Document:

exv10w1

 

EXHIBIT 10.1

CONFIDENTIAL

 

 

$300,000,000

SENIOR UNSECURED

BRIDGE LOAN AGREEMENT

Dated as of December 18, 2006

among

ALLIS-CHALMERS ENERGY INC.

as the Borrower,

THE GUARANTORS NAMED HEREIN

as the Guarantors,

THE LENDERS NAMED HEREIN

as the Lenders,

ROYAL BANK OF CANADA

as Administrative Agent,

and

RBC CAPITAL MARKETS CORPORATION

as Sole Lead Arranger and Sole Bookrunner

 

 

 

 

Table of Contents

	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	 
	 	 	 	 	 	 
	ARTICLE I Definitions	 	 	1	 
	 
	 	 	 	 	 	 
	SECTION 1.01.
	 	Defined Terms	 	 	1	 
	SECTION 1.03.
	 	Classification of Loans	 	 	17	 
	SECTION 1.04.
	 	References to Agreements and Laws	 	 	17	 
	SECTION 1.05.
	 	Times of Day	 	 	17	 
	SECTION 1.06.
	 	Timing of Payment or Performance	 	 	17	 
	 
	 	 	 	 	 	 
	ARTICLE II Loans	 	 	17	 
	 
	 	 	 	 	 	 
	SECTION 2.01.
	 	Commitments	 	 	17	 
	SECTION 2.02.
	 	Loans	 	 	17	 
	SECTION 2.03.
	 	Use of Proceeds	 	 	18	 
	SECTION 2.04.
	 	Borrowing Procedure	 	 	18	 
	SECTION 2.05.
	 	Evidence of Debt; Repayment of Loans	 	 	18	 
	SECTION 2.06.
	 	Fees	 	 	19	 
	SECTION 2.07.
	 	Interest on Loans	 	 	19	 
	SECTION 2.08.
	 	Default Interest	 	 	20	 
	SECTION 2.09.
	 	Alternate Rate of Interest	 	 	20	 
	SECTION 2.10.
	 	Repayment	 	 	20	 
	SECTION 2.11.
	 	Conversion and Continuation of Borrowings	 	 	20	 
	SECTION 2.12.
	 	Termination of Commitments	 	 	21	 
	SECTION 2.13.
	 	Optional Prepayment	 	 	21	 
	SECTION 2.14.
	 	Mandatory Prepayments	 	 	21	 
	SECTION 2.15.
	 	Reserve Requirements; Change in Circumstances	 	 	22	 
	SECTION 2.16.
	 	Change in Legality	 	 	23	 
	SECTION 2.17.
	 	Indemnity	 	 	24	 
	SECTION 2.18.
	 	Pro Rata Treatment	 	 	24	 
	SECTION 2.19.
	 	Sharing of Setoffs	 	 	24	 
	SECTION 2.20.
	 	Payments	 	 	24	 
	SECTION 2.21.
	 	Taxes	 	 	25	 
	SECTION 2.22.
	 	Assignment of Commitments Under Certain Circumstances; Duty to Mitigate	 	 	27	 
	 
	 	 	 	 	 	 
	ARTICLE III Representations and Warranties	 	 	28	 
	 
	 	 	 	 	 	 
	SECTION 3.01.
	 	Organization; Powers	 	 	28	 
	SECTION 3.02.
	 	Authorization	 	 	28	 
	SECTION 3.03.
	 	Enforceability	 	 	28	 
	SECTION 3.04.
	 	Governmental Approvals	 	 	28	 
	SECTION 3.05.
	 	Financial Statements	 	 	29	 
	SECTION 3.06.
	 	No Material Adverse Change	 	 	29	 
	SECTION 3.07.
	 	Title to Properties; Possession Under Leases	 	 	29	 
	SECTION 3.08.
	 	Subsidiaries	 	 	29	 

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	 	 	 	 	Page	 
	 
	 	 	 	 	 	 
	SECTION 3.09.
	 	Litigation; Compliance with Laws	 	 	30	 
	SECTION 3.10.
	 	Agreements	 	 	30	 
	SECTION 3.11.
	 	Federal Reserve Regulations	 	 	30	 
	SECTION 3.12.
	 	Investment Company Act	 	 	30	 
	SECTION 3.13.
	 	Tax Returns	 	 	30	 
	SECTION 3.14.
	 	No Material Misstatements	 	 	30	 
	SECTION 3.15.
	 	Employee Benefit Plans	 	 	30	 
	SECTION 3.16.
	 	Environmental Matters	 	 	31	 
	SECTION 3.17.
	 	Labor Matters	 	 	31	 
	SECTION 3.18.
	 	Solvency	 	 	31	 
	 
	 	 	 	 	 	 
	ARTICLE IV Conditions of Lending	 	 	32	 
	 
	 	 	 	 	 	 
	ARTICLE V Affirmative Covenants	 	 	35	 
	 
	 	 	 	 	 	 
	SECTION 5.01.
	 	Existence; Compliance with Laws and Contractual Obligations; Businesses and Properties	 	 	35	 
	SECTION 5.02.
	 	Insurance	 	 	35	 
	SECTION 5.03.
	 	Taxes	 	 	36	 
	SECTION 5.04.
	 	Financial Statements, Reports, etc.	 	 	36	 
	SECTION 5.05.
	 	Litigation and Other Notices	 	 	37	 
	SECTION 5.06.
	 	Maintaining Records; Access to Properties and Inspections; Maintenance of Ratings	 	 	38	 
	SECTION 5.07.
	 	Additional Guarantors	 	 	38	 
	SECTION 5.08.
	 	Use of Proceeds	 	 	38	 
	 
	 	 	 	 	 	 
	ARTICLE VI Negative Covenants	 	 	38	 
	 
	 	 	 	 	 	 
	SECTION 6.01.
	 	Indebtedness	 	 	38	 
	SECTION 6.02.
	 	Liens	 	 	39	 
	SECTION 6.03.
	 	Sale and Lease-Back Transactions	 	 	41	 
	SECTION 6.04.
	 	Investments, Loans and Advances	 	 	41	 
	SECTION 6.05.
	 	Mergers, Consolidations, and Sales of Assets	 	 	42	 
	SECTION 6.06.
	 	Restricted Payments; Restrictive Agreements	 	 	42	 
	SECTION 6.07.
	 	Transactions with Affiliates	 	 	43	 
	SECTION 6.08.
	 	Change in Nature of Business	 	 	44	 
	SECTION 6.09.
	 	Other Indebtedness and Agreements	 	 	44	 
	SECTION 6.10.
	 	Partnership, etc.	 	 	44	 
	SECTION 6.11.
	 	Accounting Changes; Fiscal Year	 	 	44	 
	SECTION 6.12.
	 	Capital Expenditures	 	 	44	 
	 
	 	 	 	 	 	 
	ARTICLE VII Events of Default	 	 	44	 
	 
	 	 	 	 	 	 
	ARTICLE VIII Guarantee	 	 	47	 
	 
	 	 	 	 	 	 
	SECTION 8.01.
	 	The Guarantee	 	 	47	 
	SECTION 8.02.
	 	Obligations Unconditional	 	 	47	 
	SECTION 8.03.
	 	Reinstatement	 	 	48	 

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	 	 	 	 	Page	 
	 
	 	 	 	 	 	 
	SECTION 8.04.
	 	Subrogation; Subordination	 	 	48	 
	SECTION 8.05.
	 	Remedies	 	 	48	 
	SECTION 8.06.
	 	Instrument for the Payment of Money	 	 	48	 
	SECTION 8.07.
	 	Continuing Guarantee	 	 	49	 
	SECTION 8.08.
	 	General Limitation on Guarantee Obligations	 	 	49	 
	SECTION 8.09.
	 	Release of Guarantors	 	 	49	 
	SECTION 8.10.
	 	Right of Contribution	 	 	49	 
	 
	 	 	 	 	 	 
	ARTICLE IX The Administrative Agent	 	 	49	 
	 
	 	 	 	 	 	 
	SECTION 9.01.
	 	Appointment and Authority	 	 	49	 
	SECTION 9.02.
	 	Rights as a Lender	 	 	49	 
	SECTION 9.03.
	 	Exculpatory Provisions	 	 	50	 
	SECTION 9.04.
	 	Reliance by Agent	 	 	50	 
	SECTION 9.05.
	 	Delegation of Duties	 	 	50	 
	SECTION 9.06.
	 	Other Agents	 	 	50	 
	SECTION 9.07.
	 	Resignation of Agent	 	 	51	 
	SECTION 9.08.
	 	Non-reliance on Agent and Other Lenders	 	 	51	 
	SECTION 9.09.
	 	Indemnification	 	 	51	 
	 
	 	 	 	 	 	 
	ARTICLE X Miscellaneous	 	 	52	 
	 
	 	 	 	 	 	 
	SECTION 10.01.
	 	Notices	 	 	52	 
	SECTION 10.02.
	 	Survival of Agreement	 	 	52	 
	SECTION 10.03.
	 	Binding Effect	 	 	53	 
	SECTION 10.04.
	 	Successors and Assigns	 	 	53	 
	SECTION 10.05.
	 	Expenses; Indemnity	 	 	55	 
	SECTION 10.06.
	 	Right of Setoff	 	 	56	 
	SECTION 10.07.
	 	Applicable Law	 	 	56	 
	SECTION 10.08.
	 	Waivers; Amendment	 	 	56	 
	SECTION 10.09.
	 	Interest Rate Limitation	 	 	57	 
	SECTION 10.10.
	 	Entire Agreement	 	 	57	 
	SECTION 10.11.
	 	WAIVER OF JURY TRIAL	 	 	57	 
	SECTION 10.12.
	 	Severability	 	 	58	 
	SECTION 10.13.
	 	Counterparts	 	 	58	 
	SECTION 10.14.
	 	Headings	 	 	58	 
	SECTION 10.15.
	 	Jurisdiction; Consent to Service of Process	 	 	58	 
	SECTION 10.16.
	 	Confidentiality	 	 	58	 
	SECTION 10.17.
	 	USA PATRIOT Act Notice	 	 	59	 

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	SCHEDULES
	 	 	 	 
	 
	 	 	 	 
	Schedule 1.01(a)

	 	—
	 	Guarantors
	Schedule 2.01

	 	—
	 	Lenders and Commitments
	Schedule 3.08

	 	—
	 	Subsidiaries
	Schedule 6.01

	 	—
	 	Existing Indebtedness
	Schedule 6.02

	 	—
	 	Existing Liens
	Schedule 6.04

	 	—
	 	Existing Investments
	 
	 	 	 	 
	EXHIBITS
	 	 	 	 
	 
	 	 	 	 
	Exhibit A

	 	—
	 	Form of Assignment and Acceptance
	Exhibit B

	 	—
	 	Form of Borrowing Request
	Exhibit C

	 	—
	 	Form of Non-Bank Certificate
	Exhibit D

	 	—
	 	Form of Notice of Interest Election

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     SENIOR UNSECURED BRIDGE LOAN AGREEMENT dated as of December 18, 2006 (this “Agreement”),
among ALLIS-CHALMERS ENERGY INC., a Delaware corporation (the “Borrower”), the GUARANTORS (as
hereinafter defined), the LENDERS (as hereinafter defined), ROYAL BANK OF CANADA, as administrative
agent for the Lenders (in such capacity, the “Administrative Agent”), and RBC CAPITAL MARKETS
CORPORATION, as the exclusive lead arranger and sole bookrunner (in such capacities, the “Lead
Arranger”).

RECITALS

     A. Pursuant to the Asset Purchase Agreement, dated October 25, 2006 (the “Purchase Agreement”,
as amended in accordance with the terms of this Agreement), by and between the Borrower and Oil &
Gas Rental Services, Inc., a Louisiana corporation (the “Target”), the Borrower intends to acquire
from the Target substantially all of the assets of the Target and assume certain liabilities of the
Target specified in the Purchase Agreement (the “Acquisition”).

     B. The Borrower has requested that the Lenders make (a) a loan to the Borrower in an aggregate
principal amount not in excess of $225,000,000 and (b) a loan to the Borrower in an aggregate
principal amount not in excess of $75,000,000, in each case on the Closing Date (as hereinafter
defined) to (a) finance a portion of the purchase price for the Acquisition and (b) pay fees, costs
and expenses related to the Transactions (as hereinafter defined).

     C. The Lenders are willing to extend such credit to the Borrower on the terms and subject to
the conditions set forth herein.

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

ARTICLE I

Definitions

          SECTION 1.01. Defined Terms

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

     “Acquired Business” shall mean the assets of the Target and its Subsidiaries acquired by the
Borrower from the Target pursuant to the Purchase Agreement.

     “Acquisition” shall have the meaning assigned to such term in the recitals.

     “Administrative Agent” shall have the meaning assigned to such term in the preamble.

     “Affiliate” shall mean, when used with respect to a specified Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is
under common Control with the Person specified; provided, however, that, (a) for purposes of
Section 6.07, the term “Affiliate” shall also include any Person that directly or
indirectly owns 10% or more of any class of Capital Stock of the Person specified or that is an
officer or director of the Person specified and (b) the term “Affiliate” with respect to the
Borrower shall specifically exclude the Administrative Agent, each Lender, in its capacity as
Lender, and any of its Affiliates.

ALY Bridge Loan Agreement

 

 

     “Agreement” shall have the meaning assigned to such term in the preamble.

     “Applicable Rate” means (a) in the case of the Bridge A Loan, (i) with respect to a Eurodollar
Rate Loan, 4.75% per annum, increasing to 5.75% per annum on the first anniversary of the Closing
Date, and (ii) with respect to a Base Rate Loan, 3.75% per annum, increasing to 4.75% on the first
anniversary of the Closing Date and (b) in the case of the Bridge B Loan, (i) with respect to a
Eurodollar Rate Loan, 6.75% per annum, increasing to 7.75% per annum on the first anniversary of
the Closing Date, and (ii) with respect to a Base Rate Loan, 5.75% per annum, increasing to 6.75%
on the first anniversary of the Closing Date.

     “Asset Sale” shall mean the sale, transfer or other disposition (by way of merger, casualty,
condemnation or otherwise) by the Borrower or any of its Subsidiaries to any Person other than the
Borrower or any of its Subsidiaries of (a) any Capital Stock of any of the Subsidiaries of the
Borrower or (b) any other assets of the Borrower or any of its Subsidiaries.

     “Assignment and Acceptance” shall mean an assignment and acceptance entered into by a Lender
and an assignee, and accepted by the Administrative Agent, in the form of Exhibit A or such
other form as shall be reasonably approved by the Administrative Agent.

     “Base Rate” shall mean for any day a fluctuating rate per annum equal to the higher of (a) the
Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest in effect for such day as publicly
announced from time to time by the Administrative Agent as its “prime rate”; provided, however,
that during the period from the date hereof to the date that is fifteen (15) days following the
Closing Date (or such earlier date as shall be specified by the Administrative Agent on which a
Eurodollar Rate Loan has become available), “Base Rate” shall mean a rate per annum equal to the
sum of two-week LIBOR (determined by the Administrative Agent to be the offered rate that appears
on the page of the LIBOR I screen that displays an average British Bankers Association Interest
Settlement Rate for deposits in Dollars for delivery on the Closing Date with a two-week term,
determined as of approximately 11:00 a.m. (London time) on the Closing Date) plus 1%. Such rate is
a rate set by the Administrative Agent based upon various factors including the Administrative
Agent’s costs and desired return, general economic conditions and other factors, and is used as a
reference point for pricing some loans, which may be priced at, above, or below such announced
rate. Any changes in such rate announced by the Administrative Agent shall take effect at the
opening of business on the day specified in the public announcement of such change.

     “Base Rate Loan” shall mean a Loan that bears interest based on the Base Rate.

     “Board” shall mean the Board of Governors of the Federal Reserve System of the United States
of America.

     “Borrower” shall have the meaning assigned to such term in the preamble.

     “Borrower Acquisition” shall mean any transaction or series of related transactions for the
purpose of, or resulting in, directly or indirectly: (a) the acquisition by the Borrower or any
Subsidiary of the Borrower of all or substantially all of the assets located in the United States
of a Person or of any business or division of a Person; (b) the acquisition by the Borrower or any
Subsidiary of the Borrower of more than fifty percent (50%) of any class of Voting Stock (or
similar Capital Stock) of any Domestic Person; or (c) a merger, consolidation or other combination
by the Borrower or any Subsidiary of the Borrower with another Person if the Borrower or any
Subsidiary of the Borrower is the surviving entity; provided that (i) in any merger involving the
Borrower, the Borrower must be the surviving entity; and

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(ii) in any merger involving a Subsidiary of the Borrower which is a Loan Party and another
Subsidiary of the Borrower which is not a Loan Party, the Subsidiary which is a Loan Party shall be
the survivor.

     “Borrowing Request” shall mean a request by the Borrower in accordance with the terms of
Section 2.04 and substantially in the form of Exhibit B, or such other form as
shall be approved by the Administrative Agent.

     “Breakage Event” shall have the meaning assigned to such term in Section 2.17.

     “Bridge A Commitment” shall mean, with respect to each Bridge A Lender, the commitment of such
Lender to make advances hereunder as set forth on Schedule 2.01, or in the Assignment and
Acceptance pursuant to which such Lender assumed its Commitment, as applicable.

     “Bridge A Lender” means a Lender that has a Bridge A Commitment or that holds any portion of
the Bridge A Loan.

     “Bridge A Loan” means, collectively, the advances by the Bridge A Lenders pursuant to their
Bridge A Commitments.

     “Bridge B Commitment” shall mean, with respect to each Bridge B Lender, the commitment of such
Lender to make advances hereunder as set forth on Schedule 2.01, or in the Assignment and
Acceptance pursuant to which such Lender assumed its Commitment, as applicable.

     “Bridge B Lender” means a Lender that has a Bridge B Commitment or that holds any portion of
the Bridge B Loan.

     “Bridge B Loan” means, collectively, the advances by the Bridge B Lenders pursuant to their
Bridge B Commitments.

     “Business Day” shall mean any day other than a Saturday, Sunday or day on which banks in New
York City are generally authorized or required by law to close; provided, however, that when used
in connection with a Eurodollar Rate Loan (including with respect to all notices and determinations
in connection therewith and any payments of principal, interest or other amounts thereon), the term
“Business Day” shall also exclude any day on which banks are generally not open for dealings in
dollar deposits in the London interbank market.

     “Capital Expenditures” shall mean, for any period, (a) the aggregate amount of additions to
property, plant and equipment and other capital expenditures of the Borrower and its Subsidiaries
that are (or should be) set forth in a Consolidated statement of cash flows of the Borrower for
such period prepared in accordance with GAAP, and (b) Capital Lease Obligations or Synthetic Lease
Obligations incurred by the Borrower and its Consolidated Subsidiaries during such period, but
excluding in each case any such expenditure made to restore, replace or rebuild property to the
condition of such property immediately prior to any damage, loss, destruction or condemnation of
such property, to the extent such expenditure is made with insurance proceeds, condemnation awards
or damage recovery proceeds relating to any such damage, loss, destruction or condemnation.

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

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     “Capital Stock” shall mean:

     (a) in the case of a corporation, corporate stock;

     (b) in the case of an association or business entity, any and all shares, interests,
participations, rights or other equivalents (however designated) of corporate stock:

     (c) in the case of a partnership or limited liability company, partnership or membership
interests (whether general or limited); and

     (d) any other interest or participation that confers on a Person the right to receive a share
of the profits and losses of, or distribution or assets of, the issuing Person, but excluding from
all of the foregoing any debt securities convertible into Capital Stock, regardless of whether such
debt securities include any right of participation with Capital Stock.

     A “Change in Control” shall be deemed to have occurred if:

     (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 in effect on the date hereof, but excluding any employee benefit
plan of such Person and its Subsidiaries, and any Person or entity acting in its capacity as
trustee, agent or other fiduciary or administrator of any such plan) shall become the “beneficial
owner” (as defined in Rules 13(d)-3 and 13(d)-5 under such Act), directly or indirectly, of more
than fifty percent (50)% of outstanding Capital Stock of the Borrower having ordinary voting power;

     (b) a majority of the seats (other than vacant seats) on the board of directors of the
Borrower shall at any time be occupied by Persons who were not (i) nominated by the board of
directors of the Borrower or (ii) appointed by directors so nominated; or

     (c) any change in control (or similar event, however denominated) shall occur in respect of
Material Indebtedness of the Borrower or any Subsidiary of the Borrower.

     “Change in Law” shall mean (a) the adoption of any law, rule or regulation after the date of
this Agreement, (b) any change in any law, rule or regulation or in the interpretation or
application thereof by any Governmental Authority after the date of this Agreement or (c)
compliance by any Lender (or, for purposes of Section 2.15, by any lending office of such
Lender or by such Lender’s holding company, if any) with any request, guideline or directive
(whether or not having the force of law) of any Governmental Authority made or issued after the
date of this Agreement.

     “Charges” shall have the meaning assigned to such term in Section 10.09.

     “Closing Date” shall mean the date on which the obligation to fund the Loans under this
Agreement shall have become effective due to the satisfaction in full or waiver of the conditions
set forth in Article IV.

     “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time, or any
legislation successor thereto.

     “Commitment” shall mean a Bridge A Commitment or a Bridge B Commitment.

     “Consolidated” refers to the consolidation of accounts in accordance with GAAP.

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     “Consolidated EBITDA” shall mean, for any period, Consolidated Net Income for such period plus

     (a) without duplication and to the extent deducted in determining such Consolidated Net
Income, the sum of

     (i) Consolidated interest expense for such period,

     (ii) Consolidated income tax expense for such period,

     (iii) all amounts attributable to depreciation and amortization for such period,

     (iv) non-recurring fees and expenses incurred in connection with the Transactions,

     (v) any non-cash charges (other than the write-down of current assets) for such period,

     (vi) executive compensation payments to the outgoing chairrman of the Target consisting
of up to $7,800,000 in cash and $11,400,000 in common stock,

     minus (b) without duplication all cash payments made during such period on account of non-cash
charges added to Consolidated Net Income pursuant to clause (a)(v) above in a previous
period.

     “Consolidated Net Income” shall mean, for any period with respect to any Person, the net
income or loss of such Person for such period determined on a Consolidated basis in accordance with
GAAP; provided that there shall be excluded (without duplication):

     (a) the income of any Subsidiary to the extent that the declaration or payment of dividends or
similar distributions by such Subsidiary of that income is not at the time permitted by operation
of the terms of its charter or any agreement, instrument, judgment, decree, statute, rule or
governmental regulation applicable to such Subsidiary,

     (b) the income or loss of any Person accrued prior to the date (i) it becomes a Subsidiary or
is merged into or consolidated with such Person or (ii) its assets are acquired by such Person or
its Subsidiaries,

     (c) after-tax gains and losses realized upon the sale or other disposition of any property
that is sold or otherwise disposed of other than in the ordinary course of business, and

     (d) extraordinary gains, losses or charges.

     “Constituent Documents” means, with respect to any Person, (a) the articles of incorporation,
certificate of incorporation, constitution or certificate of formation (or the equivalent
organizational documents) of such Person, (b) the by-laws or operating agreement (or the equivalent
governing documents) of such Person and (c) any document setting forth the manner of election or
duties of the directors or managing members of such Person (if any) and the designation, amount or
relative rights, limitations and preferences of any class or series of such Person’s Capital Stock.

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

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     “Default” shall mean any event or condition which upon notice, lapse of time or both would
constitute an Event of Default.

     “Disqualified Stock” shall mean any Capital Stock that, by its terms (or by the terms of any
security or other Capital Stock into which it is convertible or for which it is exchangeable), or
upon the happening of any event, (a) matures (excluding any maturity as the result of an optional
redemption by the issuer thereof) or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or is redeemable at the option of the holder thereof, in whole or in part,
or requires the payment of any cash dividend or any other scheduled payment constituting a return
of capital, in each case at any time on or prior to the date which is the first anniversary of the
Maturity Date, or (b) is convertible into or exchangeable (unless at the sole option of the issuer
thereof) for (i) Indebtedness or (ii) any Capital Stock referred to in clause (a) above, in
each case at any time prior to the date which is the first anniversary of the Maturity Date.

     “Dollars” or “$” shall mean lawful money of the United States of America.

     “Domestic” shall mean, with respect to an entity, that such entity is incorporated, organized
or formed under the laws of the United States, a state in the United States or any subdivision
thereof or the District of Columbia.

     “Environmental Laws” shall mean all applicable Federal, state, local and foreign laws
(including common law), treaties, regulations, rules, ordinances, codes, decrees, judgments,
directives, orders (including consent orders), and agreements having the force and effect of law in
each case, relating to protection of the environment or natural resources, or to protection of
human health and safety as it relates to Hazardous Materials exposure, the presence or Release of
Hazardous Materials in the environment, or the generation, manufacture, processing, distribution,
use, treatment, storage, transport, recycling or handling of, or the arrangement for such
activities with respect to, Hazardous Materials.

     “Environmental Liability” shall mean all liabilities, obligations, damages, losses, claims,
actions, suits, judgments, orders, fines, penalties, fees, expenses and costs (including
administrative oversight costs, natural resource damages and remediation costs), whether contingent
or otherwise, arising out of or relating to (a) compliance or non-compliance with any Environmental
Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any
Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the Release of any Hazardous
Materials or (e) any contract, agreement or other consensual arrangement pursuant to which
liability is assumed or imposed with respect to any of the foregoing.

     “Equity Issuance” shall mean the issuance of 3.2 million shares of Capital Stock by the
Borrower to the Target, which Capital Stock shall be issued as payment for a portion of the
purchase price of the Acquisition.

     “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as the same may be
amended from time to time, or any legislation successor thereto.

     “ERISA Affiliate” shall mean any trade or business (whether or not incorporated) that,
together with such Person, is treated as a single employer under Section 414(b) or (c) of the Code,
or solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single
employer under Section 414 (b), (c), (m) or (o) of the Code.

