro rata
share of such payment in accordance with Section 3.4(a), such Issuing Lender receives any payment
related to such Letter of Credit (whether directly from the Borrower or otherwise, including
proceeds of collateral applied thereto by such Issuing Lender), or any payment of

 

33

interest on
account thereof, such Issuing Lender will distribute to the Administrative Agent for the account of
such L/C Participant (and thereafter the Administrative Agent will promptly distribute to such L/C
Participant) its pro rata share thereof; provided, however, that in
the event that any such payment received by such Issuing Lender shall be required to be returned by
such Issuing Lender, such L/C Participant shall return to the Administrative Agent for the account
of such Issuing Lender (and thereafter the Administrative Agent shall promptly return to such
Issuing Lender) the portion thereof previously distributed by such Issuing Lender.

          3.5 Reimbursement Obligation of the Borrower. The Borrower agrees to reimburse each
Issuing Lender, on each date on which such Issuing Lender notifies the Borrower of the date and
amount of a draft presented under any Letter of Credit (including any Letter of Credit issued for
the account of any Subsidiary) and paid by such Issuing Lender, for the amount of (a) such draft so
paid and (b) any taxes, fees, charges or other costs or expenses incurred by such Issuing Lender in
connection with such payment (the amounts described in the foregoing clauses (a) and (b) in respect
of any drawing, collectively, the “Payment Amount”). Each such payment shall be made to
such Issuing Lender at its address for notices specified herein in lawful money of the United
States of America and in immediately available funds. Interest shall be payable on each Payment
Amount from the date of the applicable drawing until payment in full at the rate set forth in (i)
until the second Business Day following the date of the applicable drawing, Section 2.11(b) and
(ii) thereafter, Section 2.11(c). Each drawing under any Letter of Credit shall (unless an event
of the type described in clause (i) or (ii) of Section 8(f) shall have occurred and be continuing
with respect to the Borrower, in which case the procedures specified in Section 3.4 for funding by
L/C Participants shall apply) constitute a request by the Borrower to the Administrative Agent for
a borrowing pursuant to Section 2.2 of Base Rate Loans in the amount of such drawing. The
Borrowing Date with respect to such borrowing shall be the first date on which a borrowing of Loans
could be made, pursuant to Section 2.2, if the Administrative Agent had received a notice of such
borrowing at the time the Administrative Agent receives notice from the relevant Issuing Lender of
such drawing under such Letter of Credit.

          3.6 Obligations Absolute. The Borrower’s obligations under this Section 3 shall be
absolute and unconditional under any and all circumstances and irrespective of any setoff,
counterclaim or defense to payment that the Borrower may have or have had against any Issuing
Lender, any beneficiary of a Letter of Credit or any other Person. The Borrower also agrees with
each Issuing Lender that such Issuing Lender shall not be responsible for, and the Borrower’s
Reimbursement Obligations under Section 3.5 shall not be affected by, among other things, the
validity or genuineness of documents or of any endorsements thereon, even though such documents
shall in fact prove to be invalid, fraudulent or forged, or any dispute between or among the
Borrower and any beneficiary of any Letter of Credit or any other party to which such Letter of
Credit may be transferred or any claims whatsoever of the Borrower against any beneficiary of such
Letter of Credit or any such transferee. No Issuing Lender shall be liable for any error,
omission, interruption or delay in transmission, dispatch or delivery of any message or advice,
however transmitted, in connection with any Letter of Credit, except for errors or omissions found
by a final and nonappealable decision of a court of competent jurisdiction to have resulted from
the gross negligence or willful misconduct of such Issuing Lender. The Borrower agrees that any
action taken or omitted by an Issuing Lender under or in connection with any Letter of Credit
issued by it or the related drafts or documents, if done in the absence of

 

34

gross negligence or
willful misconduct and in accordance with the standards or care specified in the Uniform Commercial
Code of the State of New York, shall not excuse the Reimbursement Obligations of the Borrower
hereunder and shall not result in any liability of such Issuing Lender to the Borrower.

          3.7 Letter of Credit Payments. If any draft shall be presented for payment under any
Letter of Credit, the relevant Issuing Lender shall promptly notify the Borrower and the
Administrative Agent of the date and amount thereof. The responsibility of the relevant Issuing
Lender to the Borrower in connection with any draft presented for payment under any Letter of
Credit, in addition to any payment obligation expressly provided for in such Letter of Credit
issued by such Issuing Lender, shall be limited to determining that the documents (including each
draft) delivered under such Letter of Credit in connection with such presentment appear on their
face to be in conformity with such Letter of Credit.

          3.8 Applications. To the extent that any provision of any Application related to any
Letter of Credit is inconsistent with the provisions of this Section 3, the provisions of this
Section 3 shall apply.

          3.9 Indemnification; Exoneration; Power of Attorney.

     (a) Indemnification. IN ADDITION TO AMOUNTS PAYABLE AS ELSEWHERE PROVIDED IN
THIS SECTION, THE BORROWER HEREBY AGREES TO PROTECT, INDEMNIFY, PAY AND SAVE THE LENDERS AND
THE AGENTS HARMLESS FROM AND AGAINST ANY AND ALL CLAIMS, DEMANDS, LIABILITIES, DAMAGES,
LOSSES, COSTS, CHARGES AND EXPENSES (INCLUDING REASONABLE ATTORNEYS’ FEES) WHICH ANY LENDER
OR ANY AGENT (OTHER THAN ANY LENDER IN ITS CAPACITY AS AN ISSUING LENDER) MAY INCUR OR BE
SUBJECT TO AS A CONSEQUENCE, DIRECT OR INDIRECT, OF THE ISSUANCE OF ANY LETTER OF CREDIT
OTHER THAN ANY CLAIMS, DEMANDS, LIABILITIES, DAMAGES, LOSSES, COSTS, CHARGES, AND EXPENSES
RESULTING SOLELY FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF ANY SUCH INDEMNIFIED
PERSON. THE AGREEMENT IN THIS SECTION SHALL SURVIVE PAYMENT OF ALL OBLIGATIONS. NOTHING
CONTAINED IN THIS AGREEMENT IS INTENDED TO LIMIT THE BORROWER’S RIGHTS, IF ANY, WITH RESPECT
TO ANY ISSUING LENDER WHICH ARISE BY OPERATION OF LAW OR AS A RESULT OF THE APPLICATION AND
RELATED DOCUMENTS EXECUTED BY AND BETWEEN THE BORROWER AND ANY ISSUING LENDER.

     (b) Assumption of Risk by the Borrower. As among the Loan Parties, the
Lenders, the Issuing Lenders and the Agents, the Borrower or the relevant Loan Party assumes
all risks of the acts and omissions of, or misuse of any of the Letters of Credit by, the
respective beneficiaries of such Letters of Credit. In furtherance and not in limitation of
the foregoing, the Lenders, the Issuing Lenders and the Agents shall not be responsible for:
(i) the form, validity, sufficiency, accuracy, genuineness or legal effect of any document
submitted by any Person in connection with the application for and
issuance of and presentation of drafts with respect to any of the Letters of Credit,
even if

 

35

it should prove to be in any or all respects invalid, insufficient, inaccurate,
fraudulent or forged; (ii) the validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign any 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; (iii) the failure of the beneficiary of any Letter of Credit to
comply duly with conditions required in order to draw upon such Letter of Credit; (iv)
errors, omissions, interruptions, or delays in transmission or delivery of any messages, by
mail, cable, telegraph, telex or otherwise, whether or not they be in cipher; (v) errors in
interpretation of technical terms; (vi) any loss or delay in the transmission or otherwise
of any document required in order make a drawing under any Letter of Credit or of the
proceeds thereof; (vii) the misapplication by the beneficiary of any Letter of Credit of the
proceeds of any drawing under such Letter of Credit; or (viii) any consequences arising from
causes beyond the control of the Lenders, the Issuing Lenders or the Agents, including any
act or omission, whether rightful or wrongful, of any present or future de jure or de facto
Governmental Authority. None of the foregoing shall affect, impair or prevent the vesting of
any rights or powers of any Agent, any Issuing Lender or any Lender under this Section.

     (c) Exoneration. In furtherance and extension, and not in limitation, of the
specific provisions set forth above, any action taken or omitted by any Agent, any Issuing
Lender or any Lender under or in connection with any of the Letters of Credit or any related
certificates, if taken or omitted in good faith, shall not put any Agent, any Issuing Lender
or any Lender under any resulting liability to any Loan Party or relieve the relevant Loan
Party of any of its obligations hereunder to any such Person.

     (d) Indemnification by Lenders. The Lenders agree to indemnify each Issuing
Lender (to the extent not reimbursed by the Borrower and without limiting the obligations of
the Borrower hereunder) ratably in accordance with their respective Percentages in effect on
the date on which indemnification is sought under this Section (or, if indemnification is
sought after the date upon which the Commitments shall be terminated and the Loans shall
have been paid in full, ratably in accordance with such Percentages immediately prior to
such date), for any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses (including attorneys’ fees) or disbursements of any kind
and nature whatsoever that may be imposed on, incurred by or asserted against such Issuing
Lender in any way relating to or arising out of any Letter of Credit or the transactions
contemplated thereby or any action taken or omitted by such Issuing Lender under any Letter
of Credit or any Loan Document in connection therewith; provided that no Lender
shall be liable for any of the foregoing to the extent it arises from the gross negligence
or willful misconduct of the Person to be indemnified. Without limitation of the foregoing,
each Lender agrees to reimburse each Issuing Lender promptly upon demand for its Percentage
of any costs or expenses payable by the Borrower to such Issuing Lender, to the extent that
such Issuing Lender is not promptly reimbursed for such costs and expenses by the Borrower.
The agreement contained in this Section shall survive payment in full of all Obligations.

     (e) Power of Attorney. In connection with all inventory financed by Letters of
Credit, the Borrower hereby appoints each Issuing Lender, or such Issuing Lender’s

 

36

designee,
as its attorney, with full power and authority: (i) to sign and/or endorse the Borrower’s
name upon any warehouse or other receipts; (ii) to sign the Borrower’s name on bills of
lading and other negotiable and non-negotiable documents; (iii) to clear inventory through
customs in such Issuing Lender’s or the Borrower’s name, and to sign and deliver to customs
officials powers of attorney in the Borrower’s name for such purpose; (iv) to complete in
the Borrower’s or such Issuing Lender’s name, any order, sale, or transaction, obtain the
necessary documents in connection therewith, and collect the proceeds thereof; and (v) to do
such other acts and things as are necessary in order to enable such Issuing Lender to obtain
possession or control of the inventory and to obtain payment of the Obligations. None of
the Issuing Lenders or any of their respective designees, as the Borrower’s attorney, will
be liable for any acts or omissions, nor for any error of judgment or mistakes of fact or
law. This power, being coupled with an interest, is irrevocable until all Obligations have
been paid and satisfied.

     (f) Account Party. The Borrower hereby authorizes and directs any Issuing
Lender to name the Borrower as the “Account Party” therein and to deliver to the
Administrative Agent all instruments, documents and other writings and property received by
such Issuing Lender pursuant to the Letter of Credit, and to accept and rely upon the
Administrative Agent’s instructions and agreements with respect to all matters arising in
connection with the Letter of Credit or the Application therefor.

          3.10 Supporting Letter of Credit; Cash Collateral. If, notwithstanding the provisions of
this Section and Section 8, any Letter of Credit is outstanding upon the termination of this
Agreement, then upon such termination the Borrower shall deposit with the Administrative Agent, for
the ratable benefit of the Issuing Lenders and the Lenders, with respect to each Letter of Credit
then outstanding, as the Required Lenders in their discretion shall specify, either (i) a standby
letter of credit (a “Supporting Letter of Credit”) in form and substance satisfactory to
the Administrative Agent, issued by an issuer satisfactory to the Administrative Agent in an amount
equal to the greatest amount for which such Letter of Credit may be drawn plus any fees and
expenses associated with such Letter of Credit, under which Supporting Letter of Credit the
Administrative Agent is entitled to draw amounts necessary to reimburse the Administrative Agent,
the Issuing Lenders and the Lenders for payments to be made under or in connection with such Letter
of Credit and any fees and expenses associated with such Letter of Credit, or (ii) cash in amounts
necessary to reimburse the Administrative Agent, the Issuing Lenders and the Lenders for payments
made under or in connection with such Letter of Credit and any fees and expenses associated with
such Letter of Credit. Such Supporting Letter of Credit or deposit of cash shall be held by the
Administrative Agent, for the ratable benefit of the Administrative Agent, the Issuing Lenders and
the Lenders, as security for, and to provide for the payment of, the aggregate undrawn amount of
such Letters of Credit remaining outstanding; provided that in the case of any Letter of
Credit denominated in a currency other than Dollars, upon the request of the Administrative Agent
or the relevant Issuing Lender, the Borrower shall deposit additional amounts in the cash
collateral account in such amounts as reasonably determined by the Administrative Agent to achieve
the deposit of cash in the amount required above, taking into account the effects of currency
exchange
fluctuations with respect to the applicable currency. Reasonable interest shall accrue on any
such cash deposit, which accrued interest shall be for the account of the Borrower, subject to this
Agreement.

 

37

          3.11 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, the Borrower shall be obligated to reimburse the Issuing Lender that issued such Letter
of Credit for any and all drawings thereunder. The Borrower hereby acknowledges that the issuance
of Letters of Credit for the account of Subsidiaries inures to the benefit of the Borrower, and
that the Borrower’s business derives substantial benefits from the businesses of such Subsidiaries.

          3.12 Determination of Amount. 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 agreement 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.

SECTION 4. REPRESENTATIONS AND WARRANTIES

          To induce the Administrative Agent and the Lenders to enter into this Agreement and to make
the Loans and issue or participate in the Letters of Credit, the Borrower hereby represents and
warrants to each Agent and each Lender that:

          4.1 Financial Condition. The audited consolidated balance sheets of the Borrower as at
December 31, 2005 and December 31, 2006, and the related consolidated statements of income and of
cash flows for the fiscal years ended on such dates, reported on by and accompanied by an
unqualified report from PricewaterhouseCoopers LLP, present fairly in all material respects the
consolidated financial condition of the Borrower as at such date, and the consolidated results of
its operations and its consolidated cash flows for the respective fiscal years then ended. The
unaudited consolidated balance sheets of the Borrower as at March 31, 2007 and June 30, 2007, and
the related unaudited consolidated statements of income and cash flows for the periods ended on
such date, present fairly in all material respects the consolidated financial condition of the
Borrower as at such dates, and the consolidated results of its operations and its consolidated cash
flows for the quarterly periods then ended (subject to normal year-end audit adjustments). All
such financial statements, including the related schedules and notes thereto, have been prepared in
accordance with GAAP applied consistently throughout the periods involved (except as approved by
the aforementioned firm of accountants and disclosed therein). The Borrower and its Subsidiaries
do not have any material Guarantee Obligations, contingent liabilities and liabilities for taxes
(except for any such tax liabilities to taxing authorities outside of the United States which are
not, in the aggregate, material to the Borrower and its Subsidiaries taken as a
whole) or any long-term leases or unusual forward or long-term commitments, including, without
limitation, any interest rate or foreign currency swap or exchange transaction or other obligation
in respect of derivatives, that are not reflected in the most recent financial statements referred
to in this paragraph. During the period from December 31, 2006 to and including the date hereof
there has been no Disposition by the Borrower of any material part of its business or Property,
except as reflected in the foregoing financial statements.

 

38

          4.2 No Change. Since December 31, 2006 there has been no development or event that has
had or could reasonably be expected to have a Material Adverse Effect.

          4.3 Corporate Existence; Compliance with Law. Each of the Borrower and its Subsidiaries
(a) is duly organized, validly existing and in good standing under the laws of the jurisdiction of
its organization, (b) has the corporate power and authority, and the legal right, to own and
operate its Property, to lease the Property it operates as lessee and to conduct the business in
which it is currently engaged, (c) is duly qualified as a foreign corporation and in good standing
under the laws of each jurisdiction where its ownership, lease or operation of Property or the
conduct of its business requires such qualification except to the extent that the failure to be so
qualified could not reasonably be expected to have a Material Adverse Effect and (d) is in
compliance with all Requirements of Law except to the extent that the failure to comply therewith
could not, in the aggregate, reasonably be expected to have a Material Adverse Effect.

          4.4 Corporate Power; Authorization; Enforceable Obligations. Each Loan Party has the
corporate power and authority, and the legal right, to make, deliver and perform the Loan Documents
to which it is a party and, in the case of the Borrower, to borrow hereunder. Each Loan Party has
taken all necessary corporate or other action to authorize the execution, delivery and performance
of the Loan Documents to which it is a party and, in the case of the Borrower, to authorize the
borrowings on the terms and conditions of this Agreement. No consent or authorization of, filing
with, notice to or other act by or in respect of, any Governmental Authority or any other Person is
required in connection with the borrowings hereunder or the execution, delivery, performance,
validity or enforceability of this Agreement or any of the other Loan Documents, except (i)
consents, authorizations, filings and notices described in Schedule 4.4, which consents,
authorizations, filings and notices have been obtained or made and are in full force and effect
(except as noted on Schedule 4.19) and (ii) the filings referred to in Section 4.4. Each Loan
Document has been duly executed and delivered on behalf of each Loan Party that is a party thereto.
This Agreement constitutes, and each other Loan Document upon execution will constitute, a legal,
valid and binding obligation of each Loan Party that is a party thereto, enforceable against each
such Loan Party in accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of
creditors’ rights generally and by general equitable principles (whether enforcement is sought by
proceedings in equity or at law).

          4.5 No Legal Bar. The execution, delivery and performance of this Agreement and the other
Loan Documents, the issuance of Letters of Credit, the borrowings hereunder and the use of the
proceeds thereof will not violate any Requirement of Law or any material Contractual Obligation of
the Borrower or any of its Subsidiaries and will not result in, or require, the creation or
imposition of any Lien on any of their respective properties or revenues pursuant to any
Requirement of Law or any such Contractual Obligation (other than the Liens created by the Security
Documents). No Requirement of Law or Contractual Obligation applicable to the Borrower or any of
its Subsidiaries could reasonably be expected to have a Material Adverse Effect.

          4.6 No Material Litigation. No litigation, investigation or proceeding of or before any
arbitrator or Governmental Authority is pending or, to the knowledge of the Borrower, threatened by
or against the Borrower or any of its Subsidiaries or against any of their respective

 

39

properties or
revenues (a) with respect to any of the Loan Documents or any of the transactions contemplated
hereby or thereby, or (b) that could reasonably be expected to have a Material Adverse Effect.

          4.7 No Default. Neither the Borrower nor any of its Subsidiaries is in default under or
with respect to any of its Contractual Obligations in any respect that could reasonably be expected
to have a Material Adverse Effect. No Default or Event of Default has occurred and is continuing.

          4.8 Ownership of Property; Liens. Each of the Borrower and its Subsidiaries has title in
fee simple to, or a valid leasehold interest in, all its material real property, and good title to,
or a valid leasehold interest in, all its other material Property, and none of such Property is
subject to any Lien except as permitted by Section 7.3.

          4.9 Intellectual Property. The Borrower and each of its Subsidiaries owns, or is licensed
to use, all material Intellectual Property necessary for the conduct of its business as currently
conducted; no material claim has been asserted and is pending by any Person challenging or
questioning the use of any such Intellectual Property or the validity or effectiveness of any such
Intellectual Property, nor does the Borrower know of any valid basis for any such claim; and the
use of such Intellectual Property by the Borrower and its Subsidiaries does not infringe on the
rights of any Person in any material respect.

          4.10 Taxes. Each of the Borrower and each of its Subsidiaries has filed or caused to be
filed all Federal, state and other material tax returns that are required to be filed and has paid
all taxes shown to be due and payable on said returns or on any assessments made against it or any
of its
Property and all other taxes, fees or other charges imposed on it or any of its Property by
any Governmental Authority (other than (a) any the amount or validity of which are currently being
contested in good faith by appropriate proceedings and (b) assessments by the Republic of
Kazakhstan, disputed as of the date of this Agreement, in each case, with respect to which reserves
in conformity with GAAP have been provided on the books of the Borrower or its Subsidiaries, as the
case may be); and no tax Lien has been filed, and, to the knowledge of the Borrower, no claim is
being asserted, with respect to any such tax, fee or other charge (other than any such Liens and
claims in favor of taxing authorities outside of the United States which are not, in the aggregate,
material to the Borrower and its Subsidiaries taken as a whole).

          4.11 Federal Regulations. No part of the proceeds of any Loans will be used in violation
of Regulation U as now and from time to time hereafter in effect or for any purpose that violates
the provisions of the Regulations of the Board.

          4.12 Labor Matters. There are no strikes or other labor disputes against the Borrower or
any of its Subsidiaries pending or, to the knowledge of the Borrower, threatened that (individually
or in the aggregate) could reasonably be expected to have a Material Adverse Effect. Hours worked
by and payment made to employees of the Borrower and its Subsidiaries have not been in violation of
the Fair Labor Standards Act or any other applicable Requirement of Law dealing with such matters
that (individually or in the

 

40

aggregate) could reasonably be expected to have a Material Adverse
Effect. All payments due from the Borrower or any of its Subsidiaries on account of employee
health and welfare insurance that (individually or in the aggregate) could reasonably be expected
to have a Material Adverse Effect if not paid have been paid or accrued as a liability on the books
of the Borrower or the relevant Subsidiary.

          4.13 ERISA. Neither a Reportable Event nor an “accumulated funding deficiency” (within the
meaning of Section 412 of the Code or Section 302 of ERISA) has occurred during the five-year
period prior to the date on which this representation is made or deemed made with respect to any
Plan, and each Plan has complied in all material respects with the applicable provisions of ERISA
and the Code, except where, individually or in the aggregate, such occurrence or noncompliance has
not had and could not reasonably be expected to have a Material Adverse Effect. No termination of
a Single Employer Plan has occurred, and no Lien in favor of the PBGC or a Plan has arisen, during
such five-year period. The present value of all accrued benefits under each Single Employer Plan
(based on those assumptions used to fund such Plans) did not, as of the last annual valuation date
prior to the date on which this representation is made or deemed made, exceed the value of the
assets of such Plan allocable to such accrued benefits by a material amount. Neither the Borrower
nor any Commonly Controlled Entity has had a complete or partial withdrawal from any Multiemployer
Plan that has resulted or could reasonably be expected to result in a material liability under
ERISA, and neither the Borrower nor any Commonly Controlled Entity would become subject to any
material liability under ERISA if the Borrower or any such Commonly Controlled Entity were to
withdraw completely from all Multiemployer Plans as of the valuation date most closely
preceding the date on which this representation is made or deemed made. No such Multiemployer Plan
is in Reorganization or Insolvent.