     “ERISA Event” shall mean (a) any “reportable event”, as defined in Section 4043 of ERISA or
the regulations issued thereunder, with respect to a Plan (other than an event for which the 30-day
notice

ALY Bridge Loan Agreement

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period is waived); (b) the existence with respect to any Plan of an “accumulated funding
deficiency” (as defined in Section 412 of the Code or Section 302 of ERISA), whether or not waived;
(c) the filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an application
for a waiver of the minimum funding standard with respect to any Plan; (d) the incurrence by the
Borrower, any of its Subsidiaries or any of its ERISA Affiliates of any liability under Title IV of
ERISA with respect to the termination of any Plan or the withdrawal or partial withdrawal of the
Borrower, any of its Subsidiaries or any of its ERISA Affiliates from any Plan or Multiemployer
Plan; (e) the receipt by the Borrower, any of its Subsidiaries or any of its ERISA Affiliates from
the PBGC or a plan administrator of any notice relating to the intention to terminate any Plan or
Plans or to appoint a trustee to administer any Plan; (f) the adoption of any amendment to a Plan
that would require the provision of security pursuant to Section 401(a)(29) of the Code or Section
307 of ERISA; (g) the receipt by the Borrower, any of its Subsidiaries or any of its ERISA
Affiliates of any notice, or the receipt by any Multiemployer Plan from the Borrower, any of its
Subsidiaries or any of its ERISA Affiliates of any notice, concerning the imposition of Withdrawal
Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in
reorganization, within the meaning of Title IV of ERISA; (h) the occurrence of a “prohibited
transaction” (within the meaning of Section 4975 of the Code) with respect to which the Borrower or
any of the Subsidiaries is a “disqualified person” (within the meaning of Section 4975 of the Code)
or with respect to which the Borrower or any such Subsidiary could otherwise be liable; or (i) any
other extraordinary event or condition with respect to a Plan or Multiemployer Plan (other than
liabilities arising under clauses (a) through (h) above and any liabilities for
routine plan contributions and claims for benefits) that could reasonably be expected to result in
liability of the Borrower or any of its Subsidiaries.

     “Eurodollar Rate” shall mean for any Interest Period with respect to any Eurodollar Rate Loan:

     (a) the rate per annum equal to the rate determined by the Administrative Agent to be the
offered rate that appears on the page of the LIBOR I screen (or any successor thereto) that
displays an average British Bankers Association Interest Settlement Rate for deposits in Dollars
for delivery on the first day of such Interest Period with a term equivalent to such Interest
Period, determined as of approximately 11:00 a.m. (London time) two (2) Business Days prior to the
first day of such Interest Period, or

     (b) if the rate referenced in the preceding clause (a) does not appear on such page or service
or such page or service shall cease to be available, the rate per annum equal to the rate
determined by the Administrative Agent to be the offered rate on such other page or other service
that displays an average British Bankers Association Interest Settlement Rate for deposits in
Dollars (for delivery on the first day of such Interest Period) with a term equivalent to such
Interest Period, determined as of approximately 11:00 a.m. (London time) two (2) Business days
prior to the first day of such Interest Period, or

     (c) if the rates referenced in the preceding clauses (a) and (b) are not available, the rate
per annum determined by the Administrative Agent as the rate of interest (rounded upward to the
next 1/100th of 1%) at which deposits in Dollars for delivery on the first day of such
Interest Period in same day funds in the approximate amount of the Eurodollar Rate Loan being made,
continued or converted by the Administrative Agent and with a term equivalent to such Interest
period would be offered by the Administrative Agent’s London Branch to major banks in the offshore
Dollar market at their request at approximately 11:00 a.m. (London time) two (2) Business Days
prior to the first day of such Interest Period.

     “Eurodollar Rate Loan” shall mean a Loan that bears interest at a rate based on the Eurodollar
Rate.

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

ALY Bridge Loan Agreement

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     “Excluded Taxes” shall mean, with respect to the Administrative Agent, any Lender or any other
recipient of any payment to be made by or on account of any obligation of the Borrower hereunder,
(a) income or franchise taxes imposed on (or measured by) its net income by the United States of
America or any state or political subdivision thereof, or by the jurisdiction under the laws of
which such recipient is organized or in which its principal office is located or, in the case of
any Lender, in which its applicable lending office is located, (b) any branch profits taxes imposed
by the United States of America or any similar tax imposed by any other jurisdiction described in
clause (a) above, (c) in the case of a Foreign Lender (other than an assignee pursuant to a
request by the Borrower under Section 2.21(a)), any withholding tax that is imposed on
amounts payable to such Foreign Lender at the time such Foreign Lender becomes a party to this
Agreement (or designates a new lending office) or is attributable to such Foreign Lender’s failure
to comply with Section 2.21(e), except to the extent that such Foreign Lender (or its
assignor, if any) was entitled, at the time of designation of a new lending office (or assignment),
to receive additional amounts from the Borrower with respect to such withholding tax pursuant to
Section 2.21(a) and which withholding tax may not be eliminated by complying with
Section 2.21(e), and (d) any backup withholding tax required to be withheld or paid
pursuant to Section 3406 of the Code.

     “Existing Notes” shall mean the Borrower’s existing 9.0% senior notes due 2014.

     “Existing Senior Credit Agreement” shall mean the Borrower’s Amended and Restated Credit
Agreement dated as of January 18, 2006 by and among the Borrower, as borrower, Royal Bank, as
administrative agent and collateral agent, RBC Capital Markets, as lead arranger and sole
bookrunner, and the lenders party thereto.

     “Existing Senior Credit Documents” shall mean the Existing Senior Credit Agreement and the
credit documents contemplated under and executed by the Borrower pursuant thereto.

     “Extraordinary Receipt” shall mean any cash received by or paid to or for the account of any
Person not in the ordinary course of business, including, without limitation, tax refunds (provided
that, for greater clarity and without limiting the foregoing, ordinary tax refunds on account of
cash taxes actually paid would be considered ordinary course), pension plan reversions, proceeds of
insurance (including, without limitation, any key man life insurance but excluding proceeds of
business interruption insurance to the extent such proceeds constitute compensation for lost
earnings), condemnation awards (and payments in lieu thereof), indemnity payments and any purchase
price adjustment received in connection with any purchase agreement (including any purchase price
adjustment received in connection with the Purchase Agreement); provided, however, that an
Extraordinary Receipt shall not include cash receipts received from proceeds of insurance,
condemnation awards (or payments in lieu thereof) or indemnity payments to the extent that such
proceeds, awards or payments are received by any Person in respect of any third party claim against
such Person and applied to pay (or to reimburse such Person for its prior payment of) such claim
and the costs and expenses of such Person with respect thereto.

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

ALY Bridge Loan Agreement

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     “Fee Letter” shall mean the fee letter dated as of October 25, 2006 between the Borrower and
Royal Bank.

     “Fees” shall have the meaning assigned to such term in Section 2.06.

     “Financial Officer” of any Person shall mean the chief financial officer, principal accounting
officer, treasurer, assistant treasurer or controller of such Person.

     “Fiscal Year” shall mean the fiscal year of the Borrower and its Subsidiaries ending on
December 31 of each calendar year.

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

     “Foreign Subsidiary” shall mean any Subsidiary that is not a Domestic Subsidiary.

     “Funded Debt” of any Person means Indebtedness in respect of the Loans, in the case of the
Borrower, and all other Indebtedness of such Person that by its terms matures more than one year
after the date of determination or matures within one year from such date but is renewable or
extendible, at the option of such Person, to a date more than one year after such date or arises
under a revolving credit or similar agreement that obligates the lender or lenders to extend credit
during a period of more than one year after such date.

     “GAAP” shall mean United States generally accepted accounting principles.

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

     “Guarantee” of or by any Person shall mean any obligation, contingent or otherwise, of such
Person guaranteeing or having the economic effect of guaranteeing any Indebtedness or other
obligation of any other Person (the “primary obligor”) in any manner, whether directly or
indirectly, and including any obligation of such Person, direct or indirect, (a) to purchase or pay
(or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation
or to purchase (or to advance or supply funds for the purchase of) any security for the payment of
such Indebtedness or other obligation, (b) to purchase or lease (including pursuant to Synthetic
Lease Obligations, if applicable) property, securities or services for the purpose of assuring the
owner of such Indebtedness or other obligation of the payment of such Indebtedness or other
obligation, (c) to maintain working capital, equity capital or any other financial statement
condition or liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation or (d) as an account party in respect of any letter of credit or
letter of guaranty issued to support such Indebtedness or other obligation; provided, however, that
the term “Guarantee” shall not include endorsements for collection or deposit in the ordinary
course of business or customary and reasonable indemnity obligations in effect on the Closing Date
or entered into in connection with any acquisition or disposition of assets permitted under this
Agreement. The amount of any Guarantee shall be deemed to be an amount equal to the stated or
determinable amount of the primary obligation, or portion thereof, in respect of which such
Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability
in respect thereof as determined by the guaranteeing Person in good faith.

ALY Bridge Loan Agreement

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     “Guaranteed Obligations” shall have the meaning assigned to such term in Section 8.01.

     “Guarantors” shall mean each Domestic Subsidiary of the Borrower listed on Schedule
1.01(a) and each other Subsidiary of the Borrower that is or becomes a party to this Agreement
pursuant to Article VIII.

     “Hazardous Materials” shall mean any petroleum (including crude oil or fraction thereof) or
petroleum products or byproducts, or any pollutant or contaminant, or any forces, noise, form of
energy, substance, material or waste characterized, defined, or regulated as hazardous, toxic,
explosive, radioactive, dangerous or words of similar meaning and effect by, or pursuant to, any
Environmental Law, or which require removal, remediation or reporting under any Environmental Law,
including asbestos, or asbestos containing material, radioactive material, polychlorinated
biphenyls.

     “Hedging Agreement” shall mean any agreement with respect to any swap, forward, future, cap,
collar, floor or derivative transaction or option or similar agreement involving, or settled by
reference to, one or more rates, currencies, fuel or other commodities, equity or debt instruments
or securities, or economic, financial or pricing indices or measures of economic, financial or
pricing risk or value or any similar transaction or any combination of these transactions;
provided, however, that no phantom stock or similar plan providing for payments and on account of
services provided by current or former directors, officers, members of management, employees or
consultants of the Borrower or any Subsidiary of the Borrower shall be a Hedging Agreement.

     “Indebtedness” of any Person shall mean, without duplication, (a) all obligations of such
Person for borrowed money or with respect to deposits or advances of any kind, (b) all obligations
of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of
such Person upon which interest charges are customarily paid, (d) all obligations of such Person
under conditional sale or other title retention agreements relating to property or assets purchased
by such Person, (e) all obligations of such Person issued or assumed as the deferred purchase price
of property or services (excluding trade accounts payable and accrued obligations incurred in the
ordinary course of business), (f) all Indebtedness of others secured by any Lien on property owned
or acquired by such Person, whether or not the obligations secured thereby have been assumed, (g)
all Guarantees by such Person of Indebtedness of others, (h) all Capital Lease Obligations and
Synthetic Lease Obligations of such Person, (i) all obligations of such Person as an account party
in respect of letters of credit or letters of guaranty and (j) all obligations of such Person in
respect of bankers’ acceptances. The Indebtedness of any Person shall include the Indebtedness of
any other Person (including any partnership in which such Person is a general partner) to the
extent such Person is liable therefor as a result of such Person’s ownership interest in, or other
relationship with, such other Person, except to the extent the terms of such Indebtedness provide
that such Person is not liable therefor.

     “Indemnified Costs” shall have the meaning assigned to such term in Section 9.09.

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

     “Indemnitee” shall have the meaning assigned to such term in Section 10.05(b).

     “Interest Payment Date” shall mean (a) with respect to a Base Rate Loan, the last Business Day
of each March, June, September and December and (b) with respect to a Eurodollar Rate Loan, the
last day of the Interest Period applicable to such Loan.

     “Interest Period” shall mean, for a Eurodollar Rate Loan, the period commencing on the date of
borrowing and ending on the numerically corresponding day (or, if there is no numerically
corresponding

ALY Bridge Loan Agreement

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day, on the last day) in the calendar month that is 1, 2, 3 or 6 months, if agreed to or
available to all of the participating Lenders, as the Borrower may elect; provided, however, that
if any Interest Period would end on a day other than a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless such next succeeding Business Day would fall in
the next calendar month, in which case such Interest Period shall end on the next preceding
Business Day and provided, further, that whenever the first day of any Interest Period occurs on a
day of an initial calendar month for which there is no numerically corresponding day in the
calendar month that succeeds such initial calendar month by the numbers of months equal to the
number of months in such Interest Period shall end on the last Business Day of such succeeding
calendar month. Interest shall accrue from and including the first day of an Interest Period to
but excluding the last day of such Interest Period.

     “Investments” shall have the meaning assigned to such term in Section 6.04.

     “IRS” shall have the meaning assigned to such term in Section 2.21(e).

     “Lead Arranger” shall have the meaning assigned to such term in the recital of parties hereto.

     “Lenders” shall mean (a) the Persons listed on Schedule 2.01 (other than any such
Person that has ceased to be a party hereto pursuant to an Assignment and Acceptance) and (b) any
Person that has become a party hereto pursuant to an Assignment and Acceptance.

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

     “Loan” means the Bridge A Loan or the Bridge B Loan.

     “Loan Documents” shall mean this Agreement, the Fee Letter, the promissory notes, if any,
executed and delivered pursuant to Section 2.05(e) and each document executed by a Loan
Party and delivered to the Administrative Agent or any Lender in connection with or pursuant to any
of the foregoing or the Obligations, together with any modification of any term of any of the
foregoing.

     “Loan Parties” shall mean the Borrower and the Guarantors.

     “Loan” shall mean the senior unsecured bridge loan made collectively by the Lenders to the
Borrower pursuant to Section 2.01.

     “Margin Stock” shall have the meaning assigned to such term in Regulation U.

     “Material Adverse Effect” shall mean (a) a material adverse effect on the business, revenues,
operations, condition (financial or otherwise), liabilities (financial or otherwise), properties or
prospects of the Borrower and its Subsidiaries, taken as a whole, (b) a material impairment of the
ability of any Loan Party to perform any of its obligations under any Loan Document to which it is
or will be a party or (c) a material impairment of any rights of or benefits available to the
Lenders under any Loan Document.

     “Material Indebtedness” shall mean Indebtedness (other than the Loan), or obligations in
respect of one or more Hedging Agreements, of any one or more of the Borrower and its Subsidiaries
in an aggregate principal amount exceeding $2,000,000. For purposes of determining Material
Indebtedness,

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the “principal amount” of the obligations of the Borrower or any Subsidiary in respect of any
Hedging Agreement at any time shall be the maximum aggregate amount (giving effect to any netting
agreements) that the Borrower, or such Subsidiary would be required to pay if such Hedging
Agreement were terminated at such time.

     “Maturity Date” shall mean the date that is 18 months following the Closing Date.

     “Maximum Rate” shall have the meaning assigned to such term in Section 10.09.

     “Moody’s” shall mean Moody’s Investors Service, Inc., or any successor thereto.

     “Multiemployer Plan” shall mean a multiemployer plan as defined in Section 4001(a)(3) of ERISA
to which the Borrower or any of its ERISA Affiliates is making or accruing an obligation to make
contributions, or has within any of the preceding five plan years made or accrued an obligation to
make contributions and, in respect of which the Borrower or any of its ERISA Affiliates has any
liability.

     “Net Cash Proceeds” shall mean (a) with respect to any Asset Sale, the proceeds thereof in the
form of cash and Permitted Investments (including any such proceeds subsequently received (as and
when received) in respect of non-cash consideration initially received), net of (i) expenses
(including reasonable and customary broker’s fees or commissions, investment banking fees,
consultant fees, legal fees, survey costs, title insurance premiums, and related search and
recording charges, transfer, recording and similar taxes incurred by the Borrower and its
Subsidiaries in connection therewith and the Borrower’s good faith estimate of income taxes paid or
payable in connection with such sale) incurred in connection with such Asset Sale, (ii) amounts
provided as a reserve, in accordance with GAAP, against any liabilities under any indemnification
obligations or purchase price adjustment associated with such Asset Sale (provided that to the
extent and at the time any such amounts are released from such reserve, such amounts shall
constitute Net Cash Proceeds), (iii) the principal amount, premium or penalty, if any, interest and
other amounts on any Indebtedness for borrowed money which is secured by the asset sold in such
Asset Sale and which is repaid (other than any such Indebtedness assumed or repaid by the
purchaser); and (b) with respect to any incurrence of Indebtedness or issuance of any Capital
Stock, the cash proceeds thereof, net of all taxes and customary fees, commissions, costs and other
expenses incurred by the Borrower and its Subsidiaries in connection therewith.

     “Notice of Interest Election” shall mean a notice given by the Borrower in accordance with the
terms of Section 2.11 and substantially in the form of Exhibit D, or such other
form as shall be approved by the Administrative Agent.

     “Obligations” shall mean (a) obligations of the Borrower and the Guarantors from time to time
arising under or in respect of the due and punctual payment of (i) the principal of and premium, if
any, and interest (including interest accruing during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or allowable in such
proceeding) on the Loans, when and as due, whether at maturity, by acceleration, upon one or more
dates set for prepayment or otherwise, and (ii) all other monetary obligations, including fees,
costs, expenses and indemnities, whether primary, secondary, direct, contingent, fixed or otherwise
(including monetary obligations incurred during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or allowable in such
proceeding), of the Borrower and the Guarantors under this Agreement and the other Loan Documents,
and (b) the due and punctual performance of all covenants, agreements, obligations and liabilities
of the Borrower and the Guarantors under or pursuant to this Agreement and the other Loan
Documents.

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

     “Participant Register” shall have the meaning described to such term in Section 10.04(f).

     “PBGC” shall mean the Pension Benefit Guaranty Corporation referred to and defined in ERISA.

     “Permitted Acquisition” shall mean any Borrower Acquisition resulting in ownership of assets
inside the United States, or of Capital Stock in a Domestic Person; provided, however, that the
following requirements have been satisfied:

     (a) with respect to Borrower Acquisitions involving acquisitions of any Capital Stock, such
Borrower Acquisition shall have been approved or consented by the board of directors or similar
governing entity of the Person being acquired; and

     (b) as of the closing of such Borrower Acquisition, no Default or Event of Default shall exist
or occur as a result of, and after giving effect to, such Borrower Acquisition.

     “Permitted Investments” shall mean:

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

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

     (c) investments in certificates of deposit, banker’s acceptances and time deposits maturing
within thirteen (13) months from the date of acquisition thereof issued or guaranteed by or placed
with, and money market deposit accounts issued or offered by, any domestic office of any commercial
bank organized under the laws of, or is a foreign bank that is licensed to do business in, the
United States of America or any State thereof that has a combined capital and surplus and undivided
profits of not less than $1,000,000,000;

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

     (e) investments in “money market funds” within the meaning of Rule 2a-7 of the Investment
Company Act of 1940, as amended, substantially all of whose assets are invested in investments of
the type described in clauses (a) through (d) above; and

     (f) other short-term investments utilized by Foreign Subsidiaries in accordance with normal
investment practices for cash management in investments of a type analogous to the foregoing.

     “Permitted Refinancing” shall mean Indebtedness of the Borrower or any of its Subsidiaries
issued or incurred (including by means of the extension or renewal of existing Indebtedness) to
refinance, refund, extend, renew or replace existing Indebtedness (“Refinanced Indebtedness”);
provided that

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(a) the principal amount (or, if incurred with original issue discount, the aggregate accreted
value) of such refinancing, refunding, extending, renewing or replacing Indebtedness (the “New
Indebtedness”) is not greater than the principal amount of such Refinanced Indebtedness, (b) if
such Refinanced Indebtedness refinances the Existing Senior Credit Agreement or other Indebtedness
that is Material Indebtedness (or a Permitted Refinancing thereof), such New Indebtedness has a
final maturity that is no sooner than the final maturity of, a weighted average life to maturity
that is not earlier than the remaining weighted average life of, such Refinanced Indebtedness and
an interest rate that is not higher than the interest rate applicable to such Refinanced
Indebtedness, (c) if such Refinanced Indebtedness or any Guarantees thereof are subordinated to the
Obligations, such New Indebtedness and any Guarantees thereof remain so subordinated on terms no
less favorable to the Lenders, (d) the obligors in respect of such Refinanced Indebtedness
immediately prior to such refinancing, refunding, extending, renewing or replacing are the only
obligors on such New Indebtedness, and (e) if such Refinanced Indebtedness refinances the Existing
Senior Credit Agreement or other Indebtedness that is Material Indebtedness or (a Permitted
Refinancing thereof), such New Indebtedness contains mandatory redemption (or similar provisions),
covenants and events of default which, taken as a whole, are no less favorable to the Borrower or
the applicable Subsidiary of the Borrower and the Lenders than the mandatory redemption (or similar
provisions), covenants and events of default or Guarantees, if any, in respect of such Refinanced
Indebtedness; provided, further, however, that Permitted Refinancing shall not include (i)
Indebtedness of a Subsidiary of the Borrower that refinances Indebtedness of the Borrower or (ii)
Indebtedness of the Borrower or a Guarantor that refinances, refunds or replaces any other
Indebtedness of a Subsidiary of the Borrower (other than a Guarantor).

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

     “Plan” shall mean any employee pension benefit plan as defined in Section 3(2) of ERISA (other
than a Multiemployer Plan) that subject to the provisions of Title IV of ERISA or Section 412 of
the Code or Section 307 of ERISA and that is sponsored and/or maintained for eligible individuals
who perform services for the Borrower and/or any of its Subsidiaries or ERISA Affiliates, and in
respect of which the Borrower, any of its Subsidiaries or any ERISA Affiliate is (or, if such plan
were terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in
Section 3(5) of ERISA.

     “Purchase Agreement” shall have the meaning assigned to such term in the recitals.

     “Register” shall have the meaning assigned to such term in Section 10.04(d).

     “Regulation S-X” shall mean Regulation S-X of the United States Securities and Exchange
Commission pursuant to the Securities Exchange Act of 1934 (as amended and in effect from time to
time).

     “Regulation U” shall mean Regulation U of the Board as from time to time in effect and all
official rulings and interpretations thereunder or thereof.

     “Regulation X” shall mean Regulation X of the Board as from time to time in effect and all
official rulings and interpretations thereunder or thereof.

     “Related Documents” means the Existing Senior Credit Documents and each other document and
instrument executed with respect thereof.

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     “Related Fund” shall mean, with respect to any Lender that is a fund or commingled
investment vehicle that invests in bank loans, any other fund that invests in bank loans and is
managed or advised by the same investment advisor as such Lender or by an Affiliate of such
investment advisor.

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

     “Release” shall mean any release, spill, emission, leaking, dumping, injection, pouring,
deposit, disposal, discharge, dispersal, leaching or migration into or through the environment or
within or upon any building, structure, facility or fixture.

     “Required Lenders” shall mean, at any time, Lenders having Commitments or holding outstanding
advances representing more than fifty percent (50%) of the principal amount of the Loans.

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

     “Restricted Payment” shall mean any dividend or other distribution (whether in cash,
securities or other property) with respect to any Capital Stock in the Borrower or any Subsidiary
of the Borrower, or any payment (whether in cash, securities or other property), including any
sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition,
cancellation or termination of any Capital Stock in the Borrower or any Subsidiary of the Borrower
or any option, warrant or other right to acquire any such Capital Stock in the Borrower or any of
its Subsidiaries.

     “Royal Bank” means Royal Bank of Canada.

     “S&P” shall mean Standard & Poor’s Ratings Group, Inc. or any successor thereto.

     “Solvent” means, with respect to any Person, (a) the fair value of the assets of such Person
exceed its debts and liabilities, subordinated, contingent or otherwise; (b) the present fair
saleable value of the property of such Person is greater than the amount that is required to pay
the probable liability of its debts and other liabilities, subordinated, contingent or otherwise,
as such debts and other liabilities become absolute and matured; (c) such Person is able to pay its
debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become
absolute and matured; and (d) such Person does not have unreasonably small capital with which to
conduct the business in which it is engaged.

     “Subsidiary” shall mean, with respect to any Person (herein referred to as the “parent”), any
corporation, partnership, limited liability company, association or other business entity of which
securities or other ownership interests representing more than fifty percent (50%) of the ordinary
voting power or more than fifty percent (50%) of the general partnership interests are, at the time
any determination is being made, owned, Controlled or held by the parent, one or more subsidiaries
of the parent or a combination thereof.

     “Synthetic Lease Obligations” shall mean all monetary obligations of a Person under (a) a
so-called synthetic, off-balance sheet or tax retention lease or (b) an agreement for the use or
possession of any property (whether real, Personal or mixed) creating obligations which do not
appear on the balance sheet of such Person, but which, upon the insolvency or bankruptcy of such
Person, would be characterized as Indebtedness of such Person (without regard to accounting
treatment).

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     “Target” shall have the meaning assigned to such term in the recitals hereto.

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

     “Transactions” shall mean, collectively, (a) the execution, delivery and performance by the
parties thereto of the Purchase Agreement and the consummation of the transactions contemplated
thereby, including the Acquisition, (b) the Equity Issuance, (c) the execution, delivery and
performance by the Loan Parties of the Loan Documents to which they are a party and the making of
the Loans hereunder and the borrowings thereunder and use of the proceeds hereof and thereof, and
(d) the payment of related fees, costs and expenses.

     “Transferred Guarantor” shall have the meaning assigned to such term in Section 8.09.

     “Uniform Commercial Code” or “UCC” means the Uniform Commercial Code as in effect in any
applicable jurisdiction from time to time.

     “USA PATRIOT Act” shall mean The Uniting and Strengthening America by Providing Appropriate
Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Title III of Pub. L. No. 107-56
(signed into law October 26, 2001)).

     “Voting Stock” shall mean the Capital Stock (or equivalent) of any class or kind, of a Person,
the holders of which are entitled to vote for the election of directors, managers, or other voting
members of the governing body of such Person.

     “weighted average life to maturity” means, when applied to any Indebtedness at any date, the
number of years obtained by dividing: (i) the sum of the products obtained by multiplying (a) the
amount of each then remaining installment, sinking fund, serial maturity or other required payments
of principal, including payment at final maturity, in respect thereof, by (b) the number of years
(calculated to the nearest one-twelfth) that will elapse between such date and the making of such
payment; by (ii) the then outstanding principal amount of such Indebtedness.

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

          SECTION 1.02. Terms Generally. The definitions in Section 1.01 shall apply
equally to both the singular and plural forms of the terms defined. Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The
words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without
limitation”. The word “will” shall be construed to have the same meaning and effect as the word
“shall”; and the words “asset” and “property” shall be construed as having the same meaning and
effect and to refer to any and all tangible and intangible assets and properties, including cash,
securities, accounts and contract rights. The words “herein”, “hereof” and “hereunder”, and words
of similar import, shall be construed to refer to this Agreement in its entirety and not to any
particular provision of this Agreement unless the context shall otherwise require. All references
herein to Articles, Sections, Exhibits and Schedules shall be deemed
references to Articles and Sections of, and Exhibits and Schedules to, this Agreement unless
the context shall otherwise require. Except as otherwise expressly provided herein, (a) any
reference in this Agreement to any Loan Document or any other agreement, instrument or document
shall mean such

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document as amended, restated, amended and restated, supplemented or otherwise modified from
time to time and (b) all terms of an accounting or financial nature shall be construed in
accordance with GAAP, as in effect from time to time; provided, however, that if the Borrower
notifies the Administrative Agent that the Borrower wishes to amend any covenant in Article
VI or any related definition to eliminate the effect of any change in GAAP or the application
thereof occurring after the date of this Agreement on the operation of such covenant (or if the
Administrative Agent notifies the Borrower that the Required Lenders wish to amend Article
VI or any related definition for such purpose), then the Borrower and the Administrative Agent
shall negotiate in good faith to amend such covenant and related definitions (subject to the
approval of the Required Lenders) to preserve the original intent thereof in light of such changes
in GAAP; provided that the Borrower’s compliance with such covenant shall be determined on the
basis of GAAP as applied and in effect immediately before the relevant change in GAAP or the
application thereof became effective, until such covenant is amended.

          SECTION 1.03. Classification of Loans. For purposes of this Agreement, the Loan may
be classified and referred to by type (e.g., a “Eurodollar Rate Loan”).

          SECTION 1.04. References to Agreements and Laws. Unless otherwise expressly
provided herein, (a) references to organization documents, agreements (including the Loan
Documents) and other contractual instruments shall be deemed to include all subsequent amendments,
amendments and restatements, restatements, supplements and other modifications thereto, but only to
the extent that such amendments, amendments and restatements, restatements, supplements and other
modifications are not prohibited by any Loan Document; and (b) references to any law, statute, rule
or regulation shall include all statutory and regulatory provisions consolidating, amending,
replacing, supplementing or interpreting such law.

          SECTION 1.05. Times of Day. Unless otherwise specified, all references herein to
times of day shall be references to Eastern time (daylight or standard, as applicable).

          SECTION 1.06. Timing of Payment or Performance. When the payment of any obligation
or the performance of any covenant, duty or obligation is stated to be due or performance required
on a day which is not a Business Day, the date of such payment or performance shall extend to the
immediately succeeding Business Day and such extension of time shall be reflected in computing
interest or fees, as the case may be; provided that with respect to any payment of interest on or
principal of a Eurodollar Rate Loan, if such extension would cause any such payment to be made in
the next succeeding calendar month, such payment shall be made on the immediately preceding
Business Day.

ARTICLE II

Loans

          SECTION 2.01. Commitments. Subject to the terms and conditions herein set forth and
in connection with the borrowing request made by the Borrower pursuant to Section 2.04, (a)
each Bridge A Lender agrees, severally and not jointly, to make a single advance to the Borrower on
the Closing Date in a principal amount not to exceed its Bridge A Commitment and (b) each Bridge B
Lender agrees, severally and not jointly, to make a single advance to the Borrower on the Closing
Date in a principal amount not to exceed its Bridge B Commitment.

          SECTION 2.02. Loans. (a) Each Loan shall be made as a single borrowing
consisting of advances made by the applicable Lenders ratably in accordance with their applicable
Commitments; provided, however, that the failure of any Lender to make any advance in respect of a

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Loan shall not in itself relieve any other Lender of its obligation to lend hereunder in
respect of its applicable Commitment (it being understood, however, that no Lender shall be
responsible for the failure of any other Lender to make any advance required to be made by such
other Lender). Amounts paid or prepaid in respect of the Loans may not be reborrowed.

     (b) Subject to Sections 2.09 and 2.16, each borrowing hereunder shall be
comprised entirely of a Base Rate Loan or a Eurodollar Rate Loan at the option of the Borrower;
provided, however, that the Borrower shall not be permitted to select Eurodollar Rate Loans during
the period from the date hereof to the date that is fifteen (15) days following the Closing Date
(or such earlier date on which a Eurodollar Rate Loan has become available as shall be specified by
the Administrative Agent, in its sole discretion, in a written notice to the Borrower and the
Lenders). Subject to the immediately preceding sentence, each Lender may at its option make a
Eurodollar Rate Loan by causing any domestic or foreign branch or Affiliate of such Lender to make
such Loan; provided that any exercise of such option shall not affect the obligation of the
Borrower to repay the Loans in accordance with the terms of this Agreement. Each Lender shall make
an advance to be made by it hereunder on the Closing Date by wire transfer of immediately available
funds to such account designated by the Borrower in the Borrowing Request.

          SECTION 2.03. Use of Proceeds. The proceeds of the Loans shall be utilized by the
Borrower solely to (a) finance a portion of the purchase price for the Acquisition and (b) pay
fees, costs and expenses related to the Transactions.

          SECTION 2.04. Borrowing Procedure. In order to request a borrowing hereunder, the
Borrower shall have notified the Administrative Agent of such request by telephone one (1) Business
Day before the Closing Date. Such telephonic Borrowing Request shall be irrevocable, and shall be
confirmed promptly by hand delivery or fax to the Administrative Agent of the written Borrowing
Request and shall specify the following information: (i) that the borrowing is to be a Base Rate
Loan, (ii) the date of such borrowing (which shall be the Closing Date); (iii) the number and
location of the account to which funds are to be disbursed; (iv) the amount of such borrowing; and
(v) whether such borrowing shall be under the Bridge A Loan or Bridge B Loan. The Administrative
Agent shall promptly advise the applicable Lenders of the notice given pursuant to this Section
2.04 (and the contents thereof), and of each Lender’s portion of the request borrowing.

          SECTION 2.05. Evidence of Debt; Repayment of Loans. (a) The Borrower hereby
unconditionally promises to pay the principal amount of each Loan on the Maturity Date.

     (b) Each Lender shall maintain in accordance with its usual practice an account evidencing the
Indebtedness of the Borrower to such Lender resulting from the advance made by such Lender,
including amounts of principal and interest payable to and received by such Lender from time to
time under this Agreement.

     (c) The Administrative Agent shall maintain accounts in which it will record (i) the amount of
the advance made by each Lender hereunder, the type of each Loan and, if applicable, the Interest
Period applicable thereto, (ii) the corresponding amount of any principal or interest due and
payable or to become due and payable from the Borrower to each Lender hereunder and (iii) the
amount of any sum received by the Administrative Agent hereunder from the Borrower or any Guarantor
and each Lender’s share thereof.

     (d) The entries made in the account maintained pursuant to paragraph (b) and
(c) above shall be prima facie evidence of the existence and amounts of the obligations
therein recorded; provided, however, that the failure of any Lender or the Administrative Agent to
maintain such accounts or any

ALY Bridge Loan Agreement

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error therein shall not in any manner affect the obligations of the Borrower to repay the Loan
in accordance with the terms of this Agreement.

     (e) Any Lender may request that an advance made by it hereunder be evidenced by a promissory
note. In such event, the Borrower shall execute and deliver to such Lender a promissory note
payable to such Lender and its permitted registered assigns in form and substance reasonably
acceptable to the Administrative Agent. Notwithstanding any other provision of this Agreement, in
the event any Lender shall request and receive such a promissory note, the interests represented by
such note shall at all times (including after any assignment of all or part of such interests
pursuant to Section 10.04) be represented by one or more promissory notes payable to the
payee named therein or its registered assigns.

          SECTION 2.06. Fees. (a) The Borrower agrees to pay the fees set forth below at the
times and in the amounts specified herein (the “Fees”):

     (i) on the Closing Date, a structuring fee equal to 0.75% of the Commitments under each
Loan payable to the Lenders, on a pro rata basis in accordance with their Commitments;

     (ii) on the Closing Date, a funding fee equal to 0.50% of the funded amount of each
Loan payable to the Lenders, on a pro rata basis in accordance with their Commitments;

     (iii) on the date that is 90 days following the Closing Date, a fee equal to 0.50% of
the outstanding principal amount of each Loan payable to the Lenders, on a pro rata basis in
accordance with their ratable share of the advances under each Loan; and

     (iv) on the date that is twelve (12) months following the Closing Date, a fee equal to
0.75% of the outstanding principal amount of each Loan payable to the Lenders, on a pro rata
basis in accordance with their ratable share of the advances under each Loan.

     (b) The Fees shall be paid, in immediately available funds, to the Lenders, in the case of
clause a(ii) and to Royal Bank, in the case of clause a(i) above . Once paid, none
of the Fees shall be refundable under any circumstances.

          SECTION 2.07. Interest on Loans. (a) Subject to the provisions of Section
2.08, a Base Rate Loan made hereunder shall bear interest (computed on the basis of the actual
number of days elapsed over a year of 365 or 366 days, as the case may be, and calculated from and
including the date of such Borrowing to but excluding the date of repayment thereof) at a rate per
annum equal to the Base Rate plus the Applicable Rate; provided, however, that in no event shall
such rate be less than (i) nine percent (9%) per annum in the case of the Bridge A Loan and (ii)
eleven percent (11%) per annum in the case of the Bridge B Loan.

     (b) Subject to the provisions of Section 2.08, a Eurodollar Rate Loan made hereunder
shall bear interest (computed on the basis of the actual number of days elapsed over a year of 360
days) at a rate per annum equal to the Eurodollar Rate for the Interest Period in effect for such
Loan plus the Applicable Rate; provided, however, that in no event shall such rate be less than (i)
nine percent (9%) per annum in the case of the Bridge A Loan and (ii) eleven percent (11%) per
annum in the case of the Bridge B Loan.

     (c) Interest on the Loan shall be payable on the Interest Payment Dates applicable to such
Loan except as otherwise provided in this Agreement. The Eurodollar Rate for each Interest Period
or day within an Interest Period, as the case may be, shall be determined by the Administrative
Agent, and such determination shall be conclusive absent manifest error.

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          SECTION 2.08. Default Interest. Upon the occurrence and during the continuance of
an Event of Default, to the extent permitted by law, all Obligations under the Loan Documents shall
bear interest (including post-petition interest in any proceeding under any bankruptcy or
insolvency laws), payable on demand, (a) in the case of principal of the Loans, at the rate
otherwise applicable to the Loans pursuant to Section 2.07 plus the Applicable Rate plus
two percent (2%) per annum and (b) in all other cases, at a rate per annum (computed on the basis
of the actual number of days elapsed over a year of 360 days) equal to the rate that would be
applicable to the Base Rate Loan plus the Applicable Rate plus two percent (2%) per annum.

          SECTION 2.09. Alternate Rate of Interest. In the event that on the day that the
Administrative Agent receives Borrower’s applicable notice required by Section 2.11 for a
conversion to or continuation of a Eurodollar Rate Loan, the Administrative Agent shall have
reasonably determined that Dollar deposits in the principal amount of the borrowing requested by
the Borrower are not generally available in the London interbank market, or that the rates at which
Dollar deposits are being offered in the London interbank market will not adequately and fairly
reflect the cost to any participating Lender of making or maintaining its portion of the Eurodollar
Rate Loan during the applicable Interest Period, or that reasonable means do not exist for
ascertaining the Eurodollar Rate for such Interest Period, the Administrative Agent shall give
written or fax notice of such determination to the Borrower. In the event of any such
determination, until the Administrative Agent shall have advised the Borrower that the
circumstances giving rise to such notice no longer exist, the request by the Borrower for a
Eurodollar Rate Loan pursuant to Section 2.11 shall be deemed to be a request for a Base
Rate Loan. The determination by the Administrative Agent under this Section 2.09 shall be
conclusive absent manifest error.

          SECTION 2.10. Repayment. The principal amount of each Loan made hereunder shall be
due and payable on the Maturity Date, together with accrued and unpaid interest, unless accelerated
sooner pursuant to Article VII.

          SECTION 2.11. Conversion and Continuation of Borrowings. At any time after fifteen
(15) days following the Closing Date (or such earlier date as shall be specified by the
Administrative Agent, in its sole discretion, in a written notice to the Borrower and the Lenders),
the Borrower shall have the right upon hand delivery or fax (or telephone notice promptly confirmed
by hand delivery or fax) to the Administrative Agent of the written Notice of Interest Election (a)
not later than 11:00 a.m., New York City time, three (3) Business Day prior to conversion, to
convert a Eurodollar Rate Loan into a Base Rate Loan, (b) not later than 11:00 a.m., New York City
time, three (3) Business Days prior to conversion or continuation, to convert a Base Rate Loan into
a Eurodollar Rate Loan or to continue a Eurodollar Rate Loan as a Eurodollar Rate Loan for an
additional Interest Period, and (c) not later than 11:00 a.m., New York City time, three (3)
Business Days prior to conversion, to convert the Interest Period with respect to a Eurodollar Rate
Loan to another permissible Interest Period, subject in each case to the following:

     (i) each conversion or continuation shall be made pro rata among the applicable Lenders
in accordance with their respective share of the principal amount of the applicable Loan
converted or continued;

     (ii) each conversion shall be effected by each applicable Lender and the Administrative
Agent by recording for the account of such Lender its portion of the applicable converted
Loan; accrued interest on the Eurodollar Rate Loan being converted shall be paid by the
Borrower at the time of conversion;

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     (iii) if a Eurodollar Rate Loan is converted at a time other than the end of the
Interest Period applicable thereto, the Borrower shall pay, upon demand, any amounts due to
the applicable Lenders pursuant to Section 2.17; and

     (iv) after the occurrence and during the continuance of a Default or Event of Default,
no Loan may be converted into, or continued as, a Eurodollar Rate Loan.

     Each Notice of Interest Election given pursuant to this Section 2.11 shall be
irrevocable and shall refer to this Agreement and specify not later than 11:00 a.m., New York City
time, three (3) Business Days before the proposed conversion or continuation (i) whether the
applicable Loan is to be converted to or continued as a Eurodollar Rate Loan or a Base Rate Loan,
(ii) if such notice requests a conversion, the date of such conversion (which shall be a Business
Day) and (iii) if the applicable Loan is to be converted to or continued as a Eurodollar Rate Loan,
the Interest Period with respect thereto. If no Interest Period is specified in any such notice
with respect to any conversion to or continuation as a Eurodollar Rate Loan, the Borrower shall be
deemed to have selected an Interest Period of one month’s duration. The Administrative Agent shall
advise the applicable Lenders of any Notice of Interest Election given pursuant to this Section
2.11 and of each Lender’s portion of any converted or continued Loan. In the case of the
Eurodollar Rate Loan, if the Borrower shall not have given notice in accordance with this
Section 2.11 to continue such Loan into a subsequent Interest Period (and shall not
otherwise have given notice in accordance with this Section 2.11 to convert such Loan), the
Eurodollar Rate Loan shall, at the end of the Interest Period applicable thereto (unless repaid
pursuant to the terms hereof), automatically be continued into a Eurodollar Rate Loan with an
Interest Period of one month’s duration.

          SECTION 2.12. Termination of Commitments. The Commitments shall automatically
terminate upon the making of the Loan to the Borrower on the Closing Date. Notwithstanding the
foregoing, the Commitments shall automatically terminate at 5:00 p.m., New York City time, (a) on
the date which is one (1) day immediately following the closing date of the Purchase Agreement, if
the funding of the Loan shall not have been made by such time, or (b) if the Acquisition is not
consummated, on the date on which the parties terminate the Purchase Agreement or the Purchase
Agreement is terminated in accordance with its terms, whichever occurs first.

          SECTION 2.13. Optional Prepayment. (a) The Borrower shall have the right at
any time and from time to time to prepay the Loans, in whole or in part, upon at least three (3)
Business Days’ prior written or fax notice (or telephone notice promptly confirmed by written or
fax notice) in the case of a Eurodollar Rate Loan, or prior written or fax notice (or telephone
notice promptly confirmed by written or fax notice) at least one (1) Business Day prior to the date
of prepayment in the case of a Base Rate Loan, to the Administrative Agent before 11:00 a.m., New
York City time; provided that each partial prepayment shall be in an amount that is an integral
multiple of $1,000,000 and not less than $1,000,000.

     (b) Each notice of prepayment shall specify the prepayment date and the principal amount of
the Loan (or portion thereof) to be prepaid, shall be irrevocable and shall commit the Borrower to
prepay such Loan by the amount stated therein on the date stated therein. All prepayments under
this Section 2.13 shall be subject to Section 2.17 but otherwise without premium or
penalty. All prepayments under this Section 2.13 shall be accompanied by accrued and
unpaid interest on the principal amount to be prepaid to but excluding the date of payment.

          SECTION 2.14. Mandatory Prepayments. (a) No later than the fifth Business Day
following the receipt by the Borrower or any of its Subsidiaries of (i) Net Cash Proceeds in
respect of any Asset Sale or (ii) any Extraordinary Receipt, the Borrower shall apply an amount
equal to 100% of such proceeds received by the Borrower or any of its Subsidiaries with respect
thereto to prepay outstanding Loan amounts in accordance with Section 2.14(c), excluding, so long as no
Default has occurred and is

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continuing, any such proceeds that are reinvested in the business of the Borrower within one
hundred eighty (180) days of receipt thereof; provided that the Borrower shall not be required to
make any portion of such prepayment to the extent such portion is required to be applied to prepay
loans and/or cash collateralize obligations under the Existing Senior Credit Agreement.

     (b) In the event that the Borrower or any of its Subsidiaries shall receive Net Cash Proceeds
from (i) the issuance or sale of Capital Stock or (ii) the issuance or incurrence of Indebtedness,
the Borrower shall, simultaneously with the receipt of such Net Cash Proceeds, apply an amount
equal to 100% of such Net Cash Proceeds to prepay outstanding Loan amounts in accordance with
Section 2.14(c); provided that the Borrower shall not be required to make any portion of
such prepayment to the extent that such Net Cash Proceeds are in respect of Indebtedness issued or
incurred (or permitted to be issued or incurred) under the Existing Senior Credit Agreement.

     (c) All mandatory prepayments of outstanding Loans under this Section 2.14 shall be
allocated (i) ratably to the Lenders in respect of the outstanding Bridge A Loan and the
outstanding Bridge B Loan in the case of proceeds described in paragraph (a) above, (ii) first
ratably to Lenders in respect of the outstanding Bridge A Loan and, to the extent there is a
balance remaining, then ratably to Lenders in respect of the Bridge B Loan in the case of proceeds
described in clause (ii) of paragraph (b) above, and (iii) first ratably to the Lenders in respect
of the outstanding Bridge B Loan and, to the extent there is a balance remaining, then ratably to
Lenders in respect of the Bridge A Loan in the case of proceeds described in clause (i) of
paragraph (b) above. All prepayments under this Section 2.14 shall be subject to
Section 2.20.

     (d) The Borrower shall deliver to the Administrative Agent, at or prior to the time of each
prepayment required under this Section 2.14, (i) a certificate signed by a Financial
Officer of the Borrower setting forth in reasonable detail the calculation of the amount of such
prepayment and (ii) the notice required by Section 2.13. Each notice of prepayment shall
specify the prepayment date and the principal amount of the Loans (or portion thereof) to be
prepaid. All prepayments of the outstanding Loan amounts under this Section 2.14 shall be
subject to Section 2.17, but shall otherwise be without premium or penalty, and shall be
accompanied by accrued and unpaid interest on the principal amount to be prepaid up to but
excluding the date of payment.

          SECTION 2.15. Reserve Requirements; Change in Circumstances. (a)
Notwithstanding any other provision of this Agreement, if any Change in Law shall impose, modify or
deem applicable any reserve, special deposit or similar requirement against assets of, deposits
with or for the account of or credit extended by any Lender (except any such reserve requirement
which is reflected in the Eurodollar Rate) or shall impose on such Lender or the London interbank
market any other condition affecting this Agreement or a Eurodollar Rate Loan made by such Lender,
if applicable, and the result of any of the foregoing shall be to increase the cost to such Lender
of making or maintaining a Eurodollar Rate Loan or to reduce the amount of any sum received or
receivable by such Lender hereunder (whether of principal, interest or otherwise) by an amount
deemed by such Lender to be material, then the Borrower will pay to such Lender upon demand such
additional amount or amounts as will compensate such Lender for such additional costs incurred or
reduction suffered.

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

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then from time to time the Borrower shall pay to such Lender such additional amount or amounts
as will compensate such Lender or such Lender’s holding company for any such reduction suffered.

     (c) A certificate of a Lender setting forth the amount or amounts necessary to compensate such
Lender or its holding company, as applicable, as specified in paragraph (a) or (b)
above shall be delivered to the Borrower, shall describe the applicable Change in Law, the
resulting costs incurred or reduction suffered and shall be conclusive absent manifest error. The
Borrower shall pay such Lender the amount shown as due on any such certificate delivered by it
within ten (10) Business Days after its receipt of the same.

     (d) Failure or delay on the part of any Lender to demand compensation for any increased costs
or reduction in amounts received or receivable or reduction in return on capital shall not
constitute a waiver of such Lender’s right to demand such compensation; provided that the Borrower
shall not be under any obligation to compensate any Lender under paragraph (a) or
(b) above with respect to increased costs or reductions with respect to any period prior to
the date that is one hundred eighty (180) days prior to such request; provided, further, that the
foregoing limitation shall not apply to any increased costs or reductions arising out of the
retroactive application of any Change in Law within such 180-day period. The protection of this
Section 2.15 shall be available to each Lender regardless of any possible contention of the
invalidity or inapplicability of the Change in Law that shall have occurred or been imposed.

          SECTION 2.16. Change in Legality. (a) Notwithstanding any other provision of
this Agreement, if any Change in Law shall make it unlawful for any Lender to maintain a Eurodollar
Rate Loan or to give effect to its obligations as contemplated hereby with respect to such
Eurodollar Rate Loan, then, by written notice to the Borrower and the Administrative Agent:

     (i) such Lender may declare that no Eurodollar Rate Loan will thereafter (for the
duration of such unlawfulness) be available hereunder (or be continued for additional
Interest Periods) and no Base Rate Loan will thereafter (for such duration) be converted
into a Eurodollar Rate Loan, whereupon any request to convert a Base Rate Loan to a
Eurodollar Rate Loan or to continue a Eurodollar Rate Loan for an additional Interest
Period) shall, as to such Lender only, be deemed a request to continue the Base Rate Loan as
such for an additional Interest Period or to convert a Eurodollar Rate Loan into an Base
Rate Loan, as the case may be), unless such declaration shall be subsequently withdrawn; and

     (ii) such Lender may require that any outstanding Eurodollar Rate Loan made by it be
converted to a Base Rate Loan, in which event such Eurodollar Rate Loan shall be
automatically converted to a Base Rate Loan as of the effective date of such notice as
provided in paragraph (b) below.

In the event any Lender shall exercise its rights under clause (i) or (ii) above,
all payments and prepayments of principal that would otherwise have been applied to repay the
Eurodollar Rate Loan that would have been made by such Lender or the converted Eurodollar Rate Loan
of such Lender shall instead be applied to repay each Base Rate Loan made by such Lender in lieu
of, or resulting from the conversion of, such Eurodollar Rate Loan.

     (b) For purposes of this Section 2.16, a notice to the Borrower by any Lender shall be
effective as to any Eurodollar Rate Loan made by such Lender, if lawful, on the last day of the
Interest Period then applicable to such Eurodollar Rate Loan; in all other cases such notice shall
be effective on the date of receipt by the Borrower.

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          SECTION 2.17. Indemnity. The Borrower shall indemnify each Lender against any loss
or expense that such Lender may sustain or incur as a consequence of (a) any event, other than a
default by such Lender in the performance of its obligations hereunder, which results in (i) such
Lender receiving or being deemed to receive any amount on account of the principal of any
Eurodollar Rate Loan prior to the end of the Interest Period in effect therefor, (ii) the
conversion of any Eurodollar Rate Loan to a Base Rate Loan, or the conversion of the Interest
Period with respect to any Eurodollar Rate Loan, in each case other than on the last day of the
Interest Period in effect therefor, or (iii) any Eurodollar Rate Loan to be made by such Lender not
being made after notice of such Loan shall have been given by the Borrower hereunder (any of the
events referred to in this clause (a) above being called a “Breakage Event”) or (b) any
default in the making of any payment or prepayment required to be made hereunder. In the case of
any Breakage Event, such loss shall include an amount equal to the excess, as reasonably determined
by such Lender, of (i) its cost of obtaining funds for the Eurodollar Rate Loan that is the subject
of such Breakage Event for the period from the date of such Breakage Event to the last day of the
Interest Period in effect (or that would have been in effect) for such Loan over (ii) the amount of
interest likely to be realized by such Lender in redeploying the funds released or not utilized by
reason of such Breakage Event for such period. A certificate of any Lender setting forth any amount
or amounts which such Lender is entitled to receive pursuant to this Section 2.17 shall be
delivered to the Borrower and shall be conclusive absent manifest error.

          SECTION 2.18. Pro Rata Treatment. Except as required under Section 2.14,
2.15, 2.21 or 2.22, the Loans, each payment or prepayment of principal
amount of each Loan, each payment of interest on each Loan, and each conversion of each Loan to or
continuation of such Loan shall be allocated pro rata among the applicable Lenders in accordance
with the respective portion of the principal amount of such outstanding Loan. Each Lender agrees
that in computing such Lender’s portion of a Loan to be made hereunder, the Administrative Agent
may, in its discretion, round each Lender’s percentage of such Loan to the next highest or lower
whole dollar amount.