          4.14 Investment Company Act; Other Regulations. 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. No Loan Party is subject to regulation under any Requirement of Law
(other than Regulation X of the Board) which limits its ability to incur Indebtedness.

          4.15 Subsidiaries. (a) The Subsidiaries listed on Schedule 4.15 constitute all of the
Subsidiaries of the Borrower at the date hereof. Schedule 4.15 sets forth as of the Closing Date
the name and jurisdiction of incorporation of each such Subsidiary and, as to each, the percentage
of each class of Capital Stock owned by each Loan Party.

          (b) As of the date hereof, there are no outstanding subscriptions, options, warrants, calls,
rights or other agreements or commitments (other than stock options granted to employees or
directors and directors’ qualifying shares) of any nature relating to any Capital Stock of the
Borrower or any Subsidiary, except as disclosed on Schedule 4.15.

          4.16 Use of Proceeds. The proceeds of the Loans, and the Letters of Credit, shall be used
for the general corporate purposes of the Borrower and its Subsidiaries, including to satisfy tax
obligations owed by any Loan Party to the Republic of Kazakhstan.

          4.17 Environmental Matters.

          Other than as set forth on Schedule 4.17 and exceptions to any of the following that could
not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect:

 

 

41

          (a) The Borrower and its Subsidiaries: (i) are, and within the period of all applicable
statutes of limitation have been, in compliance with all applicable Environmental Laws; (ii) hold
all Environmental Permits (each of which is in full force and effect) required for any of their
current or intended operations or for any property owned, leased, or otherwise operated by any of
them; (iii) are, and within the period of all applicable statutes of limitation have been, in
compliance with all of their Environmental Permits; and (iv) reasonably believe that: each of
their Environmental Permits will be timely renewed and complied with, without material expense; any
additional Environmental Permits that may be required of any of them will be timely obtained and
complied with, without material expense; and compliance with any Environmental Law that is or is
expected to become applicable to any of them will be timely attained and maintained, without
material expense.

          (b) Materials of Environmental Concern are not present at, on, under, in, or about any real
property now or formerly owned, leased or operated by the Borrower or any of its Subsidiaries, or
at any other location (including, without limitation, any location to which Materials of
Environmental Concern have been sent for re-use or recycling or for treatment, storage, or
disposal) which could reasonably be expected to (i) give rise to liability of the Borrower or any
of its Subsidiaries under any applicable Environmental Law or otherwise result in costs to the
Borrower or any of its Subsidiaries, or (ii) interfere with the Borrower’s or any of its
Subsidiaries’ continued operations, or (iii) impair the fair saleable value of any real property
owned or leased by the Borrower or any of its Subsidiaries.

          (c) There is no judicial, administrative, or arbitral proceeding (including any notice of
violation or alleged violation) under or relating to any Environmental Law to which the Borrower or
any of its Subsidiaries is, or to the knowledge of the Borrower or any of its Subsidiaries will be,
named as a party that is pending or, to the knowledge of the Borrower or any of its Subsidiaries,
threatened.

          (d) Neither the Borrower nor any of its Subsidiaries has received any written request for
information, or been notified that it is a potentially responsible party under or relating to the
federal Comprehensive Environmental Response, Compensation, and Liability Act or any similar
Environmental Law, or with respect to any Materials of Environmental Concern.

          (e) Neither the Borrower nor any of its Subsidiaries has entered into or agreed to any consent
decree, order, or settlement or other agreement, or is subject to any judgment, decree, or order or
other agreement, in any judicial, administrative, arbitral, or other forum for dispute resolution,
relating to compliance with or liability under any Environmental Law.

          (f) Neither the Borrower nor any of its Subsidiaries has assumed or retained, by contract or
operation of law, any liabilities of any kind, fixed or contingent, known or unknown, under any
Environmental Law or with respect to any Material of Environmental Concern other than indemnity
obligations in the ordinary course of business.

          4.18 Accuracy of Information, etc. No written statement or information contained in this Agreement, any other Loan Document or
any other document, certificate or written statement furnished to the
Administrative Agent or the Lenders or any of them, by or on behalf of any Loan Party for use
in connection with the transactions contemplated by this

 

42

Agreement or the other Loan Documents,
contained as of the date such statement, information, document or certificate was so furnished, any
untrue statement of a material fact or omitted to state a material fact necessary in order to make
the statements contained herein or therein, taken as a whole, not materially misleading in light of
the circumstances under which made. The projections and pro forma financial
information contained in the materials referenced above are based upon good faith estimates and
assumptions believed by management of the Borrower to be reasonable at the time made, it being
recognized by the Lenders that such financial information as it relates to future events is not to
be viewed as fact and that actual results during the period or periods covered by such financial
information may differ from the projected results set forth therein by a material amount. As of
the Closing Date, there is no fact known to any Loan Party that could reasonably be expected to
have a Material Adverse Effect that has not been expressly disclosed herein, in the other Loan
Documents or in any other documents, certificates and statements furnished to the Administrative
Agent and the Lenders for use in connection with the transactions contemplated hereby and by the
other Loan Documents.

          4.19 Security Documents. The Guarantee and Collateral Agreement is effective to create in favor of the
Administrative Agent, for the benefit of the Secured Parties, a legal, valid and enforceable
security interest in the Collateral described therein and proceeds thereof. When financing
statements in appropriate form are filed in the offices specified on Schedule 4.19, the Guarantee
and Collateral Agreement shall constitute a fully perfected Lien on, and security interest in, all
right, title and interest of the Loan Parties in such Collateral and the proceeds thereof, as
security for the Obligations (as defined in the Guarantee and Collateral Agreement), in each case
prior and superior in right to any other Person (except Liens permitted by Section 7.3).

          4.20 Solvency. As of the Closing Date, each of the Borrower and each Loan Party that is a Material
Subsidiary is, and after giving effect to the incurrence of all Indebtedness and obligations being
incurred in connection herewith and therewith will be and will continue to be, Solvent.

SECTION 5. CONDITIONS PRECEDENT

          5.1 Conditions to Initial Extension of Credit. The agreement of each Lender to make the initial extension of credit requested to be made
by it hereunder is subject to the satisfaction, prior to or concurrently with the making of such
extension of credit on the Closing Date, of the following conditions precedent:

          (a) Loan Documents. The Administrative Agent shall have received (i) this Agreement,
executed and delivered by a duly authorized officer of the Borrower, (ii) the Acknowledgment and
Confirmation, executed and delivered by a duly authorized officer of the Borrower and each
Subsidiary Guarantor and (iii) a Lender Addendum executed and delivered by each Lender and accepted
by the Borrower.

          (b) Financial Statements. The Lenders shall have received (i) audited consolidated
financial statements of the Borrower for the 2005 and 2006 fiscal years and (ii) unaudited interim
consolidated financial statements of the Borrower for each fiscal quarterly period ended subsequent
to the date of the latest applicable financial statements delivered

 

43

pursuant to clause (i) of this
paragraph as to which such financial statements are available, and such financial statements shall
not, in the reasonable judgment of the Lenders, reflect any material adverse change in the
consolidated financial condition of the Borrower, as reflected in the financial statements or
projections previously delivered to them.

          (c) Fees. The Lenders, the Arrangers and the Administrative Agent shall have received
all fees required to be paid, and all expenses for which invoices have been presented (including
reasonable fees, disbursements and other charges of counsel to the Administrative Agent), on or
before the Closing Date.

          (d) Business Plan. The Lenders shall have received a satisfactory business plan for
fiscal years 2007-2009.

          (e) Liquidity. The Borrowing Base shall be no less than $60,000,000 on the Closing
Date. After giving effect to any extensions of credit made hereunder on the Closing Date and the
use of the proceeds thereof, the sum of (A) total unrestricted cash and cash equivalents of the
Borrower and its Subsidiaries and (B) the Excess Credit Availability, in each case as of the
Closing Date, shall be no less than $150,000,000.

          (f) Lien Searches. The Administrative Agent shall have received the results of a
recent lien search in each of the jurisdictions in which Uniform Commercial Code financing
statement or other domestic filings or recordations should be made to evidence or perfect security
interests in all personal property assets of the Loan Parties, and such search shall reveal no
liens on any of the assets of the Loan Party, except for Liens permitted by Section 7.3 or Liens to
be released in connection with this Agreement.

          (g) Collateral Appraisal. The Lenders shall have received copies of a satisfactory
independent collateral appraisal of the assets of Quail Tools prepared by Superior Asset
Appraisals.

          (h) Closing Certificate. The Administrative Agent shall have received a certificate
of each Loan Party, dated the Closing Date, substantially in the form of Exhibit C, with
appropriate insertions and attachments.

          (i) Legal Opinions. The Administrative Agent shall have received the following
executed legal opinions:

	 	(i)	 	the legal opinion of Bracewell & Giuliani LLP,
substantially in the form of Exhibit E-1; and
	 
	 	(ii)	 	the legal opinion of Ronald Potter, Esq.,
general counsel of the Borrower and its Subsidiaries, substantially in
the form of Exhibit E-2.

Each such legal opinion shall cover such other matters incident to the transactions contemplated by
this Agreement as the Administrative Agent may reasonably require.

 

44

          (j) Filings, Registrations and Recordings. Each document (including, without
limitation, any Uniform Commercial Code financing statement) required by the Security Documents or
under law or reasonably requested by the Administrative Agent to be filed, registered or recorded
in order to create in favor of the Administrative Agent, for the benefit of the Secured Parties, a
perfected Lien on the Collateral described therein, prior and superior in right to any other Person
(other than with respect to Liens expressly permitted by Section 7.3), shall have been delivered to
the Administrative Agent in proper form for filing, registration or recordation.

          (k) Insurance. The Administrative Agent shall have received insurance certificates
satisfying the requirements of Section 5.3 of the Guarantee and Collateral Agreement.

          5.2 Conditions to Each Extension of Credit. The agreement of each Lender to make any extension of credit requested to be made by it
hereunder on any date is subject to the satisfaction of the following conditions precedent:

          (a) Representations and Warranties. (i) Each of the representations and warranties
made by any Loan Party in or pursuant to the Loan Documents which is qualified by materiality shall
be true and correct and (ii) each of the other representations and warranties made by any Loan
Party in or pursuant to the Loan Documents shall be true and correct in all material respects, in
each case on and as of such date as if made on and as of such date.

          (b) No Default. No Default or Event of Default shall have occurred and be continuing
on such date or after giving effect to the extensions of credit requested to be made on such date.

          (c) Borrowing Base. At any time when the Total Extensions of Credit equal or exceed
$40,000,000, the Administrative Agent shall be satisfied that, after giving effect to such
extension of credit and the use of proceeds thereof, the Borrowing Base shall not be less than the
Total Extensions of Credit.

          Each borrowing by and issuance of a Letter of Credit on behalf of the Borrower hereunder shall
constitute a representation and warranty by the Borrower as of the date of such extension of credit
that the conditions contained in this Section 5.2 have been satisfied.

SECTION 6. AFFIRMATIVE COVENANTS

          The Borrower hereby agrees that, so long as the Commitments remain in effect, any Letter of
Credit remains outstanding or any Loan or other amount is owing to any Lender or any Agent
hereunder, the Borrower shall and shall cause each of its Subsidiaries (other than any Immaterial
Subsidiary) to:

          6.1 Financial Statements. Furnish to the Administrative Agent (which shall promptly furnish to each Lender):

          (a) as soon as available, but in any event within 90 days after the end of each fiscal year of
the Borrower, a copy of the audited consolidated balance sheet of the Borrower and

 

45

its consolidated
Subsidiaries as at the end of such year and the related audited consolidated statements of income
and of cash flows for such year, setting forth in each case in comparative form the figures as of
the end of and for the previous year, reported on without a “going concern” or like qualification
or exception, or qualification arising out of the scope of the audit, by KPMG LLP or other
independent certified public accountants of nationally recognized standing;

          (b) as soon as available, but in any event not later than 45 days after the end of each of the
first three quarterly periods of each fiscal year of the Borrower, the unaudited consolidated
balance sheet of the Borrower and its consolidated Subsidiaries as at the end of such quarter and
the related unaudited consolidated statements of income and of cash flows for such quarter and the
portion of the fiscal year through the end of such quarter, setting forth in each case in
comparative form the figures as of the end of and for the corresponding period in the previous
year, certified by a Responsible Officer as being fairly stated in all material respects (subject
to normal year-end audit adjustments); and

          (c) as soon as available, but in any event not later than 30 days after the end of each month
occurring during each fiscal year of the Borrower (other than the third, sixth, ninth and twelfth
such month), the unaudited consolidated balance sheets of the Borrower and its Subsidiaries as at
the end of such month and the related unaudited consolidated statements of income and of cash flows
for such month and the portion of the fiscal year through the end of such month, setting forth in
each case in comparative form the figures as of the end of and for the corresponding period in the
previous year, certified by a Responsible Officer as being fairly stated in all material respects
(subject to normal year-end audit adjustments);

all such financial statements to be complete and correct in all material respects and to be
prepared in reasonable detail and in accordance with GAAP applied consistently throughout the
periods reflected therein and with prior periods (except as approved by such accountants or
officer, as the case may be, and disclosed therein).

          6.2 Certificates; Other Information. Furnish to the Administrative Agent (which shall promptly furnish to each Lender), or, in
the case of clause (f), to the relevant Lender:

          (a) concurrently with the delivery of the financial statements referred to in Section 6.1(a),
a certificate of the independent certified public accountants reporting on such financial
statements stating that in making the examination necessary therefor no knowledge was obtained of
any Default or Event of Default, except as specified in such certificate (it being understood that
such certificate shall be limited to the items that independent certified public
accountants are permitted to cover in such certificates pursuant to their professional
standards and customs of the profession);

          (b) concurrently with the delivery of any financial statements pursuant to Section 6.1, (i) a
certificate of a Responsible Officer stating that, to the best of such Responsible Officer’s
knowledge, each Loan Party during such period has observed or performed all of its covenants and
other agreements, and satisfied every condition, contained in this Agreement and the other Loan
Documents to which it is a party to be observed, performed or satisfied by it, in each case to the
extent any failure to do so would constitute a Default or Event of Default

 

46

hereunder, and that such
Responsible Officer has obtained no knowledge of any Default or Event of Default except as
specified in such certificate and (ii) in the case of quarterly or annual financial statements, (x)
a Compliance Certificate containing all information and calculations necessary for determining
compliance by the Borrower and its Subsidiaries with the provisions of this Agreement referred to
therein as of the last day of the fiscal quarter or fiscal year of the Borrower, as the case may
be, and (y) any UCC financing statements or other filings specified in such Compliance Certificate
as being required to be delivered therewith;

          (c) as soon as available, and in any event no later than 45 days after the end of each fiscal
year of the Borrower, a detailed consolidated budget for the following fiscal year (including a
projected consolidated balance sheet of the Borrower and its Subsidiaries as of the end of the
following fiscal year, and the related consolidated statements of projected cash flow, projected
changes in financial position and projected income), and, as soon as available, significant
revisions, if any, of such budget and projections with respect to such fiscal year (collectively,
the “Projections”), which Projections shall in each case be accompanied by a certificate of
a Responsible Officer stating that such Projections are based on reasonable estimates, information
and assumptions and that such Responsible Officer has no reason to believe that such Projections
are incorrect or misleading in any material respect;

          (d) no later than 10 Business Days prior to the effectiveness thereof, copies of
substantially final drafts of any proposed amendment, supplement, waiver or other modification with
respect to the Indentures;

          (e) within five days after the same are sent, copies of all financial statements and reports
that the Borrower sends to the holders of any class of its debt securities or public equity
securities and, within five days after the same are filed, copies of all financial statements and
reports that the Borrower may make to, or file with, the SEC; and

          (f) promptly, such additional financial and other information as any Lender may from time to
time reasonably request.

          6.3 Conduct of Business and Maintenance of Existence, etc. (a) (i) Preserve, renew and keep in full force and effect its corporate or other existence
and (ii) take all reasonable action to maintain all rights, privileges and franchises useful and
necessary in the normal conduct of its business, except, in each case, as otherwise permitted by
Section 7.4 and except, in the case of clause (ii) above, to the extent that failure to do so could
not reasonably be expected to have a Material Adverse Effect; and (b) comply with all
Contractual Obligations and Requirements of Law, except to the extent that failure to comply
therewith could not, in the aggregate, reasonably be expected to have a Material Adverse Effect.

          6.4 Maintenance of Property; Insurance. (a) Keep all material Property and systems useful and necessary in its business in good
working order and condition, ordinary wear and tear excepted and (b) maintain with financially
sound and reputable insurance companies insurance on all its Property in at least such amounts and
against at least such risks (but including in any event public liability, product liability and
business interruption) as are usually insured against in the same general area by companies engaged
in the same or a similar business.

 

47

          6.5 Inspection of Property; Books and Records; Discussions. (a) Keep proper books of records and account in which full, true and correct entries in
conformity with GAAP and all Requirements of Law shall be made of all dealings and transactions in
relation to its business and activities and (b) permit any Lender (accompanied by any other Lender
that so elects) to visit and inspect any of its properties and examine and make abstracts from any
of its books and records at any reasonable time, upon reasonable prior notice, and to discuss the
business, operations, properties and financial and other condition of the Borrower and its
Subsidiaries with officers and employees of the Borrower and its Subsidiaries and with its
independent certified public accountants (it being understood that all such notices shall be given
through the Administrative Agent and shall be coordinated with any other such notices to the extent
reasonably possible), in each case no more often than twice in any calendar year in the aggregate
for all Lenders unless an Event of Default shall have occurred and be continuing.

          6.6 Notices. Promptly give notice to the Administrative Agent (which shall promptly furnish such notice
to the Lenders) of:

          (a) the occurrence of any Default or Event of Default;

          (b) any (i) default or event of default under any Contractual Obligation of the Borrower or
any of its Subsidiaries that could reasonably be expected to have a Material Adverse Effect or (ii)
litigation, investigation or proceeding which may exist at any time between the Borrower or any of
its Subsidiaries and any Governmental Authority that, if adversely determined, could reasonably be
expected to have a Material Adverse Effect;

          (c) any litigation or proceeding affecting the Borrower or any of its Subsidiaries (i) in
which the amount involved is $5,000,000 or more and not covered by insurance or (ii) in which
injunctive or similar relief is sought which, if granted, could reasonably be expected to have a
Material Adverse Effect;

          (d) the following events, as soon as possible and in any event within 10 days after the
Borrower knows or has reason to know thereof: (i) the occurrence of any Reportable Event with
respect to any Plan, a failure to make any required contribution to a Plan, the creation of any
Lien in favor of the PBGC or a Plan or any withdrawal from, or the termination, Reorganization
or Insolvency of, any Multiemployer Plan or (ii) the institution of proceedings or the taking of
any other action by the PBGC or the Borrower or any Commonly Controlled Entity or any Multiemployer
Plan with respect to the withdrawal from, or the termination, Reorganization or Insolvency of, any
Plan; and

          (e) any development or event that has had or could reasonably be expected to have a Material
Adverse Effect.

Each notice pursuant to this Section shall be accompanied by a statement of a Responsible Officer
setting forth details of the occurrence referred to therein and stating what action the Borrower or
the relevant Subsidiary proposes to take with respect thereto.

          6.7 Environmental Laws. Comply in all respects with, and take all reasonable action to ensure compliance in all
respects by all tenants and subtenants, if any, with, all applicable Environmental Laws, and obtain
and comply in all respects with and maintain, and

 

48

take all reasonable action to ensure that all
tenants and subtenants obtain and comply in all respects with and maintain, any and all licenses,
approvals, notifications, registrations or permits required by applicable Environmental Laws,
except to the extent that any failures to so comply or maintain could not, in the aggregate,
reasonably be expected to result in a Material Adverse Effect.

          6.8 Additional Collateral, etc. (a) With respect to any Specified Personal Property acquired after the Closing Date by the
Borrower or any Subsidiary Guarantor (other than any Property subject to a Lien expressly permitted
by Section 7.3(g) or 7.3(j)) as to which the Administrative Agent, for the benefit of the Secured
Parties, does not have a perfected Lien, promptly (i) execute and deliver to the Administrative
Agent such amendments to the Guarantee and Collateral Agreement or such other documents as the
Administrative Agent reasonably deems necessary to grant to the Administrative Agent, for the
benefit of the Secured Parties, a security interest in such Property and (ii) take all actions
necessary or advisable to grant to the Administrative Agent, for the benefit of the Secured
Parties, a perfected first priority security interest in such Property, subject to Permitted Liens,
including without limitation, the filing of Uniform Commercial Code financing statements in such
jurisdictions as may be required by the Guarantee and Collateral Agreement or by law or as may be
requested by the Administrative Agent.

          (b) With respect to any new Material Subsidiary (other than an Excluded Subsidiary) created or
acquired after the Closing Date (which, for the purposes of this paragraph, shall include any
existing Material Subsidiary that ceases to be an Excluded Subsidiary and any existing Domestic
Subsidiary that ceases to be an Immaterial Subsidiary), by the Borrower or any of the Subsidiary
Guarantors, promptly (i) cause such new Subsidiary (A) to become a party to the Guarantee and
Collateral Agreement and (B) in the case of any Domestic Subsidiary, to take such actions necessary
or advisable to grant to the Administrative Agent for the benefit of the Secured Parties a
perfected first priority security interest in the Collateral described in the Guarantee and
Collateral Agreement with respect to such new Subsidiary (subject to Permitted
Liens), including, without limitation, the filing of Uniform Commercial Code financing
statements in such jurisdictions as may be required by the Guarantee and Collateral Agreement or by
law or as may be reasonably requested by the Administrative Agent, and (ii) if reasonably requested
by the Administrative Agent, deliver to the Administrative Agent legal opinions relating to the
matters described above, which opinions shall be in form and substance, and from counsel,
reasonably satisfactory to the Administrative Agent.

          6.9 Borrowing Base Certificate. In the case of the Borrower, at any time when the Total Extensions of Credit equal or
exceed $40,000,000, deliver or cause to be delivered, at the Borrower’s expense, the following:

          (a) to the Administrative Agent, the following documents in a form satisfactory to it:

	 	(i)	 	on a monthly basis and in no event later than
25 days after the end of each such month or, if an Event of Default
shall exist, more frequently as the Administrative Agent may reasonably
request (but in no event more often than weekly) or as the Borrower
shall 

 

49

	 	 	 	elect, a Borrowing Base Certificate, accompanied by such
supporting detail and documentation as is contemplated by the Borrowing
Base Certificate and/or as shall be requested by the Administrative
Agent in its reasonable discretion (in a form and detail satisfactory
to the Administrative Agent);
	 
	 	(ii)	 	on a monthly basis and in no event later than
25 days after the end of each such month or, if an Event of Default
shall exist, more frequently as the Administrative Agent may in good
faith request (but in no event more often than weekly), detailed agings
of Accounts and a detailed listing of the inventory of Quail Tools
(together with a reconciliation to its general ledger);
	 
	 	(iii)	 	upon the Administrative Agent’s request in
good faith (but in no event more often than (x) monthly so long as no
Event of Default shall exist or (y) weekly if an Event of Default shall
exist), (A) copies of customer statements and credit memos, remittance
advices and reports, and copies of deposit slips and bank statements,
and (B) a statement of the outstanding loans and payments made, and
Accounts owing to, Affiliates as of the last day of the immediately
preceding month.