          SECTION 2.19. Sharing of Setoffs. Each Lender agrees that if it shall, through the
exercise of a right of banker’s lien, setoff or counterclaim against any Loan Party, or pursuant to
a secured claim under Section 506 of Title 11 of the United States Code or other security or
interest arising from, or in lieu of, such secured claim, received by such Lender under any
applicable bankruptcy, insolvency or other similar law or otherwise, or by any other means, obtain
payment (voluntary or involuntary) in respect of the Loans as a result of which the unpaid
principal portion of its advances made hereunder shall be proportionately less than the unpaid
principal portion of the advances made by any other Lender, it shall be deemed simultaneously to
have purchased from such other Lender at face value, and shall promptly pay to such other Lender
the purchase price for, a participation in the advances of such other Lender, so that the aggregate
unpaid principal amount of the Loans held by each Lender shall be in the same proportion to the
aggregate unpaid principal amount of the Loans then outstanding as the principal amount of its
advances prior to such exercise of banker’s lien, setoff or counterclaim or other event was to the
principal amount of the Loans outstanding prior to such exercise of banker’s lien, setoff or
counterclaim or other event; provided, however, that if any such purchase or purchases or
adjustments shall be made pursuant to this Section 2.19 and the payment giving rise thereto
shall thereafter be recovered, such purchase or purchases or adjustments shall be rescinded to the
extent of such recovery and the purchase price or prices or adjustment restored without interest.
The Borrower expressly consents to the foregoing arrangements and agrees that any Lender holding a
participation in the Loan deemed to have been so purchased may exercise any and all rights of
banker’s lien, setoff or counterclaim with respect to any and all moneys owing by the Borrower to
such Lender by reason thereof as fully as if such Lender had made the Loan directly to the Borrower
in the amount of such participation.

          SECTION 2.20. Payments. (a) The Borrower shall make each payment (including
principal of or interest on each Loan or any Fees or other amounts) hereunder and under any other
Loan

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Document not later than 11:00 a.m., New York City time, on the date when due in immediately
available Dollars, without setoff, defense or counterclaim. Each such payment shall be made to the
ratable account of the applicable Lenders at the address for payment specified in the signature
page hereto (or such other address as the applicable Lenders may from time to time specify in
accordance with Section 10.01). All payments hereunder and under the other Loan Documents
shall be made in Dollars. The Administrative Agent shall distribute any such payments received by
it for the account of any other person to the appropriate recipient promptly following receipt
thereof.

     (b) Except as otherwise expressly provided herein, whenever any payment (including
principal of or interest on the Loan or any Fees or other amounts) hereunder or under any other
Loan Document shall become due, or otherwise would occur, on a day that is not a Business Day, such
payment may be made on the next succeeding Business Day, and such extension of time shall in such
case be included in the computation of interest or Fees, if applicable.

          SECTION 2.21. Taxes. (a) Any and all payments by or on account of any obligation of
any Loan Party hereunder or under any other Loan Document shall be made free and clear of and
without deduction for any Indemnified Taxes or Other Taxes; provided that if any Indemnified Taxes
or Other Taxes are required to be withheld or deducted from such payments, then (i) the sum payable
shall be increased as necessary so that after making all required deductions or withholdings
(including deductions or withholdings applicable to additional sums payable under this Section
2.21) the Administrative Agent or the Lender (as the case may be) receives an amount equal to
the sum it would have received had no such deductions or withholdings been made, (ii) such Loan
Party shall make such deductions or withholdings and (iii) such Loan Party shall pay the full
amount deducted or withheld to the relevant Governmental Authority in accordance with applicable
law.

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

     (c) The Borrower shall indemnify the Administrative Agent and each Lender within thirty (30)
days after written demand therefor, for the full amount of any Indemnified Taxes or Other Taxes
paid by the Administrative Agent or such Lender, as the case may be, on or with respect to any
payment by or on account of any obligation of the Borrower or any other Loan Party hereunder or
under any other Loan Document (including Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this Section 2.21) and any penalties, interest and
reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified
Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental
Authority. A certificate as to the amount of such payment or liability delivered to the Borrower by
a Lender or by the Administrative Agent on behalf of itself or a Lender shall be conclusive absent
manifest error.

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

     (e) Any Foreign Lender that is entitled to an exemption from or reduction of withholding tax
under the law of the jurisdiction in which the Borrower is located, or any treaty to which such
jurisdiction is a party, with respect to payments under this Agreement shall deliver to the
Borrower (with a copy to the Administrative Agent), on or prior to the date a payment is to be made
to such Lender under this Agreement or promptly upon learning that any such documentation expired or became obsolete, at
the reasonable request of the Borrower, such properly completed and executed documentation
prescribed by

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applicable law or reasonably requested by the Borrower as will permit such payments to be made
without withholding or at a reduced rate of withholding; provided that such Lender is legally
entitled to complete, execute and deliver such documentation. Such completion, execution or
delivery will not be required if, in such Lender’s judgment, it would materially prejudice the
legal position of such Lender. In addition, each Foreign Lender shall (i) furnish on or before the
date it becomes a party to the Agreement either (A) two accurate and complete originally executed
copies of U.S. Internal Revenue Service (“IRS”) Form W-8BEN (or successor form) or (B) two accurate
and complete originally executed copies of IRS Form W-8ECI (or successor form), certifying, in
either case, to such Foreign Lender’s legal entitlement to an exemption or reduction from U.S.
federal withholding tax with respect to all interest payments hereunder, and (ii) provide a new
Form W-8BEN (or successor form) or Form W-8ECI (or successor form) upon the expiration or
obsolescence of any previously delivered form to reconfirm any complete exemption from, or any
entitlement to a reduction in, U.S. federal withholding tax with respect to any interest payment
hereunder; provided that any Foreign Lender that is not a “bank” within the meaning of Section
881(c)(3)(A) of the Code and is relying on the so-called “portfolio interest exemption” shall also
furnish a “Non-Bank Certificate” in the form of Exhibit C together with a Form W-8BEN.
Notwithstanding any other provision of this paragraph, a Foreign Lender shall not be required to
deliver any form pursuant to this paragraph that such Foreign Lender is not legally able to
deliver.

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

     (g) Any Foreign Lender, to the extent it does not act or ceases to act for its own account
with respect to any portion of any sums paid or payable to such Foreign Lender under any of the
Loan Documents (for example, in the case of a grant of a participation by such Foreign Lender),
shall deliver to the Administrative Agent on the date when such Foreign Lender ceases to act for
its own account with respect to any portion of any such sums paid or payable, and at such other
times as may be necessary in the determination of the Administrative Agent (in its reasonable
discretion), (i) two duly signed completed copies of the forms or statements required to be
provided by such Foreign Lender as set forth above in paragraph (e), to establish
the portion of any such sums paid or payable with respect to which such Foreign Lender acts for its
own account that is not subject to U.S. withholding tax, and (ii) two duly signed completed copies
of IRS Form W-81MY (or any successor thereto), together with any information such Foreign Lender
chooses to transmit with such form, and any other certificate or statement of exemption required
under the Code, to establish that such Foreign Lender is not acting for its own account with
respect to a portion of any such sums payable to such Lender.

     (h) If the Administrative Agent or a Lender determines, in its sole discretion, that it has
received a refund of any Indemnified Taxes or Other Taxes as to which it has been indemnified by
the Borrower or with respect to which the Borrower has paid additional amounts pursuant to this
Section 2.21, it shall pay to the Borrower an amount equal to such refund (but only to the
extent of indemnity payments made, or additional amounts paid, by the Borrower under this
Section 2.21 with respect to the Indemnified Taxes or Other Taxes giving rise to such
refund), net of all out-of-pocket expenses of the Administrative Agent or such Lender, as the case
may be, and without interest (other than any interest paid by the relevant Governmental Authority
with respect to such refund); provided that the Borrower, upon the request of the Administrative
Agent or such Lender, agrees to repay the amount paid over to the Borrower (plus any penalties,
interest or other charges imposed by the relevant Governmental Authority) to the Administrative
Agent or such Lender in the event the Administrative Agent or such Lender is required to repay such
refund to such Governmental Authority. This paragraph shall not be construed to

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require the Administrative Agent or any Lender to make available its tax returns (or any other
information relating to its taxes that it deems confidential) to the Borrower or any other Person.

     (i) Failure or delay on the part of any Lender to demand compensation for any Indemnified
Taxes or Other Taxes shall not constitute a waiver of such Lender’s right to demand such
compensation; provided that the Borrower shall not be under any obligation to compensate any Lender
under paragraph (a), (b) or (c) above with respect to Indemnified Taxes or
Other Taxes with respect to any period prior to the date that is one hundred eighty (180) days
prior to such request; provided, further, that the foregoing limitation shall not apply to any
increased costs or reductions arising out of the retroactive application of any Indemnified Taxes
or Other Taxes within such 180-day period. The protection of this Section 2.21 shall be
available to each Lender regardless of any possible contention of the invalidity or inapplicability
of the Indemnified Taxes or Other Taxes that shall have occurred or been imposed.

          SECTION 2.22. Assignment of Commitments Under Certain Circumstances; Duty to
Mitigate. (a) In the event (i) any Lender delivers a certificate requesting compensation
pursuant to Section 2.15, (ii) any Lender delivers a notice described in Section
2.16 or (iii) the Borrower is required to pay any additional amount to any Lender or any
Governmental Authority on account of any Lender pursuant to Section 2.21, the Borrower may,
upon notice to such Lender and the Administrative Agent, require such Lender to transfer and assign
(in accordance with and subject to the restrictions contained in Section 10.04, other than
10.04(b)(ii)(B)), all of its interests, rights and obligations under this Agreement to an
assignee that shall assume such assigned obligations (which assignee may be another Lender, if a
Lender accepts such assignment); provided that (A) the Borrower shall have received the prior
written consent of the Administrative Agent with regard to the identity of the assignee, which
consent shall not unreasonably be withheld or delayed, and (B) such assignee (or the Borrower, in
the case of amounts then due and payable by it) shall have paid to the affected Lender in
immediately available funds an amount equal to the sum of the principal of and interest accrued to
the date of such payment on the outstanding Loan amounts corresponding to such Lender plus all Fees
and other amounts accrued for the account of such Lender hereunder with respect thereto (including
any amounts under Sections 2.15 and 2.17); provided, further, that if prior to
receipt of notice of any such transfer and assignment the circumstances or event that resulted in
such Lender’s claim for compensation under Section 2.15, notice under Section 2.16
or the amounts paid pursuant to Section 2.21, as the case may be, cease to cause such
Lender to suffer increased costs or reductions in amounts received or receivable or reduction in
return on capital, or cease to have the consequences specified in Section 2.16, or cease to
result in amounts being payable under Section 2.21, as the case may be (including as a
result of any action taken by such Lender pursuant to paragraph (b) below), or if such
Lender shall waive its right to claim further compensation under Section 2.15 in respect of
such circumstances or event or shall withdraw its notice under Section 2.16 or shall waive
its right to further payments under Section 2.21 in respect of such circumstances or event
or shall consent to the proposed amendment, waiver, consent or other modification, as the case may
be, then such Lender shall not thereafter be required to make any such transfer and assignment
hereunder. Each Lender hereby grants to the Administrative Agent an irrevocable power of attorney
(which power is coupled with an interest) to execute and deliver, on behalf of such Lender as
assignor, any Assignment and Acceptance necessary to effectuate any assignment of such Lender’s
interests hereunder in respect of the circumstances contemplated by this Section 2.22(a).

     (b) If (i) any Lender shall request compensation under Section 2.15, (ii) any Lender
delivers a notice described in Section 2.16 or (iii) the Borrower is required to pay any
additional amount to any Lender or any Governmental Authority on account of any Lender, pursuant to
Section 2.21, then such Lender shall use reasonable efforts (which shall not require such
Lender to incur an unreimbursed loss or unreimbursed cost or expense or otherwise take any action
inconsistent with its internal policies or legal or regulatory restrictions or suffer any
disadvantage or burden deemed by it to be material) (A) to file any certificate or document
reasonably requested by the Borrower or (B) to assign its rights and delegate and

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transfer its obligations hereunder to another of its offices, branches or affiliates, if such
filing or assignment would reduce its claims for compensation under Section 2.15 or enable
it to withdraw its notice pursuant to Section 2.16 or would reduce amounts payable pursuant
to Section 2.21, as the case may be, in the future. The Borrower hereby agrees to pay all
reasonable out-of-pocket costs and expenses incurred by any Lender in connection with any such
filing or assignment, delegation and transfer.

ARTICLE III

Representations and Warranties

     Each Loan Party represents and warrants (it being understood that for purposes of the
representations and warranties made in the Loan Documents on the Closing Date, such representations
and warranties shall be construed as though each of the Transactions have been consummated) to the
Administrative Agent and each of the Lenders that:

          SECTION 3.01. Organization; Powers. The Borrower and each of its Subsidiaries (a)
is duly organized or formed, validly existing and in good standing under the laws of the
jurisdiction of its organization, (b) has all requisite power and authority to own its property and
assets and to carry on its business as now conducted and as proposed to be conducted, (c) is
qualified to do business in, and is in good standing in, every jurisdiction where its ownership,
lease or operation of properties or the conduct of its business requires such qualification, except
where the failure to so qualify or be in good standing, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect, and (d) has the requisite power and
authority to execute, deliver and perform its obligations under each of the Loan Documents and each
other agreement or instrument contemplated thereby to which it is a party.

          SECTION 3.02. Authorization. The Transactions to be entered into by each Loan Party
are within such Loan Party’s powers and have been duly authorized by all necessary action on the
party of such Loan Party. The execution, delivery and performance of the Loan Documents, including
the borrowings hereunder and the use of the proceeds therefrom, (a) have been duly authorized by
all requisite corporate or limited liability company and, if required, stockholder or member action
and (b) will not (i) violate (A) any provision of any applicable law, statute, rule or regulation,
or of the certificate or articles of incorporation or other constitutive documents or by-laws or
operating agreement of any Loan Party, (B) any applicable order of any Governmental Authority or
(C) any provision of any indenture, agreement or other instrument to which the Borrower or any of
its Subsidiaries is a party or by which any of them or any of their property is bound, (ii) be in
conflict with, result in a breach of or constitute (alone or with notice or lapse of time or both)
a default under, or give rise to any right to accelerate or to require the prepayment, repurchase
or redemption of any obligation under any such indenture, agreement or other instrument or (iii)
result in the creation or imposition of any Lien upon or with respect to any property or assets now
owned or hereafter acquired by the Borrower or any Subsidiary of the Borrower.

          SECTION 3.03. Enforceability. This Agreement has been duly executed and delivered
by each Loan Party and constitutes, and each other Loan Document when executed and delivered by
each Loan Party thereto will constitute, a legal, valid and binding obligation of such Loan Party
enforceable against such Loan Party in accordance with its terms.

          SECTION 3.04. Governmental Approvals. No action, consent or approval of,
registration or filing with or any other action by any Governmental Authority is necessary or will
be required in connection with the Loan Documents, except for such as have been made or obtained
and are in full force and effect.

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          SECTION 3.05. Financial Statements. (a) The Borrower has heretofore furnished
to the Administrative Agent and each Lender the Borrower’s consolidated balance sheets and related
statements of income, stockholders’ equity and cash flows (i) as of and for fiscal year ended
December 31, 2005, audited by and accompanied by the report of UHY Mann Frankfort Stein & Lipp
CPAs, LLP, independent public accountants, and (ii) as of and for the fiscal quarters ended March
31, 2006, June 30, 2006 and September 30, 2006, and at least thirty (30) days before the Closing
Date, each certified by its chief financial officer. Such financial statements present fairly in
all material respects the financial condition and results of operations and cash flows of the
Borrower and its consolidated Subsidiaries as of such dates and for such periods. Such balance
sheets and the notes thereto disclose all material liabilities, direct or contingent, of the
Borrower and its consolidated Subsidiaries as of the dates thereof. Such financial statements were
prepared in accordance with GAAP consistently applied throughout the period covered thereby, except
as otherwise noted therein and, subject, in the case of unaudited financial statements, to year-end
audit adjustments and the absence of footnotes.

     (b) The Borrower has heretofore furnished to the Administrative Agent and each Lender (i) the
Target’s consolidated balance sheets and related statements of income, stockholders’ equity and
cash flows (A) as of and for each of the twelve-month periods ending October 31, 2004, October 31,
2005 and October 31, 2006, audited by and accompanied by the report of UHY Mann Frankfort Stein &
Lipp CPAs, independent public accountants, and prepared in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise noted therein, and (B) as of and
for the nine-month period ended July 31, 2005, and (ii) any other financial statements required to
create pro forma financial statements for the twelve-month period most recently ended on September
30, 2006, and at least five (5) Business Days before the Closing Date, each certified by Target’s
chief financial officer. Such financial statements present fairly in all material respects the
financial condition and results of operations and cash flows of the Target and its consolidated
subsidiaries as of such dates and for such periods. Such balance sheets and the notes thereto
disclose all material liabilities, direct or contingent, of the Target and its consolidated
subsidiaries as of the dates thereof. Such financial statements were prepared in accordance with
Regulation S-X with respect to the periods covered thereby and are not adversely materially
inconsistent with the information provided to the Administrative Agent prior to October 25, 2006.

          SECTION 3.06. No Material Adverse Change. Since December 31, 2005, no event, change
or condition has occurred that (individually or in the aggregate) has had, or could reasonably be
expected to have, a Material Adverse Effect.

          SECTION 3.07. Title to Properties; Possession Under Leases. (a) Each of the
Borrower and its Subsidiaries has good and marketable title in fee simple to, or valid leasehold
interests in, all its material properties and assets (including, without limitation, all of its
intellectual property and licenses) necessary or used in the ordinary course of business. Other
than minor defects in title that do not materially interfere with its ability to conduct its
business or to utilize such assets for their intended purposes, all such material properties and
assets are free and clear of Liens (other than as permitted under Section 6.02).

     (b) Immediately following the consummation of the Transactions, none of the Borrower or any of
its Subsidiaries is obligated under any right of first refusal, option or other contractual right
to sell, assign or otherwise dispose of any material property or any interest therein.

          SECTION 3.08. Subsidiaries. The Borrower does not have any Subsidiaries other than
the Subsidiaries set forth in Schedule 3.08. Schedule 3.08 sets forth as of the
Closing Date a list of all Subsidiaries of the Borrower and the percentage ownership interest of
the Borrower therein. The shares of capital stock or other ownership interests so indicated on
Schedule 3.08 are fully paid and non-

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assessable and are owned by the Borrower, directly or indirectly, free and clear of all Liens
(other than as permitted under Section 6.02).

          SECTION 3.09. Litigation; Compliance with Laws. There are no actions, suits or
proceedings at law or in equity or by or before any Governmental Authority now pending or, to the
knowledge of the Borrower, threatened against the Borrower or any Subsidiary of the Borrower or any
business, property or rights of any such Person (i) that purport to affect or pertain to any Loan
Document or the Transactions or (ii) except as described in the Borrower’s quarterly report on Form
10-Q for the fiscal quarter ended September 30, 2006, as to which there is a reasonable possibility
of an adverse determination and that, if adversely determined, could reasonably be expected,
individually or in the aggregate, to result in a Material Adverse Effect.

          SECTION 3.10. Agreements. Other than as could not reasonably be expected to result
in a Material Adverse Effect, none of the Borrower or any of its Subsidiaries is in default under
any indenture or other agreement or instrument evidencing Indebtedness, or any other material
agreement or instrument to which it is a party or by which it or any of its properties or assets
are bound.

          SECTION 3.11. Federal Reserve Regulations. (a) None of the Borrower or any of
its Subsidiaries is engaged principally, or as one of its important activities, in the business of
extending credit for the purpose of buying or carrying Margin Stock.

     (b) No part of the proceeds of the Loan will be used to purchase or carry any margin stock or
to extend credit to others for the purpose of purchasing or carrying any Margin Stock in violation
of Regulation U or Regulation X issued by the Board.

          SECTION 3.12. Investment Company Act. None of the Borrower or any Subsidiary of the
Borrower is an “investment company” as defined in, or subject to regulation under, the Investment
Company Act of 1940.

          SECTION 3.13. Tax Returns. Each of the Borrower and its Subsidiaries has filed or
caused to be filed all Federal, state and other tax returns required to have been filed by it and
has paid, caused to be paid, or made provisions for the payment of all taxes due and payable by it
and all material assessments received by it, except such taxes and assessments that are being
contested in good faith by appropriate proceedings and for which the Borrower or such Subsidiary,
as applicable, shall have set aside on its books, in accordance with GAAP, adequate reserves.

          SECTION 3.14. No Material Misstatements. The information, reports, financial
statements, exhibits, certificates and schedules (other than projections and other forward looking
information) furnished by or on behalf of the Borrower to the Administrative Agent or the Lenders
in connection with the transactions contemplated hereby or the negotiation or syndication of any
Loan Document or included therein or delivered pursuant thereto (taken as a whole) did not and do
not contain any material misstatement of fact or omit to state any material fact necessary to make
the statements therein, in the light of the circumstances under which they were made, not
misleading; provided that to the extent any such information, report, financial statement, exhibit,
certificate or schedule was based upon or constitutes a forecast or projection, the Borrower
represents only that such information was prepared in good faith on the basis of reasonable
assumptions in light of the conditions existing at the time of delivery of such projections, and
represented, at the time of delivery thereof, a reasonable good faith estimate of future financial
performance by the Borrower.

          SECTION 3.15. Employee Benefit Plans. Each of the Borrower and its ERISA Affiliates
is in material compliance, with respect to each benefit plan or arrangement, with the applicable

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provisions of ERISA and the Code and the regulations and published interpretations thereunder.
No ERISA Event has occurred or is reasonably expected to occur that, when taken together with all
other such ERISA Events, could reasonably be expected to result in a Material Adverse Effect. The
present value of all benefit liabilities under each Plan (based on the assumptions used for
purposes of Statement of Financial Accounting Standards No. 87) did not, as of the last annual
valuation date applicable thereto, exceed the fair market value of the assets of such Plan (based
on the assumptions used for purposes of Statement of Financial Accounting Standards No. 87) by an
amount that could reasonably be expected to result in a Material Adverse Effect.

          SECTION 3.16. Environmental Matters. (a) Except as would not reasonably be
expected to result, individually or in the aggregate, in the Borrower, any Subsidiary of Borrower
or the Acquired Business incurring material Environmental Liabilities:

     (i) the operations of the Borrower, any Subsidiary of the Borrower, and the Acquired
Business have not failed to comply with Environmental Laws, including by obtaining,
maintaining and complying with all permits, licenses or other approvals required under any
Environmental Law;

     (ii) none of the Borrower , any Subsidiary of the Borrower, or the Acquired Business is
a party to and no real property currently or, to the knowledge of the Borrower, previously
owned, leased, operated or otherwise occupied by the Borrower, any Subsidiary of the
Borrower or the Acquired Business is subject to or the subject of a contractual obligation
or a pending or, to the knowledge of the Borrower, threatened claim, suit, proceeding,
demand, investigation, order, notice of violation or notice of potential liability pursuant
to any Environmental Law; and

     (iii) none of the Borrower, any Subsidiary of the Borrower, or the Acquired Business
have caused or suffered to occur a release of Hazardous Materials.

     (b) None of the Borrower or any Subsidiary of the Borrower knows of any facts, circumstances
of conditions with respect to past or present operations of the Borrower, any Subsidiary of the
Borrower, or the Acquired Business including receipt of any information request or notice of
potential responsibility under the Comprehensive Environmental Response, Compensation and Liability
Act or similar Environmental Laws, reasonably likely to result, individually or in the aggregate,
in the Borrower, any Subsidiary of the Borrower, or the Acquired Business incurring material
Environmental Liabilities.

          SECTION 3.17. Labor Matters. As of the Closing Date, (a) there are no strikes,
lockouts or slowdowns against the Borrower or any Subsidiary of the Borrower pending or, to the
knowledge of the Borrower, threatened, (b) the hours worked by and payments made to employees of
the Borrower and its Subsidiaries have not been in violation of the Fair Labor Standards Act or any
other applicable Federal, state, local or foreign law dealing with such matters, (c) all payments
due from the Borrower or any Subsidiary of the Borrower, or for which any claim may be made against
the Borrower or any Subsidiary of the Borrower, on account of wages and employee health and welfare
insurance and other benefits, have been paid or accrued as a liability on the books of the Borrower
or such Subsidiary and (d) the consummation of the Transactions will not give rise to any right of
termination or right of renegotiation on the part of any union under any collective bargaining
agreement to which the Borrower or any Subsidiary of the Borrower is bound.

          SECTION 3.18. Solvency. On the Closing Date after giving effect to the
Transactions, each Loan Party is Solvent.

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ARTICLE IV

Conditions of Lending

     The obligations of the Lenders to make advances hereunder are subject to the satisfaction of
the following conditions on the Closing Date:

     (a) The Administrative Agent shall have received executed counterparts of this
Agreement by each party hereto, sufficient in number for distribution to the Administrative
Agent, each Lender and the Borrower, and a promissory note executed by the Borrower in favor
of each Lender requesting a promissory note pursuant to Section 2.05(e).

     (b) The Administrative Agent shall have received a Borrowing Request in accordance with
Section 2.04.

     (c) The representations and warranties set forth in Article III and in each
other Loan Document shall be true and correct in all material respects on and as of the
Closing Date with the same effect as though made on and as of such date, except to the
extent such representations and warranties expressly relate to an earlier date, in which
case they shall be true and correct in all material respects as of such earlier date.

     (d) At the time of and immediately after the making of the Loan, no Default or Event of
Default shall have occurred and be continuing.

     (e) The Administrative Agent shall have received, on behalf of itself and the Lenders,
an opinion of Andrews Kurth LLP, counsel for the Loan Parties, (A) dated the Closing Date,
(B) addressed to the Administrative Agent, the Lead Arranger and the Lenders, and (C) in
form and substance reasonably satisfactory to the Administrative Agent, the Lead Arranger
and the Lenders.

     (f) The Administrative Agent shall have received (i) a copy of the certificate or
articles of incorporation or organization, including all amendments thereto, of each of the
Borrower and its Domestic Subsidiaries, certified as of a recent date by the Secretary of
State of the state of its organization, and a certificate as to the good standing of such
Person as of a recent date, from such Secretary of State; (ii) a certificate of the
Secretary or Assistant Secretary of each the Borrower and its Domestic Subsidiaries dated
the Closing Date and certifying (A) that attached thereto is a true and complete copy of the
by-laws or operating (or limited liability company) agreement of such Person as in effect on
the Closing Date and at all times since a date prior to the date of the resolutions
described in clause (B) below, (B) that attached thereto is a true and complete copy
of resolutions duly adopted by the Board of Directors (or equivalent body) of the Borrower
and the Domestic Subsidiaries authorizing the execution, delivery and performance of the
Loan Documents to which such Person is a party and, in the case of the Borrower, the
borrowings hereunder, and that such resolutions have not been modified, rescinded or amended
and are in full force and effect, (C) that the certificate or articles of incorporation or
organization of such Person have not been amended since the date of the last amendment
thereto shown on the certificate of good standing furnished pursuant to clause (i)
above, and (D) as to the incumbency and specimen signature of each officer executing any
Loan Document or any other document delivered in connection herewith on behalf of such
Person; and (iii) a certificate of another officer as to the incumbency and specimen
signature of the Secretary or Assistant Secretary executing the certificate pursuant to
clause (ii) above.