          (b) To the Administrative Agent such other reports, statements and reconciliations with
respect to the Borrowing Base or the Collateral as it shall from time to time request in its
reasonable discretion.

          6.10 Cash Management Systems. (a) Within 30 days after the opening of any deposit account, securities account, lockbox
account, concentration account, collection account or disbursement account, in each case other than
any Immaterial Account, in the United States, deliver to the Administrative Agent a schedule (a
“Supplemental Account Identification Schedule”) which provides, in respect of each such
account opened since the Closing Date (i) the name and location of each bank and securities
intermediary at which the Borrower or such Subsidiary Guarantor maintains a deposit account,
securities account, lockbox account, concentration account, collection account or disbursement
account in the United States and (ii) the account number and account name or other relevant
descriptive data with respect to each such account and such other information with respect to each
such account as the Administrative Agent shall reasonably request.

          (b) On or before the date which is 30 days after the delivery of any Supplemental Account
Identification Schedule, cause to be delivered to the Administrative Agent a Control Agreement
and/or a Lockbox Agreement with respect to each account described in such Supplemental Account
Identification Schedule which the Administrative Agent reasonably requires to be subject to such an
agreement, in each case duly executed and delivered by the Borrower or the relevant Subsidiary
Guarantor and by the bank or securities intermediary that maintains such account.

 

50

          (c) Cause all proceeds of any Collateral in every form, including, without limitation, cash,
checks, wire transfers and other forms of receipts, to be deposited promptly in a collection
account or lockbox account (i) in respect of which a Control Agreement and/or Lockbox Agreement, as
appropriate, is in effect and (ii) which, at any time after an Event of Default has occurred and is
continuing, is used solely for the purpose of receiving proceeds of Collateral.

          6.11 Inspection of Collateral. The Borrower agrees that the Administrative Agent or its agents may, as the Administrative
Agent shall deem necessary or appropriate in the exercise of its sole discretion, enter upon the
premises of the Borrower or any Subsidiary Guarantor at any time and from time to time, during
normal business hours and upon reasonable notice under the circumstances, and at any time
whatsoever on and after the occurrence of a Default or Event of Default, for the purposes of
conducting field examinations and appraisals and inspecting, evaluating and verifying the
Collateral, all of the above to be at the Borrower’s expense during the existence of an Event of
Default and at the Administrative Agent’s expense if no Event of Default exists. Notwithstanding
the foregoing, at any time, but not more than on one occasion in any fiscal year of the Borrower,
the Administrative Agent may require an appraisal of the Collateral at the Borrower’s expense.

          6.12 Further Assurances. From time to time execute and deliver, or cause to be executed and delivered, such
additional instruments, certificates or documents, and take such actions, as the Administrative
Agent may reasonably request for the purposes of implementing or effectuating the provisions of
this Agreement and the other Loan Documents, or of more fully perfecting or renewing the rights of
the Administrative Agent and the Lenders with respect to the Collateral
(or with respect to any additions thereto or replacements or proceeds thereof or with respect
to any other property or assets hereafter acquired by the Borrower or any Subsidiary which may be
deemed to be part of the Collateral) pursuant hereto or thereto. Upon the exercise by the
Administrative Agent or any Lender of any power, right, privilege or remedy pursuant to this
Agreement or the other Loan Documents which requires any consent, approval, recording,
qualification or authorization of any Governmental Authority, the Borrower will execute and
deliver, or will cause the execution and delivery of, all applications, certifications, instruments
and other documents and papers that the Administrative Agent or such Lender may be required to
obtain from the Borrower or any of its Subsidiaries for such governmental consent, approval,
recording, qualification or authorization.

SECTION 7. NEGATIVE COVENANTS

          The Borrower hereby agrees that, so long as the Commitments remain in effect, any Letter of
Credit remains outstanding or any Loan or other amount is owing to any Lender or any Agent
hereunder, the Borrower shall not, and shall not permit any of its Subsidiaries (other than any
Immaterial Subsidiary) to, directly or indirectly:

          7.1 Financial Condition Covenants.

 

51

          (a) Consolidated Leverage Ratio. Permit the Consolidated Leverage Ratio as at the
last day of any period of four consecutive fiscal quarters of the Borrower to exceed 4.50:1.00.

          (b) Consolidated Interest Coverage Ratio. Permit the Consolidated Interest Coverage
Ratio for any period of four consecutive fiscal quarters of the Borrower to be less than 2.00:1.00.

          (c) Consolidated Senior Secured Leverage Ratio. Permit the Consolidated Senior
Secured Leverage Ratio as at the last day of any period of four consecutive fiscal quarters of the
Borrower to exceed 1.25:1.00.

          7.2 Limitation on Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:

          (a) (I) Indebtedness of any Loan Party pursuant to any Loan Document and (II) any unsecured
Indebtedness of any Loan Party the Net Cash Proceeds of which are used (i) to repay any
Indebtedness referred to in the preceding clause (I), provided that such repayment is
accompanied by an equal permanent reduction of the Commitments, or (ii) to pay premiums, fees or
expenses payable in connection with any such repayment;

          (b) Indebtedness (i) of the Borrower to any Subsidiary and of any Wholly Owned Subsidiary
Guarantor to the Borrower or any other Subsidiary and (ii) of any Subsidiary to any Loan Party or
other Subsidiary;

          (c) Indebtedness (including, without limitation, Capital Lease Obligations) secured by Liens
permitted by Section 7.3(g) in an aggregate principal amount not to exceed $10,000,000 at any one
time outstanding;

          (d) (I) Indebtedness outstanding on the date hereof and listed on Schedule 7.2(d) and (II) any
Indebtedness the Net Cash Proceeds of which are used (i) to refinance, refund, renew or extend any
Indebtedness referred to in the preceding clause (I) (without any shortening of the maturity of any
principal amount thereof) or (ii) to pay premiums, fees or expenses payable in connection with any
such refinancing, refunding, renewal or extension;

          (e) (i) Guarantee Obligations of the Borrower or any Subsidiary in respect of Indebtedness
permitted under this Section 7.2 and (ii) Guarantee Obligations made in the ordinary course of
business by the Borrower or any of its Subsidiaries of obligations of the Borrower or any
Subsidiary Guarantor;

          (f) Indebtedness represented by agreements of the Borrower or any Subsidiary providing for
indemnification, adjustment of purchase price, or similar obligations, in each case, incurred or
assumed in connection with the Disposition of any business, assets, or Capital Stock of the
Borrower or any Subsidiary; provided that the maximum aggregate liability in respect of all
such Indebtedness shall at no time exceed the gross proceeds actually received by the Borrower and
its Subsidiaries in connection with such Disposition; and

 

52

          (g) additional Indebtedness of the Borrower or any of its Subsidiaries in an aggregate
principal amount (for the Borrower and all Subsidiaries) not to exceed $20,000,000 at any one time
outstanding.

          7.3 Limitation on Liens. Create, incur, assume or suffer to exist any Lien upon any of its Property, whether now
owned or hereafter acquired, except for:

          (a) Liens for taxes, assessments or governmental charges or claims not yet due or which are
being contested in good faith by appropriate proceedings, provided that adequate reserves
with respect thereto are maintained on the books of the Borrower or its Subsidiaries, as the case
may be, in conformity with GAAP;

          (b) Landlords’, carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other
like Liens arising in the ordinary course of business which are not overdue for a period of more
than 30 days or that are being contested in good faith by appropriate proceedings;

          (c) pledges or deposits in connection with workers’ compensation, unemployment insurance and
other social security legislation;

          (d) deposits to secure the payment or performance of bids, tenders, government contracts,
trade contracts (other than for borrowed money), leases, statutory or regulatory obligations,
surety and appeal bonds, performance bonds and other obligations of a like nature incurred in the
ordinary course of business;

          (e) easements, rights-of-way, restrictions and other similar encumbrances incurred in the
ordinary course of business that, in the aggregate, are not substantial in amount and which do not
in any case materially detract from the value of the Property subject thereto or materially
interfere with the ordinary conduct of the business of the Borrower or any of its Subsidiaries;

          (f) Liens in existence on the date hereof listed on Schedule 7.3(f), securing Indebtedness
permitted by Section 7.2(d), provided that no such Lien is spread to cover any additional
Property after the Closing Date;

          (g) Liens securing Indebtedness of the Borrower or any other Subsidiary incurred pursuant to
Section 7.2(c) to finance the acquisition of fixed or capital assets, provided that (i)
such Liens shall be created within 90 days after the acquisition of such fixed or capital assets,
(ii) such Liens do not at any time encumber any Property other than the Property financed by such
Indebtedness and (iii) the amount of Indebtedness secured thereby is not increased;

          (h) Liens created pursuant to the Security Documents;

          (i) any interest or title of a lessor under any lease entered into by the Borrower or any
other Subsidiary in the ordinary course of its business and covering only the assets so leased;

          (j) Liens not otherwise permitted by this Section 7.3 so long as neither (i) the aggregate
outstanding principal amount of the obligations secured thereby nor (ii) the aggregate

 

53

fair market
value (determined, in the case of each such Lien, as of the date such Lien is incurred) of the
assets subject thereto exceeds (as to the Borrower and all Subsidiaries) $20,000,000 at any one
time;

          (k) judgment Liens not giving rise to an Event of Default so long as any appropriate legal
proceedings which may have been duly initiated for the review of such judgment shall not have been
finally terminated or the period within which such proceedings may be initiated shall not have
expired;

          (l) Liens upon specific items of inventory or other goods of the Borrower or any Subsidiary
securing such Person’s obligations in respect of bankers acceptances issued or created for the
account of such Person to facilitate the purchase, shipment, or storage of such inventory or other
goods; and

          (m) Liens securing reimbursement obligations with respect to commercial letters of credit that
encumber documents and other property or assets relating to such letters of credit and products and
proceeds thereof.

          7.4 Limitation on Fundamental Changes. Enter into any merger, consolidation or amalgamation, or liquidate, wind up or dissolve
itself (or suffer any liquidation or dissolution), or Dispose of all or substantially all of its
Property or business, except that:

          (a) any Subsidiary of the Borrower may be merged or consolidated with or into the Borrower
(provided that the Borrower shall be the continuing or surviving corporation) or with or
into any Subsidiary Guarantor (provided that (i) the Subsidiary Guarantor shall be the
continuing or surviving corporation or (ii) simultaneously with such transaction, the continuing or
surviving corporation shall become a Subsidiary Guarantor and the Borrower shall comply with
Section 6.9 in connection therewith);

          (b) any Subsidiary may merge with any other Subsidiary (or any Person that becomes a
Subsidiary contemporaneously with such merger) so long as, in the case of any merger involving a
Subsidiary Guarantor, the surviving Person shall be (or shall contemporaneously become) a
Subsidiary Guarantor and such merger could not reasonably be expected to have a material adverse
effect on the business, assets, property or financial condition of the surviving Subsidiary; and

          (c) any Subsidiary of the Borrower may Dispose of any or all of its assets (upon voluntary
liquidation or otherwise) to the Borrower or any Subsidiary (so long as, in the case of any such
Disposition by a Subsidiary Guarantor, the Subsidiary to whom such assets are disposed of is a
Subsidiary Guarantor) and may be dissolved following such Disposition.

          7.5 Limitation on Disposition of Property. Dispose of (i) any barge rig located in the Gulf of Mexico, (ii) any Eligible Accounts
Receivable or (iii) any Eligible Rental Equipment, in each case whether now owned or hereafter
acquired, or issue or Dispose of any Capital Stock of any Person that directly or indirectly owns
any of the foregoing, except:

          (a) Dispositions permitted by Section 7.4(c);

 

54

          (b) the Disposition of obsolete or worn out property, or property that is no longer used or
useful in such Person’s business, in the ordinary course of business;

          (c) the Disposition of inventory or other assets in the ordinary course of business or
consistent with past practice;

          (d) Dispositions of cash or Cash Equivalents;

          (e) the sale or issuance of any Subsidiary’s Capital Stock to the Borrower or any Subsidiary
Guarantor;

          (f) transfers of assets between or among the Borrower and the Subsidiary Guarantors;

          (g) any Dispositions constituted by the granting of Liens permitted by Section 7.3;

          (h) any lease of drill pipe by Quail Tools to a customer located outside of the United States
and any subsequent sale to such customer of any such drill pipe;

          (i) any sale by the Borrower or any Subsidiary to its customers of drill pipe, tools, and
associated drilling equipment utilized in connection with a drilling contract for the employment of
a drilling rig in the ordinary course of business and consistent with past practice; and

          (j) Dispositions of Property described on Schedule 7.5(j).

          7.6 Limitation on Restricted Payments. Declare or pay any dividend on, or make any payment on account of, or set apart assets for
a sinking or other analogous fund for, the purchase, redemption, defeasance, retirement or other
acquisition of, any Capital Stock of the Borrower or any Subsidiary, whether now or hereafter
outstanding, or make any other distribution in respect thereof, either directly or indirectly,
whether in cash or property or in obligations of the Borrower or any Subsidiary, or enter into any
derivatives or other transaction with any financial institution, commodities or stock exchange or
clearinghouse (a “Derivatives Counterparty”) obligating the Borrower or any Subsidiary to
make payments to such Derivatives Counterparty as a result of any change in market value of any
such Capital Stock (collectively, “Restricted Payments”), except that:

          (a) any Subsidiary (a “Paying Subsidiary”) may make Restricted Payments (i) to the
Borrower or any Subsidiary Guarantor, (ii) in the case of any Paying Subsidiary that is a
partnership or a limited liability company, ratably to the partners or members thereof, as the case
may be, so long as at least one such partner or member, as the case may be, is a Subsidiary
Guarantor and (iii) if such Paying Subsidiary is not a Subsidiary Guarantor, to any other
Subsidiary which is the parent of such Paying Subsidiary;

          (b) the Borrower may make Restricted Payments in the form of common stock of the Borrower;

 

55

          (c) the Borrower may make Restricted Payments in connection with (i) the conversion,
redemption, or repurchase of the Convertible Notes and (ii) the High Strikes Agreements.

          (d) so long as no Event of Default has occurred and is continuing or would be caused thereby,
the Borrower or any Subsidiary may repurchase, redeem, or otherwise acquire or retire any Capital
Stock of the Borrower or any Subsidiary held by any existing or former officer or employee of the
Borrower or any Subsidiary pursuant to any equity subscription agreement, stock option agreement,
or similar agreement, provided, that the aggregate amount of payments under this paragraph
subsequent to the date hereof (net of any proceeds received by the Borrower subsequent to the date
hereof in connection with resales of any common stock or common stock options so purchased) shall
not exceed $2,000,000 in any 12 month period; and

          (e) the Borrower may acquire Capital Stock in connection with the exercise of stock options or
stock appreciation rights by way of cashless exercise or in connection with the satisfaction of
withholding tax obligations.

          7.7 Limitation on Modifications of Debt Instruments, etc. (a) amend, modify or otherwise change, or consent or agree to any amendment, modification,
waiver or other change to, any of the terms of the Convertible Notes, the Senior Notes, the Senior
Floating Rate Notes or any Refinancing Debt to the extent that any such amendment, modification,
waiver or other change would shorten the maturity or increase the amount of any payment of
principal thereof, increase the rate or shorten the date for payment of interest thereon or make
any covenant or other restriction applicable to the Borrower or any of its Subsidiaries materially
more restrictive) or (b) amend its certificate of incorporation in any manner adverse to the
Administrative Agent or the Lenders.

          7.8 Limitation on Transactions with Affiliates. Enter into any transaction, including, without limitation, any purchase, sale, lease or
exchange of Property, the rendering of any service or the payment of any management, advisory or
similar fees, with any Affiliate (other than the Borrower or any Subsidiary Guarantor) unless such
transaction is (a) otherwise permitted under this Agreement, (b) in the ordinary course of business
of the Borrower or such Subsidiary, as the case may be, and (c) upon fair and reasonable terms no
less favorable to the Borrower or such Subsidiary, as the case may be, than it would obtain in a
comparable arm’s length transaction with a Person that is not an Affiliate, except for transactions
permitted by the following sentence. This Section 7.8 shall not apply to the following
transactions: (i) any employment agreement entered into by the Borrower or any of its Subsidiaries
in the ordinary course of business and consistent with past practices, (ii) payment of reasonable
directors’ fees to Persons who are not otherwise Affiliates of the Borrower, (iii) sales of Capital
Stock of the Borrower to Affiliates of the Borrower, (iv) any Restricted Payment otherwise
permitted under Section 7.6 or any Investment, (v) indemnification agreements with, and payments
made, to officers, directors, and employees of the Borrower or any Subsidiary pursuant to charter,
bylaw, statutory, or contractual provisions, and (vi) the performance of obligations of the
Borrower or any Subsidiary under the terms of any agreement to which the Borrower or any Subsidiary
is a party as of the date of this Agreement, and any amendments, modifications, supplements,
extensions, or renewals of such agreements; provided that any such amendments,
modifications, supplements, extensions, or renewals of such agreements are not materially more

 

56

disadvantageous, taken as a whole, to the Administrative Agent and the Lenders than the terms of
such agreements as in effect on the date of this Agreement.

          7.9 Limitation on Changes in Fiscal Periods. Permit the fiscal year of the Borrower to end on a day other than December 31 or change the
Borrower’s method of determining fiscal quarters.

          7.10 Limitation on Negative Pledge Clauses. Enter into or suffer to exist or become effective any agreement that prohibits or limits
the ability of the Borrower or any of its Subsidiaries to create, incur, assume or suffer to exist
any Lien upon any of its Property or revenues, whether now owned or hereafter acquired, to secure
the Obligations or, in the case of any guarantor, its obligations under the Guarantee and
Collateral Agreement, other than (a) this Agreement and the other Loan Documents, (b) the
Indentures or any indenture or similar instrument governing any Refinancing Debt, (c) any
agreements governing any purchase money Liens or Capital Lease Obligations or other secured
Indebtedness otherwise permitted hereby (in which case, any prohibition or limitation shall only be
effective against the assets financed thereby or securing such Indebtedness), (d) customary non
assignment provisions in any contract or lease entered into in the ordinary course of business and
consistent with past practices, (e) applicable law or any applicable rule, regulation, or order of
any Governmental Authority, (f) provisions with respect to the disposition or distribution of
assets or property in joint venture agreements, asset sale agreements, stock sale agreements, and
other similar agreements entered into in the ordinary course of business, and (g) restrictions on
cash or other deposits or net worth imposed by customers under contracts entered into in the
ordinary course of business.

          7.11 Limitation on Restrictions on Subsidiary Distributions. Enter into or suffer to exist or become effective any consensual encumbrance or restriction
on the ability of any Subsidiary to (a) make Restricted Payments in respect of any Capital Stock of
such Subsidiary held by, or pay any Indebtedness owed to, the Borrower or any other Subsidiary, (b)
make Investments in the Borrower or any other Subsidiary or (c) transfer any of its assets to the
Borrower or any other Subsidiary, except for such encumbrances or restrictions existing under or by
reason of (i) any restrictions existing under the Loan Documents, (ii) any restrictions with
respect to a Subsidiary imposed pursuant to an agreement that has been entered into in connection
with the Disposition of all or substantially all of the Capital Stock or assets of such Subsidiary,
(iii) any restrictions imposed pursuant to agreements governing any purchase money Liens or Capital
Lease Obligations or other secured Indebtedness otherwise permitted hereby (in which case, any
prohibition or limitation shall only be effective as to transfers of the assets financed thereby or
securing such Indebtedness), (iv) customary non assignment provisions in any contract or lease
entered into in the ordinary course of business and consistent with past practices, (v) applicable
law or any applicable rule, regulation, or order of any Governmental Authority, (vi) provisions
with respect to the disposition or distribution of assets or property in joint venture agreements,
asset sale agreements, stock sale agreements, and other similar agreements entered into in the
ordinary course of business, provided that such provisions apply only to the assets subject
to such agreements, and (vii) restrictions on cash or other deposits or net worth imposed by
customers under contracts entered into in the ordinary course of business.

          7.12 Limitation on Lines of Business. Enter into any material business except for those businesses
in which the Borrower and its
Subsidiaries are engaged on the date of this

 

57

Agreement or that are incidental or reasonably related
thereto or that are a reasonable extension thereof, as determined in good faith by the Borrower or
applicable Subsidiary.

          7.13 Limitation on Hedge Agreements. Enter into any Hedge Agreement other than Hedge Agreements entered into in the ordinary
course of business, and not for speculative purposes, to protect against changes in interest rates
or foreign exchange rates.