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     (g) The Administrative Agent shall have received a certificate, dated the Closing
Date and signed by a Financial Officer of the Borrower, confirming compliance with the
conditions precedent set forth in paragraphs (c) and (d) of this Article
IV.

     (h) The Administrative Agent shall have received all Fees and other amounts due and
payable on or prior to the Closing Date, including reimbursement or payment of all out of
pocket expenses required to be reimbursed or paid by the Borrower hereunder or under any
other Loan Document (including fees, disbursements and other charges of counsel for the
Administrative Agent, the Lead Arranger and the Lenders).

     (i) The results of legal, environmental, financial, tax and accounting due diligence
relating to the Acquired Business and the Transactions shall be satisfactory to the
Administrative Agent.

     (j) The Acquisition shall be consummated substantially simultaneously with the funding
of the Loan on the Closing Date in accordance with and on the terms described in the
Purchase Agreement, and no provision or condition of the Purchase Agreement shall have been
waived, amended, supplemented or otherwise modified in a manner that is adverse in any
material respect to the interests of the Lenders without the prior written consent of the
Administrative Agent. Each of the parties to the Purchase Agreement shall have complied in
all material respects with all covenants set forth therein and to be complied by it on or
prior to the Closing Date, and the Acquisition shall have been consummated in accordance
with the terms thereof without any amendment to the terms thereof that is material and
adverse to the interests of the Lenders that has not been consented to by the Lead Arranger.
The Administrative Agent and the Lenders shall have received copies of the Purchase
Agreement and all certificates, opinions and other documents delivered thereunder, certified
by a Financial Officer as being complete and correct.

     (k) The Borrower shall not be in breach of the terms of the engagement letter entered
between the Borrower and the Lead Arranger with respect to the issuance of (i) a combination
of unsecured senior notes and (ii) common and/or preferred equity securities, in each case
in connection with the refinancing of the Loans.

     (l) The Equity Issuance shall have been made.

     (m) After giving effect to the Transactions, the Borrower and its Subsidiaries shall
have outstanding no Indebtedness or Disqualified Stock other than (i) Indebtedness under the
Loan Documents as defined in this Agreement, (ii) Indebtedness listed on Schedule
6.01(if any), and (iii) the amounts outstanding under the Existing Senior Credit
Agreement and the Existing Notes, and (iv) Indebtedness described in the Borrower’s
quarterly report on Form 10-Q for the fiscal quarter ended September 30, 2006.

     (n) The Administrative Agent shall have been satisfied with the waiver of the Existing
Senior Credit Agreement permitting the transactions contemplated hereunder and a copy of
such waiver shall be certified on behalf of the Borrower by a Responsible Officer.

     (o) The Administrative Agent shall have received a certificate from the chief financial
officer (or officer with reasonably equivalent responsibilities) of the Borrower certifying
that each Loan Party is Solvent as of the Closing Date.

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     (p) The Lenders shall have received from the Loan Parties, to the extent
requested, all documentation and other information required by regulatory authorities under
applicable “know your customer” and anti-money laundering rules and regulations, including
the USA PATRIOT Act.

     (q) At least five (5) Business Days prior to the Closing Date, the Administrative Agent
and the Lenders shall have received (i) audited consolidated balance sheets and related
statements of income, stockholders’ equity and cash flows of the Target as of and for the
fiscal years ended October 31, 2004, October 31, 2005 and October 31, 2006 and (ii)
unaudited consolidated balance sheets and related statements of income, stockholders’ equity
and cash flows of the Target as of and for the fiscal nine-month periods ended July 31, 2005
and July 31, 2006, all (A) prepared in accordance with Regulation S-X and (B) shall not be
materially adversely inconsistent with the information provided by or on behalf of the
Borrower to the Administrative Agent or the Lead Arranger on or prior to October 25, 2006.

     (r) The Administrative Agent and the Lenders shall have received (i) forecasts, each in
form reasonably satisfactory to the Administrative Agent and the Lenders, of balance sheets,
income statements and cash flow statements for (A) each quarter for the first four quarters
following the Closing Date and (B) each year commencing with the first fiscal year following
the Closing Date until Maturity Date, and (ii) evidence that Consolidated EBITDA of the
Target and its subsidiaries for the fiscal twelve-month period ended October 31, 2006 was
not less than $46,000,000.

     (s) None of the (i) information and data (excluding financial projections) that have
been made available by or on behalf of the Borrower (whether prior to or on or after October
25, 2006) in connection with the Transactions and (b) all financial projections concerning
the Borrower, its Subsidiaries, the Target and the Transactions that have been made by or on
behalf of the Borrower and that have been made available to the Administrative Agent, the
Lead Arranger or the Lenders in connection with the Transactions shall be misleading or
incorrect in any material respect taken as a whole, in light of the circumstances under
which such statements were made.

     (t) No event or condition shall have occurred or shall have become known that in the
Administrative Agent and the Lenders’ judgment (i) could reasonably be expected to result in
a failure to satisfy any condition of their respective obligations hereunder or (ii) has had
or could reasonably be expected to have a Material Adverse Effect since December 31, 2005,
in the case of the Borrower, and since October 31, 2005 (after giving effect to the
Transactions), with respect to the Target.

     (u) (i) All governmental, regulatory, shareholder and third party approvals necessary
in connection with the Transactions shall have been obtained and be in full force and effect
(without the imposition of any conditions that are not acceptable to the Lenders) and the
Administrative Agent and the Lenders shall have received copies, certified by a Responsible
Officer of the Borrower, of all filings made with any Governmental Authority in connection
with the Transactions, (ii) all applicable waiting periods in connection with the
Transactions shall have expired without any action taken by any Governmental Authority, and
(iii) no law or regulation shall be applicable in the judgment of the Lenders, except, in
any of the conditions set out in clauses (i), (ii) or (iii), where failure of such condition
to be met would not reasonably be expected to restrain, prevent, or impose materially
adverse conditions upon the Transactions.

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     (v) There shall not be any pending or threatened action, investigation, litigation
or other proceedings (private or governmental) with respect to any of the Transactions that
could reasonably be expected to have a material adverse effect on (i) the business,
operations, condition (whether financial or otherwise), liabilities (contingent or
otherwise) or prospects of the Borrower and its Subsidiaries, taken as a whole and after
giving effect to the Transactions, or on any aspect of the Transactions, (ii) the ability of
the Loan Parties to perform their obligations under the Loan Documents or (iii) the rights
and remedies of the Lenders under the Loan Documents.

     (w) The Administrative Agent shall have received such other approvals, opinions or
documents as any Lender, acting through the Administrative Agent, may reasonably request.

ARTICLE V

Affirmative Covenants

     Each Loan Party covenants and agrees with each Lender that until the principal of and interest
on the Loans, all Fees and all other expenses or amounts payable under any Loan Document shall have
been paid in full, each Loan Party will, and will cause each of its Subsidiaries to:

          SECTION 5.01. Existence; Compliance with Laws and Contractual Obligations;
Businesses and Properties. (a) Do or cause to be done all things necessary to preserve, renew
and keep in full force and effect its legal existence under the laws of its jurisdiction of
organization.

     (b) (i) Do or cause to be done all things necessary to obtain, preserve, renew, extend and
keep in full force and effect the rights, licenses, permits, franchises, authorizations, patents,
copyrights, trademarks and trade names necessary or desirable to the conduct of its business, (ii)
maintain and operate such business in substantially the manner in which it is presently conducted
and operated, (iii) comply with (A) applicable laws, rules, regulations and decrees and orders of
any Governmental Authority (including Environmental Laws and ERISA), whether now in effect or
hereafter enacted, except in such instance in which any such law, rule, regulation, decree or order
is being contested in good faith or a bona fide dispute exists with respect thereto or the failure
to comply therewith could not reasonably be expected to have a Material Adverse Effect, and (B) the
obligations, covenants and conditions contained in any material indenture, agreement or other
agreement, except to the extent that the failure to comply therewith could not reasonably be
expected to have a Material Adverse Effect or cause the mandatory acceleration of amounts owing
thereunder prior to maturity, and (iv) maintain and preserve all property necessary or desirable to
the conduct of such business and keep such property in good repair, working order and condition and
from time to time make, or cause to be made, all repairs, renewals, additions, improvements and
replacements thereto necessary or desirable to the conduct of its business.

          SECTION 5.02. Insurance. (a) Keep its insurable properties adequately insured
at all times by financially sound and reputable insurers to such extent and against such risks,
including fire and other risks insured against by extended coverage, as is customary with companies
in the same or similar businesses operating in the same or similar locations.

     (b) Deliver original or certified copies of all such policies to the Administrative Agent
promptly upon request therefor; deliver to the Administrative Agent, prior to the cancellation,
modification or nonrenewal of any such policy of insurance, a copy of a renewal or replacement
policy (or other evidence of renewal of a policy previously delivered to the Administrative Agent)
together with evidence reasonably satisfactory to the Administrative Agent of payment of the
premium therefor.

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          SECTION 5.03. Taxes. Pay and discharge promptly when due all taxes, assessments and
governmental charges or levies imposed upon it or upon its income or profits or in respect of its
property, before the same shall become delinquent or in default; provided, however, that such
payment and discharge shall not be required with respect to any such tax, assessment, charge or
levy so long as the validity or amount thereof is (a) being contested in good faith, (b) by
appropriate proceedings diligently conducted and (c) with respect to which adequate reserves in
accordance with GAAP have been established;

          SECTION 5.04. Financial Statements, Reports, etc. In the case of the Borrower,
furnish to the Administrative Agent (who will distribute to each Lender):

     (a) within 90 days after the end of each Fiscal Year, its consolidated balance sheet
and related statements of income, stockholders’ equity and cash flows showing the financial
condition of the Borrower and its consolidated Subsidiaries as of the close of such Fiscal
Year and the results of its operations and the operations of such persons during such year,
together with comparative figures for the immediately preceding Fiscal Year, all in
reasonable detail and prepared in accordance with GAAP, all audited by UHY Mann Frankfort
Stein & Lipp CPAs, LLP, or other independent public accountants of recognized national
standing and accompanied by an opinion of such accountants (which opinion shall be without a
“going concern” or like qualification or exception and without any qualification or
exception as to the scope of such audit) to the effect that such consolidated financial
statements fairly present the financial condition and results of operations of the Borrower
and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP;

     (b) within 45 days after the end of each of the first three fiscal quarters of each
Fiscal Year, its consolidated balance sheet and related statements of income, stockholders’
equity and cash flows showing the financial condition of the Borrower and its consolidated
Subsidiaries as of the close of such fiscal quarter and the results of its operations and
the operations of such Persons during such fiscal quarter and the then elapsed portion of
the Fiscal Year, and comparative figures for the same periods in the immediately preceding
Fiscal Year, all certified by one of its Financial Officers as fairly presenting in all
material respects the financial condition and results of operations of the Borrower and its
consolidated Subsidiaries on a consolidated basis in accordance with GAAP, subject to normal
year-end audit adjustments and the absence of footnotes;

     (c) concurrently with any delivery of financial statements under paragraph (a)
or (b) above, a certificate of a Financial Officer of the Borrower certifying that
no Event of Default or Default has occurred or, if such an Event of Default or Default has
occurred, specifying the nature and extent thereof and any corrective action taken or
proposed to be taken with respect thereto; and concurrently with any delivery of financial
statements under paragraph (a) above, a certificate of the accounting firm
certifying that such accounting firm did not become aware of any Event of Default or Default
having occurred or, if such accounting firm shall have become aware than and Event of
Default or Default has occurred, specifying the nature thereof;

     (d) within 45 days after the commencement of each Fiscal Year of the Borrower, a
detailed consolidated budget for such Fiscal Year (including a projected consolidated
balance sheet and related statements of projected operations and cash flows as of the end of
and for such Fiscal Year and setting forth the material assumptions used for purposes of
preparing such budget) and, promptly when available, any material revisions of such budget;

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     (e) promptly after the same become publicly available, copies of all periodic
filings and other reports, proxy statements and other materials filed by the Borrower with
the United States Securities and Exchange Commission, or any Governmental Authority
succeeding to any or all of the functions of said Commission, or with any national
securities exchange, or distributed to its shareholders or other creditors;

     (f) promptly after the request by the Administrative Agent, all documentation and other
information that any Lender reasonably requests in order to comply with its ongoing
obligations under applicable “know your customer” and anti-money laundering rules and
regulations, including the USA PATRIOT Act;

     (g) promptly after the receipt thereof by the Borrower or any of its Subsidiaries, a
copy of any “management letter” received by any such person from its certified public
accountants and management’s response thereto;

     (h) concurrently with the delivery of the certificate delivered pursuant to clause
(a) above with respect to the end of a Fiscal Year, a certificate of a Financial Officer
of the Borrower setting forth the amount of Capital Expenditures during the relevant Fiscal
Year and the base amount for the next succeeding Fiscal Year; and

     (i) promptly, from time to time, such other information regarding the operations,
business affairs and financial condition of the Borrower or any Subsidiary of the Borrower,
or compliance with the terms of any Loan Document, as the Administrative Agent or any Lender
may reasonably request.

          SECTION 5.05. Litigation and Other Notices. Promptly upon any Responsible Officer
of the Borrower or any Subsidiary of the Borrower becoming aware thereof, furnish to the
Administrative Agent and each Lender written notice of the following:

     (a) (i) the occurrence of any Event of Default or Default, specifying the nature and
extent thereof and the corrective action (if any) taken or proposed to be taken with respect
thereto and (ii) the occurrence of any “Default” or “Event of Default” under the Existing
Senior Credit Agreement;

     (b) the filing or commencement of, or any written threat or notice of intention of any
person to file or commence, any action, suit or proceeding, whether at law or in equity or
by or before any Governmental Authority, against the Borrower or any of its Affiliates that
could reasonably be expected to result in liability of the Borrower and its Subsidiaries in
an aggregate amount exceeding $1,000,000;

     (c) the occurrence of any ERISA Event that, alone or together with any other ERISA
Events that have occurred, has resulted in liability of the Borrower and its Subsidiaries in
an aggregate amount exceeding $1,000,000;

     (d) the receipt by the Borrower or any Subsidiary of the Borrower of written notice of
violation of or potential liability under or pursuant to Environmental Laws that is
reasonably expected to result in the Borrower or any Subsidiary of the Borrower incurring
fines or penalties pursuant to Environmental Laws in amounts equal to $100,000 or other
Environmental Liabilities in an aggregate amount exceeding $500,000; and

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     (e) the occurrence of any other event that has resulted in, or could reasonably be
expected to result in, a Material Adverse Effect.

          SECTION 5.06. Maintaining Records; Access to Properties and Inspections; Maintenance
of Ratings. Keep proper books of record and account in which full, true and correct entries in
conformity with GAAP are made. Permit any representatives designated by the Administrative Agent
or any Lender to visit and inspect the financial records and the properties of the Borrower or its
Subsidiaries upon reasonable times and as often as reasonably requested, and to make extracts from
and copies of such financial records and permit any representatives designated by the
Administrative Agent or any Lender to discuss the affairs, finances and condition of such person
with the officers thereof and independent accountants therefor.

          SECTION 5.07. Additional Guarantors. With respect to any Domestic Subsidiary
created or acquired after the Closing Date, promptly (and in any event within thirty (30) days
after such Person becomes a Domestic Subsidiary) cause such Domestic Subsidiary to execute a
joinder agreement or such comparable documentation, in form and substance reasonably acceptable to
the Administrative Agent, to become a Guarantor.

          SECTION 5.08. Use of Proceeds. The proceeds of the Loans shall be used solely to
pay a portion of the cash purchase price of the Acquisition and to pay related fees, costs and
expenses.

ARTICLE VI

Negative Covenants

     Each Loan Party covenants and agrees that, until the principal of and interest on each Loan,
all Fees and all other expenses or amounts payable under any Loan Document have been paid in full,
each Loan Party will not, nor will it cause or permit any of its Subsidiaries to:

          SECTION 6.01. Indebtedness. Incur, create, assume or permit to exist any
Indebtedness, except:

     (a) Indebtedness in respect of the Existing Notes and Indebtedness existing on the
Closing Date and described in the Borrower’s quarterly report on Form 10-Q for the fiscal
quarter ended September 30, 2006 or set forth in Schedule 6.01 and any Permitted
Refinancing of any of the foregoing Indebtedness;

     (b) Indebtedness created hereunder and under the other Loan Documents;

     (c) intercompany Indebtedness of the Borrower and its Subsidiaries to extent permitted
by Section 6.04;

     (d) Indebtedness of the Borrower or any Subsidiary incurred to finance the acquisition,
construction or improvement of any asset, and any Permitted Refinancing thereof; provided
that (i) such Indebtedness (other than Permitted Refinancing) is incurred in one or more
separate transactions prior to or within ninety (90) days after such acquisition or the
completion of such construction or improvement and (ii) the aggregate principal amount of
Indebtedness permitted by this Section 6.01(d), when combined with the aggregate
principal amount of all Capital Lease Obligations incurred pursuant to Section
6.01(e), shall not exceed $10,000,000 at any time outstanding;

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     (e) Capital Lease Obligations in an aggregate principal amount, when combined with
the aggregate principal amount of all Indebtedness incurred pursuant to Sections
6.01(d), not in excess of $10,000,000 at any time outstanding;

     (f) Indebtedness of (i) any Person that becomes a Guarantor after the Closing Date
pursuant to a Permitted Acquisition or (ii) the Borrower and the Guarantors assumed in
connection with any Permitted Acquisition (so long as such Indebtedness is not incurred in
contemplation of such Permitted Acquisition) and any Permitted Refinancing in respect of the
foregoing; provided that both immediately prior and after giving effect thereto, no Default
shall exist or result therefrom;

     (g) Indebtedness under (or permitted by) the Existing Senior Credit Documents and any
Permitted Refinancing thereof or increase in the amount outstanding under the Existing
Senior Credit Document as permitted under the terms of the Existing Notes;

     (h) Hedging Agreements permitted pursuant to Section 6.04(d);

     (i) Guarantees by the Borrower or any of their Subsidiaries of Indebtedness of the
Borrower or any other Subsidiary of the Borrower otherwise permitted hereunder; provided
that (A) no guarantee by any Subsidiary of the Borrower that is not a Loan Party shall be
permitted unless such Subsidiary shall have also provided a Guarantee of the Obligations
substantially on the terms to the Lenders and (B) if the Indebtedness being Guaranteed is
subordinated to the Obligations, such Guarantee shall be subordinated to the Guarantee of
the Obligations on terms at least as favorable to the Lenders as those contained in the
subordination of such Indebtedness;

     (j) cash management obligations and Indebtedness incurred by the Borrower or any of its
Subsidiaries in respect of netting services, overdraft protections and similar arrangements
in each case in connection with cash management and deposit accounts; and

     (k) obligations in respect of surety, stay, customs and appeal bonds, performance
bonds, performance and completion guarantees and other obligations of a like nature provided
by the Borrower or any of its Subsidiaries, in each case in the ordinary course of business.

          SECTION 6.02. Liens. Create, incur, assume or permit to exist any Lien on any
property or any income or revenues or rights in respect of any thereof now owned or hereafter
acquired by it, except:

     (a) Liens on property of the Borrower and its Subsidiaries existing on the Closing Date
and set forth in Schedule 6.02; provided that the modification, refinancing,
extension, renewal and replacement thereof of the obligations secured or benefited by such
Liens (if such obligations constitute Indebtedness) is permitted by Section 6.01;

     (b) Liens securing the obligations of the Borrower and its Subsidiaries under the
Existing Senior Credit Documents;

     (c) any Lien existing on any property acquired by the Borrower or any of its
Subsidiaries after the Closing Date (if such Lien existed prior to the acquisition of such
asset) or existing on any property or assets of any Person that becomes a Subsidiary after
the Closing Date prior to the time such Person becomes a Subsidiary, as the case may be and
any modification, refinancing, extension, renewal and replacement thereof; provided that (i)
such Lien is not created in contemplation of or in connection with such acquisition or such
Person becoming a Subsidiary,

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(ii) such Lien does not apply to any other property or assets of the Borrower or any
Subsidiary of the Borrower and (iii) the Indebtedness secured thereby is permitted by
Section 6.01;

     (d) Liens for taxes not yet due and payable so long as adequate reserves in accordance
with GAAP have been established or, to the extent such taxes are due and payable, the
validity or amount thereof is being contested in good faith by appropriate proceedings
diligently conducted for which adequate reserves in accordance with GAAP have been
established;

     (e) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s, landlords,
construction contractors or other like Liens arising in the ordinary course of business;
provided that such Liens are for amounts not yet due and payable or delinquent so long as
adequate reserves in accordance with GAAP have been established or, to the extent such
amounts are so due and payable, such amounts are being contested in good faith by
appropriate proceedings for which adequate reserves in accordance with GAAP have been
established;

     (f) Liens incurred in the ordinary course of business in compliance with workmen’s
compensation, unemployment insurance and other social security laws or regulations; provided
that such Liens are for amounts not yet due and payable or delinquent so long as adequate
reserves in accordance with GAAP have been established or, to the extent such amounts are so
due and payable, such amounts are being contested in good faith by appropriate proceedings
for which adequate reserves in accordance with GAAP have been established;

     (g) deposits to secure the performance of bids, trade contracts (other than
Indebtedness for borrowed money), leases, statutory obligations, surety, stay, customs and
appeal bonds, performance bonds, performance and completion guarantees and other obligations
of a like nature incurred in the ordinary course of business;

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

     (i) purchase money security interests in property acquired (or, in the case of
improvements, constructed) by the Borrower or any Subsidiary of the Borrower; provided that
(i) such security interests secure Indebtedness permitted by Section 6.01(e), (ii)
such security interests are incurred, and the Indebtedness secured thereby is created,
within ninety (90) days after such acquisition (or construction), and (iii) such security
interests apply only to the property acquired and not to any other property or assets of the
Borrower or any of its Subsidiaries;

     (j) judgment Liens securing judgments not constituting an Event of Default under
Article VII;

     (k) any interest or title of a lessor or sublessor under any lease entered into by the
Borrower or any of its Subsidiaries in the ordinary course of business and covering only the
assets so leased and any Liens of such lessor’s or sublessor’s interest or title;

     (l) Liens (i) on cash deposits and other funds maintained with a depositary
institution, in each case arising in the ordinary course of business by virtue of any
statutory or common law provision relating to banker’s liens, (ii) attaching to commodity trading accounts or
other brokerage accounts incurred in the ordinary course of business, (iii) in favor of a
banking

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institution arising as a matter of law encumbering deposits (including the right of
set-off) and which are within the general parameters customary in the banking industry, (iv)
relating to a pooled deposit or sweep accounts of the Borrower or any of its Subsidiaries to
permit satisfaction of overdraft or similar obligations incurred in the ordinary course of
business of such person or (v) relating to purchase orders and other similar agreements
entered into in the ordinary course of business; provided that such Liens are non-consensual
and arise by operation of law;

     (m) leases or subleases granted to any other Person in the ordinary course of business;

     (n) Liens arising from precautionary UCC financing statement filings (or similar
filings under applicable Law) regarding leases entered into by the Borrower or any of its
Subsidiaries in the ordinary course of business; and

     (o) other Liens securing Indebtedness or other obligations outstanding in an aggregate
principal amount not to exceed $10,000,000.

          SECTION 6.03. Sale and Lease-Back Transactions. Enter into any arrangement,
directly or indirectly, with any person whereby it shall sell or transfer any property, real or
personal, used or useful in its business, whether now owned or hereafter acquired, and thereafter
rent or lease such property or other property which it intends to use for substantially the same
purpose or purposes as the property being sold or transferred unless (a) the sale or transfer of
such property is permitted by Section 6.05 and (b) any Capital Lease Obligations,
Guarantees or Liens arising in connection therewith are permitted by Sections 6.01 and
6.02, as applicable.

          SECTION 6.04. Investments, Loans and Advances. Purchase, hold or acquire any
Capital Stock or evidences of indebtedness of, make or permit to exist any loans or advances to, or
make or permit to exist any investment in any other person, or purchase or otherwise acquire all or
substantially all the assets or business of any other person or assets constituting a business
unit, line of business or division of another person (collectively, “Investments”), except:

     (a) (i) Investments by a Loan Party in another Loan Party, (ii) Investments by Loan
Parties in Subsidiaries of the Borrower that are not Loan Parties in an aggregate amount for
all such Investments not to exceed $10,000,000 at any time outstanding and (ii) Investments
by Subsidiaries of the Borrower that are not Loan Parties in other such Subsidiaries;

     (b) Investment in assets that were Permitted Investments at the time made;

     (c) Investments received in connection with the bankruptcy or reorganization of, or
settlement of delinquent accounts or other disputes with, any person, in each case in the
ordinary course of business and upon foreclosure with respect to any secured Investment or
other transfer of title with respect to any secured Investment;

     (d) the Borrower and its Subsidiaries may enter into Hedging Agreements that are not
speculative in nature and are entered into to hedge or mitigate risks to which the Borrower
or a Subsidiary is exposed in the conduct of its business;

     (e) Permitted Acquisitions;

     (f) Investments existing or contemplated on the date hereof and set forth on
Schedule 6.04 and any modification, replacement, renewal or extension thereof;
provided that the amount

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of the original Investment is not increased except by the terms of such Investment or
as otherwise permitted by this Section 6.04;

     (g) Investments in the ordinary course consisting of endorsements for collection or
deposit;

     (h) the Acquisition and Investments acquired by the Borrower in connection therewith;
and

     (i) additional Investments not to exceed $10,000,000 at any time outstanding.