SECTION 8. EVENTS OF DEFAULT

          If any of the following events shall occur and be continuing:

          (a) The Borrower shall fail to pay any principal of any Loan or Reimbursement Obligation when
due in accordance with the terms hereof; or the Borrower shall fail to pay any interest on any Loan
or Reimbursement Obligation, or any other amount payable hereunder or under any other Loan
Document, within three Business Days after any such interest or other amount becomes due in
accordance with the terms hereof or thereof; or

          (b) Any representation or warranty made or deemed made by any Loan Party herein or in any
other Loan Document or in any certificate, document or financial or other statement furnished by it
at any time under or in connection with this Agreement or any such other Loan Document shall prove
to have been inaccurate in any material respect on or as of the date made or deemed made or
furnished; or

          (c) (i) Any Loan Party shall default in the observance or performance of any agreement
contained in clause (i) or (ii) of Section 6.3(a) (with respect to the Borrower only), Section
6.6(a) or Section 7, or in Section 5 of the Guarantee and Collateral Agreement or (ii) any Loan
Party shall default in the observance or performance of any agreement contained in Section 6.1 or
in clause (i) of Section 6.9(a) and such default shall continue unremedied for a period of 10 days;
or

          (d) Any Loan Party shall default in the observance or performance of any other agreement
contained in this Agreement or any other Loan Document (other than as provided in paragraphs (a)
through (c) of this Section), and such default shall continue unremedied for a period of 30 days;
or

          (e) The Borrower or any of its Subsidiaries shall (i) default in making any payment of any
principal of any Indebtedness (including, without limitation, but without duplication of the
Indebtedness guaranteed thereby, any Guarantee Obligation, but excluding the Loans and
Reimbursement Obligations) on the scheduled or original due date with respect thereto; or (ii)
default in making any payment of any interest on any such Indebtedness beyond the period of grace,
if any, provided in the instrument or agreement under which such Indebtedness was created; or (iii)
default in the observance or performance of any other agreement or condition relating to any such
Indebtedness or contained in any instrument or agreement evidencing, securing or relating thereto,
or any other event shall occur or condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or beneficiary of such Indebtedness (or a trustee or
agent on behalf of such holder or beneficiary) to cause, with the giving of notice if required,
such Indebtedness to become due prior to its stated maturity or to become subject to or mandatory
offer to purchase by the obligor thereunder or (in

 

58

the case of any such Indebtedness constituting a
Guarantee Obligation) to become payable; provided, that a default, event or condition
described in clause (i), (ii) or (iii) of this paragraph (e) shall not at any time constitute an
Event of Default unless, at such time, one or more defaults, events or conditions of the type
described in clauses (i), (ii) and (iii) of this paragraph (e) shall have occurred and be
continuing with respect to Indebtedness the outstanding principal amount of which exceeds in the
aggregate $10,000,000; or

          (f) (i) The Borrower or any of its Subsidiaries (other than any Immaterial Subsidiary) shall
commence any case, proceeding or other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization or relief of
debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate
it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to it or its debts, or (B)
seeking appointment of a receiver, trustee, custodian, conservator or other similar official for it
or for all or any substantial part of its assets, or the Borrower or any of its Subsidiaries (other
than any Immaterial Subsidiary) shall make a general assignment for the benefit of its creditors;
or (ii) there shall be commenced against the Borrower or any of its Subsidiaries (other than any
Immaterial Subsidiary) any case, proceeding or other action of a nature referred to in clause (i)
above that (A) results in the entry of an order for relief or any such adjudication or appointment
or (B) remains undismissed, undischarged or unbonded for a period of 60 days; or (iii) there shall
be commenced against the Borrower or any of its Subsidiaries (other than any Immaterial Subsidiary)
any case, proceeding or other action seeking issuance of a warrant of attachment, execution,
distraint or similar process against all or any substantial part of its assets that results in the
entry of an order for any such relief that shall not have been vacated, discharged, or stayed or
bonded pending appeal within 60 days from the entry thereof; or (iv) the Borrower or any of its
Subsidiaries shall take any action in furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (i), (ii), or (iii) above; or (v) the Borrower
or any of its Subsidiaries (other than any Immaterial Subsidiary) shall generally not, or shall be
unable to, or shall admit in writing its inability to, pay its debts as they become due; or

          (g) Any Person shall engage in any “prohibited transaction” (as defined in Section 406 of
ERISA or Section 4975 of the Code) involving any Plan, (ii) any “accumulated funding deficiency”
(as defined in Section 302 of ERISA), whether or not waived, shall exist with respect to any Plan,
or any Lien in favor of the PBGC or a Plan shall arise on the assets of the Borrower or any
Commonly Controlled Entity, (iii) a Reportable Event shall occur with respect to, or proceedings
shall commence to have a trustee appointed, or a trustee shall be appointed, to administer or to
terminate, any Single Employer Plan, which Reportable Event or commencement of proceedings or
appointment of a trustee is, in the reasonable opinion of the Required Lenders, likely to result in
the termination of such Plan for purposes of Title IV of ERISA, (iv) any Single Employer Plan shall
terminate for purposes of Title IV of ERISA, (v) the Borrower or any Commonly Controlled Entity
shall incur any liability in connection with a withdrawal from, or the Insolvency or Reorganization
of, a Multiemployer Plan or (vi) any other event or condition shall occur or exist with respect to
a Plan; and in each case in clauses (i) through (vi) above, such event or condition, together with
all other such events or conditions, if any, could reasonably be expected to have a Material
Adverse Effect; or

 

 

59

          (h) One or more judgments or decrees shall be entered against the Borrower or any of its
Subsidiaries involving for the Borrower and its Subsidiaries taken as a whole a liability (not paid
or fully covered by insurance as to which the relevant insurance company has acknowledged coverage)
of $10,000,000 or more, and all such judgments or decrees shall not have been vacated, discharged,
stayed or bonded pending appeal by the earlier of (i) the date which 30 days from the entry thereof
and (ii) the date on which the relevant judgment creditor(s) has begun to enforce such judgment(s)
or decree(s); or

          (i) Any of the Security Documents shall cease, for any reason (other than by reason of the
express release thereof pursuant to Section 10.15), to be in full force and effect, or any Loan
Party or any Affiliate of any Loan Party shall so assert, or any Lien on a material portion of the
Collateral created by any of the Security Documents shall cease (other than by reason of the
express release thereof pursuant to Section 10.15) to be enforceable and of the same effect and
priority purported to be created thereby; or

          (j) The guarantee contained in Section 2 of the Guarantee and Collateral Agreement shall
cease, for any reason (other than by reason of the express release thereof pursuant to Section
10.15), to be in full force and effect or any Loan Party or any Affiliate of any Loan Party shall
so assert; or

          (k) Any Change of Control shall occur;

then, and in any such event, (A) if such event is an Event of Default specified in clause (i) or
(ii) of paragraph (f) above with respect to the Borrower, automatically the Commitments shall
immediately terminate and the Loans hereunder (with accrued interest thereon) and all other amounts
owing under this Agreement and the other Loan Documents (including, without limitation, all amounts
of L/C Obligations, whether or not the beneficiaries of the then outstanding Letters of Credit
shall have presented the documents required thereunder) shall immediately become due and payable,
and (B) if such event is any other Event of Default, either or both of the following actions may be
taken: (i) with the consent of the Required Lenders, the Administrative Agent may, or upon the
request of the Required Lenders, the Administrative Agent shall, by notice to the Borrower declare
the Commitments to be terminated forthwith, whereupon the Commitments shall immediately terminate;
and (ii) with the consent of the Required Lenders, the Administrative Agent may, or upon the
request of the Required Lenders, the Administrative Agent shall, by notice to the Borrower, declare
the Loans hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement and the other Loan Documents (including, without limitation, all amounts of L/C
Obligations, whether or not the beneficiaries of the then outstanding Letters of Credit shall have
presented the documents required thereunder) to be due and payable forthwith, whereupon the same
shall immediately become due and payable. In the case of all Letters of Credit with respect to
which presentment for honor shall not have occurred at the time of an acceleration pursuant to this
paragraph, the Borrower shall at such time deposit in a cash collateral account opened by the
Administrative Agent an amount equal to the aggregate then undrawn and unexpired amount of such
Letters of Credit; provided that in the case of any Letter of Credit denominated in a
currency other than Dollars, upon the request of the Administrative Agent or the relevant Issuing
Lender, the Borrower shall deposit additional amounts in the cash collateral account in such
amounts as reasonably determined by the Administrative Agent to achieve the deposit of cash in the
amount

 

60

required above, taking into account the effects of currency exchange fluctuations with respect to
the applicable currency. Amounts held in such cash collateral account shall be applied by the
Administrative Agent to the payment of drafts drawn under such Letters of Credit, and the unused
portion thereof after all such Letters of Credit shall have expired or been fully drawn upon, if
any, shall be applied to repay other obligations of the Borrower hereunder and under the other Loan
Documents. After all such Letters of Credit shall have expired or been fully drawn upon, all
Reimbursement Obligations shall have been satisfied and all other obligations of the Borrower
hereunder and under the other Loan Documents shall have been paid in full, the balance, if any, in
such cash collateral account shall be returned to the Borrower (or such other Person as may be
lawfully entitled thereto).

SECTION 9. THE ADMINISTRATIVE AGENT

          9.1
Appointment. Each Lender hereby irrevocably designates and appoints the Administrative Agent as the
agent of such Lender under this Agreement and the other Loan Documents, and each Lender irrevocably
authorizes the Administrative Agent, in such capacity, to take such action on its behalf under the
provisions of this Agreement and the other Loan Documents and to exercise such powers and perform
such duties as are expressly delegated to the Administrative Agent by the terms of this Agreement
and the other Loan Documents, together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Agreement, the Administrative
Agent shall not have any duties or responsibilities, except those expressly set forth herein, or
any fiduciary relationship with any Lender, and no implied covenants, functions, responsibilities,
duties, obligations or liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Administrative Agent.

          9.2
Delegation of Duties. The Administrative Agent may execute any of its duties under this Agreement and the other
Loan Documents by or through agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent shall not be
responsible for the negligence or misconduct of any agents or attorneys-in-fact selected by it with
reasonable care.

          9.3
Exculpatory Provisions. Neither the Administrative Agent nor any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or any other Loan Document
(except to the extent that any of the foregoing are found by a final and nonappealable decision of
a court of competent jurisdiction to have resulted from its or such Person’s own gross negligence
or willful misconduct) or (ii) responsible in any manner to any of the Lenders for any recitals,
statements, representations or warranties made by any Loan Party or any officer thereof contained
in this Agreement or any other Loan Document or in any certificate, report, statement or other
document referred to or provided for in, or received by the Administrative Agent under
or in connection with, this Agreement or any other Loan Document or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document or for any failure of any Loan Party to perform its obligations hereunder or thereunder.
The Administrative Agent shall not be under any obligation to any Lender to ascertain or to inquire
as to the observance or performance of

 

61

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 Loan
Party.

          9.4
Reliance by Administrative Agent. The Administrative Agent shall be entitled to rely, and shall be fully protected in
relying, upon any instrument, writing, resolution, notice, consent, certificate, affidavit, letter,
telecopy, telex or teletype message, statement, order 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, without limitation, counsel to the Loan
Parties), independent accountants and other experts selected by the Administrative Agent. The
Administrative Agent may deem and treat the payee of any Note as the owner thereof for all purposes
unless such Note shall have been transferred in accordance with Section 10.6 and all actions
required by such Section in connection with such transfer shall have been taken. The
Administrative Agent shall be fully justified in failing or refusing to take any action under this
Agreement or any other Loan Document unless it shall first receive such advice or concurrence of
the Required Lenders (or, if so specified by this Agreement, all Lenders or any other instructing
group of Lenders specified by this Agreement) as it deems appropriate or it shall first be
indemnified to its satisfaction by the Lenders against any and all liability and expense that may
be incurred by it by reason of taking or continuing to take any such action. The Administrative
Agent shall in all cases be fully protected in acting, or in refraining from acting, under this
Agreement and the other Loan Documents in accordance with a request of the Required Lenders (or, if
so specified by this Agreement, all Lenders or any other instructing group of Lenders specified by
this Agreement), and such request and any action taken or failure to act pursuant thereto shall be
binding upon all the Lenders and all future holders of the Loans.

          9.5
Notice of Default. The Administrative Agent shall not be deemed to have knowledge or notice of the occurrence
of any Default or Event of Default hereunder unless the Administrative Agent shall have received
notice from a Lender or the Borrower referring to this Agreement, describing such Default or Event
of Default and stating that such notice is a “notice of default”. In the event that the
Administrative Agent shall receive such a notice, the Administrative Agent shall give notice
thereof to the Lenders. The Administrative Agent shall take such action with respect to such
Default or Event of Default as shall be reasonably directed by the Required Lenders (or, if so
specified by this Agreement, all Lenders or any other instructing group of Lenders specified by
this Agreement); provided that unless and until the Administrative Agent shall have
received such directions, the Administrative Agent may (but shall not be obligated to) take such
action, or refrain from taking such action, with respect to such Default or Event of Default as it
shall deem advisable in the best interests of the Lenders.

          9.6
Non-Reliance on Administrative Agent and Other Lenders. Each Lender expressly acknowledges that neither the Administrative Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates have made any
representations or warranties to it and that no act by the Administrative Agent hereafter taken,
including any review of the affairs of a Loan Party or any affiliate of a Loan Party, shall be
deemed to constitute any representation or warranty by the Administrative Agent to any Lender.
Each Lender represents to the Administrative Agent that it has, independently and without reliance
upon the Administrative Agent or any other Lender, and based on such documents and information as
it has deemed appropriate, made its own appraisal of and investigation into the business,
operations, property, financial and other condition and creditworthiness of the Loan Parties and
their affiliates and made its own decision to make its Loans hereunder and enter into this
Agreement. Each Lender also represents that it will, independently and without reliance upon the
Administrative Agent or any other Lender, and based on such documents and information as it shall
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
investigation as it deems necessary to inform itself as to the business, operations, property,

 

62

financial and other condition and creditworthiness of the Loan Parties and their affiliates.
Except for notices, reports and other documents expressly required to be furnished to the Lenders
by the Administrative Agent hereunder, the Administrative Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information concerning the business,
operations, property, condition (financial or otherwise), prospects or creditworthiness of any Loan
Party or any affiliate of a Loan Party that may come into the possession of the Administrative
Agent or any of its officers, directors, employees, agents, attorneys-in-fact or affiliates.

          9.7
Indemnification. The Lenders agree to indemnify each Agent in its capacity as such (to the extent not
reimbursed by the Borrower and without limiting the obligation of the Borrower to do so), ratably
according to their respective Percentages in effect on the date on which indemnification is sought
under this Section (or, if indemnification is sought after the date upon which the Commitments
shall have terminated and the Loans shall have been paid in full, ratably in accordance with such
Percentages immediately prior to such date), for, and to save each Agent harmless from and against,
any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind whatsoever that may at any time (including, without
limitation, at any time following the payment of the Loans) be imposed on, incurred by or asserted
against such Agent in any way relating to or arising out of, the Commitments, this Agreement, any
of the other Loan Documents or any documents contemplated by or referred to herein or therein or
the transactions contemplated hereby or thereby or any action taken or omitted by such Agent under
or in connection with any of the foregoing; provided that no Lender shall be liable for the
payment of any portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements that are found by a final and nonappealable
decision of a court of competent jurisdiction to have resulted from such Agent’s gross negligence
or willful misconduct. The agreements in this Section shall survive the payment of the Loans and
all other amounts payable hereunder.

          9.8
Agent in Its Individual Capacity. Each Agent and its affiliates may make loans to, accept deposits from and generally engage
in any kind of business with any Loan Party as though such Agent were not an Agent. With respect
to its Loans made or renewed by it and with respect to any Letter of Credit issued or participated
in by it, each Agent shall have the same rights and powers under this Agreement and the other Loan
Documents as any Lender and may exercise the same as though it were not an Agent, and the terms
“Lender” and “Lenders” shall include each Agent in its individual capacity.

          9.9
Successor Administrative Agent. The Administrative Agent may resign as Administrative Agent upon 10 days’ notice to the
Lenders and the Borrower. If the Administrative Agent shall resign as Administrative Agent under
this Agreement and the other

 

63

Loan Documents, then the Required Lenders shall appoint from among the
Lenders a successor agent for the Lenders, which successor agent shall (unless an Event of Default
under Section 8(a) or Section 8(f) with respect to the Borrower shall have occurred and be
continuing) be subject to approval by the Borrower (which approval shall not be unreasonably
withheld or delayed), whereupon such successor agent shall succeed to the rights, powers and duties
of the Administrative Agent, and the term “Administrative Agent” shall mean such successor agent
effective upon such appointment and approval, and the former Administrative Agent’s rights, powers
and duties as Administrative Agent shall be terminated, without any other or further act or deed on
the part of such former Administrative Agent or any of the parties to this Agreement or any holders
of the Loans. If no successor agent has accepted appointment as Administrative Agent by the date
that is 10 days following a retiring Administrative Agent’s notice of resignation, the retiring
Administrative Agent’s resignation shall nevertheless thereupon become effective, and the Lenders
shall assume and perform all of the duties of the Administrative Agent hereunder until such time,
if any, as the Required Lenders appoint a successor agent as provided for above. After any
retiring Administrative Agent’s resignation as Administrative Agent, the provisions of this Section
9 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 and the other Loan Documents.

          9.10
Authorization to Release Liens and Guarantees. The Administrative Agent is hereby irrevocably authorized by each of the Lenders to effect
any release of Liens or guarantee obligations contemplated by Section 10.15.

          9.11
The Arrangers; the Syndication Agent. Neither the Arrangers nor the Syndication Agent, in their respective capacities as such,
shall have no duties or responsibilities, and shall incur no liability, under this Agreement and
the other Loan Documents.

SECTION 10. MISCELLANEOUS

          10.1
Amendments and Waivers. Neither this Agreement or any other Loan Document, nor any terms hereof or thereof may be
amended, supplemented or modified except in accordance with the provisions of this Section 10.1. The Required Lenders, the Administrative Agent and each Loan Party party
to the relevant Loan Document may, or (with the written consent of the Required Lenders) the
Administrative Agent and each Loan Party party to the relevant Loan Document may, from time to
time, (a) enter into written amendments, supplements or modifications hereto and to the other Loan
Documents (including amendments and restatements hereof or thereof) for the purpose of adding any
provisions to this Agreement or the other Loan Documents or changing in any manner the rights of
the Lenders or of the Loan Parties hereunder or thereunder or (b) waive, on such terms and
conditions as may be specified in the instrument of waiver, any of the requirements of this
Agreement or the other Loan Documents or any Default or Event of Default and its consequences;
provided, however, that no such waiver and no such amendment, supplement or
modification shall:

	 	(i)	 	forgive the principal amount or extend the
final scheduled date of maturity of any Loan or Reimbursement
Obligation, reduce the stated rate of any interest or fee payable
hereunder or extend the scheduled date of any payment thereof, or
increase the amount or extend the expiration date of any Commitment of
any Lender, in

 

64

	 	 	 	each case without the consent of each Lender directly
affected thereby;
	 
	 	(ii)	 	amend, modify or waive any provision of this
Section or reduce the percentage specified in the definition of
Required Lenders, consent to the assignment or transfer by the Borrower
of any of its rights and obligations under this Agreement and the other
Loan Documents, release all or substantially all of the Collateral or
release all or substantially all of the Subsidiary Guarantors from
their respective guarantee obligations under the Guarantee and
Collateral Agreement, in each case without the consent of all Lenders;
	 
	 	(iii)	 	amend, modify or waive any provision of
Section 9, or any other provision affecting the rights, duties or
obligations of any Agent, without the consent of any Agent directly
affected thereby;
	 
	 	(iv)	 	amend, modify or waive any provision of Section
2.14 without the consent of each Lender directly affected thereby;
	 
	 	(v)	 	amend, modify or waive any provision of Section
3 without the consent of each Issuing Lender affected thereby;
	 
	 	(vi)	 	impose restrictions on assignments and
participations that are more restrictive than, or additional to, those
set forth in Section 10.6 without the consent of all Lenders;
	 
	 	(vii)	 	increase the Advance Rates under the Borrowing
Base or increase the L/C Commitment without the consent of all Lenders;
or
	 
	 	(viii)	 	amend, modify or waive any provision of (A) the definition of
“Borrowing Base” or (B) any of the capitalized terms used in such
definition, in each case without the consent of Lenders whose
Percentages are no less than 75% in the aggregate.

Any such waiver and any such amendment, supplement or modification shall apply equally to each of
the Lenders and shall be binding upon the Loan Parties, the Lenders, the Administrative Agent and
all future holders of the Loans. In the case of any waiver, the Loan Parties, the Lenders and the
Administrative Agent shall be restored to their former position and rights hereunder and under the
other Loan Documents, and any Default or Event of Default waived shall be deemed to be cured and
not continuing; but no such waiver shall extend to any subsequent or other Default or Event of
Default, or impair any right consequent thereon. Any such waiver, amendment, supplement or
modification shall be effected by a written instrument signed by the parties required to sign
pursuant to the foregoing provisions of this Section; provided, that delivery of an
executed signature page of any such instrument by facsimile transmission shall be effective as
delivery of a manually executed counterpart thereof.

 

65

          10.2
Notices. All notices, requests and demands to or upon the respective parties hereto to be effective
shall be in writing (including by telecopy), and, unless otherwise expressly provided herein, shall
be deemed to have been duly given or made when delivered, or three Business Days after being
deposited in the mail, postage prepaid, or, in the case of telecopy notice, when received,
addressed (a) in the case of the Borrower and the Administrative Agent, as follows and (b) in the
case of the Lenders, as set forth in an administrative questionnaire delivered to the
Administrative Agent or on Schedule I to the Lender Addendum to which such Lender is a party or, in
the case of a Lender which becomes a party to this Agreement pursuant to an Assignment and
Acceptance, in such Assignment and Acceptance or (c) in the case of any party, to such other
address as such party may hereafter notify to the other parties hereto:

	 	 	 	 	 
	 

	 	The Borrower:
	 	Parker Drilling Company

1401 Enclave Parkway

Suite 600

Houston, Texas 77077

Attention: Kirk Brassfield

Telecopy: 281-406-2331

Telephone: 281-406-2330
	 
	 	 	 	 
	 

	 	The Administrative Agent:
	 	In the case of any borrowing request or
any notice relating to any prepayment or the conversion or continuation of any
Loan,
	 
	 	 	 	 
	 

	 	 	 	Lehman Commercial Paper Inc.

Bank Loan Operations

745 Seventh Avenue

16th Floor

New York, New York 10019

Attention: Michelle Rosolinksy

Telecopy: 646-758- 5015

Telephone: 212-526-6590
	 
	 	 	 	 
	 

	 	 	 	In the case of any other notice or communication,
	 
	 	 	 	 
	 

	 	 	 	Lehman Commercial Paper Inc.

Loan Portfolio Group

745 Seventh Avenue

7th Floor

New York, New York 10019

Attention: Parker Drilling Portfolio Manager

Telecopy: 646-758-2774

Telephone: 212-526-1819
	 
	 	 	 	 
	 

	 	Issuing Lender:
	 	As notified by such Issuing Lender to the Administrative Agent and the Borrower

 

66

provided that any notice, request or demand to or upon the Administrative Agent, any
Issuing Lender or any Lender shall not be effective until received.

          10.3
No Waiver; Cumulative Remedies. No failure to exercise and no delay in exercising, on the part of the Administrative Agent
or any Lender, any right, remedy, power or privilege hereunder or under the other Loan Documents
shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or the exercise of any
other right, remedy, power or privilege. The rights, remedies, powers and privileges herein
provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided
by law.

          10.4
Survival of Representations and Warranties. All representations and warranties made herein, in the other Loan Documents and in any
document, certificate or statement delivered pursuant hereto or in connection herewith shall
survive the execution and delivery of this Agreement and the making of the Loans and other
extensions of credit hereunder.