          SECTION 6.05. Mergers, Consolidations, and Sales of Assets. (a) Wind up,
liquidate or dissolve its affairs or merge into or consolidate with any other person, or permit any
other person to merge into or consolidate with it, except any Subsidiary of the Borrower may merge
or consolidate into (A) the Borrower in a transaction in which the Borrower is the surviving
corporation or (B) any Guarantor so long as such Guarantor is the surviving corporation.

     (b) Make any Asset Sale except:

     (i) Asset Sales of obsolete, used, surplus or worn out property, whether now owned or
hereafter acquired, or of property no longer used or useful in the conduct of business of
the Borrower and its Subsidiaries, in each case in the ordinary course of business;

     (ii) Asset Sales of inventory in the ordinary course of business;

     (iii) Asset Sales by the Borrower or any of its Subsidiaries to the Borrower or any of
its Subsidiaries (in each case including any such Asset Sales effected pursuant to a merger,
liquidation or dissolution); provided that if the transferor of such property is a Loan
Party (A) the transferee thereof must either be the Borrower or a Guarantor or (B) to the
extent such transaction constitutes an Investment, such transaction is permitted under
Section 6.04;

     (iv) Asset Sales of Permitted Investments;

     (v) leases or subleases of property in the ordinary course of business and which do not
materially interfere with the business of the Borrower and its Subsidiaries;

     (vi) Asset Sales in the ordinary course of business consisting of the abandonment of
intellectual property rights which, in the reasonable good faith determination of the
Borrower, are not material to the conduct of the business of the Borrower and its
Subsidiaries; and

     (vii) other Asset Sales so long as (A) no Default has occurred and is continuing, (B)
such sale is for fair market value, and (C) not less than 75% of the consideration therefor
is received in cash.

          SECTION 6.06. Restricted Payments; Restrictive Agreements. (a) Declare or make,
or agree to declare or make, directly or indirectly, any Restricted Payment, or incur any
obligation (contingent or otherwise) to do so except:

     (i) any Subsidiary of the Borrower may declare and make Restricted Payments ratably to
its equity holders;

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     (ii) the Borrower and its Subsidiaries may declare and make Restricted Payments payable
solely in the Capital Stock of such Person;

     (iii) on the Closing Date, the Borrower and its Subsidiaries may consummate the
Transactions;

     (iv) to the extent constituting Restricted Payments, the Borrower and its Subsidiaries
may enter into transactions expressly permitted by Section 6.06 or 6.07;

     (v) repurchases of Capital Stock of the Borrower deemed to occur upon exercise of stock
options or warrants if such Capital Stock represent a portion of the exercise price of such
options or warrants; and

     (vi) the Borrower and its Subsidiaries may purchase, redeem or otherwise acquire
Capital Stock issued by it with the proceeds from substantially concurrent issue of new
shares of its common stock or other common Capital Stock.

     (b) Enter into, incur or permit to exist any agreement or other arrangement that prohibits,
restricts or imposes any condition upon:

     (i) the ability of the Borrower or any Subsidiary of the Borrower to create, incur or
permit to exist any Lien upon any of its property or assets to secure the Obligations, or

     (ii) the ability of any Subsidiary of the Borrower to pay dividends or other
distributions with respect to any of its Capital Stock or to make or repay loans or advances
to the Borrower or any other Subsidiary of the Borrower or to Guarantee Indebtedness of the
Borrower or any other Subsidiary of the Borrower; provided that

     (A) the foregoing shall not apply to

     (1) restrictions and conditions imposed by law or by the Existing
Senior Credit Agreement, the Existing Notes or any Loan Document;

     (2) customary restrictions and conditions contained in agreements
relating to an Asset Sale of a Subsidiary of the Borrower or any property
pending such sale; provided that such restrictions and conditions apply only
to the Subsidiary of the Borrower or property that is to be sold;

     (3) restrictions or conditions imposed by any agreement relating to
secured Indebtedness permitted by this Agreement if such restrictions or
conditions apply only to the property or assets securing such Indebtedness;
and

     (B) clause (i) of the foregoing shall not apply to customary provisions
in leases, subleases, licenses, sublicenses and other contracts restricting the
assignment thereof.

          SECTION 6.07. Transactions with Affiliates. Except for transactions by or among
Loan Parties, sell or transfer any property or assets to, or purchase or acquire any property or
assets from, or otherwise engage in any other transactions with, any of its Affiliates, except:

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     (a) the Borrower or any Subsidiary of the Borrower may engage in any of the
foregoing transactions at prices and on terms and conditions not less favorable to the
Borrower or such Subsidiary that could be obtained on an arm’s-length transaction with a
Person other than an Affiliate;

     (b) Restricted Payments may be made to the extent provided by Section 6.06; and

     (c) Investments may be made to the extent provided by Section 6.04.

          SECTION 6.08. Change in Nature of Business. Engage at any time in any material line
of business or business activity other than the business conducted by it and its Subsidiaries on
the Closing Date (after giving effect to the Transactions) and business activities reasonably
incidental, ancillary or related thereto.

          SECTION 6.09. Other Indebtedness and Agreements. (a) Permit any waiver,
supplement, modification, amendment, termination, release, refinancing or refunding of any Related
Document except to the extent such waiver, supplement, modification, amendment, termination,
release, refinancing or refunding do not materially and adversely affect the interests of the
Lenders under the Loan Documents.

     (b) Change its capital structure (including in the terms of its outstanding Capital Stock) or
otherwise amend its Constituent Documents, except for changes and amendments that do not materially
affect the rights and privileges of the Borrower or any Subsidiary of the Borrower and do not
materially affect the interests of the Lenders under the Loan Documents.

          SECTION 6.10. Partnership, etc. Become a general partner in any limited partnership
or permit any of its Subsidiaries to do so except through a special purpose entity.

          SECTION 6.11. Accounting Changes; Fiscal Year. Change its (a) accounting treatment
and reporting practices or tax reporting treatment, except as required or permitted by GAAP and
disclosed to the Lenders and the Administrative Agent or (b) fiscal year.

          SECTION 6.12. Capital Expenditures. Permit the aggregate amount of Capital
Expenditures made by the Borrower and its Subsidiaries in any fiscal year set forth below to exceed
the amount set forth below for such fiscal year:

	 	 	 	 	 
	Fiscal Year	 	Amount
	2007

	 	$	48,000,000	 
	2008 until Maturity

	 	$	43,000,000	 

ARTICLE VII

Events of Default

     In case of the happening of any of the following events (“Events of Default”):

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     (a) any representation or warranty made or deemed made in any Loan Document or any
representation, warranty, statement or information contained in any report, certificate,
financial statement or other instrument furnished pursuant to any Loan Document, shall prove
to have been false or misleading in any material respect when so made, deemed made or
furnished;

     (b) default shall be made in the payment of any principal of a Loan when and as the
same shall become due and payable, whether at the due date thereof or at a date fixed for
prepayment thereof or by acceleration thereof or otherwise;

     (c) default shall be made in the payment of interest on a Loan or any Fee or other
amount (other than an amount referred to in (b) above) due under any Loan Document, when and
as the same shall become due and payable, and such default shall continue unremedied for a
period of three (3) Business Days;

     (d) default shall be made in the due observance or performance by the Borrower or any
of its Subsidiaries of any covenant, condition or agreement contained in Section
5.01(a), 5.05(a) or 5.07 or in Article VI;

     (e) default shall be made in the due observance or performance by the Borrower or any
Subsidiary of the Borrower of any covenant, condition or agreement contained in any Loan
Document (other than those specified in clause (b), (c) or (d)
above) and such default shall continue unremedied for a period of thirty (30) days after the
earlier of (i) written notice thereof from the Administrative Agent to the Borrower or (ii)
the Borrower’s knowledge of such default;

     (f) (i) the Borrower or any Subsidiary of the Borrower shall fail to pay any principal
or interest, regardless of amount, due in respect of any Material Indebtedness, when and as
the same shall become due and payable (after giving effect to an applicable grace period),
or (ii) any other event or condition occurs that results in any Material Indebtedness
becoming due prior to its scheduled maturity or that enables or permits (with or without the
giving of notice, the lapse of time or both) the holder or holders of such Material
Indebtedness or any trustee or agent on its or their behalf to cause any Material
Indebtedness to become due, or to require the prepayment, repurchase, redemption or
defeasance thereof, prior to its scheduled maturity; provided that clause (ii) shall
not apply to secured Material Indebtedness that becomes due as a result of the voluntary
sale or transfer of the property or assets securing such Material Indebtedness or as a
result of the exercise of any right of optional prepayment or redemption of such Material
Indebtedness.

     (g) an involuntary proceeding shall be commenced or an involuntary petition shall be
filed in a court of competent jurisdiction seeking (i) relief in respect of the Borrower or
any Subsidiary of the Borrower, or of a substantial part of the property or assets of the
Borrower or a Subsidiary of the Borrower, under Title 11 of the United States Code, as now
constituted or hereafter amended, or any other Federal, state or foreign bankruptcy,
insolvency, receivership or similar law, (ii) the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Borrower or any Subsidiary of the Borrower or for a
substantial part of the property or assets of the Borrower or a Subsidiary of the Borrower
or (iii) the winding-up or liquidation of the Borrower or any Subsidiary of the Borrower;
and such proceeding or petition shall continue undismissed for 60 days or an order or decree
approving or ordering any of the foregoing shall be entered;

     (h) the Borrower or any Subsidiary of the Borrower shall (i) voluntarily commence any
proceeding or file any petition seeking relief under Title 11 of the United States Code, as
now

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constituted or hereafter amended, or any other Federal, state or foreign
bankruptcy, insolvency, receivership or similar law, (ii) consent to the institution of any
proceeding or the filing of any petition described in paragraph (g) above, (iii)
apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Borrower or any Subsidiary of the Borrower or for a
substantial part of the property or assets of the Borrower or any Subsidiary of the
Borrower, (iv) file an answer admitting the material allegations of a petition filed against
it in any such proceeding, (v) make a general assignment for the benefit of creditors, (vi)
become unable, admit in writing its general inability or fail generally to pay its debts as
they become due or (vii) take any action for the purpose of effecting any of the foregoing;

     (i) one or more judgments for the payment of money in an aggregate amount exceeding
$2,000,000 (except to the extent fully covered by insurance pursuant to which the insurer
has accepted liability therefore in writing) shall be rendered against the Borrower, any
Subsidiary of the Borrower or any combination thereof and the same shall remain undischarged
for a period of thirty (30) consecutive days during which execution shall not be effectively
stayed, or any action shall be legally taken by a judgment creditor to levy upon assets or
properties of the Borrower or any Subsidiary of the Borrower to enforce any such judgment;

     (j) an ERISA Event shall have occurred that, when taken together with all other ERISA
Events, could reasonably be expected to result in liability of the Borrower and its ERISA
Affiliates in an aggregate amount exceeding $1,000,000;

     (k) any Guarantee for any reason shall cease to be in full force and effect (other than
in accordance with its terms), or any Guarantor shall deny in writing that it has any
further liability (other than as a result of the discharge of such Guarantor in accordance
with the terms of the Loan Documents);

     (l) Any Loan Document or any material provisions thereof shall at any time and for any
reason case to be valid and binding on the Borrower or any Guarantor, or any the Borrower or
any Guarantor shall so claim in writing to any Lender; or

     (m) any Change in Control shall occur;

then, and in every such event (other than an event with respect to the Borrower described in
paragraph (g) or (h) above), and at any time thereafter during the continuance of
such event, the Administrative Agent may, and at the request of the Required Lenders shall, by
notice to the Borrower, take either or both of the following actions, at the same or different
times: declare the Loans then outstanding to be forthwith due and payable in whole or in part, whereupon the principal of the Loans so declared to be due and
payable, together with accrued interest thereon and any unpaid accrued Fees and all other
liabilities of the Borrower accrued hereunder and under any other Loan Document, shall become
forthwith due and payable, without presentment, demand, protest or any other notice of any kind,
all of which are hereby expressly waived by the Borrower, anything contained herein or in any other
Loan Document to the contrary notwithstanding; and in any event with respect to the Borrower
described in paragraph (g) or (h) above, the principal of the Loans then
outstanding, together with accrued interest thereon and any unpaid accrued Fees and all other
liabilities of the Borrower accrued hereunder and under any other Loan Document, shall
automatically become due and payable, without presentment, demand, protest or any other notice of
any kind, all of which are hereby expressly waived by the Borrower, anything contained herein or in
any other Loan Document to the contrary notwithstanding.

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ARTICLE VIII

Guarantee

          SECTION 8.01. The Guarantee. The Guarantors hereby jointly and severally guarantee
to each Lender and their respective successors and assigns, the prompt payment in full when due
(whether at stated maturity, by required prepayment, declaration, demand, by acceleration or
otherwise) of the principal of and interest (including any interest, fees, costs or charges that
would accrue but for the provisions of the Title 11 of the United States Code after any bankruptcy
or insolvency petition under Title 11 of the United States Code) on the Loans made by the Lenders
to, and the promissory notes held by each Lender of, Borrower, and all other Obligations from time
to time owing to the Lenders by any Loan Party under any Loan Document, in each case strictly in
accordance with the terms thereof (such obligations being herein collectively called the
“Guaranteed Obligations”). The Guarantors hereby jointly and severally agree that if Borrower or
other Guarantor(s) shall fail to pay in full when due (whether at stated maturity, by acceleration
or otherwise) any of the Guaranteed Obligations, the Guarantors will promptly pay the same in cash,
without any demand or notice whatsoever, and that in the case of any extension of time of payment
or renewal of any of the Guaranteed Obligations, the same will be promptly paid in full when due
(whether at extended maturity, by acceleration or otherwise) in accordance with the terms of such
extension or renewal.

          SECTION 8.02. Obligations Unconditional. The obligations of the Guarantors under
Section 8.01 shall constitute a guaranty of payment and to the fullest extent permitted by
applicable law, are absolute, irrevocable and unconditional, joint and several, irrespective of the
value, genuineness, validity, regularity or enforceability of the Guaranteed Obligations of
Borrower under this Agreement, the promissory notes, if any, or any other agreement or instrument
referred to herein or therein, or any substitution, release or exchange of any other guarantee of
or security for any of the Guaranteed Obligations, and, irrespective of any other circumstance
whatsoever that might otherwise constitute a legal or equitable discharge or defense of a surety or
Guarantor (except for payment in full). Without limiting the generality of the foregoing, to the
extent permitted by applicable law, it is agreed that the occurrence of any one or more of the
following shall not alter or impair the liability of the Guarantors hereunder which shall remain
absolute, irrevocable and unconditional under any and all circumstances as described above:

     (a) at any time or from time to time, without notice to the Guarantors, the time for any
performance of or compliance with any of the Guaranteed Obligations shall be extended, or such
performance or compliance shall be waived;

     (b) any of the acts mentioned in any of the provisions of this Agreement or the promissory
notes, if any, or any other agreement or instrument referred to herein or therein shall be done or
omitted;

     (c) the maturity of any of the Guaranteed Obligations shall be accelerated, or any of the
Guaranteed Obligations shall be amended in any respect, or any right under the Loan Documents or
any other agreement or instrument referred to herein or therein shall be amended or waived in any
respect or any other guarantee of any of the Guaranteed Obligations or any security therefor shall
be released or exchanged in whole or in part or otherwise dealt with;

     (d) the release of any other Guarantor pursuant to Section 8.09.

To the extent permitted by applicable law, the Guarantors hereby expressly waive diligence,
presentment, demand of payment, protest and all notices whatsoever, and any requirement that any
Lender exhaust any
right, power or remedy or proceed against the Borrower under this Agreement or the promissory
notes, if

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any, or any other agreement or instrument referred to herein or therein, or against any
other person under any other guarantee of, or security for, any of the Guaranteed Obligations. To
the extent permitted by applicable law, the Guarantors waive any and all notice of the creation,
renewal, extension, waiver, termination or accrual of any of the Guaranteed Obligations and notice
of or proof of reliance by any Lender upon this Guarantee or acceptance of this Guarantee, and the
Guaranteed Obligations, and any of them, shall conclusively be deemed to have been created,
contracted or incurred in reliance upon this Guarantee, and all dealings between the Borrower and
the Lenders shall likewise be conclusively presumed to have been had or consummated in reliance
upon this Guarantee. To the extent permitted by applicable law, this Guarantee shall be construed
as a continuing, absolute, irrevocable and unconditional guarantee of payment without regard to any
right of offset with respect to the Guaranteed Obligations at any time or from time to time held by
the Lenders, and the obligations and liabilities of the Guarantors hereunder shall not be
conditioned or contingent upon the pursuit by the Lenders or any other person at any time of any
right or remedy against the Borrower or against any other person which may be or become liable in
respect of all or any part of the Guaranteed Obligations or against any collateral security or
guarantee therefor or right of offset with respect thereto. To the extent permitted by applicable
law, this Guarantee shall remain in full force and effect and be binding in accordance with and to
the extent of its terms upon the Guarantors and the successors and assigns thereof, and shall inure
to the benefit of the Lenders, and their respective successors and assigns, notwithstanding that
from time to time during the term of this Agreement there may be no Guaranteed Obligations
outstanding.

          SECTION 8.03. Reinstatement. The obligations of the Guarantors under this
Article VIII shall be automatically reinstated if and to the extent that for any reason any
payment by or on behalf of the Borrower or other Loan Party in respect of the Guaranteed
Obligations is rescinded or must be otherwise restored by any holder of any of the Guaranteed
Obligations, whether as a result of any proceedings in bankruptcy or reorganization or otherwise.

          SECTION 8.04. Subrogation; Subordination. Each Guarantor hereby agrees that until
the indefeasible payment and satisfaction in full in cash of all Guaranteed Obligations under this
Agreement it shall waive any claim and shall not exercise any right or remedy, direct or indirect,
arising by reason of any performance by it of its guarantee in Section 8.01, whether by
subrogation or otherwise, against the Borrower or any other Guarantor of any of the Guaranteed
Obligations or any security for any of the Guaranteed Obligations.

          SECTION 8.05. Remedies. The Guarantors jointly and severally agree that, to the
extent permitted by applicable law, as between the Guarantors and the Lenders, the obligations of
the Borrower under this Agreement and the promissory notes, if any, may be declared to be forthwith
due and payable as provided in Article VII (and shall be deemed to have become
automatically due and payable in the circumstances provided in Article VII) for purposes of
Section 8.01, notwithstanding any stay, injunction or other prohibition preventing such
declaration (or such obligations from becoming automatically due and payable) as against the
Borrower and that, in the event of such declaration (or such obligations being deemed to have
become automatically due and payable), such obligations (whether or not due and payable by the
Borrower) shall forthwith become due and payable by the Guarantors for purposes of Section
8.01.

          SECTION 8.06. Instrument for the Payment of Money. Each Guarantor hereby
acknowledges that the guarantee in this Article VIII constitutes an instrument for the
payment of money, and consents and agrees that any Lender, at its sole option, in the event of a
dispute by such Guarantor in the payment of any moneys due hereunder, shall have the right to bring
a motion-action under New York CPLR Section 3213.

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          SECTION 8.07. Continuing Guarantee. The guarantee in this Article VIII is a
continuing guarantee of payment, and shall apply to all Guaranteed Obligations whenever arising.

          SECTION 8.08. General Limitation on Guarantee Obligations. In any action or
proceeding involving any state corporate, limited partnership or limited liability company law, or
any applicable state, federal or foreign bankruptcy, insolvency, reorganization or other law
affecting the rights of creditors generally, if the obligations of any Guarantor under Section
8.01 would otherwise be held or determined to be void, voidable, invalid or unenforceable, or
subordinated to the claims of any other creditors, on account of the amount of its liability under
Section 8.01, then, notwithstanding any other provision to the contrary, the amount of such
liability shall, without any further action by such Guarantor, any Loan Party or any other person,
be automatically limited and reduced to the highest amount (after giving effect to the right of
contribution established in Section 8.10) that is valid and enforceable and not
subordinated to the claims of other creditors as determined in such action or proceeding.

          SECTION 8.09. Release of Guarantors. If, in compliance with the terms and
provisions of the Loan Documents, all or substantially all of the Capital Stock or property of any
Guarantor are sold or otherwise transferred (a “Transferred Guarantor”) to a person or persons,
none of which is the Borrower or a Subsidiary of the Borrower, such Transferred Guarantor shall,
upon the consummation of such sale or transfer, be automatically released from its obligations
under this Agreement, and, so long as the Borrower shall have provided the Lenders such
certifications or documents as any Lender shall reasonably request, the Lenders shall take such
actions as are necessary to effect each release described in this Section 8.09 in
accordance with the terms hereof, so long as the Borrower shall have provided the Lenders such
certifications or documents as any Lender shall reasonably request in order to demonstrate
compliance with this Agreement.

          SECTION 8.10. Right of Contribution. Each Guarantor hereby agrees that to the
extent that a Guarantor shall have paid more than its proportionate share of any payment made
hereunder, such Guarantor shall be entitled to seek and receive contribution from and against any
other Guarantor hereunder which has not paid its proportionate share of such payment. Each
Guarantor’s right of contribution shall be subject to the terms and conditions of Section
8.04. The provisions of this Section 8.10 shall in no respect limit the obligations
and liabilities of any Guarantor to the Lenders, and each Guarantor shall remain liable to the
Lenders for the full amount guaranteed by such Guarantor hereunder.

ARTICLE IX

The Administrative Agent

          SECTION 9.01. Appointment and Authority. Each of the Lenders hereby irrevocably
appoints Royal Bank its agent and authorizes the Administrative Agent to take such actions on its
behalf and to exercise such powers as are delegated to the Administrative Agent by the terms of the
Loan Documents, together with such actions and powers as are reasonably incidental thereto.

          SECTION 9.02. Rights as a Lender. The bank serving as the Administrative Agent
hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and
may exercise the same as though it were not an agent, and such bank and its Affiliates may accept
deposits from, lend money to and generally engage in any kind of business with the Borrower or any
Subsidiary of the Borrower or other Affiliate thereof as if it were not an agent hereunder.

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          SECTION 9.03. Exculpatory Provisions. The Administrative Agent shall not have any
duties or obligations except those expressly set forth in the Loan Documents. Without limiting the
generality of the foregoing, (a) the Administrative Agent shall not be subject to any fiduciary or
other implied duties, regardless of whether a Default or Event of Default has occurred and is
continuing, (b) the Administrative Agent shall not have any duty to take any discretionary action
or exercise any discretionary powers, except discretionary rights and powers expressly contemplated
hereby that the Administrative Agent is instructed in writing to exercise by the Required Lenders
(or such other number or percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 10.08), and (c) except as expressly set forth in the Loan Documents,
the Administrative Agent shall not have any duty to disclose, nor shall it be liable for the
failure to disclose, any information relating to the Borrower or any of its Subsidiaries that is
communicated to or obtained by the bank serving as Administrative Agent or any of its Affiliates in
any capacity. The Administrative Agent shall not be liable for any action taken or not taken by it
with the consent or at the request of the Required Lenders (or such other number or percentage of
the Lenders as shall be necessary under the circumstances as provided in Section 10.08) or
in the absence of its own gross negligence or willful misconduct. The Administrative Agent shall
not be deemed to have knowledge of any Default or Event of Default unless and until written notice
thereof is given to the Administrative Agent by the Borrower or a Lender, and the Administrative
Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement,
warranty or representation made in or in connection with any Loan Document, (ii) the contents of
any certificate, report or other document delivered thereunder or in connection therewith, (iii)
the performance or observance of any of the covenants, agreements or other terms or conditions set
forth in any Loan Document, (iv) the validity, enforceability, effectiveness or genuineness of any
Loan Document or any other agreement, instrument or document, or (v) the satisfaction of any
condition set forth in Article IV or elsewhere in any Loan Document, other than to confirm
receipt of items expressly required to be delivered to the Administrative Agent.

          SECTION 9.04. Reliance by Agent. The Administrative Agent shall be entitled to rely
upon, and shall not incur any liability for relying upon, any notice, request, certificate,
consent, statement, instrument, document or other writing believed by it to be genuine and to have
been signed or sent by the proper person. The Administrative Agent may also rely upon any
statement made to it orally or by telephone and believed by it to have been made by the proper
person, and shall not incur any liability for relying thereon. The Administrative Agent may
consult with legal counsel (who may be counsel for the Borrower or any Affiliate thereof),
independent accountants and other experts selected by it, and shall not be liable for any action
taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

          SECTION 9.05. Delegation of Duties. The Administrative Agent may perform any
and all its duties and exercise its rights and powers by or through any one or more sub-agents
appointed by it. The Administrative Agent and any such sub-agent may perform any and all its
duties and exercise its rights and powers by or through their respective Related Parties. The
exculpatory provisions of the preceding paragraphs shall apply to any such sub-agent and to the
Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their
respective activities in connection with the syndication of the credit facilities provided for
herein as well as activities as agent.

          SECTION 9.06. Other Agents. None of the Lenders or other Persons identified on the
facing page or signature pages of this Agreement as a “syndication agent,” “documentation agent,”
“bookrunner,” or “lead arranger” shall have any right, power, obligation, liability, responsibility
or duty under this Agreement other than to the extent expressly set forth herein and, in the case
of such Lenders, those applicable to all Lenders as such. Without limiting the foregoing, none of
the Lenders or other Persons so identified shall have or be deemed to have any fiduciary
relationship with any Lender. Each

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Lender acknowledges that it has not relied, and will not rely, on any of the Lenders or other
Persons so identified in deciding to enter into this Agreement or in taking or not taking action
hereunder.

          SECTION 9.07. Resignation of Agent. Subject to the appointment and acceptance of a
successor Agent as provided below, the Administrative Agent may resign at any time by notifying the
Lenders and the Borrower. Upon receipt of any such notice of resignation of the Administrative
Agent, the Required Lenders shall have the right, in consultation with the Borrower, to appoint a
successor which shall be a commercial banking institution organized under the laws of the United
States or any State or a United States branch or agency of a commercial banking institution, in
each case having a combined capital and surplus of at least $500,000,000 or which shall otherwise
be reasonably acceptable to the Borrower, such acceptance not to be unreasonably withheld or
delayed. Upon the acceptance of its appointment as Administrative Agent hereunder by a successor,
such successor shall succeed to and become vested with all the rights, powers, privileges and
duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder. The fees payable by the Borrower to a
successor Administrative Agent shall be the same as those payable to its predecessor unless
otherwise agreed between the Borrower and such successor. After the Administrative Agent’s
resignation hereunder, the provisions of this Article IX and Section 10.05 shall
continue in effect for the benefit of such retiring Administrative Agent, its sub-agents and their
respective Related Parties in respect of any actions taken or omitted to be taken by any of them
while acting as Administrative Agent.