          10.5
Payment of Expenses. The Borrower agrees (a) to pay or reimburse the Administrative Agent for all its reasonable
out-of-pocket costs and expenses incurred in connection with the syndication of the Facility (other
than fees payable to syndicate members) and the development, preparation and
execution of, and any amendment, supplement or modification to, this Agreement and the other
Loan Documents and any other documents prepared in connection herewith or therewith, and the
consummation and administration of the transactions contemplated hereby and thereby, including,
without limitation, the reasonable fees and disbursements and other charges of counsel to the
Administrative Agent and the charges of Intralinks, (b) to pay or reimburse each Lender and the
Administrative Agent for all their costs and expenses incurred in connection with the enforcement
or preservation of any rights under this Agreement, the other Loan Documents and any other
documents prepared in connection herewith or therewith, including, without limitation, the fees and
disbursements of counsel (including the allocated fees and disbursements and other charges of
in-house counsel) to each Lender and of counsel to the Administrative Agent, (c) to pay, indemnify,
or reimburse each Lender and the Administrative Agent for, and hold each Lender and the
Administrative Agent harmless from, any and all recording and filing fees and any and all
liabilities with respect to, or resulting from any delay in paying, stamp, excise and other taxes,
if any, which may be payable or determined to be payable in connection with the execution and
delivery of, or consummation or administration of any of the transactions contemplated by, or any
amendment, supplement or modification of, or any waiver or consent under or in respect of, this
Agreement, the other Loan Documents and any such other documents, and (d) to pay, indemnify or
reimburse each Lender, the Administrative Agent, their respective affiliates, and their respective
officers, directors, trustees, employees, advisors, agents and controlling persons (each, an
“Indemnitee”) for, and hold each Indemnitee harmless from and against any and all other
liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever with respect to the execution, delivery,
enforcement, performance and administration of this Agreement, the other Loan Documents and any
such other documents, including, without limitation, any of the foregoing relating to the use of
proceeds of the Loans or the violation of, noncompliance with or liability under, any Environmental
Law applicable to the operations of the Borrower any of its Subsidiaries or any of the Properties
and the fees and disbursements and other charges of legal counsel in connection with the foregoing
(all the

 

67

foregoing in this clause (d), collectively, the “Indemnified Liabilities”),
provided, that the Borrower shall have no obligation hereunder to any Indemnitee with
respect to Indemnified Liabilities to the extent such Indemnified Liabilities have resulted from
the gross negligence or willful misconduct of such Indemnitee, and provided further
that the Borrower shall have no obligation hereunder to any Indemnitee which is such an advisor
with respect to losses, damages, liabilities or related expenses of such advisor in respect of any
claims brought by any other Indemnitee against such advisor arising from the negligence of such
advisor in the provision of services to such other Indemnitee. No Indemnitee shall be liable for
any damages arising from the use by unauthorized persons of Information or other materials sent
through electronic, telecommunications or other information transmission systems that are
intercepted by such persons or for any special, indirect, consequential or punitive damages in
connection with the Facility. Without limiting the foregoing, and to the extent permitted by
applicable law, the Borrower agrees not to assert and to cause its Subsidiaries not to assert, and
hereby waives and agrees to cause its Subsidiaries so to waive, all rights for contribution or any
other rights of recovery with respect to all claims, demands, penalties, fines, liabilities,
settlements, damages, costs and expenses of whatever kind or nature, under or related to
Environmental Laws, that any of them might have by statute or otherwise against any Indemnitee.
All amounts due under this Section shall be payable not later than 30 days after written demand
therefor. Statements payable by the Borrower pursuant to this Section shall be
submitted to the Borrower at the address of the Borrower set forth in Section 10.2, or to such
other Person or address as may be hereafter designated by the Borrower in a notice to the
Administrative Agent. The agreements in this Section shall survive repayment of the Loans and all
other amounts payable hereunder.

          10.6
Successors and Assigns; Participations and Assignments. (a) This Agreement shall be binding upon and inure to the benefit of the Borrower, the
Lenders, the Administrative Agent, all future holders of the Loans and their respective successors
and assigns, except that the Borrower may not assign or transfer any of its rights or obligations
under this Agreement without the prior written consent of the Administrative Agent and each Lender.

          (b) Any Lender may, without the consent of the Borrower, in accordance with applicable law, at
any time sell to one or more banks, financial institutions or other entities (each, a
“Participant”) participating interests in any Loan owing to such Lender, any Commitment of
such Lender or any other interest of such Lender hereunder and under the other Loan Documents. In
the event of any such sale by a Lender of a participating interest to a Participant, such Lender’s
obligations under this Agreement to the other parties to this Agreement shall remain unchanged,
such Lender shall remain solely responsible for the performance thereof, such Lender shall remain
the holder of any such Loan for all purposes under this Agreement and the other Loan Documents, and
the Borrower and the Administrative Agent shall continue to deal solely and directly with such
Lender in connection with such Lender’s rights and obligations under this Agreement and the other
Loan Documents. In no event shall any Participant under any such participation have any right to
approve any amendment or waiver of any provision of any Loan Document, or any consent to any
departure by any Loan Party therefrom, except to the extent that such amendment, waiver or consent
would require the consent of the Lender from whom such Participant purchased such participation
pursuant to Section 10.1. The Borrower agrees that if amounts outstanding under this Agreement and
the Loans are due or unpaid, or shall have been declared or shall have become due and payable upon
the occurrence of an Event of Default, each Participant shall, to the maximum extent permitted by
applicable law, be

 

68

deemed to have the right of setoff in respect of its participating interest in
amounts owing under this Agreement to the same extent as if the amount of its participating
interest were owing directly to it as a Lender under this Agreement, provided that, in
purchasing such participating interest, such Participant shall be deemed to have agreed to share
with the Lenders the proceeds thereof as provided in Section 10.7(a) as fully as if such
Participant were a Lender hereunder. The Borrower also agrees that each Participant shall be
entitled to the benefits of Sections 2.15, 2.16 and 2.17 with respect to its participation in the
Commitments and the Loans outstanding from time to time as if such Participant were a Lender;
provided that, in the case of Section 2.16, such Participant shall have complied with the
requirements of said Section, and provided, further, that no Participant shall be
entitled to receive any greater amount pursuant to any such Section than the transferor Lender
would have been entitled to receive in respect of the amount of the participation transferred by
such transferor Lender to such Participant had no such transfer occurred.

          (c) Any Lender (an “Assignor”) may, in accordance with applicable law and upon written
notice to the Administrative Agent, at any time and from time to time assign to any
Lender or any affiliate, Related Fund or Control Investment Affiliate thereof or, with the
consent of the Borrower and the Administrative Agent and the written consent of the Issuing Lender
(which, in each case, shall not be unreasonably withheld or delayed) (provided (x) that no
such consent need be obtained by the Administrative Agent or any of its Affiliates and (y) the
consent of the Borrower need not be obtained with respect to any assignment if an Event of Default
shall have occurred and be continuing), to an additional bank, financial institution or other
entity that is not a competitor of the Borrower or its Subsidiaries (an “Assignee”) all or
any part of its rights and obligations under this Agreement pursuant to an Assignment and
Acceptance, substantially in the form of Exhibit D, executed by such Assignee and such Assignor
(and, where the consent of the Borrower, the Administrative Agent or the Issuing Lender is required
pursuant to the foregoing provisions, by the Borrower and such other Persons) and delivered to the
Administrative Agent for its acceptance and recording in the Register; provided that ((i)
no such assignment to an Assignee (other than any Lender or any affiliate thereof) shall be in an
aggregate principal amount of less than $2,500,000 and (ii) after giving effect thereto, the
assigning Lender shall have Commitments and Loans aggregating at least $2,500,000, unless otherwise
agreed by the Borrower and the Administrative Agent (in each case other than in the case of an
assignment of all of a Lender’s interests under the Facility), unless otherwise agreed by the
Borrower and the Administrative Agent. Upon such execution, delivery, acceptance and recording,
from and after the effective date determined pursuant to such Assignment and Acceptance, (x) the
Assignee thereunder shall be a party hereto and, to the extent provided in such Assignment and
Acceptance, have the rights and obligations of a Lender hereunder with Commitments and/or Loans as
set forth therein, and (y) the Assignor thereunder shall, to the extent provided in such Assignment
and Acceptance, be released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all of an Assignor’s rights and obligations under this
Agreement, such Assignor shall cease to be a party hereto, except as to Section 2.15, 2.16 and 10.5
in respect of the period prior to such effective date). Notwithstanding any provision of this
Section, the consent of the Borrower shall not be required for any assignment that occurs at any
time when any Event of Default shall have occurred and be continuing. For purposes of the minimum
assignment amounts set forth in this paragraph, multiple assignments by or to two or more Related
Funds, or to two or more funds that will be Related Funds after giving effect to such assignments,
shall be aggregated.

 

69

          (d) The Administrative Agent shall, on behalf of the Borrower, maintain at its address
referred to in Section 10.2 a copy of each Assignment and Acceptance delivered to it and a register
(the “Register”) for the recordation of the names and addresses of the Lenders and the
Commitment of, and principal amount of the Loans owing to, each Lender from time to time. The
entries in the Register shall be conclusive, in the absence of manifest error, and the Borrower,
the Administrative Agent and the Lenders shall treat each Person whose name is recorded in the
Register as the owner of the Loans and any Notes evidencing such Loans recorded therein for all
purposes of this Agreement. Any assignment of any Loan, whether or not evidenced by a Note, shall
be effective only upon appropriate entries with respect thereto being made in the Register (and
each Note shall expressly so provide). Any assignment or transfer of all or part of a Loan
evidenced by a Note shall be registered on the Register only upon surrender for registration of
assignment or transfer of the Note evidencing such Loan, accompanied by a duly executed Assignment
and Acceptance; thereupon one or more new Notes in the same aggregate principal amount shall be
issued to the designated Assignee, and the old Notes shall be returned by the Administrative Agent
to the Borrower marked “canceled”. The Register shall be available for inspection by the Borrower or any Lender (with respect to any
entry relating to such Lender’s Loans) at any reasonable time and from time to time upon reasonable
prior notice.

          (e) Upon its receipt of an Assignment and Acceptance executed by an Assignor and an Assignee
(and, in any case where the consent of any other Person is required by Section 10.6(c), by each
such other Person) together with payment to the Administrative Agent of a registration and
processing fee of $3,500 (treating multiple, simultaneous assignments by or to two or more Related
Funds, or to two or more funds that will be Related Funds after giving effect to such assignments,
as a single assignment) (except that no such registration and processing fee shall be payable in
the case of an Assignee which is already a Lender or is an affiliate or Related Fund of a Lender or
a Person under common management with a Lender), the Administrative Agent shall (i) promptly accept
such Assignment and Acceptance and (ii) on the effective date determined pursuant thereto record
the information contained therein in the Register and give notice of such acceptance and
recordation to the Borrower. On or prior to such effective date, the Borrower, at its own expense,
upon request, shall execute and deliver to the Administrative Agent (in exchange for the Note of
the assigning Lender) a new Note to the order of such Assignee in an amount equal to the Commitment
assumed by it pursuant to such Assignment and Acceptance and, if the Assignor has retained a
Commitment, upon request, a new Note to the order of the Assignor in an amount equal to the
Commitment retained by it hereunder. Such new Note shall be dated the Closing Date and shall
otherwise be in the form of the Note replaced thereby.

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

          10.7
Adjustments; Set-off. (a) Except to the extent that this Agreement provides for payments to be allocated to a
particular Lender, if any Lender (a “Benefitted Lender”) shall at any time receive any
payment of all or part of the Obligations owing to it, or

 

70

receive any collateral in respect thereof
(whether voluntarily or involuntarily, by set-off, pursuant to events or proceedings of the nature
referred to in Section 8(f), or otherwise), in a greater proportion than any such payment to or
collateral received by any other Lender, if any, in respect of such other Lender’s Obligations,
such Benefitted Lender shall purchase for cash from the other Lenders a participating interest in
such portion of each such other Lender’s Obligations, or shall provide such other Lenders with the
benefits of any such collateral, as shall be necessary to cause such Benefitted Lender to share the
excess payment or benefits of such collateral ratably with each of the other Lenders;
provided, however, that if all or any portion of such excess payment or benefits is
thereafter recovered from such Benefitted Lender, such purchase shall be rescinded, and the
purchase price and benefits returned, to the extent of such recovery, but without interest.

          (b) In addition to any rights and remedies of the Lenders provided by law, each Lender shall
have the right, without prior notice to the Borrower, any such notice being expressly
waived by the Borrower to the extent permitted by applicable law, upon any amount becoming due
and payable by the Borrower hereunder (whether at the stated maturity, by acceleration or
otherwise), to set off and appropriate and apply against such amount any and all deposits (general
or special, time or demand, provisional or final), in any currency, and any other credits,
indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held or owing by such Lender or any branch or agency
thereof to or for the credit or the account of the Borrower. Each Lender agrees promptly to notify
the Borrower and the Administrative Agent after any such setoff and application made by such
Lender, provided that the failure to give such notice shall not affect the validity of such
setoff and application.

          10.8
Counterparts. This Agreement may be executed by one or more of the parties to this Agreement on any
number of separate counterparts, and all of said counterparts taken together shall be deemed to
constitute one and the same instrument. Delivery of an executed signature page of this Agreement
or of a Lender Addendum by facsimile transmission shall be effective as delivery of a manually
executed counterpart hereof. A set of the copies of this Agreement signed by all the parties shall
be lodged with the Borrower and the Administrative Agent.

          10.9
Severability. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction.

          10.10
Integration. This Agreement and the other Loan Documents represent the entire agreement of the Borrower,
the Agents, the Arranger and the Lenders with respect to the subject matter hereof and thereof, and
there are no promises, undertakings, representations or warranties by the Arranger, any Agent or
any Lender relative to subject matter hereof not expressly set forth or referred to herein or in
the other Loan Documents.

          10.11
GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE
GOVERNED

 

71

BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

          10.12
Submission To Jurisdiction; Waivers. The Borrower hereby irrevocably and unconditionally:

          (a) submits for itself and its Property in any legal action or proceeding relating to this
Agreement and the other Loan Documents to which it is a party, or for recognition and enforcement
of any judgment in respect thereof, to the non-exclusive general jurisdiction of the courts of the
State of New York, the courts of the United States of America for the Southern District of New
York, and appellate courts from any thereof;

          (b) consents that any such action or proceeding may be brought in such courts and waives any
objection that it may now or hereafter have to the venue of any such action or proceeding in any
such court or that such action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;

          (c) agrees that service of process in any such action or proceeding may be effected by mailing
a copy thereof by registered or certified mail (or any substantially similar form of mail), postage
prepaid, to the Borrower at its address set forth in Section 10.2 or at such other address of which
the Administrative Agent shall have been notified pursuant thereto;

          (d) agrees that nothing herein shall affect the right to effect service of process in any
other manner permitted by law or shall limit the right to sue in any other jurisdiction; and

          (e) waives, to the maximum extent not prohibited by law, any right it may have to claim or
recover in any legal action or proceeding referred to in this Section any special, exemplary,
punitive or consequential damages.

          10.13
Acknowledgments. The Borrower hereby acknowledges that:

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

          (b) neither the Arranger, any Agent nor any Lender has any fiduciary relationship with or duty
to the Borrower arising out of or in connection with this Agreement or any of the other Loan
Documents, and the relationship between the Arranger, the Agents and the Lenders, on one hand, and
the Borrower, on the other hand, in connection herewith or therewith is solely that of debtor and
creditor; and

          (c) no joint venture is created hereby or by the other Loan Documents or otherwise exists by
virtue of the transactions contemplated hereby among the Arranger, the Agents and the Lenders or
among the Borrower and the Lenders.

          10.14
Confidentiality. Each of the Agents and the Lenders agrees to keep confidential all non-public information
provided to it by any Loan Party pursuant to this Agreement that is designated by such Loan Party
as confidential; provided that nothing herein shall prevent any Agent or any Lender from
disclosing any such information (a) to the Arranger,

 

72

any Agent, any other Lender or any affiliate
of any thereof, (b) to any Participant or Assignee (each, a “Transferee”) or prospective
Transferee that agrees to comply with the provisions of this Section or substantially
equivalent provisions, (c) to any of its employees, directors, agents, attorneys, accountants
and other professional advisors, (d) to any financial institution that is a direct or indirect
contractual counterparty in swap agreements or such contractual counterparty’s professional advisor
(so long as such contractual counterparty or professional advisor to such contractual counterparty
agrees to be bound by the provisions of this Section), (e) upon the request or demand of any
Governmental Authority having jurisdiction over it, (f) in response to any order of any court or
other Governmental Authority or as may otherwise be required pursuant to any Requirement of Law,
(g) in connection with any litigation or similar proceeding, (h) that has been publicly disclosed
other than in breach of this Section, (i) to the National Association of Insurance Commissioners or
any similar organization or any nationally recognized rating agency that requires access to
information about a Lender’s investment portfolio in connection with ratings issued with respect to
such Lender or (j) in connection with the exercise of any remedy hereunder or under any other Loan
Document. Notwithstanding anything to the contrary in the foregoing sentence or any other express
or implied agreement, arrangement or understanding, the parties hereto hereby agree that, from the
commencement of discussions with respect to the financing provided hereunder, any party hereto (and
each of its employees, representatives, or agents) is permitted to disclose to any and all persons,
without limitation of any kind, the tax structure and tax aspects of the transactions contemplated
hereby, and all materials of any kind (including opinions or other tax analyses) related to such
tax structure and tax aspects.

          10.15
Release of Guarantees and Liens. (a) Notwithstanding anything to the contrary contained herein or in any other Loan
Document, promptly upon request of the Borrower (i) in connection with any Disposition of Property
permitted by the Loan Documents, the Administrative Agent shall (without notice to, or vote or
consent of, any Lender, or any party to any Bank Product) take such actions as shall be required to
release its security interest in any Collateral being Disposed of in such Disposition and (ii) upon
any Disposition of a Person permitted by the Loan Documents, the Administrative Agent shall
(without notice to, or vote or consent of, any Lender, or any party to any Bank Product) take such
actions as shall be required to release any guaranty and other obligations of such Person under any
Loan Document.

          (b) Notwithstanding anything to the contrary contained herein or any other Loan Document, when
all Obligations (other than obligations in respect of any Bank Product) have been paid in full, all
Commitments have terminated or expired and no Letter of Credit shall be outstanding, upon request
of the Borrower, the Administrative Agent shall (without notice to, or vote or consent of, any
Lender, or any party to any Bank Product) take such actions as shall be required to release its
security interest in all Collateral, and the Administrative Agent shall (without notice to, or vote
or consent of, any Lender, or any party to any Bank Product) take such actions as shall be required
to release all guarantee obligations under any Loan Document, whether or not on the date of such
release there may be outstanding Obligations in respect of Bank Products. Any such release of
guarantee obligations shall be deemed subject to the provision that such guarantee obligations
shall be reinstated if after such release any portion of any payment in respect of the Obligations
guaranteed thereby shall be rescinded or must otherwise be restored or returned upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of the Borrower or any
Guarantor, or upon or as a result of the appointment of a

 

73

receiver, intervenor or conservator of,
or trustee or similar officer for, the Borrower or any Guarantor or any substantial part of its property, or otherwise, all as though such payment
had not been made.

          10.16
Accounting Changes. In the event that any “Accounting Change” (as defined below) shall occur and such change
results in a change in the method of calculation of financial covenants, standards or terms in this
Agreement, then the Borrower and the Administrative Agent agree to enter into negotiations in order
to amend such provisions of this Agreement so as to equitably reflect such Accounting Change with
the desired result that the criteria for evaluating the Borrower’s financial condition shall be the
same after such Accounting Change as if such Accounting Change had not been made. Until such time
as such an amendment shall have been executed and delivered by the Borrower, the Administrative
Agent and the Required Lenders, all financial covenants, standards and terms in this Agreement
shall continue to be calculated or construed as if such Accounting Change had not occurred.
“Accounting Change” refers to any change in accounting principles required by the promulgation of
any rule, regulation, pronouncement or opinion by the Financial Accounting Standards Board of the
American Institute of Certified Public Accountants or, if applicable, the SEC.

          10.17
Delivery of Lender Addenda. Each initial Lender shall become a party to this Agreement by delivering to the
Administrative Agent a Lender Addendum duly executed by such Lender, the Borrower and the
Administrative Agent.

          10.18
Usury Not Intended. It is the intent of the Borrower and each Lender in the execution and performance of this
Agreement and the other Loan Documents to contract in strict compliance with applicable usury laws,
including conflicts of law concepts, from time to time in effect governing the Loans of each
Lender. In furtherance thereof, the Lenders and the Borrower stipulate and agree that none of the
terms and provisions contained in this Agreement or the other Loan Documents shall ever be
construed to create a contract to pay, as consideration for the use, forbearance or detention of
money, interest at a rate in excess of the maximum nonusurious interest rate under applicable law
(the “Maximum Rate”) and that for purposes hereof “interest” shall include the aggregate of
all charges which constitute interest under such laws that are contracted for, charged or received
under this Agreement; and in the event that, notwithstanding the foregoing, under any circumstances
the aggregate amounts taken, reserved, charged, received or paid on the Loans, include amounts
which by applicable law are deemed interest which would exceed the Maximum Rate, then such excess
shall be deemed to be a mistake and each Lender receiving same shall credit the same on the
principal of its Loans (or if such Loans shall have been paid in full, refund said excess to the
Borrower). In the event that the maturity of any Loans is accelerated by reason of any election of
the holder thereof resulting from any Event of Default under this Agreement or otherwise, or in the
event of any required or permitted prepayment, then such consideration that constitutes interest
may never include more than the Maximum Rate and excess interest, if any, provided for in this
Agreement or otherwise shall be canceled automatically as of the date of such acceleration or
prepayment and, if theretofore paid, shall be credited on the applicable Loans (or, if the applicable Loans shall have been paid in
full, refunded to the Borrower). In determining whether or not the interest paid or payable under
any specific contingencies exceeds the Maximum Rate, the Borrower and the Lenders shall to the
maximum extent permitted under applicable law amortize, prorate, allocate and spread in equal parts
during the period of the full stated term of the Loans all amounts

 

74

considered to be interest under
applicable law at any time contracted for, charged, received or reserved in connection with the
Obligations. The provisions of this Section 10.18 shall control over all other provisions of this
Agreement or the other Loan Documents which may be in apparent conflict herewith.

          10.19
WAIVERS OF JURY TRIAL. THE BORROWER, THE AGENTS AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL
BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND
FOR ANY COUNTERCLAIM THEREIN.

          10.20
USA PATRIOT Act Notice. Each Lender that is subject to the Act (as hereinafter defined) and the Administrative
Agent (for itself and not on behalf of any Lender) hereby notifies the 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 each
Loan Party, which information includes the name and address of each Loan Party and other
information that will allow such Lender or the Administrative Agent, as applicable, to identify
each Loan Party in accordance with the Act.

 

75

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

	 	 	 	 	 
	 	PARKER DRILLING COMPANY

 	 
	 	By:  	/s/ David W. Tucker
 	 
	 	 	Name:  	David W. Tucker 	 
	 	 	Title:  	Treasurer and Assistant Secretary 	 
	 

	 	 	 	 	 
	 	LEHMAN BROTHERS INC., as Arranger

 	 
	 	By:  	/s/ Frank P. Turner
 	 
	 	 	Name:  	Frank P. Turner 	 
	 	 	Title:  	Vice President 	 
	 

	 	 	 	 	 
	 	LEHMAN COMMERCIAL PAPER INC.,

as Administrative Agent

 	 
	 	By:  	/s/ Ritam Bhalla
 	 
	 	 	Name:  	Ritam Bhalla 	 
	 	 	Title:  	Authorized Signatory 	 
	 

	 	 	 	 	 
	 	BANK OF AMERICA, N.A.,

as Syndication Agent and as Issuing Lender

 	 
	 	By:  	/s/ Shelley A. McGregor
 	 
	 	 	Name:  	Shelley A. McGregor 	 
	 	 	Title:  	Senior Vice President 	 
	 

 

Annex A

PRICING GRID

	 	 	 	 	 	 	 	 	 
	 	 	Applicable Margin	 	Applicable Margin
	Consolidated Leverage Ratio	 	for Eurodollar Loans	 	for Base Rate Loans
	34.00:1.00

	 	 	3.00	%	 	 	2.00	%
	<4.00:1.00
but 3 3.00:1.00

	 	 	2.75	%	 	 	1.75	%
	<3.00:1.00

	 	 	2.50	%	 	 	1.50	%

Changes in the Applicable Margin resulting from changes in the Consolidated Leverage Ratio shall
become effective on the date (the “Adjustment Date”) on which financial statements are
delivered to the Lenders pursuant to Section 6.1(a) or 6.1(b) (but in any event not later than the
45th day after the end of each of the first three quarterly periods of each fiscal year or the 90th
day after the end of each fiscal year, as the case may be) and shall remain in effect until the
next change to be effected pursuant to this paragraph. If any financial statements referred to
above are not delivered within the time periods specified above, then, until such financial
statements are delivered, the Consolidated Leverage Ratio as at the end of the fiscal period that
would have been covered thereby shall for the purposes of this definition be deemed to be greater
than or equal to 4.00 to 1:00. Each determination of the Consolidated Leverage Ratio pursuant to
this Pricing Grid shall be made for the periods and in the manner contemplated by Section 7.1(a).

 

 

Annex B

EXISTING LETTERS OF CREDIT

 

 

Annex C

EXISTING CONTROL AGREEMENTS

 

 

SCHEDULE 1.1

BORROWING BASE PROVISIONS

          “Accounts”: accounts receivable of the Borrower or any of its Subsidiaries arising out
of the sales or leasing of goods or services made by the Borrower or any of its Subsidiaries in the
ordinary course of business.

          “Advance Rate”: at any time, the applicable percentage set forth in clause (a)(i) or
(a)(ii) of the definition of “Borrowing Base” or such other percentage as may become effective in
lieu of such applicable percentage in accordance with paragraph (b) or (c) of such definition.

          “Bank Product Reserves”: at any time, reserves in respect of Bank Products then
provided and outstanding.

          “Borrowing Base”: (a) Subject to paragraphs (b) and (c) below, at any time, the
amount equal at such time to:

          (i) eighty-five percent (85%) of the aggregate Net Amount of Eligible Accounts
Receivable, plus

          (ii) the Net Book Value of the Eligible Rental Equipment multiplied by the lesser of
(A) the Equipment OLV Percentage and (B) one hundred percent (100%), minus

          (iii) the amount of any reserves established by the Administrative Agent pursuant to
paragraph (b) below.

Notwithstanding the foregoing, in no event shall more than sixty percent (60%) of the amount of the
Borrower Base consist of Eligible Rental Equipment in reliance on clause (a)(ii) above.

          (b) The Administrative Agent at any time in the exercise of its Permitted Discretion shall be
entitled to (i) establish and increase or decrease reserves against Eligible Accounts Receivable
and Eligible Rental Equipment, (ii) establish and increase or decrease Bank Products Reserves,
(iii) reduce the Advance Rates to be applied under clauses (a)(i) and (a)(ii) above to a level
below the rates stated therein or (following any such reduction or following any increase in such
Advance Rates pursuant to paragraph (c) below) restore such Advance Rates to any level equal to or
below the Advance Rates stated in clauses (a)(i) and (a)(ii) above, (iv) impose additional
restrictions (or eliminate any such additional restrictions) to the standards of eligibility set
forth in the respective definitions of “Eligible Accounts Receivable” and “Eligible Rental
Equipment” and (v) establish and increase or decrease a reserve in the amount of interest payable
by the Borrower under the Agreement on Loans and drawings under Letters of Credit.

 

 

          (c) The Administrative Agent at any time in the exercise of its Permitted Discretion shall be
entitled, with the consent of all Revolving Credit Lenders, to increase the Advance Rates to a
level above the rates stated in clauses (a)(i) and (a)(ii) above.

          “Cost”: in respect of any Quail Rental Assets, the net cost of such Quail Rental
Assets to Quail Tools after all cash and other discounts or other allowances which may be allowed
or taken by Quail Tools against the purchase price of such Quail Rental Assets.

          “Eligible Accounts Receivable”: Accounts of the Borrower and the Subsidiary Guarantors
payable in Dollars. In determining the amount to be so included, the face amount of such Accounts
shall exclude any such Accounts that the Administrative Agent determine to be ineligible pursuant
to the definition of the term “Borrowing Base” set forth herein. Unless otherwise approved in
writing by the Administrative Agent, no Account of the Borrower or its Subsidiaries shall be deemed
to be an Eligible Account Receivable if:

          (a) it arises out of a sale made by such Borrower or any of its Subsidiaries to an
Affiliate; or

          (b) (i) in the case of any Account due from an account debtor other than a Qualified
Account Debtor (as defined below), the Account is unpaid more than (A) 60 days after the
original payment due date and/or (B) 90 days after the original invoice date and (ii) in the
case of Accounts due from account debtors whose long-term unsecured debt obligations are
rated at least A by Moody’s Investors Service, Inc. or A2 by Standard & Poor’s Rating
Services (each, a “Qualified Account Debtor”), the Account is unpaid more than (A) 90 days
after the original payment due date and/or (B) 120 days after the original invoice date; or

          (c) it is from the same account debtor (or any Affiliate thereof) and fifty percent
(50%) or more, in face amount, of all Accounts from such account debtor (and any Affiliate
thereof) are ineligible pursuant to clause (b) above; or

          (d) the Account, when aggregated with all other Accounts of such account debtor (and
any Affiliate thereof), exceeds ten percent (10%) in face value of all Accounts of the
Borrower and its Subsidiaries combined then outstanding, to the extent of such excess,
provided that (i) Accounts supported or secured by an irrevocable letter of credit in form
and substance satisfactory to the Administrative Agent, issued by a financial institution
satisfactory to the Administrative Agent, and duly transferred to the Administrative Agent
(together with sufficient documentation to permit direct draws by the Administrative Agent)
shall be excluded to the extent of the face amount of such letter of credit for the purposes
of such calculation and (ii) with respect to the account debtors listed on the annex
attached hereto, the percentage referred to above shall be deemed to be the percentage set
forth on such annex opposite the name of such account debtor; or

          (e) (i) the account debtor is also a creditor of the Borrower or such Subsidiary, (ii)
the account debtor has disputed its liability on, or the account debtor has made any claim
with respect to, such Account or any other Account due from such

 

 

account debtor to the Borrower or such Subsidiary, which has not been resolved or (iii)
the Account otherwise is or may reasonably be expected to become subject to any right of
setoff by the account debtor or with respect to which any other claim, counterclaim,
chargeback, rebate, allowance or offset has been asserted; provided that any Account deemed
ineligible pursuant to this clause (e) shall only be ineligible to the extent of the amount
owed by the Borrower or such Subsidiary to the account debtor, the amount of such dispute or
claim, or the amount of such setoff, other claim, counterclaim, chargeback, rebate,
allowance or offset, as applicable; or

          (f) the account debtor has commenced a voluntary case under the federal bankruptcy
laws, as now constituted or hereafter amended, or made an assignment for the benefit of
creditors, or if a decree or order for relief has been entered by a court having
jurisdiction over the account debtor in an involuntary case under the federal bankruptcy
laws, as now constituted or hereafter amended, or if any other petition or other application
for relief under the federal bankruptcy laws has been filed by or against the account
debtor, or if the account debtor has filed a certificate of dissolution under applicable
state law or shall be liquidated, dissolved or wound-up, or shall authorize or commence any
action or proceeding for dissolution, winding-up or liquidation, or if the account debtor
has failed, suspended business, declared itself to be insolvent, is generally not paying its
debts as they become due or has consented to or suffered a receiver, trustee, liquidator or
custodian to be appointed for it or for all or a significant portion of its assets or
affairs (any such act or event an “Act of
Bankruptcy”), unless the payment of
Accounts from such account debtor is secured by assets of, or guaranteed by, in either case
in a manner satisfactory to the Administrative Agent, a Person with respect to which an Act
of Bankruptcy has not occurred and that is acceptable to the Administrative Agent or, if the
Account from such account debtor arises subsequent to a decree or order for relief with
respect to such account debtor under the federal bankruptcy laws, as now or hereafter in
effect, the Administrative Agent shall have determined that the timely payment and
collection of such Account will not be impaired; or

          (g) the sale is to an account debtor outside of the United States, Canada or Puerto
Rico, unless such account debtor has supplied the Borrower or such Subsidiary with an
irrevocable letter of credit in form and substance satisfactory to the Administrative Agent,
issued by a financial institution satisfactory to the Administrative Agent and which has
been duly transferred to the Administrative Agent (together with sufficient documentation to
permit direct draws by the Administrative Agent); or

          (h) the sale to the account debtor is on a bill-and-hold, guarantied sale,
sale-and-return, sale on approval or consignment basis or made pursuant to any other written
agreement providing for repurchase or return; or

          (i) the Administrative Agent determines in its Permitted Discretion that collection of
such Account is insecure or that such Account may not be paid by reason of the account
debtor’s financial inability to pay; or

          (j) the account debtor is the United States of America, any State or any political
subdivision, department, agency or instrumentality thereof, unless the

 

 

Borrower or such Subsidiary duly assigns its rights to payment of such Account to the
Agent pursuant to the Collateral Assignment of Claims Act of 1940 (31 U.S.C. § 3727 et seq.)
or complies with any similar State or local law as Agent shall require; or

          (k) the goods giving rise to such Account have not been shipped and delivered to and
accepted by the account debtor or the services giving rise to such Account have not been
performed by the Borrower or such Subsidiary and accepted by the account debtor or the
Account otherwise does not represent a final sale (except to the extent that such Account
arises from a leasing transaction); or

          (l) any documentation relating to the Account does not comply with all applicable legal
requirements, including, where applicable, the Federal Consumer Credit Protection Act, the
Federal Truth in Lending Act and Regulation Z of the Board of Governors of the Federal
Reserve System; or

          (m) the Administrative Agent does not have a valid and perfected first priority
security interest in such Account or the Account does not otherwise conform to the
representations and warranties contained in the Credit Agreement, any Security Document or
any of the other Loan Documents; or

          (n) the Accounts are subject to any adverse security deposit, progress payment or other
similar advance made by or for the benefit of the applicable account debtor; provided, that
any Account deemed ineligible pursuant to this clause (n) shall only be ineligible to the
extent of the amount of any such deposit, payment or other similar advance; or

          (o) the Accounts are evidenced by or arise under any instrument or chattel paper unless
such instruments or chattel paper have been pledged to the Administrative Agent containing
such endorsement as the Administrative Agent shall require; or

          (p) the account debtor has a presence in a State requiring the filing of Notice of
Business Activities Report or similar report in order to permit the Borrower or such
Subsidiary to seek judicial enforcement in such State of payment of such Account unless the
Borrower or such Subsidiary has qualified to do business in such State or has filed a Notice
of Business Activities Report or equivalent report for the then current year or such failure
to file and inability to seek judicial enforcement is capable of being remedied without any
material delay or material cost; or

          (q) the Account arises from progress billings or other billing arrangements such that
the obligation of the account debtor with respect to such Account is conditioned upon the
Borrower’s or such Subsidiary’s satisfactory completion of any further performance under the
agreement giving rise thereto; or

          (r) the Account is deemed by the Administrative Agent in its Permitted Discretion to be
otherwise ineligible for inclusion in the calculation of the Borrowing Base.

 

 

          “Eligible Rental Equipment”: Rental Equipment of Quail Tools. Unless otherwise
approved in writing by the Administrative Agent, no Rental Equipment shall be Eligible Rental
Equipment unless: (i) it is owned solely by Quail Tools and Quail Tools has good, valid and
marketable title thereto; (ii) it is at all times subject to the Administrative Agent’s valid and
duly perfected first priority security interest granted pursuant to the Guarantee and Collateral
Agreement and no other Lien (other than (x) any Permitted Liens referred to in Section 7.3(a) of
the Credit Agreement or (y) any landlord’s Lien unless a rent reserve with respect to the relevant
leased property has been deducted from the Borrowing Base in accordance with clause (ii) of the
following sentence); (iii) Quail Tools shall at all times have title to such Rental Equipment and
shall have the ability to direct the disposition thereof (subject only to the rights of any lessor
under any lease in effect with respect to such Rental Equipment) and it is not located outside the
continental United States, the Gulf of Mexico and Canada; (iv) it is not obsolete, unmerchantable
or slow moving, as determined by the Administrative Agent in its reasonable credit judgment; and
(v) it conforms in all respects to the Warranties and representations set forth in the Credit
Agreement and is fully insured in the manner required by the Credit Agreement. In no event shall
(i) any Rental Equipment held under a Vendor Lease, (ii) any Rental Equipment held at a leased
property (other than Rental Equipment on active lease located at customer locations in the ordinary
course of business) unless a landlord lien waiver satisfactory in all respects to the
Administrative Agent has been obtained with respect thereto (or, if no landlord lien waiver has
been obtained, a rent reserve equal to three months rent on such leased property has, if elected by
the Administrative Agent in its sole discretion, been deducted from the Borrowing Base) and (iii)
any Rental Equipment otherwise deemed ineligible by the Administrative Agent in its Permitted
Discretion, constitute Eligible Rental Equipment.

          “Equipment OLV Percentage”: at any time, the percentage equal to (i) the Net OLV of
the Quail Rental Assets as of the date of the then most recent appraisal of the Quail Rental Assets
divided by the Net Book Value of the Quail Rental Assets as of such date, multiplied by (ii) 50%.

          “Net Amount”: with respect to any Account at any time, the face amount of such
Account on any date less (to the extent not otherwise deducted pursuant to the definition of
“Eligible Account”) any and all returns, rebates, discounts (which may, at the Administrative
Agent’s option, be calculated on shortest terms), credits, allowances or taxes (including any
sales, excise or other taxes) at any time issued, owing, claimed by any account debtor, granted,
outstanding or payable in connection with, or any interest accrued on the amount of, such Account
at such time.

          “Net Book Value”: (i) Cost minus (ii) accumulated depreciation calculated (A)
in accordance with GAAP and (B) consistently with the Quail Tools’ accounting practices as of the
Closing Date.

          “Net OLV”: as reasonably determined by the Administrative Agent in good faith based
on the most recent appraisal conducted pursuant to the Existing Credit Facilities or Section 6.11,
as applicable, the Value of the Eligible Rental Equipment that is estimated to be recoverable in an
orderly liquidation of such Equipment (less applicable freight and duty charges, if any), net of
liquidation expenses.

 

 

          “Ordinary Course of Business”: with respect to any transaction involving any Person,
the ordinary course of such Person’s business, as conducted by such Person in accordance with past
practices and undertaken by such Person in good faith and not for the purpose of evading any
covenant or restriction in any Loan Document.

          “Permitted Discretion”: the Administrative Agent’s judgment exercised in good faith
based upon its consideration of any factor which the Administrative Agent believes in good faith:
(a) will or reasonably could be expected to adversely affect the value of the applicable Revolving
Credit Facility Collateral, the enforceability or priority of the Administrative Agent’s Liens
thereon or the amount which the Agents, the Lenders or any Issuing Lender would be likely to
receive (after giving consideration to delays in payment and costs of enforcement) in the
liquidation of such Collateral; (b) suggests that any collateral report of financial information
delivered to the Administrative Agent by any Person, with respect to the applicable Revolving
Credit Facility Collateral is incomplete, inaccurate or misleading in any material respect; (c)
materially increases the likelihood of a bankruptcy, reorganization or other insolvency proceeding
involving the Borrower or any Subsidiary of the Borrower or any of the applicable Revolving Credit
Facility Collateral; or (d) creates or reasonably could be expected to create a Default or Event of
Default. In exercising such judgment, the Administrative Agent may consider such factors already
included in or tested by the definition of Eligible Accounts Receivable or Eligible Rental
Equipment, as well as any of the following: (i) the changes in collection history and dilution with
respect the Account; (ii) changes in demand for, pricing of, or product mix of Rental Equipment;
(iii) changes in any concentration of risk with respect to the Borrower’s or any of its
Subsidiaries Accounts or Rental Equipment; and (iv) any other factors that change in any material
respect the credit risk of lending to the Borrower on the security of the Borrower’s or any of its
Subsidiaries Accounts or Rental Equipment. The burden of establishing lack of good faith hereunder
shall be on the Borrower.

          “Quail Rental Assets”: all Rental Equipment owned by Quail Tools.

          “Rental Equipment”: Inventory which is of a type offered for lease in the Ordinary
Course of Business as conducted on the Closing Date.

          “Value”: with reference to the value of Equipment, value determined on the basis of
the lower of cost or market of such Equipment in accordance with GAAP, with the cost thereof
calculated on a first-in, first-out basis determined in accordance with GAAP.

          “Vendor Lease”: a lease pursuant to which Goods are leased from a Vendor Lessor,
whether or not such lease constitutes an operating or a capital lease under GAAP and whether or not
such lease constitutes a true lease or a secured transaction under the UCC or any other Requirement
of Law.

          “Vendor Lessor”: a Person who leases Goods to another Person pursuant to Vendor Lease.

 

 

SCHEDULE 4.4

CONSENTS, AUTHORIZATIONS, FILINGS AND NOTICES

 

 

SCHEDULE 4.15

SUBSIDIARIES; CAPITAL STOCK

 

 

SCHEDULE 4.17

ENVIRONMENTAL MATTERS

 

 

SCHEDULE 4.19

UCC FILING JURISDICTIONS

	 	 	 
	Loan Party	 	Filing Office
	 
	 	 

 

 

SCHEDULE 7.2(d)

EXISTING INDEBTEDNESS

 

 

SCHEDULE 7.3(f)

EXISTING LIENS

 

 

SCHEDULE 7.5(j)

DISPOSITIONSexv10w1

 

EXHIBIT 10.1

SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT

     THIS SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT dated as of September 19, 2007
(the “Second Amendment”) is entered into among Quanta Services, Inc., a Delaware
corporation (the “Borrower”), the Guarantors, the Lenders party hereto and Bank of America,
N.A., as Administrative Agent, Swing Line Lender and L/C Issuer. All capitalized terms used herein
and not otherwise defined herein shall have the meanings given to such terms in the Credit
Agreement (as defined below).

RECITALS

     WHEREAS, the Borrower, the Guarantors, the Lenders and the Administrative Agent entered into
that certain Amended and Restated Credit Agreement dated as of June 12, 2006 (as amended or
modified from time to time, the “Credit Agreement”);

     WHEREAS, the Borrower has requested that the Lenders amend the Credit Agreement as set forth
below;

     NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein,
and for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

     1. Amendments.

     (a) The following new definitions are hereby added to Section 1.01 of the
Credit Agreement in the appropriate alphabetical order to read as follows:

     “Immaterial Subsidiary” means, at any time, any Subsidiary of the
Borrower then having net assets with a book value of less than $5,000,000 and gross
assets with a book value of less than $20,000,000; provided, that if the aggregate
book value of (a) the net assets of all Subsidiaries of the Borrower that would
otherwise constitute Immaterial Subsidiaries shall exceed $20,000,000 or (b) the
gross assets of all Subsidiaries of the Borrower that would otherwise constitute
Immaterial Subsidiaries shall exceed $50,000,000, only those such Subsidiaries as
shall not then have net assets the aggregate book value of which is greater than
$20,000,000 or gross assets the aggregate book value of which is greater than
$50,000,000 and as shall be designated in writing by the Borrower to the
Administrative Agent as Immaterial Subsidiaries shall be deemed to constitute
Immaterial Subsidiaries.

     “Second Amendment Effective Date” means September 19, 2007.

     (b) The definition of “Aggregate Revolving Commitments” in Section 1.01
of the Credit Agreement is hereby amended to read as follows:

     “Aggregate Revolving Commitments” means the Revolving Commitments of
all the Lenders. The amount of the Aggregate Revolving Commitments in effect on the
Second Amendment Effective Date is FOUR HUNDRED SEVENTY-FIVE MILLION DOLLARS
($475,000,000).

 

 

     (c) The definition of “Applicable Rate” in Section 1.01 of the Credit
Agreement is hereby amended to read as follows:

     “Applicable Rate” means the following percentages per annum, based upon
the Consolidated Leverage Ratio as set forth in the most recent Compliance
Certificate received by the Administrative Agent pursuant to Section
7.02(a):

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	Revolving Loans
	Pricing	 	Consolidated	 	Commitment	 	Letter of	 	Eurodollar	 	Base Rate
	Level	 	Leverage Ratio	 	Fee	 	Credit Fee	 	Loans	 	Loans
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	1

	 	> 3.0 to 1.0
	 	 	0.35	%	 	 	1.75	%	 	 	1.75	%	 	 	0.75	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	2

	 	> 2.25 to 1.0 but
< 3.0 to 1.0
	 	 	0.30	%	 	 	1.50	%	 	 	1.50	%	 	 	0.50	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	3

	 	> 1.50 to 1.0 but
< 2.25 to 1.0
	 	 	0.275	%	 	 	1.375	%	 	 	1.375	%	 	 	0.375	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	4

	 	> 1.00 to 1.0 but
< 1.50 to 1.0
	 	 	0.225	%	 	 	1.25	%	 	 	1.25	%	 	 	0.25	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	5

	 	> 0.50 to 1.0 but
< 1.00 to 1.0
	 	 	0.175	%	 	 	1.00	%	 	 	1.00	%	 	 	0.00	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	6

	 	< 0.50 to 1.0
	 	 	0.150	%	 	 	0.875	%	 	 	0.875	%	 	 	0.00	%

Any increase or decrease in the Applicable Rate resulting from a change in the
Consolidated Leverage Ratio shall become effective as of the first Business Day
immediately following the date a Compliance Certificate is required to be delivered
pursuant to Section 7.02(a); provided, however, that if a
Compliance Certificate is not delivered when due in accordance with such Section,
then Pricing Level 1 shall apply as of the first Business Day after the date on
which such Compliance Certificate was required to have been delivered and shall
continue to apply until the first Business Day immediately following the date a
Compliance Certificate is delivered in accordance with Section 7.02(a),
whereupon the Applicable Rate shall be adjusted based upon the calculation of the
Consolidated Leverage Ratio contained in such Compliance Certificate.
Notwithstanding the foregoing, the Applicable Rate in effect from the Second
Amendment Effective Date through the first Business Day immediately following the
date a Compliance Certificate is required to be delivered pursuant to Section
7.02(a) for the fiscal quarter ending September 30, 2007 shall be determined
based upon Pricing Level 4.