          SECTION 9.08. Non-reliance on Agent and Other Lenders. Each Lender acknowledges
that it has, independently and without reliance upon the Administrative Agent or any other Lender
and based on such documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also acknowledges that it will,
independently and without reliance upon the Administrative Agent or any other Lender and based on
such documents and information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement or any other Loan
Document, any related agreement or any document furnished hereunder or thereunder.

          SECTION 9.09. Indemnification. (a) Each Lender severally agrees to indemnify
the Administrative Agent (to the extent not promptly reimbursed by the Borrower under Section
10.05) from and against such Lender’s ratable share of any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind
or nature whatsoever that may be imposed on, incurred by, or asserted against the Administrative
Agent in any way relating to or arising out of the Loan Documents or any action taken or omitted by
the Administrative Agent under the Loan Documents (the “Indemnified Costs”); provided, however,
that no Lender shall be liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgment, suits, costs, expenses or disbursements resulting from the
Administrative Agent’s gross negligence or willful misconduct as found in a final non-appealable
judgment by a court of competent jurisdiction. Without limitation of the foregoing, each Lender
agrees to reimburse the Administrative Agent promptly upon demand for it ratable share of any costs
and expenses (including, without limitation, fees and expenses of counsel) payable by the Borrower
under Section 10.05, to the extent that the Administrative Agent is not promptly reimbursed
for such costs and expenses by the Borrower. In the case of any investigation, litigation or
proceeding giving rise to any Indemnified Costs, this Section 9.09 applies whether any such
investigation, litigation or proceeding is brought by any Lender or any other Person.

     (b) The failure of any Lender to reimburse the Administrative Agent promptly upon demand for
its ratable share of any amount required to be paid by such Lender to the Administrative Agent as
provided herein shall not relieve any other Lender of its obligation hereunder to reimburse the
Administrative Agent for its ratable share of such amount, but no Lender shall be responsible for
the failure of any other Lender to reimburse the Administrative Agent for such other Lender’s
ratable share of

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such amount. Without prejudice to the survival of any other agreement of any Lender
hereunder, the agreement and obligations of each Lender contained in this Section 9.09
shall survive the payment in full of principal, interest and all other amount payable hereunder and
under the other Loan Documents.

ARTICLE X

Miscellaneous

          SECTION 10.01. Notices. Notices and other communications provided for herein shall
be in writing and shall be delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by fax, as follows:

     (a) if to the Borrower, to it at Allis-Chalmers Energy Inc., 5075 Westheimer, Suite
890, Houston, Texas 77056, Attention of: General Counsel (Fax No. 713-369-0555), cc:
Andrews Kurth LLP, 600 Travis Street, Suite 4200, Houston , Texas 77002, Attention of:
Henry Havre, Esq. (Fax No. 713-238-7279);

     (b) if to Royal Bank as the Administrative Agent, to Royal Bank of Canada, Agency
Services Group, Royal Bank Plaza, P.O. Box 50, 200 Bay Street, 12th Floor, South Tower,
Toronto, Ontario M5J 2W7, Canada, Attention: Manager, Agency (Fax No. (416) 842-4023); and

     (c) if to a Lender, to it at its address (or fax number) set forth on Schedule
2.01 or in the Assignment and Acceptance pursuant to which such Lender shall have become
a party hereto.

     All notices and other communications given to any party hereto in accordance with the
provisions of this Agreement shall be deemed to have been given on the date of receipt if delivered
by hand or overnight courier service or sent by fax or on the date five (5) Business Days after
dispatch by certified or registered mail if mailed, in each case delivered, sent or mailed
(properly addressed) to such party as provided in this Section 10.01 or in accordance with
the latest unrevoked direction from such party given in accordance with this Section 10.01.
As agreed to among the Borrower, the Administrative Agent and the applicable Lenders from time to
time in writing, notices and other communications may also be delivered or furnished by e-mail;
provided that the foregoing shall not apply to notices pursuant to Article II or to
compliance and no Event of Default certificates delivered pursuant to Section 5.04(d)
unless otherwise agreed by the Administrative Agent; provided, further, that approval of such
procedures may be limited to particular notices or communications. All such notices and other
communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an
acknowledgement from the intended recipient (such as by the “return receipt requested” function, as
available, return e-mail or other written acknowledgement); provided that if not given during the
normal business hours of the recipient, such notice or communication shall be deemed to have been
given at the opening of business on the next Business Day for the recipient.

          SECTION 10.02. Survival of Agreement. All covenants, agreements, representations
and warranties made by the Loan Parties herein and in the certificates or other instruments
prepared or delivered in connection with or pursuant to this Agreement or any other Loan Document,
shall be considered to have been relied upon by the Lenders and shall survive the making by the
Lenders of their respective advances hereunder, regardless of any investigation made by the Lenders
or on their behalf, and shall continue in full force and effect as long as the principal of or any
accrued interest on the Loan or any Fee or any other amount payable under this Agreement or any
other Loan Document is outstanding. The provisions of Sections 2.15, 2.17,
2.21, 9.09 and 10.05 shall remain operative and in full force and

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effect regardless of the expiration of the term of this Agreement, the consummation of the
transactions contemplated hereby, the repayment of any of the Loan, the invalidity or
unenforceability of any term or provision of this Agreement or any other Loan Document, or any
investigation made by or on behalf of the Administrative Agent or any Lender.

          SECTION 10.03. Binding Effect. This Agreement shall become effective when it shall
have been executed by the Borrower, the Administrative Agent, the Lead Arranger and the Lenders and
when the Administrative Agent and the Lenders shall have received counterparts hereof which, when
taken together, bear the signatures of each of the other parties hereto.

          SECTION 10.04. Successors and Assigns. (a) Whenever in this Agreement any of
the parties hereto is referred to, such reference shall be deemed to include the permitted
successors and assigns of such party; and all covenants, promises and agreements by or on behalf of
the Borrower, the Administrative Agent, or the Lenders that are contained in this Agreement shall
bind and inure to the benefit of their respective successors and assigns.

     (b) Any Lender may assign to one or more assignees all or a portion of its interests, rights
and obligations under this Agreement (including all or a portion of its ratable share of a Loan),
each such assignment by a Lender to be of a ratable portion of its share of the Bridge A Loan and
the Bridge B Loan; provided, however, that (i) the Administrative Agent and the Borrower must give
its prior written consent to such assignment (which consent shall not be unreasonably withheld or
delayed), provided that the consent of the Borrower shall not be required to any such assignment
(A) made to a Lender or an Affiliate or Related Fund of a Lender, or (B) during the continuance of
any Default or Event of Default and (ii) (A) in the case of any assignment, other than assignments
to any Lender or any Affiliate or Related Fund thereof, the amount of the Commitments or advances
under the Loans of the assigning Lender subject to each such assignment (determined as of the date
of the Assignment and Acceptance with respect to such assignment is delivered to the Administrative
Agent) shall not be less than $1,000,000 (or if less, the entire remaining amount of such Lender’s
ratable share of the applicable Loan) and shall be in an amount that is an integral multiple of
$1,000,000; provided, however, that simultaneous assignments to two or more Related Funds shall be
combined for purposes of determining whether the minimum assignment requirement is met, and (B) in
the case of any assignment to a Lender or any Affiliate or Related Fund thereof, after giving
effect to such assignment, the ratable share of the applicable Loan of the assigning Lender and its
Affiliates and Related Funds shall be zero or not less than $1,000,000 and the ratable share of the
applicable Loan of the assignee Lenders or their Affiliates and Related Funds shall not be less
than $1,000,000, (iv) the parties to each such assignment shall execute and deliver to the
Administrative Agent an Assignment and Acceptance (such Assignment and Acceptance to be (A)
electronically executed and delivered to the Administrative Agent via an electronic settlement
system then acceptable to the Administrative Agent (or, if previously agreed with the
Administrative Agent, manually), and (B) delivered together with a processing and recordation fee
of $3,500, unless waived or reduced by the Administrative Agent in its sole discretion; provided
that only one such fee shall be payable in connection with simultaneous assignments by or to two or
more Related Funds) and (v) the assignee, if it shall not be a Lender immediately prior to the
assignment, shall deliver to the Administrative Agent an Administrative Questionnaire. Upon
acceptance and recording pursuant to paragraph (e) of this Section 10.04, from and
after the effective date specified in each Assignment and Acceptance, (A) the assignee thereunder
shall be a party hereto and, to the extent of the interest assigned by such Assignment and
Acceptance, have the rights and obligations of a Lender under this Agreement and (B) the assigning
Lender thereunder shall, to the extent of the interest assigned by such Assignment and Acceptance,
be released from its obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender’s rights and obligations
under this Agreement, such Lender shall cease to be a party hereto but shall continue to be
entitled to the

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benefits of Sections 2.15, 2.17, 2.21, 9.09 and 10.05,
as well as to any Fees accrued for its account and not yet paid).

     (c) By executing and delivering an Assignment and Acceptance, the assigning Lender thereunder
and the assignee thereunder shall be deemed to confirm to and agree with each other and the other
parties hereto as follows: (i) such assigning Lender warrants that it is the legal and beneficial
owner of the interest being assigned thereby free and clear of any adverse claim and that its
ratable share of the applicable Loan, in each case without giving effect to assignments thereof
which have not become effective, are as set forth in such Assignment and Acceptance, (ii) except as
set forth in (i) above, such assigning Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations made in or in
connection with this Agreement, or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement, any other Loan Document or any other instrument or document
furnished pursuant hereto, or the financial condition of the Borrower or any Subsidiary of the
Borrower or the performance or observance by the Borrower or any Subsidiary of the Borrower of any
of its obligations under this Agreement, any other Loan Document or any other instrument or
document furnished pursuant hereto; (iii) such assignee represents and warrants that it is legally
authorized to enter into such Assignment and Acceptance; (iv) such assignee confirms that it has
received a copy of this Agreement, together with copies of the most recent financial statements
referred to in Section 3.05(a) or delivered pursuant to Section 5.04 and such other
documents and information as it has deemed appropriate to make its own credit analysis and decision
to enter into such Assignment and Acceptance; (v) such assignee will independently and without
reliance upon the Administrative Agent, such assigning Lender or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under this Agreement; (vi) such assignee appoints and
authorizes the Administrative Agent to take such action as agent on its behalf and to exercise such
powers under this Agreement as are delegated to the Administrative Agent by the terms hereof,
together with such powers as are reasonably incidental thereto; and (vii) such assignee agrees that
it will perform in accordance with their terms all the obligations which by the terms of this
Agreement are required to be performed by it as a Lender.

     (d) The Administrative Agent, acting for this purpose as an agent of the Borrower, shall
maintain at one of its offices in referred to in Section 10.01 a copy of each Assignment
and Acceptance delivered to it and a register for the recordation of the names and addresses of the
Lenders, and the Commitment of, and principal amount of the Loans owing to, each Lender pursuant to
the terms hereof from time to time (the “Register”). The entries in the Register shall be
conclusive and the Borrower, the Administrative Agent and the Lenders may treat each person whose
name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all
purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Borrower and any Lender, at any reasonable time and from time to
time upon reasonable prior notice.

     (e) Upon its receipt of, and consent to, a duly completed Assignment and Acceptance executed
by an assigning Lender and an assignee, an Administrative Questionnaire completed in respect of the
assignee (unless the assignee shall already be a Lender hereunder), the processing and recordation
fee referred to in paragraph (b) above, if applicable, the written consent of the
Administrative Agent and the Borrower to such assignment (in each case to the extent required
pursuant to paragraph (b) above), any applicable tax forms, and the delivery to the
Administrative Agent of any promissory note (if any) issued pursuant to Section 2.05(e)
marked “cancelled”, the Administrative Agent shall (i) accept such Assignment and Acceptance and
(ii) record the information contained therein in the Register. No assignment shall be effective
unless it has been recorded in the Register as provided in this paragraph (e).

     (f) Each Lender may without the consent of the Borrower or the Administrative Agent sell
participations to one or more banks or other persons in all or a portion of its rights and
obligations under

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this Agreement (including all or a portion of its ratable share of the applicable Loan);
provided, however, that (i) such Lender’s obligations under this Agreement shall remain unchanged,
(ii) such Lender shall remain solely responsible to the other parties hereto for the performance of
such obligations, (iii) the participating banks or other persons shall be entitled to the benefit
of the cost protection provisions contained in Sections 2.15, 2.17 and 2.21
to the same extent as if they were Lenders (but, with respect to any particular participant, to no
greater extent than the Lender that sold the participation to such participant), (iv) such Lender
shall maintain a Register substantially in the form described in Section 10.04(d) (the
“Participant Register”), (v) if such Lender is a Foreign Lender, such Lender shall collect from
each participating bank or other persons, prior to the time such participating bank or other
persons receive payments with respect to such participation, the appropriate forms, certificates
and statements described in Section 2.21 as if such participating banks or other persons
were a Lender under Section 2.21, and (vi) the Borrower, the Administrative Agent and the
Lenders shall continue to deal solely and directly with such Lender in connection with such
Lender’s rights and obligations under this Agreement, and such Lender shall retain the sole right
to enforce the obligations of the Borrower relating to the applicable Loan and to approve any
amendment, modification or waiver of any provision of this Agreement (other than amendments,
modifications or waivers decreasing any fees payable to such participating bank or person hereunder
or the amount of principal of or the rate at which interest is payable on the Loans in which such
participating bank or person has an interest, extending any scheduled principal payment date or
date fixed for the payment of interest on the Loan in which such participating bank or person has
an interest, or releasing any Guarantor (other than in connection with the sale of such Guarantor
in a transaction permitted by Section 6.05)).

     (g) Any Lender or participant may, in connection with any assignment or participation or
proposed assignment or participation pursuant to this Section 10.04, disclose to the
assignee or participant or proposed assignee or participant any information relating to the
Borrower furnished to such Lender by or on behalf of the Borrower; provided that, prior to any such
disclosure of information designated by the Borrower as confidential, each such assignee or
participant or proposed assignee or participant shall execute an agreement whereby such assignee or
participant shall agree (subject to customary exceptions) to preserve the confidentiality of such
confidential information on terms no less restrictive than those applicable to the Lenders pursuant
to Section 10.16.

     (h) Any Lender may at any time assign all or any portion of its rights under this Agreement to
secure extensions of credit to such Lender or in support of obligations owed by such Lender;
provided that no such assignment shall release a Lender from any of its obligations hereunder or
substitute any such assignee for such Lender as a party hereto.

     (i) The Borrower shall not assign or delegate any of its rights or duties hereunder without
the prior written consent of the Administrative Agent and each Lender, and any attempted assignment
without such consent shall be null and void.

          SECTION 10.05. Expenses; Indemnity. (a) The Borrower agrees to pay all
out-of-pocket costs and expenses (i) incurred by the Administrative Agent and the Lead Arranger in
connection with the preparation and administration of this Agreement and the other Loan Documents
or in connection with any amendments, modifications or waivers of the provisions hereof or thereof
(whether or not the transactions hereby or thereby contemplated shall be consummated) or (ii)
incurred by the Administrative Agent, the Lead Arranger or any Lender in connection with the
enforcement or protection of its rights in connection with this Agreement and the other Loan
Documents or in connection with the Loans made hereunder, including fees, disbursements and other
charges of counsel for the Administrative Agent, the Lead Arranger and the Lenders, and, in
connection with any such enforcement or protection, fees, disbursements and other charges of
counsel as the Administrative Agent, the Lead Arranger or any Lender determine to be reasonably
necessary.

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     (b) The Borrower agrees to indemnify the Administrative Agent, the Lead Arranger, each Lender
and each Related Party of any of the foregoing persons and their successors and assigns (each such
person being called an “Indemnitee”) against, and to hold each Indemnitee harmless from, any and
all costs, expenses (including reasonable fees, disbursements and other charges of counsel and
liabilities of such Indemnitee arising out of or in connection with (i) the execution or delivery
of this Agreement or any other Loan Document or any agreement or instrument contemplated thereby,
the performance by the parties thereto of their respective obligations thereunder or the
consummation of the Transactions and the other transactions contemplated thereby, (ii) the use of
the proceeds of the Loan, (iii) any claim, litigation, investigation or proceeding relating to any
of the foregoing, whether or not any Indemnitee is a party thereto (and regardless of whether (A)
such matter is initiated by a third party or by the Borrower, any other Loan Party or any of their
respective Affiliates or (B) the Indemnitees are a party to such claim, litigation, investigation
or proceeding), or (iv) any actual or alleged presence or Release of Hazardous Materials on any
property currently or formerly owned or operated by the Borrower or any of its Subsidiaries, or any
Environmental Liability related in any way to the Borrower or its Subsidiaries; provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such costs, expenses or
liabilities resulted from the gross negligence or willful misconduct of such Indemnitee (or its
Related Parties).

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

     (d) The provisions of this Section 10.05 shall survive the expiration of the term of
this Agreement, the consummation of the transactions contemplated hereby, the repayment of any of
the Loan, the invalidity or unenforceability of any term or provision of this Agreement or any
other Loan Document, or any investigation made by or on behalf of the Administrative Agent or any
Lender. All amounts due under this Section 10.05 shall be payable on written demand
therefor.

          SECTION 10.06. Right of Setoff. If an Event of Default shall have occurred and be
continuing, each Lender is hereby authorized at any time and from time to time, except to the
extent prohibited by law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other indebtedness at any time owing by such
Lender to or for the credit or the account of the Borrower and all the obligations of the Borrower
now or hereafter existing under this Agreement and other Loan Documents held by such Lender,
irrespective of whether or not such Lender shall have made any demand under this Agreement or such
other Loan Document and although such obligations may be unmatured. The rights of each Lender
under this Section 10.06 are in addition to other rights and remedies (including other
rights of setoff) which such Lender may have.

          SECTION 10.07. Applicable Law. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.

          SECTION 10.08. Waivers; Amendment. (a) No failure or delay of the
Administrative Agent or any Lender in exercising any power or right hereunder or under any other
Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any
such right or power, or any abandonment or discontinuance of steps to enforce such a right or
power, preclude any other or further exercise thereof or the exercise of any other right or power.
The rights and remedies of the Administrative Agent and the Lenders hereunder and under the other
Loan Documents are cumulative and are not exclusive of any rights or remedies that they would
otherwise have. No waiver of any provision

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of this Agreement or any other Loan Document or consent to any departure by the
Borrower or any other Loan Party therefrom shall in any event be effective unless the same shall be
permitted by paragraph (b) below, and then such waiver or consent shall be effective only
in the specific instance and for the purpose for which given. No notice or demand on the Borrower
in any case shall entitle the Borrower to any other or further notice or demand in similar or other
circumstances.

     (b) Neither this Agreement nor any other Loan Document nor any provision hereof or thereof may
be waived, amended or modified except pursuant to an agreement or agreements in writing entered
into by the Required Lenders and the Loan Parties that are party thereto and are affected by such
waiver, amendment or modification; provided, however, that no such agreement shall (i) decrease the
principal amount of, or extend the maturity of or any scheduled principal payment date or date for
the payment of any interest on the Loan, or waive or forgive any such payment or any part thereof,
or the rate of interest on the Loan, without the prior written consent of each Lender directly
adversely affected thereby, (ii) decrease or extend the date for payment of any Fees of any Lender
without the prior written consent of such Lender, (iii) amend or modify the pro rata requirements
of Section 2.18, the provisions of Section 10.04(j) or the provisions of this
Section 10.08 or release all or substantially all of the Guarantors (determined based on
the vale of their Guarantees of the Obligations), without the prior written consent of each Lender,
or (iv) reduce the percentage contained in the definition of the term “Required Lenders” without
the prior written consent of each Lender; provided, further that no such agreement shall amend,
modify or otherwise affect the rights or duties of the Administrative Agent hereunder or under any
other Loan Document without the prior written consent of the Administrative Agent.

          SECTION 10.09. Interest Rate Limitation. Notwithstanding anything herein to the
contrary, if at any time the interest rate applicable to the Loans, together with all fees, charges
and other amounts which are treated as interest on the Loans under applicable law (collectively the
“Charges”), shall exceed the maximum lawful rate (the “Maximum Rate”) which may be contracted for,
charged, taken, received or reserved by the Lender holding such Loan in accordance with applicable
law, the rate of interest payable in respect of the Loans hereunder, together with all Charges
payable in respect thereof, shall be limited to the Maximum Rate and, to the extent lawful, the
interest and Charges that would have been payable in respect of the Loans but were not payable as a
result of the operation of this Section 10.09 shall be cumulated and the interest and
Charges payable to such Lender in respect of the periods shall be increased (but not above the
Maximum Rate therefor) until such cumulated amount shall have been received by such Lender.

          SECTION 10.10. Entire Agreement. This Agreement and the other Loan Documents
constitute the entire contract between the parties relative to the subject matter hereof. Any
other previous agreement among the parties with respect to the subject matter hereof is superseded
by this Agreement and the other Loan Documents. Nothing in this Agreement or in the other Loan
Documents, expressed or implied, is intended to confer upon any person (other than the parties
hereto and thereto, their respective successors and assigns permitted hereunder and, to the extent
expressly contemplated hereby, the Indemnitees, the Related Parties of each of the Administrative
Agent and the Lenders) any rights, remedies, obligations or liabilities under or by reason of this
Agreement or the other Loan Documents.

          SECTION 10.11. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR
ANY OF THE OTHER LOAN DOCUMENTS. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES

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THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE
OTHER LOAN DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS
IN THIS SECTION 10.11.

          SECTION 10.12. Severability. In the event any one or more of the provisions
contained in this Agreement or in any other Loan Document should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the remaining provisions
contained herein and therein shall not in any way be affected or impaired thereby (it being
understood that the invalidity of a particular provision in a particular jurisdiction shall not in
and of itself affect the validity of such provision in any other jurisdiction). The parties shall
endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions
with valid provisions the economic effect of which comes as close as possible to that of the
invalid, illegal or unenforceable provisions.

          SECTION 10.13. Counterparts. This Agreement may be executed in counterparts (and by
different parties hereto on different counterparts), each of which shall constitute an original but
all of which when taken together shall constitute a single contract, and shall become effective as
provided in Section 10.03. Delivery of an executed signature page to this Agreement by
facsimile transmission shall be as effective as delivery of a manually signed counterpart of this
Agreement.

          SECTION 10.14. Headings. Article and Section headings and the Table of Contents
used herein are for convenience of reference only, are not part of this Agreement and are not to
affect the construction of, or to be taken into consideration in interpreting, this Agreement.

          SECTION 10.15. Jurisdiction; Consent to Service of Process. (a) Each of the
Loan Parties hereby irrevocably and unconditionally submits, for itself and its property, to the
nonexclusive jurisdiction of any New York State court or Federal court of the United States of
America sitting in New York City, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Agreement or the other Loan Documents, or for
recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or proceeding may be heard and
determined in such New York State or, to the extent permitted by law, in such Federal court. Each
of the parties hereto agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law. Nothing in this Agreement shall affect any right that the Administrative
Agent or any Lender may otherwise have to bring any action or proceeding relating to this Agreement
or the other Loan Documents against the Loan Parties or their respective properties in the courts
of any jurisdiction.

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

     (c) Each party to this Agreement irrevocably consents to service of process in the manner
provided for notices in Section 10.01. Nothing in this Agreement will affect the right of
any party to this Agreement to serve process in any other manner permitted by law.

          SECTION 10.16. Confidentiality. Each of the Administrative Agent and the Lenders
agrees to maintain the confidentiality of the Information (as defined below), except that
Information may be disclosed (a) to its and its Affiliates’ officers, directors, employees and
agents, including accountants,

ALY Bridge Loan Agreement

58

 

legal counsel and other advisors (it being understood that the persons to whom such disclosure
is made will be informed of the confidential nature of such Information and instructed to keep such
Information confidential), (b) to the extent requested by any regulatory authority or
quasi-regulatory authority, (c) to the extent required by applicable laws or regulations or by any
subpoena or similar legal process, (d) in connection with the exercise of any remedies hereunder or
under the other Loan Documents or any suit, action or proceeding relating to the enforcement of its
rights hereunder or thereunder, (e) subject to an agreement containing provisions substantially the
same as those of this Section 10.16, to (i) any actual or prospective assignee of or
participant in any of its rights or obligations under this Agreement and the other Loan Documents
or (ii) any actual or prospective counterparty (or its advisors) to any swap or derivative
transaction relating to the Borrower, any of its Subsidiaries or any Affiliate thereof or any of
their respective obligations, (f) with the consent of the Borrower or (g) to the extent such
Information becomes publicly available other than as a result of a breach of this Section
10.16. For the purposes of this Section, “Information” shall mean all information received
from the Borrower and related to the Borrower or its business, other than any such information that
was available to the Administrative Agent or any Lender on a nonconfidential basis prior to its
disclosure by the Borrower; provided that, in the case of Information received from the Borrower
after the date hereof, such information is clearly identified at the time of delivery as
confidential. Any person required to maintain the confidentiality of Information as provided in
this Section 10.16 shall be considered to have complied with its obligation to do so if
such person has exercised the same degree of care to maintain the confidentiality of such
Information as such person would accord its own confidential information.

          SECTION 10.17. USA PATRIOT Act Notice. Each Lender 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, it is required to obtain, verify and record information that
identifies the Borrower, which information includes the name and address of the Borrower and other
information that will allow such Lender or the Administrative Agent, as applicable, to identify the
Borrower in accordance with the USA PATRIOT Act.

[Remainder of this page intentionally left blank]

ALY Bridge Loan Agreement

59

 

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

	 	 	 	 	 
	 	ALLIS-CHALMERS ENERGY INC.,

as the Borrower

 	 
	 	By:  	/s/ Victor M. Perez
 	 
	 	 	Name:  	Victor M. Perez 	 
	 	 	Title:  	Chief Financial Officer 	 
	 

ALY Bridge Loan Agreement

 

 

	 	 	 	 	 
	 	The following entities, each as a Guarantor:

AIRCOMP L.L.C.