     (d) The definition of “Consolidated EBIT” in Section 1.01 of the Credit
Agreement is hereby amended to read as follows:

     “Consolidated EBIT” means, for any period, for the Borrower and its
Subsidiaries on a consolidated basis, an amount equal to Consolidated Net Income for
such period plus the following to the extent deducted in calculating such
Consolidated Net Income: (a) Consolidated Interest Expense for such period, (b) the
provision for taxes based on income or revenues payable by the Borrower and its
Subsidiaries for such period, (c) without duplication, Non-Cash Charges for such
period and (d) any professional fees, facility closure costs, legal fees and other
out-of-pocket fees and expenses incurred as a result of the Borrower’s Acquisition
of InfraSource Services and

2

 

its Subsidiaries; provided that the amounts referred to in this clause (d) (x)
shall not, in the aggregate, exceed $25,000,000 and (y) shall only be permitted to
be added back to Consolidated Net Income during any period in the first eighteen
(18) months following the First Amendment Effective Date, all as determined in
accordance with GAAP. Notwithstanding the foregoing, for purposes of calculating
Consolidated EBIT for any period, the amount of Consolidated EBIT attributable to
Foreign Subsidiaries for such period shall not exceed twenty percent (20%) of total
Consolidated EBIT.

     (e) The definition of “Consolidated EBITDA” in Section 1.01 of the
Credit Agreement is hereby amended to read as follows:

     “Consolidated EBITDA” means, for any period, for the Borrower and its
Subsidiaries on a consolidated basis, an amount equal to (a) Consolidated EBIT for
such period plus (b) the amount of depreciation and amortization expense for
such period (to the extent deducted in calculating Consolidated Net Income for such
period), all as determined in accordance with GAAP. Notwithstanding the foregoing,
for purposes of calculating Consolidated EBITDA for any period, the amount of
Consolidated EBITDA attributable to Foreign Subsidiaries for such period shall not
exceed twenty percent (20%) of total Consolidated EBITDA.

     (f) Clause (ii) in the definition of “Disposition” in Section 1.01 of
the Credit Agreement is hereby amended to read as follows:

     (ii) (a) the sale, lease, license, transfer or other disposition of machinery
and equipment (including vehicles) that is obsolete, uneconomical, surplus, worn out
or otherwise no longer used or useful in the conduct of business of the Borrower and
its Subsidiaries, or the retirement or replacement of any such assets (with assets
of equal or greater value) and (b) the lease or sublease of machinery and equipment
(including vehicles) to subcontractors in the ordinary course of business,

     (g) The “.” at the end of the definition of “Excluded Property” in Section
1.01 of the Credit Agreement is hereby replaced with the word “and”, and the following
clauses (f), (g) and (h) are hereby added after clause (e) in such definition to read as
follows:

     (f) the fractional interest of the Borrower or its Subsidiary in that certain
Raytheon Hawker 900XP aircraft (or any replacement thereof), (g) any owned real
Property of InfraSource Services or any of its Subsidiaries on the First Amendment
Effective Date having in the aggregate for all such real Properties a book value of
less than $3,000,000, and (h) the Capital Stock of any Foreign Subsidiary that is an
Immaterial Subsidiary and is acquired or formed on or after the First Amendment
Effective Date.

     (h) The definition of “Maturity Date” in Section 1.01 of the Credit
Agreement is hereby amended to read as follows:

     “Maturity Date” means September 19, 2012.

     (i) The definition of “Threshold Amount” in Section 1.01 of the Credit
Agreement is hereby amended to read as follows:

3

 

     “Threshold Amount” means $15,000,000.

     (j) The references to “Sunesys, Inc.” in Section 6.24 of the Credit Agreement
and Section 3.5(c) of the Pledge Agreement are each hereby amended to read as
“Sunesys, LLC”.

     (k) The first paragraph of Article VII of the Credit Agreement is hereby
amended to read as follows:

     So long as any Lender shall have any Revolving Commitment hereunder, any Loan or other
Obligation hereunder shall remain unpaid or unsatisfied (other than any contingent indemnity
obligations that, by their terms, survive the termination of this Agreement) or any Letter
of Credit shall remain outstanding, the Loan Parties shall and shall cause each Subsidiary
to:

     (l) The second sentence of Section 7.14 of the Credit Agreement is hereby
amended to read as follows:

     Without limiting the generality of the above, subject to the provisions of
Section 7.12 the Loan Parties will cause (a) 100% of the issued and
outstanding Capital Stock of each Domestic Subsidiary and (b) 65% (or such greater
percentage that, due to a change in an applicable Law after the date hereof, (1)
could not reasonably be expected to cause the undistributed earnings of such Foreign
Subsidiary as determined for United States federal income tax purposes to be treated
as a deemed dividend to such Foreign Subsidiary’s United States parent and (2) could
not reasonably be expected to cause any material adverse tax consequences) of the
issued and outstanding Capital Stock entitled to vote (within the meaning of Treas.
Reg. Section 1.956-2(c)(2)) and 100% of the issued and outstanding Capital Stock not
entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)) that in
each case is directly owned by the Borrower or any Domestic Subsidiary in each
Foreign Subsidiary (other than any Immaterial Subsidiary acquired or formed on or
after the First Amendment Effective Date) to be subject at all times to a first
priority, perfected Lien in favor of the Administrative Agent pursuant to the terms
and conditions of the Collateral Documents or such other security documents as the
Administrative Agent shall reasonably request.

     (m) The first paragraph of Article VIII of the Credit Agreement is hereby
amended to read as follows:

     So long as any Lender shall have any Revolving Commitment hereunder, any Loan
or other Obligation hereunder shall remain unpaid or unsatisfied (other than any
contingent indemnity obligations that, by their terms, survive the termination of
this Agreement) or any Letter of Credit shall remain outstanding, no Loan Party
shall, nor shall it permit any Subsidiary to, directly or indirectly:

     (n) Section 8.01(q) of the Credit Agreement is hereby amended to read as
follows:

     (q) (i) Liens in favor of the Surety on the Surety Priority Collateral arising
pursuant to any of the Surety Credit Documents; provided that such Liens
remain subject to the terms of the Intercreditor Agreement, (ii) Liens (provided
that those of the Surety shall be subject to the terms of the Intercreditor
Agreement) arising as a matter of law which secure the obligations of the Borrower
or any Subsidiary under any surety bond

4

 

provided in the ordinary course of business, (iii) Liens in favor of Arch
Insurance Company or any subsidiary or affiliate of Arch Insurance Company or any of
their respective co-sureties or reinsurers which secure the obligations of
InfraSource Services or any of its Subsidiaries under those certain surety bonds
identified on Schedule 8.03(e) and (iv) Liens which secure the obligations
of any Subsidiary (including any Person with which such Subsidiary is merged or
consolidated pursuant to the applicable Permitted Acquisition) that in either case
is acquired subsequent to the Second Amendment Effective Date pursuant to a
Permitted Acquisition under any surety bonds permitted under Section
8.03(e)(iv); provided that such Liens are terminated within one hundred
eighty (180) days of the date of such Permitted Acquisition; and

     (o) The word “and” is hereby deleted from the end of Section 8.01(q) of the
Credit Agreement, Section 8.01(r) of the Credit Agreement is hereby renamed to be
Section 8.01(v) and new Sections 8.01(r), (s), (t) and
(u) are hereby added after Section 8.01(q) and prior to Section
8.01(v) of the Credit Agreement to read as follows: 

     (r) Liens on insurance policies and the proceeds thereof pursuant to insurance
premium financing arrangements;

     (s) Liens on the assets of Foreign Subsidiaries in connection with financing
arrangements for their benefit that are not otherwise prohibited under this
Agreement;

     (t) Liens on cash reserves securing Indebtedness of the Borrower and its
Subsidiaries in respect of surety bonds permitted by Section 8.03(e)(i);
provided that the aggregate amount of all such deposits and cash reserves
provided by the Borrower and its Subsidiaries in respect of surety bonds shall not,
at any time, exceed ten percent (10%) of the aggregate backlog of all contracts
covered by surety bonds;

     (u) Liens on machinery and equipment in favor of contract counterparties
arising under contracts entered into in the ordinary course of business, provided
that such Liens (x) secure only future performance and (y) shall not secure any
surety bonds; and

     (p) Section 8.01(r) of the Credit Agreement (which is being renamed to be
Section 8.01(v)) is hereby amended to read as follows:

     (v) other Liens in an aggregate amount outstanding not exceeding $15,000,000 at
any time.

     (q) Section 8.02(j) of the Credit Agreement is hereby amended to read as
follows:

     (j) Investments in Foreign Subsidiaries in an amount not to exceed $50,000,000
in the aggregate at any time outstanding; and

     (r) Section 8.02(k) of the Credit Agreement is hereby amended to read as
follows:

     (k) any other Investments in an aggregate amount at any time outstanding not to
exceed the greater of (i) $50,000,000 and (ii) an amount equal to sum of (A) 7.5 %
of Consolidated Net Worth plus (B) the amount of Non-Cash Charges for each fiscal
quarter period ending after the Second Amendment Effective Date plus (C) the
aggregate amount of

5

 

all repurchases or redemptions of shares of the Borrower’s Capital Stock to the
extent permitted under Section 8.06(c).

     (s) The word “and” is hereby deleted from the end of Section 8.02(j) of the
Credit Agreement, the “.” is hereby deleted from the end of Section 8.02(k) of the
Credit Agreement and new Sections 8.02(l) and (m) are hereby added after
Section 8.02(k) of the Credit Agreement to read as follows: 

     (l) Investments (including Indebtedness and Equity Interests) received in
connection with the bankruptcy or reorganization of suppliers and customers and in
settlement of delinquent obligations of, and other disputes with, customers and
suppliers arising in the ordinary course of business; and

     (m) Investments by the Borrower or any Subsidiary in Swap Contracts permitted
under Section 8.03(d).

     (t) Section 8.03(e) of the Credit Agreement is hereby amended to read as
follows:

     (e) (i) obligations of the Borrower or any Subsidiary under surety bonds
provided in the ordinary course of business, (ii) obligations of the Borrower and
its Subsidiaries under the Surety Credit Documents; provided that such
obligations are subject to the terms of the Intercreditor Agreement, (iii)
obligations of InfraSource Services or any of its Subsidiaries with respect to the
surety bonds identified on Schedule 8.03(e), it being understood and agreed
that such surety bonds identified on Schedule 8.03(e) shall not be renewed
or extended and (iv) obligations of any Subsidiary of the Borrower (including any
Person with which such Subsidiary is merged or consolidated pursuant to the
applicable Permitted Acquisition) that in either case is acquired subsequent to the
Second Amendment Effective Date pursuant to a Permitted Acquisition with respect to
any surety bonds in existence at the time of the applicable Permitted Acquisition;
provided that such surety bonds are released or replaced with surety bonds
issued pursuant to the Surety Credit Documents and subject to the terms of the
Intercreditor Agreement within one hundred eighty (180) days of the date of such
Permitted Acquisition;

     (u) Section 8.03(n) of the Credit Agreement is hereby amended to read as
follows:

     (n) Guarantees with respect to Indebtedness permitted under clauses (a) through
(i), (p) and (q) of this Section 8.03;

     (v) The “.” is hereby deleted from the end of Section 8.03(o) of the Credit
Agreement and new Sections 8.03(p) and (q) are hereby added after
Section 8.03(o) of the Credit Agreement to read as follows: 

     (p) Indebtedness in an aggregate principal amount not to exceed $5,000,000 of
all Foreign Subsidiaries; and

     (q) Indebtedness of the Borrower or any of its Subsidiaries consisting of the
financing of insurance premiums in the ordinary course of business.

6

 

     (w) The “.” at the end of Section 8.04 of the Credit Agreement is hereby
deleted and replaced with “; and” and a new subsection (f) is hereby added at the end of
Section 8.04 to read as follows:

     (f) any Immaterial Subsidiary may liquidate, wind up or dissolve.

     (x) The first paragraph of Section 8.05 of the Credit Agreement is hereby
amended to read as follows:

     Make any Disposition unless (a) the consideration paid in connection therewith
shall be cash or Cash Equivalents paid contemporaneously with consummation of the
transaction and shall be in an amount not less than the fair market value of the
Property disposed of, (b) if such transaction is a Sale and Leaseback Transaction,
such transaction is not prohibited by the terms of Section 8.15, (c) such
transaction does not involve a sale or other disposition of receivables other than
receivables owned by or attributable to other Property concurrently being disposed
of in a transaction otherwise permitted under this Section 8.05, and (d) the
aggregate net book value of all of the assets sold or otherwise disposed of by the
Borrower and its Subsidiaries in all such transactions in any fiscal year of the
Borrower shall not exceed an amount equal to three percent (3%) of Consolidated Net
Worth (without giving effect to any deduction for Non-Cash Charges) as of the end of
the preceding fiscal year.

     (y) Sections 8.06(c) and (d) of the Credit Agreement are each hereby
amended to read as follows:

     (c) provided that (i) no Default or Event of Default exists immediately prior
to and after giving effect to any such dividend, purchase, redemption, acquisition
or retirement and (ii) the Consolidated Leverage Ratio on a Pro Forma Basis after
giving effect to such dividend, purchase, redemption, acquisition or retirement is
less than 2.50 to 1.00, the Borrower may make dividends and purchase, redeem,
acquire or retire shares of its Capital Stock of any class or any warrants or
options to purchase any such shares of its Capital Stock in an aggregate amount not
to exceed in any fiscal year an amount equal to the sum of, without duplication, (x)
ten percent (10%) of Consolidated Net Worth as of the fiscal quarter ending
September 30, 2007 plus (y) the amount of Non-Cash Charges for each fiscal quarter
ending after the Second Amendment Effective Date plus (z) fifty percent (50%) of
Consolidated Net Income for each fiscal quarter ending after the Second Amendment
Effective Date; and

     (d) for the avoidance of doubt, the Borrower or any Subsidiary may make any
payment permitted by Section 8.12(b).

     (z) The “.” is hereby deleted from the end of Section 8.06(d) of the Credit
Agreement and replaced with “and” and a new subsection (e) is hereby added at the end of
Section 8.06 of the Credit Agreement to read as follows: 

     (e) provided that no Default or Event of Default exists immediately prior to or
after giving effect to any such purchase, redemption, acquisition or retirement, the
Borrower may purchase, redeem, acquire or retire shares of its Capital Stock in an
aggregate amount not to exceed $270,000,000 in connection with any
issuance of shares of Capital Stock of the Borrower to holders of the 2003 Convertible
Subordinated

7

 

Debentures in connection with any conversion of the 2003 Convertible
Subordinated Debentures to Capital Stock of the Borrower.

     (aa) Section 8.11(a) of the Credit Agreement is hereby amended to read as
follows:

     (a) [Intentionally omitted.]

     (bb) The following sentence is hereby added at the end of Section 8.12(b) of
the Credit Agreement to read as follows:

Notwithstanding the foregoing, the Borrower may purchase any or all of its
Indebtedness under the 2000 Subordinated Indenture, the 2003 Convertible
Subordinated Debentures Documents, the 2006 Convertible Subordinated Notes Documents
and the documents governing any Permitted Subordinated Refinancing Indebtedness so
long as no Default or Event of Default shall have occurred and be continuing or
would occur as a result therefrom.

     (cc) Section 8.14 of the Credit Agreement is hereby amended to read as follows:

     8.14 Preferred Capital Stock.

Notwithstanding any other provisions of this Agreement to the contrary, (a) permit
any Subsidiary of the Borrower to issue or have outstanding any shares of preferred
Capital Stock (other than (i) the 485 shares of preferred Capital Stock issued by
Allteck Line Contractors, Inc. to the Borrower and (ii) the 3,499 shares of
preferred Capital Stock issued by Quanta Services of Canada Ltd. to the Borrower) or
(b) create, incur, assume or suffer to exist any Lien on any Capital Stock of any
Subsidiary of the Borrower, except for Permitted Liens.

     (dd) Section 8.15 of the Credit Agreement is hereby amended to read as follows:

     8.15 Sale Leasebacks.

Enter into any Sale and Leaseback Transaction other than (a) the sale and leaseback
of trucks and other equipment for immaterial amounts in the ordinary course of
business and (b) those Sale and Leaseback Transactions subsequent to the Second
Amendment Effective Date which do not exceed $50,000,000 in the aggregate based on
the net book value, at the time of the applicable transaction, of the assets subject
thereto.

     (ee) Section 8.16 of the Credit Agreement is hereby amended to read as follows:

     8.16 Capital Expenditures.

The Borrower and its Subsidiaries will not permit Consolidated Capital Expenditures
to exceed (a) $150,000,000 during the fiscal year ending December 31, 2007, (b)
$200,000,000 during the fiscal year ending December 31, 2008 and (c) during each
fiscal year thereafter an amount equal to fifty percent (50%) of Consolidated EBITDA
for the prior fiscal year; provided, however, up to $50,000,000 of the unused amount
for Consolidated Capital Expenditures for the fiscal year ending December 31, 2008
may be

8

 

carried over and used to make Consolidated Capital Expenditures in the fiscal year
ending December 31, 2009.

(ff) Section 9.01(g) of the Credit Agreement is hereby amended to read as
follows:

(g) Insolvency Proceedings, Etc. Any Loan Party or any of its Subsidiaries
(other than an Immaterial Subsidiary) institutes or consents to the institution of
any proceeding under any Debtor Relief Law, or makes an assignment for the benefit
of creditors; or applies for or consents to the appointment of any receiver,
trustee, custodian, conservator, liquidator, rehabilitator or similar officer for it
or for all or any material part of its Property; or any receiver, trustee,
custodian, conservator, liquidator, rehabilitator or similar officer is appointed
without the application or consent of such Person and the appointment continues
undischarged or unstayed for sixty calendar days; or any proceeding under any Debtor
Relief Law relating to any such Person or to all or any material part of its
Property is instituted without the consent of such Person and continues undismissed
or unstayed for sixty calendar days, or an order for relief is entered in any such
proceeding; or

(gg) Section 9.01(h) of the Credit Agreement is hereby amended to read as
follows:

(h) Inability to Pay Debts; Attachment. (i) The Borrower or any Subsidiary
(other than an Immaterial Subsidiary) becomes unable or admits in writing its
inability or fails generally to pay its debts as they become due, or (ii) any writ
or warrant of attachment or execution or similar process is issued or levied against
all or any material part of the Property of any such Person and is not released,
vacated or fully bonded within thirty days after its issue or levy; or

(hh) Section 9.01(i) of the Credit Agreement is hereby amended to read as
follows:

(i) Judgments. There is entered against the Borrower or any Subsidiary
(other than an Immaterial Subsidiary) (i) one or more final judgments or orders for
the payment of money in an aggregate amount exceeding the Threshold Amount (to the
extent not covered by independent third-party insurance as to which the insurer does
not dispute coverage), and any such judgments or orders shall not have been paid,
discharged or bonded pending appeal (or the Borrower has not obtained an indemnity
against on terms and conditions satisfactory to the Lenders in their reasonable
discretion) within thirty (30) days from the entry thereof, or (ii) any one or more
non-monetary final judgments that have, or could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect and, in either case, (A)
enforcement proceedings are commenced by any creditor upon such judgment or order,
or (B) there is a period of ten consecutive days during which a stay of enforcement
of such judgment, by reason of a pending appeal or otherwise, is not in effect; or

     (ii) Schedule 2.01 to the Credit Agreement is hereby amended to read as
provided on Schedule 2.01 attached hereto.

     (jj) Schedule 8.02 to the Credit Agreement is hereby amended to read as
provided on Schedule 8.02 attached hereto.

9

 

     (kk) Section 1 of Schedule 11.02 to the Credit Agreement is hereby amended to
add the Borrower’s website “www.quantaservices.com”.

     2. Conditions Precedent. This Second Amendment shall be effective immediately upon
satisfaction of the following conditions precedent:

     (a) Receipt by the Administrative Agent of counterparts of this Second Amendment duly
executed by each of the Borrower, the Guarantors, the Lenders and Bank of America, N.A., as
Administrative Agent.

     (b) Receipt by the Administrative Agent of a certificate of a Responsible Officer of
the Borrower and each other Loan Party, in form and substance reasonably satisfactory to the
Administrative Agent and its legal counsel, (i) certifying that the Organization Documents
of each Loan Party delivered on the Closing Date have not been amended, supplemented or
otherwise modified since the Closing Date (except to the extent the Administrative Agent has
been notified thereof in accordance with the Credit Agreement) and remain in full force and
effect (as so amended, supplemented or otherwise modified, as applicable) as of the Second
Amendment Effective Date and (ii) attaching resolutions of each Loan Party approving and
adopting this Second Amendment, the transactions contemplated herein and authorizing the
execution and delivery of this Second Amendment and any documents, agreements or
certificates related thereto and certifying that such resolutions have not been amended,
supplemented or otherwise modified and remain in full force and effect as of the Second
Amendment Effective Date.

     (c) Receipt by the Administrative Agent of favorable opinions of legal counsel to the
Loan Parties, addressed to the Administrative Agent and each Lender, dated as of the Second
Amendment Effective Date, in form and substance reasonably satisfactory to the
Administrative Agent.

     (d) Receipt by the Administrative Agent and the Lenders of any fees and expenses
payable by the Borrower in connection with this Second Amendment.

     3. Miscellaneous.

     (a) The Credit Agreement and the obligations of the Loan Parties thereunder and under
the other Loan Documents, are hereby ratified and confirmed and shall remain in full force
and effect according to their terms.

     (b) Upon the effectiveness of this Second Amendment, each reference in the Credit
Agreement to “this Agreement,” “hereunder” or words of like import shall mean and be a
reference to the Credit Agreement, as affected and amended by this Second Amendment.

     (c) Each Guarantor (i) acknowledges and consents to all of the terms and conditions of
this Second Amendment, (ii) affirms all of its obligations under the Loan Documents as
affected and amended by this Second Amendment and (iii) agrees that this Second Amendment
and all documents executed in connection herewith do not operate to reduce or discharge its
obligations under the Credit Agreement or the other Loan Documents.

     (d) The Borrower and the Guarantors hereby represent and warrant as follows:

10

 

     (i) Each Loan Party has taken all necessary action to authorize the execution,
delivery and performance of this Second Amendment;

     (ii) This Second Amendment has been duly executed and delivered by the Loan
Parties and constitutes each of the Loan Parties’ legal, valid and binding
obligations, enforceable in accordance with its terms, except as such enforceability
may be subject to (A) bankruptcy, insolvency, reorganization, fraudulent conveyance
or transfer, moratorium or similar laws affecting creditors’ rights generally and
(B) general principles of equity (regardless of whether such enforceability is
considered in a proceeding at law or in equity); and

     (iii) No consent, approval, authorization or order of, or filing, registration
or qualification with, any court or governmental authority or third party is
required in connection with the execution, delivery or performance by any Loan Party
of this Second Amendment.

     (e) The Loan Parties represent and warrant to the Lenders that (i) the representations
and warranties of the Loan Parties set forth in Article VI of the Credit Agreement
and in each other Loan Document are true and correct in all material respects as of the date
hereof with the same effect as if made on and as of the date hereof, except to the extent
such representations and warranties expressly relate solely to an earlier date and (ii) no
event has occurred and is continuing which constitutes a Default or an Event of Default.

     (f) By executing this Second Amendment, each Lender identified as a New Lender on the
signature pages hereto hereby ratifies the terms and conditions of the Credit Agreement and
agrees to be bound by all of the terms and conditions of the Credit Agreement.

     (g) This Second Amendment may be executed in any number of counterparts, each of which
when so executed and delivered shall be an original, but all of which shall constitute one
and the same instrument. Delivery of an executed counterpart of this Second Amendment by
telecopy shall be effective as an original and shall constitute a representation that an
executed original shall be delivered.

     (h) THIS SECOND AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL
BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK.

[Signature pages follow]

11

 

     IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment to be duly executed
as of the date first above written.

BORROWER:

	 	 	 	 	 
	 	QUANTA SERVICES, INC.,

a Delaware corporation

 	 
	 	By:  	/s/ Nicholas M. Grindstaff
 	 
	 	 	Name:  	Nicholas M. Grindstaff 	 
	 	 	Title:  	Treasurer 	 
	 

GUARANTORS:

	 	 	 	 	 
	 	ARBY CONSTRUCTION, INC.

AUSTIN TRENCHER, INC.

CCLC, INC.

CONTI COMMUNICATIONS, INC.

CROCE ELECTRIC COMPANY, INC.

DILLARD SMITH CONSTRUCTION COMPANY

DRIFTWOOD ELECTRICAL CONTRACTORS, INC.

GLOBAL ENERCOM MANAGEMENT, INC.

GOLDEN STATE UTILITY CO.

H.L. CHAPMAN PIPELINE CONSTRUCTION, INC.

MANUEL BROS., INC.

MEARS GROUP, INC.

NETWORK ELECTRIC COMPANY

NORTH SKY COMMUNICATIONS, INC.

PARKSIDE SITE & UTILITY COMPANY CORPORATION

PARKSIDE UTILITY CONSTRUCTION CORP.

PWR FINANCIAL COMPANY

QPC, INC.

QSI, INC.

QUANTA DELAWARE, INC.

QUANTA GOVERNMENT SERVICES, INC.

QUANTA GOVERNMENT SOLUTIONS, INC.

QUANTA LX ACQUISITION, INC.

QUANTA LXI ACQUISITION, INC.

QUANTA LXII ACQUISITION, INC.

QUANTA LXIII ACQUISITION, INC.

QUANTA LXIV ACQUISITION, INC.

QUANTA LXV ACQUISITION, INC.

QUANTA LXVI ACQUISITION, INC.

 	 
	 	By:  	/s/ Nicholas M. Grindstaff
 	 
	 	 	Name:  	Nicholas M. Grindstaff 	 
	 	 	Title:  	Treasurer 	 
	 

QUANTA SERVICES, INC.

SECOND AMENDMENT TO AMENDED

AND RESTATED CREDIT AGREEMENT

 

 

	 	 	 	 	 
	 	QUANTA LXVII ACQUISITION, INC.

QUANTA LXVIII ACQUISITION, INC.

QUANTA LXIX ACQUISITION, INC.

QUANTA LXX ACQUISITION, INC.

QUANTA LXXI ACQUISITION, INC.

QUANTA LXXII ACQUISITION, INC.

QUANTA LXXIII ACQUISITION, INC.

QUANTA SERVICES CONTRACTING, INC.

QUANTA UNDERGROUND SERVICES, INC.

QUANTA UTILITY INSTALLATION COMPANY, INC.

QUANTA UTILITY SERVICES-GULF STATES, INC.

QUANTA WIRELESS SOLUTIONS, INC.

R.A. WAFFENSMITH & CO., INC.

SPALJ CONSTRUCTION COMPANY

SUMTER UTILITIES, INC.

TOM ALLEN CONSTRUCTION COMPANY

TTGP, INC.

TTLP, INC.

UNDERGROUND CONSTRUCTION CO., INC.

UTILITY LINE MANAGEMENT SERVICES, INC.

VCI TELCOM, INC.

W.C. COMMUNICATIONS, INC.,

ADVANCED TECHNOLOGIES AND INSTALLATION CORPORATION

ALLTECK LINE CONTRACTORS (USA), INC.

POTELCO, INC.

BRADFORD BROTHERS, INCORPORATED

TTM, INC.

CMI SERVICES, INC.

TRAWICK CONSTRUCTION COMPANY, INC.

FIBER TECHNOLOGIES, INC.

VCS SUB, INC.

FIVE POINTS CONSTRUCTION CO.

MEJIA PERSONNEL SERVICES, INC.

SOUTHWEST TRENCHING COMPANY, INC.

INTERMOUNTAIN ELECTRIC, INC.

IRBY CONSTRUCTION COMPANY

METRO UNDERGROUND SERVICES, INC. OF ILLINOIS

PROFESSIONAL TELECONCEPTS, INC.

 	 
	 	By:  	/s/ Nicholas M. Grindstaff
 	 
	 	 	Name:  	Nicholas M. Grindstaff 	 
	 	 	Title:  	Treasurer 	 
	 

QUANTA SERVICES, INC.

SECOND AMENDMENT TO AMENDED

AND RESTATED CREDIT AGREEMENT

 

 

	 	 	 	 	 
	 	PAR ELECTRICAL CONTRACTORS, INC.

PROFESSIONAL TELECONCEPTS, INC.

THE RYAN COMPANY, INC.

 	 
	 	By:  	/s/ Nicholas M. Grindstaff
 	 
	 	 	Name:  	Nicholas M. Grindstaff 	 
	 	 	Title:  	Treasurer 	 
	 
	 
	 	QDE LLC

 	 
	 	By:  	PWR Financial Company,
 	 
	 	 	its sole member 	 
	 	 	 
	 	By:  	                  /s/ Nicholas M. Grindstaff
 	 
	 	 	Name:  	Nicholas M. Grindstaff 	 
	 	 	Title:  	Treasurer 	 
	 
	 
	 	QUANTA ASSET MANAGEMENT LLC

 	 
	 	By:  	QSI, Inc.,
its sole member
 	 
	 	 	 
	 	By:  	                  /s/ Nicholas M. Grindstaff
 	 
	 	 	Name:  	Nicholas M. Grindstaff 	 
	 	 	Title:  	Treasurer 	 
	 
	 
	 	TOTAL QUALITY MANAGEMENT SERVICES, LLC

 	 
	 	By:  	VCS Sub, Inc., its sole member
 	 
	 
	 	By:  	                  /s/ Nicholas M. Grindstaff
 	 
	 	 	Name:  	Nicholas M. Grindstaff 	 
	 	 	Title:  	Treasurer 	 
	 

	 	 	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 

QUANTA SERVICES, INC.

SECOND AMENDMENT TO AMENDED

AND RESTATED CREDIT AGREEMENT

 

 

	 	 	 	 	 
	 	QUANTA UTILITY SERVICES, LLC

 	 
	 	By:  	Mejia Personnel Services, Inc.,
 	 
	 	 	its sole member 	 
	 	 	 
	 	By:  	                 /s/ Nicholas M. Grindstaff
 	 
	 	 	Name:  	Nicholas M. Grindstaff 	 
	 	 	Title:  	Treasurer 	 
	 
	 
	 	TJADER, L.L.C.

OKAY CONSTRUCTION COMPANY, LLC

 	 
	 	By:  	Spalj Construction Company,
 	 
	 	 	its sole member 	 
	 	 	 
	 	By:  	                  /s/ Nicholas M. Grindstaff
 	 
	 	 	Name:  	Nicholas M. Grindstaff 	 
	 	 	Title:  	Treasurer 	 
	 
	 
	 	MEARS/CPG LLC

MEARS ENGINEERING/ LLC

MEARS/HDD, LLC

MEARS SERVICES LLC

 	 
	 	By:  	Mears Group, Inc.,
 	 
	 	 	the sole member of each of the foregoing 	 
	 	 	limited liability companies 	 
	 	 	 
	 	By:  	                  /s/ Nicholas M. Grindstaff
 	 
	 	 	Name:  	Nicholas M. Grindstaff 	 
	 	 	Title:  	Treasurer 	 
	 
	 
	 	S.K.S. PIPELINERS, LLC

 	 
	 	By:  	Arby Construction, Inc.,
 	 
	 	 	its sole member 	 
	 	 	 
	 	By:  	                    /s/ Nicholas M. Grindstaff
 	 
	 	 	Name:  	Nicholas M. Grindstaff 	 
	 	 	Title:  	Treasurer 	 
	 

QUANTA SERVICES, INC.

SECOND AMENDMENT TO AMENDED

AND RESTATED CREDIT AGREEMENT

 

 

	 	 	 	 	 
	 	TNS-VA, LLC

 	 
	 	By:  	Professional Teleconcepts, Inc.,
 	 
	 	 	its sole member 	 
	 	 	 
	 	By:  	                    /s/ Nicholas M. Grindstaff
 	 
	 	 	Name:  	Nicholas M. Grindstaff 	 
	 	 	Title:  	Treasurer 	 
	 
	 
	 	NORTH HOUSTON POLE LINE, L.P.

LINDSEY ELECTRIC, L.P.

DIGCO UTILITY CONSTRUCTION, L.P.

 	 
	 	By:  	Mejia Personnel Services, Inc.,
 	 
	 	 	its general partner 	 
	 	 	 
	 	By:  	                 /s/ Nicholas M. Grindstaff
 	 
	 	 	Name:  	Nicholas M. Grindstaff 	 
	 	 	Title:  	Treasurer 	 
	 
	 
	 	QUANTA SERVICES MANAGEMENT
PARTNERSHIP, L.P.

QUANTA ASSOCIATES, L.P.

 	 
	 	By:  	QSI, Inc.,
 	 
	 	 	its general partner 	 
	 	 	 
	 	By:  	                  /s/ Nicholas M. Grindstaff
 	 
	 	 	Name:  	Nicholas M. Grindstaff 	 
	 	 	Title:  	Treasurer 	 
	 
	 
	 	TRANS TECH ELECTRIC, L.P.

 	 
	 	By:  	TTGP, Inc.,
 	 
	 	 	its general partner 	 
	 	 	 
	 	By:  	                  /s/ Nicholas M. Grindstaff
 	 
	 	 	Name:  	Nicholas M. Grindstaff 	 
	 	 	Title:  	Treasurer 	 
	 

QUANTA SERVICES, INC.

SECOND AMENDMENT TO AMENDED

AND RESTATED CREDIT AGREEMENT

 

 

	 	 	 	 	 
	 	PWR NETWORK, LLC

 	 
	 	By:  	PWR Financial Company,
 	 
	 	 	its sole member 	 
	 	 	 
	 	By:  	                  /s/ Nicholas M. Grindstaff
 	 
	 	 	Name:  	Nicholas M. Grindstaff 	 
	 	 	Title:  	Treasurer 	 
	 
	 
	 	QUANTA RECEIVABLES, LP

 	 
	 	By:  	PWR Network, LLC,
 	 
	 	 	its general partner 	 
	 	 	 
	 	By:  	                  PWR Financial Company,
 	 
	 	 	its sole member 	 
	 	 	 
	 	By:  	                  /s/ Nicholas M. Grindstaff
 	 
	 	 	Name:  	Nicholas M. Grindstaff 	 
	 	 	Title:  	Treasurer 	 
	 
	 
	 	SPECTRUM CONSTRUCTION

CONTRACTING, L.L.C.

 	 
	 	By:  	Conti Communications, Inc.,
 	 
	 	 	its sole member 	 
	 	 	 
	 	By:  	                  /s/ Nicholas M. Grindstaff
 	 
	 	 	Name:  	Nicholas M. Grindstaff 	 
	 	 	Title:  	Treasurer 	 
	 

QUANTA SERVICES, INC.

SECOND AMENDMENT TO AMENDED

AND RESTATED CREDIT AGREEMENT

 

 

	 	 	 	 	 
	ADMINISTRATIVE AGENT: 	
BANK OF AMERICA, N.A.,

as Administrative Agent

 	 
	 	By:  	/s/ Rosanne Parsill
 	 
	 	 	Name:  	Rosanne Parsill 	 
	 	 	Title:  	Assistant Vice President 	 
	 
	 
	LENDERS: 	
BANK OF AMERICA, N.A.,

as a Lender, Swing Line Lender and L/C Issuer

 	 
	 	By:  	/s/ Gary L. Mingle
 	 
	 	 	Name:  	Gary L. Mingle 	 
	 	 	Title:  	Senior Vice-President 	 
	 
	 
	 	WACHOVIA BANK, N.A.,

as a Lender

 	 
	 	By:  	/s/ Michael R. Quiray
 	 
	 	 	Name:  	Michael R. Quiray 	 
	 	 	Title:  	Vice President 	 
	 
	 
	 	CALYON NEW YORK BRANCH,

as a Lender

 	 
	 	By:  	/s/ Samuel L. Hill
 	 
	 	 	Name:  	Samuel L. Hill 	 
	 	 	Title:  	Managing Director/Region Head 	 
	 	 	 
	 	By:  	                   /s/ Robert S. Smith
 	 
	 	 	Name:  	Robert S. Smith 	 
	 	 	Title:  	Managing Director 	 
	 
	 
	 	WELLS FARGO BANK, N.A. ,

as a Lender

 	 
	 	By:  	/s/ H. Michael Sultanik
 	 
	 	 	Name:  	H. Michael Sultanik 	 
	 	 	Title:  	Vice President 	 
	 

QUANTA SERVICES, INC.

SECOND AMENDMENT TO AMENDED

AND RESTATED CREDIT AGREEMENT

 

 

	 	 	 	 	 
	 	THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, as a Lender

 	 
	 	By:  	/s/ Brian N. Thomas
 	 
	 	 	Name:  	Brian N. Thomas 	 
	 	 	Title:  	Vice President 	 
	 
	 
	 	PRUCO LIFE INSURANCE COMPANY,

as a Lender

 	 
	 	By:  	/s/ Brian N. Thomas
 	 
	 	 	Name:  	Brian N. Thomas 	 
	 	 	Title:  	Vice President 	 
	 
	 
	 	BMO CAPITAL MARKETS FINANCING, INC.,

as a New Lender

 	 
	 	By:  	/s/ John Armstrong
 	 
	 	 	Name:  	John Armstrong 	 
	 	 	Title:  	Vice President 	 
	 
	 
	 	JPMORGAN CHASE BANK, N.A.,

as a Lender

 	 
	 	By:  	                       /s/ R. Michael Arnett
       	 
	 	 	Name:  	R. Michael Arnett 	 
	 	 	Title:  	Vice President 	 
	 
	 
	 	COMPASS BANK,

as a Lender

 	 
	 	By:  	                       /s/ Tom Brosig
 	 
	 	 	Name:  	Tom Brosig 	 
	 	 	Title:  	Senior Vice President 	 
	 

QUANTA SERVICES, INC.

SECOND AMENDMENT TO AMENDED

AND RESTATED CREDIT AGREEMENT

 

 

	 	 	 	 	 
	 	MIDFIRST BANK,

as a Lender

 	 
	 	By:  	/s/ Shawn D. Brewer
 	 
	 	 	Name:  	Shawn D. Brewer 	 
	 	 	Title:  	Vice President 	 
	 
	 
	 	PNC BANK, NATIONAL ASSOCIATION,

as a New Lender

 	 
	 	By:  	/s/ W. J. Bowne
 	 
	 	 	Name:  	W. J. Bowne 	 
	 	 	Title:  	Managing Director 	 
	 
	 
	 	CREDIT SUISSE,

as a Lender

 	 
	 	By:  	/s/ Vanessa Gomez
 	 
	 	 	Name:  	Vanessa Gomez 	 
	 	 	Title:  	Vice President 	 
	 	 	 
	 	By:  	                        /s/ Morenikeji Ajayi
 	 
	 	 	Name:  	Morenikeji Ajayi 	 
	 	 	Title:  	Associate 	 
	 
	 
	 	AMEGY BANK NATIONAL ASSOCIATION,

as a Lender

 	 
	 	By:  	/s/ Laif Afseth
 	 
	 	 	Name:  	Laif Afseth 	 
	 	 	Title:  	Senior Vice President 	 
	 

QUANTA SERVICES, INC.

SECOND AMENDMENT TO AMENDED

AND RESTATED CREDIT AGREEMENT

 

 

	 	 	 	 	 
	 	COMMERZBANK AG, NEW YORK AND

GRAND CAYMAN BRANCHES,

as a Lender

 	 
	 	By:  	/s/ Edward C. A. Forsberg, Jr.
 	 
	 	 	Name:  	Edward C. A. Forsberg, Jr. 	 
	 	 	Title:  	Senior Vice President & Manager 	 
	 	 	 
	 	By:  	                  /s/ David A. Bennett
 	 
	 	 	Name:  	David A. Bennett 	 
	 	 	Title:  	Vice President 	 
	 
	 
	 	NORTH FORK BUSINESS CAPITAL CORP.,

as a Lender

 	 
	 	By:  	/s/ Ron Walker
 	 
	 	 	Name:  	Ron Walker 	 
	 	 	Title:  	Vice President 	 
	 
	 
	 	WEBSTER BANK, NATIONAL ASSOCIATION,

as a Lender

 	 
	 	By:  	/s/ Gail Bruhn
 	 
	 	 	Name:  	Gail Bruhn 	 
	 	 	Title:  	Sr. Vice President 	 
	 
	 
	 	MB FINANCIAL BANK, N.A.

as a Lender

 	 
	 	By:  	/s/ Henry Wessel
 	 
	 	 	Name:  	Henry Wessel 	 
	 	 	Title:  	Vice President 	 
	 
	 
	 	FIRSTRUST BANK,

as a Lender

 	 
	 	By:  	/s/ Ellen Frank
 	 
	 	 	Name:  	Ellen Frank 	 
	 	 	Title:  	Vice President 	 
	 

QUANTA SERVICES, INC.

SECOND AMENDMENT TO AMENDED

AND RESTATED CREDIT AGREEMENT

 

 

Schedule 2.01

REVOLVING COMMITMENTS AND PRO RATA SHARES

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Pro Rata Share of
	 	 	Revolving	 	Revolving
	Lenders	 	Commitment	 	Commitment
	 
	 	 	 	 	 	 	 	 
	Bank of America, N.A.
	 	$	65,000,000	 	 	 	13.684210526	%
	Wachovia Bank, N.A.
	 	$	52,500,000	 	 	 	11.052631579	%
	Calyon New York Branch
	 	$	40,000,000	 	 	 	8.421052632	%
	Wells Fargo Bank, N.A.
	 	$	40,000,000	 	 	 	8.421052632	%
	The Prudential Insurance Company of America
	 	$	28,772,727	 	 	 	6.057416211	%
	Pruco Life Insurance Company
	 	$	8,727,273	 	 	 	1.837320632	%
	BMO Capital Markets
	 	$	32,500,000	 	 	 	6.842105263	%
	JPMorgan Chase Bank, N.A.
	 	$	32,500,000	 	 	 	6.842105263	%
	Compass Bank
	 	$	27,500,000	 	 	 	5.789473684	%
	MidFirst Bank
	 	$	25,000,000	 	 	 	5.263157895	%
	PNC Bank, National Association
	 	$	25,000,000	 	 	 	5.263157895	%
	Credit Suisse, Cayman Islands
Branch
	 	$	20,000,000	 	 	 	4.210526316	%
	Amegy Bank National Association
	 	$	20,000,000	 	 	 	4.210526316	%
	Commerzbank AG, New York and
Grand Cayman Branches
	 	$	20,000,000	 	 	 	4.210526316	%
	North Fork
	 	$	15,000,000	 	 	 	3.157894737	%
	Webster Bank, National
Association
	 	$	10,000,000	 	 	 	2.105263158	%
	MB Financial Bank, N.A.
	 	$	7,500,000	 	 	 	1.578947368	%
	Firstrust Bank
	 	$	5,000,000	 	 	 	1.052631579	%
	Total
	 	$	475,000,000	 	 	 	100.000000000	%

 

 

Schedule 8.02

INVESTMENTS EXISTING ON THE SECOND AMENDMENT EFFECTIVE DATE

All Investments existing on the Second Amendment Effective Date in:

	•	 	Pivotel, LLC, a Delaware limited liability company (or any of its successors or
assigns) in an aggregate amount of approximately $500,000; and
	 
	•	 	Foreign Subsidiaries existing on or prior to the Second Amendment Effective Date in an
aggregate amount of approximately $10 million as of the Second Amendment Effective Date,
including, without limitation, Investments in:

Allteck Line Contractors, Inc., a British Columbia corporation (or any of its
successors or assigns) (including, without limitation, pursuant to that certain
letter of credit no. 3048269 for the benefit of Bank of Nova Scotia in the amount of
$3,000,000);

Quanta Services of Canada Ltd., a British Columbia limited company (or any of its
successors or assigns);

Mears Canada Corp., a Nova Scotia corporation (or any of its successors or assigns);

Mearsmex S. de R.L. de C.V., a sociedad de responsabilidad limitada de capital
variable organized under the laws of Mexico (or any of its successors or assigns);

Par Internacional, S. de R.L. de C.V., a sociedad de responsabilidad limitada de
capital variable organized under the laws of Mexico (or any of its successors or
assigns);

Servicios Par Electric, S. de R.L. de C.V., a sociedad de responsabilidad limitada
de capital variable organized under the laws of Mexico (or any of its successors or
assigns);

Quanta International Limited, an international business company organized under the
laws of the British Virgin Islands (or any of its successors or assigns);

InfraSource Services (Canada), ULC, an Alberta company (or any of its successors or
assigns);

InfraSource Power (Canada) Inc., an Alberta company (or any of its
successors or assigns); and

EHV Elecon, Inc., a Puerto Rican company (or any of its successors or
assigns).

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00129-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00129-of-00352.parquet"}]]