ALLIS-CHALMERS GP, LLC

ALLIS-CHALMERS PRODUCTION SERVICES, INC.

ALLIS-CHALMERS RENTAL TOOLS, INC.

ALLIS-CHALMERS TUBULAR SERVICES, INC.

MOUNTAIN COMPRESSED AIR, INC.

OILQUIP RENTALS, INC.

PETRO-RENTALS, INCORPORATED

ROGERS OIL TOOL SERVICES, INC.

STRATA DIRECTIONAL TECHNOLOGY, INC.

TARGET ENERGY, INC.

 	 
	 	By:  	/s/ Theodore F. Pound III
 	 
	 	 	Name:  	Theodore F. Pound III 	 
	 	 	Title:  	Vice President and Secretary 	 
	 
	 	ALLIS-CHALMERS MANAGEMENT, LP

 	 
	 	By:  	Allis-Chalmers GP, LLC, its sole general partner
 	 
	 	 	 	 
	 	 	 	 
	 
	 	 	 
	 	By:  	                    /s/ Theodore F. Pound III
 	 
	 	 	Name:  	Theodore F. Pound III 	 
	 	 	Title:  	Vice President and Secretary 	 
	 
	 	ALLIS-CHALMERS LP, LLC

 	 
	 	By:  	/s/ Jeffrey R. Freedman
 	 
	 	 	Name:  	Jeffrey R. Freedman 	 
	 	 	Title:  	Vice President and Secretary 	 
	 

ALY Bridge Loan Agreement

 

 

	 	 	 	 	 
	 	ROYAL BANK OF CANADA,

as a Lender,

 	 
	 	by  	/s/ Jason S. York
 	 
	 	 	Name:  	Jason S. York 	 
	 	 	Title:  	Authorized Signatory 	 
	 
	 	ROYAL BANK OF CANADA,

as Administrative Agent,

 	 
	 	by  	/s/ David Wheatley
 	 
	 	 	Name:  	David Wheatley 	 
	 	 	Title:  	Manager, Agency 	 
	 

ALY Bridge Loan Agreement

 

 

SCHEDULE 1.01(a)

GUARANTORS

	 	1.	 	Allis-Chalmers GP, LLC
	 
	 	2.	 	Allis-Chalmers LP, LLC
	 
	 	3.	 	Allis-Chalmers Management, LP
	 
	 	4.	 	Allis-Chalmers Production Services, Inc.
	 
	 	5.	 	Allis-Chalmers Rental Tools, Inc.
	 
	 	6.	 	Allis-Chalmers Tubular Services, Inc.
	 
	 	7.	 	AirComp L.L.C.
	 
	 	8.	 	Mountain Compressed Air, Inc.
	 
	 	9.	 	OilQuip Rentals, Inc.
	 
	 	10.	 	Petro-Rentals, Incorporated
	 
	 	11.	 	Rogers Oil Tool Services, Inc.
	 
	 	12.	 	Strata Directional Technology, Inc.
	 
	 	13.	 	Target Energy, Inc.

ALY Bridge Loan Agreement

Schedule 1.01(a)

 

 

SCHEDULE 2.01

LENDERS AND COMMITMENTS

	 	 	 
	Lender	 	Commitment
	 
	 	 
	Royal Bank of Canada

	 	US$300,000,000

ALY Bridge Loan Agreement

Schedule 2.01

 

 

SCHEDULE 3.08

SUBSIDIARIES

	 	14.	 	Allis-Chalmers GP, LLC
	 
	 	15.	 	Allis-Chalmers LP, LLC
	 
	 	16.	 	Allis-Chalmers Management, LP
	 
	 	17.	 	Allis-Chalmers Production Services, Inc.
	 
	 	18.	 	Allis-Chalmers Rental Tools, Inc.
	 
	 	19.	 	Allis-Chalmers Tubular Services, Inc.
	 
	 	20.	 	AirComp L.L.C.
	 
	 	21.	 	DLS Drilling, Logistics and Services Corporation
	 
	 	22.	 	Mountain Compressed Air, Inc.
	 
	 	23.	 	OilQuip Rentals, Inc.
	 
	 	24.	 	Petro-Rentals, Incorporated
	 
	 	25.	 	Rogers Oil Tool Services, Inc.
	 
	 	26.	 	Strata Directional Technology, Inc.
	 
	 	27.	 	Target Energy, Inc.

ALY Bridge Loan Agreement

Schedule 3.08

 

 

SCHEDULE 6.01

EXISTING INDEBTEDNESS

none

ALY Bridge Loan Agreement

Schedule 6.01

 

 

SCHEDULE 6.02

EXISTING LIENS

	 	 	 	 	 	 	 
	Debtor	 	Creditor	 	Asset Secured	 	Filing Jurisdiction
	 
	 	 	 	 	 	 
	AC Tubular

	 	PACCAR
	 	4 Trucks
	 	Hidalgo County, Texas
	 
	 	 	 	 	 	 
	AC Tubular

	 	Texas State Bank
	 	Yard in Edinburg, Texas
	 	Hidalgo County, Texas
	 
	 	 	 	 	 	 
	AC Tubular

	 	Jens H. Mortensen, Jr.
	 	Tools, machinery and equipment
	 	Hidalgo County, Texas
	 
	 	 	 	 	 	 
	AC Tubular

	 	Jens H. Mortensen, Jr.
	 	Equipment in Mexico
	 	Mexico
	 
	 	 	 	 	 	 
	AC Tubular

	 	Texas State Bank
	 	3 Forklifts
 9 Vehicles
	 	Hidalgo County, Texas
	 
	 	 	 	 	 	 
	Downhole Injection Systems

	 	Ford Motor Credit
	 	Ford vehicle
	 	Midland County, Texas
	 
	 	 	 	 	 	 
	Capcoil Tubing Services

	 	Navistar
	 	3 Trucks
	 	Gregg County, Texas
	 
	 	 	 	 	 	 
	Capcoil Tubing Services

	 	Ford Motor Credit
	 	7 Vehicles
	 	Gregg County, Texas
	 
	 	 	 	 	 	 
	Borrower and AirComp

	 	Caterpillar
	 	Air compressors
	 	Delaware and Texas

ALY Bridge Loan Agreement

Schedule 6.02

 

 

SCHEDULE 6.04

EXISTING INVESTMENTS

	 	a)	 	Allis-Chalmers GP, LLC — 100% owned by the Borrower
	 
	 	b)	 	Allis-Chalmers LP, LLC — 100% owned by the Borrower
	 
	 	c)	 	Allis-Chalmers Management, LP —  100% general partner interest owned by
Allis-Chalmers GP, LLC and 100% limited partner interest owned by Allis-Chalmers LP, LLC
	 
	 	d)	 	Allis-Chalmers Production Services, Inc. — 100% owned by the Borrower
	 
	 	e)	 	Allis-Chalmers Rental Tools, Inc. — 100% owned by the Borrower
	 
	 	f)	 	Allis-Chalmers Tubular Services, Inc. — 100% owned by the Borrower
	 
	 	g)	 	AirComp L.L.C. — 100% owned by Mountain Compressed Air, Inc.
	 
	 	h)	 	DLS Drilling, Logistics and Services Corporation — 100% owned by the Borrower
	 
	 	i)	 	Mountain Compressed Air, Inc. — 100% owned by OilQuip Rentals, Inc.
	 
	 	j)	 	OilQuip Rentals, Inc. — 100% owned by the Borrower
	 
	 	k)	 	Petro-Rentals, Incorporated — 100% owned by the Borrower
	 
	 	l)	 	Rogers Oil Tool Services, Inc. — 100% owned by the Borrower
	 
	 	m)	 	Strata Directional Technology, Inc. — 100% owned by the Borrower
	 
	 	n)	 	Target Energy, Inc. — 100% owned by the Borrower
	 
	 	o)	 	Advances to officers, directors and employees of the Borrower and Subsidiaries in an
aggregate amount not to exceed $50,000 at any time outstanding, for travel, entertainment,
relocation and analogous ordinary business purposes;
	 
	 	p)	 	Investments consisting of Borrower’s lending up to $19,100,000 to DLS Drilling,
Logistics and Services, Corp. (“DLS”);
	 
	 	q)	 	Investments consisting of unlimited intercompany Indebtedness between DLS and DLS’
Subsidiaries, including both “due to” and “due from” intercompany loans and receivables
between DLS and DLS’ Subsidiaries;
	 
	 	r)	 	Investments consisting of Borrower’s and Guarantor’s being liable for up to $9,100,000
in connection with a letter of credit issued by Royal Bank of Canada under the Existing
Senior Credit Agreement to secure Indebtedness of up to $9,100,000 owing by DLS’

ALY Bridge Loan Agreement

Schedule 6.04

 

 

	 	 	 	Argentina Branch to US Bank National Association, such letter of credit to be substituted
for and replace an existing letter of credit issued by JPMorgan Chase Bank;
	 
	 	s)	 	Investments consisting of Borrower’s and Guarantor’s being liable in connection with a
letter of credit issued by Royal Bank of Canada under the Existing Senior Credit Agreement
to secure a customs duty guarantee issued by Banco Bisa for the benefit of DLS’ Argentina
Branch; and
	 
	 	t)	 	other Investments by Borrower (including monies funded under the Existing Senior Credit
Agreement and lent to DLS and DLS’ Subsidiaries and letters of credit issued under the
Existing Senior Credit Agreement to secure obligations of DLS and DLS’ Subsidiaries) in DLS
and/or DLS’ Subsidiaries in an aggregate amount at any one time not to exceed $5,000,000
(such $5,000,000 limit to be applicable to all Investments described in this clause (f),
whether or not funded or issued under the Existing Senior Credit Agreement)

ALY Bridge Loan Agreement

Schedule 6.04

 

 

EXHIBIT A

FORM OF

ASSIGNMENT AND ACCEPTANCE

ASSIGNMENT AND ACCEPTANCE

     Reference is made to the Senior Unsecured Bridge Loan Agreement, dated as of December 18,
2006 (as amended, amended and restated, supplemented or otherwise modified from time to time, the
“Loan Agreement”; the terms defined therein, unless otherwise defined herein, are being used herein
as therein defined) among ALLIS-CHALMERS ENERGY INC., a Delaware corporation (the “Borrower”), the
Guarantors named therein, the Lenders party thereto, Royal Bank of Canada, as Administrative Agent
for the Lenders, and RBC Capital Markets Corporation, as Lead Arranger.

     Each “Assignor” referred to on Schedule 1 hereto (each, an “Assignor”) and each
“Assignee” referred to on Schedule 1 hereto (each, an “Assignee”) agrees severally with
respect to all information relating to it and its assignment hereunder and on Schedule 1
hereto as follows:

     (a) Such Assignor hereby sells and assigns, without recourse except as to the
representations and warranties made by it herein, to such Assignee, and such Assignee hereby
purchases and assumes from such Assignor, an interest in and to such Assignor’s rights and
obligations under the Loan Agreement as of the Effective Date (as defined herein) equal to
the percentage interest specified on Schedule 1 hereto of all outstanding rights and
obligations under the Loan Agreement. After giving effect to such sale and assignment, such
Assignee’s Commitments and the amount of the Loans owing to such Assignee will be as set
forth on Schedule 1 hereto.

     (b) Such Assignor (i) represents and warrants that its name set forth on Schedule
1 hereto is its legal name, that it is the legal and beneficial owner of the interest or
interests being assigned by it hereunder and that such interest or interests are free and
clear of any adverse claim and its ratable share of [Bridge A Loan] [and] [Bridge B Loan],
[in each case] without giving effect to assignments thereof which have not become effective,
are as set forth in Schedule 1 hereto; (ii) makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or representations made
in or in connection with any Loan Document or any other instrument or document furnished
pursuant thereto, or the execution, legality, validity, enforceability, genuineness,
sufficiency of value of any Loan Document or any other instrument or document furnished
pursuant thereto; and (iii) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of any Loan Party or the performance
or observance by any Loan Party of any of its obligations under any Loan Document or any
other instrument or document furnished pursuant thereto.

     (c) Such Assignee (i) confirms that, to the extent it has so requested, it has received
a copy of the Loan Agreement, together with copies of the most recent financial statements
referred to in Section 3.05(a) or delivered pursuant to Section 5.04 thereof
and such other documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment and Acceptance; (ii) agrees that it
will, independently and without reliance upon the Administrative Agent, the Assignor or any
other Lender and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action under the
Loan Agreement; (iii) represents and warrants that its

ALY Bridge Loan Agreement

Exhibit A — Form of Assignment and Acceptance

 

 

name set forth on Schedule 1 hereto is its legal name; (iv) appoints and
authorizes the Administrative Agent to take such action as agent on its behalf and to
exercise such powers and discretion under the Loan Documents as are delegated to the
Administrative Agent by the terms thereof, together with such powers and discretion as are
reasonably incidental thereto; (v) agrees that it will perform in accordance with their
terms all of the obligations that by the terms of the Loan Agreement are required to be
performed by it as a Lender; (vi) attaches any U.S. Internal Revenue Service forms required
under Section 2.21 of the Loan Agreement (and undertakes to deliver to the
Administrative Agent originals of any such U.S. Internal Revenue Service form), and (vii)
represents and warrants that it is legally authorized to enter into this Assignment and
Acceptance.

     (d) Following the execution of this Assignment and Acceptance, it will be delivered to
the Administrative Agent for acceptance and recording by the Administrative Agent. The
effective date for this Assignment and Acceptance (the “Effective Date”) shall be the date
of acceptance hereof by the Administrative Agent.

     (e) Upon such acceptance and recording by the Administrative Agent, as of the Effective
Date, (i) such Assignee shall be a party to the Loan Agreement and, to the extent provided
in this Assignment and Acceptance, have the rights and obligations of a Lender thereunder
and (ii) such Assignor shall, to the extent provided in this Assignment and Acceptance,
relinquish its rights and be released from its obligations under the Loan Agreement (other
than its rights and obligations under the Loan Documents that are specified under the terms
of such Loan Documents to survive the payment in full of the Obligations of the Loan Parties
under the Loan Documents to the extent any claim thereunder relates to an event arising
prior to the Effective Date of this Assignment and Acceptance) and, if this Assignment and
Acceptance covers all of the remaining portion of the rights and obligations of such
Assignor under the Loan Agreement, such Assignor shall cease to be a party thereto.

     (f) Upon such acceptance and recording by the Administrative Agent, from and after the
Effective Date, the Administrative Agent shall make all payments under the Loan Agreement
and the other Loan Documents in respect of the interest assigned hereby (including, without
limitation, all payments of principal, interest and fees with respect thereto) to such
Assignee. Such Assignor and such Assignee shall make all appropriate adjustments in
payments under the Loan Agreement and the other Loan Documents for periods prior to the
Effective Date directly between themselves.

     (g) This Assignment and Acceptance shall be governed by, and construed in accordance
with, the laws of the State of New York.

     (h) This Assignment and Acceptance may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of Schedule 1 to this Assignment and
Acceptance by telecopier shall be effective as delivery of an original executed counterpart
of this Assignment and Acceptance.

     IN WITNESS WHEREOF, each Assignor and each Assignee have caused Schedule 1 to
this Assignment and Acceptance to be executed by their officers thereunto duly authorized as of the
date specified thereon.

[The Remainder of this Page Has Intentionally Been Left Blank]

ALY Bridge Loan Agreement

Exhibit A — Form of Assignment and Acceptance

 

 

SCHEDULE 1

TO

ASSIGNMENT AND ACCEPTANCE

	 	 	 	 	 
	ASSIGNOR:	 	 	 	 
	Bridge A Commitment
	 	 	 	 
	Percentage interest assigned
	 	 	%	 
	Bridge B Commitment
	 	 	 	 
	Percentage interest assigned
	 	 	%	 
	Advance under Bridge A Loan
	 	 	 	 
	Outstanding principal amount of advance under Bridge A Loan
assigned
	 	$	 	 
	Advance under Bridge B Loan
	 	 	 	 
	Outstanding principal amount of advance under Bridge B Loan
assigned
	 	$	 	 

	 	 	 	 	 
	ASSIGNEE:	 	 	 	 
	Bridge A Commitment
	 	 	 	 
	Percentage interest assumed
	 	 	%	 
	Bridge B Commitment
	 	 	 	 
	Percentage interest assumed
	 	 	%	 
	Advance under Bridge A Loan
	 	 	 	 
	Outstanding principal amount of advance under Bridge A Loan
assumed
	 	$	 	 
	Advance under Bridge B Loan
	 	 	 	 
	Outstanding principal amount of advance under Bridge B Loan
assumed
	 	$	 	 

ALY Bridge Loan Agreement

Exhibit A — Form of Assignment and Acceptance

 

 

Effective Date:

1_____,
200__

Assignor

__________, as Assignor

[Type or print legal name of Assignor]

	 	 	 	 	 
	 	 	 
	 	By  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  		 
	 
	 	 	Dated: 	__________, 200__ 	 
	 

 

			
	1	 	This date should be no earlier than five Business Days after the delivery of this
Assignment and Acceptance to the Administrative Agent.

ALY Bridge Loan Agreement

Exhibit A — Form of Assignment and Acceptance

 

 

Assignee

___________, as Assignee

[Type or print legal name of Assignee]

	 	 	 	 	 
	 	 	 
	 	By  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

Dated: __________, 200__

Domestic Lending Office:

Eurodollar Lending Office:

ALY Bridge Loan Agreement

Exhibit A — Form of Assignment and Acceptance

 

 

Accepted and Approved this                      day

of                     , 20___

	 	 	 	 	 
	ROYAL BANK OF CANADA,

     as Administrative Agent

 	 	 
	By  	 	 	 	 
	 	Name:  	 	 	 
	 	Title:  	 	 	 
	 

[Approved this ____ day of                     , 20__

	 	 	 	 	 
	1 [ALLIS-CHALMERS ENERGY INC.

 	 	 
	By  	 	 	 	 
	 	Name:  	 	 	 
	 	Title:  ]	 	 	 
	 

 

			
	1	 	If required by the Loan Agreement.

ALY Bridge Loan Agreement

Exhibit A — Form of Assignment and Acceptance

 

 

EXHIBIT B

     FORM OF

BORROWING REQUEST

BORROWING REQUEST

December           , 2006

Royal Bank of Canada,

   as Administrative Agent

   under the Loan Agreement

   referred to below

P.O. Box 50

200 Bay Street, 12th Floor,

South Tower, Royal Bank Plaza,

Toronto, Ontario M5J 2W7

Attention: Manager, Agency

Facsimile: (416) 842-4023

Ladies and Gentlemen:

     The undersigned, ALLIS-CHALMERS ENERGY INC., refers to the Senior Unsecured Bridge Loan
Agreement, dated as of December 18, 2006 (as amended, amended and restated, supplemented or
otherwise modified from time to time, the “Loan Agreement”; terms used but not defined herein,
shall have the meaning ascribed to such terms in the Loan Agreement), among the undersigned,
ALLIS-CHALMERS ENERGY INC., a Delaware Corporation, the Guarantors named therein, the Lenders party
thereto, Royal Bank of Canada, as Administrative Agent for the Lenders, and RBC Capital Markets
Corporation, as Lead Arranger, and hereby gives you notice, irrevocably, pursuant to Section 2.04
of the Loan Agreement that the undersigned hereby requests a borrowing under the Loan Agreement (a
“Borrowing”), and in that connection sets forth below the information relating to such borrowing
(the “Proposed Borrowing”) as required by the Loan Agreement:

     The undersigned hereby requests:

	 	1.	 	A Borrowing
	 
	 	2.	 	on December 18, 2006
	 
	 	3.	 	in the amount of [US$225,000,000] [US$75,000,000]
	 
	 	4.	 	under the [Bridge A Loan] [Bridge B Loan]
	 
	 	5.	 	comprised of Base Rate Loans

ALY Bridge Loan Agreement

Exhibit B — Form of Borrowing Request

 

 

	 	6.	 	to be disbursed to the following account:

[Account Name and Number]

[Location of Account]

     The undersigned hereby certifies that the following statements are true on the date
hereof, and will be true on the date of the Proposed Borrowing:

     (A) The representations and warranties contained in each Loan Document are correct in
all material respects on and as of the date of the Proposed Borrowing, before and after
giving effect to the Proposed Borrowing and to the application of the proceeds therefrom, as
though made on and as of such date, other than any such representations or warranties that,
by their terms, refer to a specific date other than the date of the Proposed Borrowing, in
which case, as of such specific date.

     (B) No Default has occurred and is continuing, or would result from such Proposed
Borrowing or from the application of the proceeds therefrom.

     Delivery of an executed counterpart of this Borrowing Request by telecopier shall be effective
as delivery of an original executed counterpart of this Borrowing Request.

	 	 	 	 	 
	 	Very truly yours,

ALLIS-CHALMERS ENERGY INC.

 	 
	 	By  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

ALY Bridge Loan Agreement

Exhibit B — Form of Borrowing Request

 

 

EXHIBIT C

     FORM OF

NON-BANK CERTIFICATE

CERTIFICATE REGARDING NON-BANK STATUS

[Date]

[Allis-Chalmers Energy Inc.

5075 Westheimer, Suite 890

Houston, TX 77056

Attn: General Counsel

Fascimile: (713) 369-0555]

[Royal Bank of Canada,

   as Administrative Agent

   under the Loan Agreement

   referred to below

P.O. Box 50

200 Bay Street, 12th Floor,

South Tower, Royal Bank Plaza,

Toronto, Ontario M5J 2W7

Attention: Manager, Agency

Facsimile: (416) 842-4023]

     Reference is made to the Senior Unsecured Bridge Loan Agreement, dated as of December 18, 2006
(as amended, amended and restated, supplemented or otherwise modified from time to time, the
“Loan Agreement”; terms used but not defined herein, shall have the meaning ascribed to such terms
in the Loan Agreement), among Allis-Chalmers Energy Inc., a Delaware Corporation (the “Borrower”),
the Guarantors named therein, the Lenders party thereto, Royal Bank of Canada, as Administrative
Agent for the Lenders (the “Administrative Agent”), and RBC Capital Markets Corporation, as Lead
Arranger. Pursuant to Section 2.21(e) of the Loan Agreement, the undersigned hereby certifies that it is not a “bank” or other Person described in Section 881(c)(3) of the Internal
Revenue Code of 1986, as amended.

	 	 	 	 	 
	 	[NAME OF
LENDER] 

	 
	 	By  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

ALY Bridge Loan Agreement

Exhibit C — Form of Non-Bank Certificate

 

 

EXHIBIT D

     FORM OF

NOTICE OF INTEREST ELECTION

NOTICE OF INTEREST ELECTION

[Date]

Royal Bank of Canada,

   as Administrative Agent

   under the Loan Agreement

   referred to below

P.O. Box 50

200 Bay Street, 12th Floor,

South Tower, Royal Bank Plaza,

Toronto, Ontario M5J 2W7

Attention: Manager, Agency

Facsimile: (416) 842-4023

Ladies and Gentlemen:

          The undersigned, ALLIS-CHALMERS ENERGY INC., refers to the Senior Unsecured Bridge Loan
Agreement, dated as of December 18, 2006 (as amended, amended and restated, supplemented or
otherwise modified from time to time, the “Loan Agreement”; terms used but not defined herein,
shall have the meaning ascribed to such terms in the Loan Agreement), among the undersigned,
ALLIS-CHALMERS ENERGY INC., a Delaware Corporation, the Guarantors named therein, the Lenders party
thereto, Royal Bank of Canada, as Administrative Agent for the Lenders, and RBC Capital Markets
Corporation, as Lead Arranger, and hereby gives you notice, irrevocably, pursuant to Section
2.11 of the Loan Agreement that the undersigned hereby elects to [convert the [Eurodollar Rate
Loan] [Base Rate Loan] to [Base Rate Loan] [Eurodollar Rate Loan] under the [Bridge A Loan] [Bridge
B Loan]] (the “Conversion”) [continue the Eurodollar Rate Loan under the [Bridge A Loan] [Bridge B
Loan] for an additional Interest Period] (the “Continuation”), and in that connection sets forth
below the information relating to such election as required by Section 2.11 of the Loan
Agreement:

	 	(a)	 	If the applicable Loan is to be converted:

	 	(i)	 	the type of Loan to be converted is [                    ];
	 
	 	(ii)	 	the new type of Loan after giving effect to the Conversion is
[                    ] (the “Converted Loan”);
	 
	 	(iii)	 	the date of the Conversion, being a Business Day, is [                    ]
(the “Conversion Date”); and
	 
	 	(iv)	 	the Interest Period applicable to the Converted Loan is [___] months
[if applicable].

ALY Bridge Loan Agreement

Exhibit D — Form of Notice of Interest Election

 

 

	 	(b)	 	If the Loan is a Eurodollar Rate Loan which is to continue as a Eurodollar
Rate Loan for an additional Interest Period, the subsequent Interest Period applicable
to such Eurodollar Rate Loan is [___] months.

     The undersigned hereby certifies that the following statement is true on the date
hereof, and will be true on [the Conversion Date] [the date of the Continuation]:

     No Default has occurred and is continuing, or would result from such [Conversion]
[Continuation].

     Delivery of an executed counterpart of this Notice of Interest Election by facsimile shall be
effective as delivery of an original executed counterpart of this Notice of Interest Election.

	 	 	 	 	 
	 	Very truly yours,

ALLIS-CHALMERS ENERGY INC.

 	 
	 
	 	By  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

ALY Bridge Loan Agreement

Exhibit D — Form of Notice of Interest Electionexv10w2

 

Exhibit
10.2

INVESTOR RIGHTS AGREEMENT

     This Investor Rights Agreement dated as of December 18 2006 (this “Agreement”) is entered into
by and among Allis-Chalmers Energy Inc., a Delaware corporation (the “Company”), and Oil & Gas
Rental Services, Inc., a Louisiana corporation (the “Investor”).

     WHEREAS, the Company and the Investor have entered into an Asset Purchase Agreement dated as
of October 25, 2006 (the “Asset Purchase Agreement”) pursuant to which the Investor shall receive a
number of shares of the common stock, par value $0.01 per share, of the Company (the “Common
Stock”), as set forth therein;

     WHEREAS, in order to induce the Investor to enter into the Asset Purchase Agreement, the
Company has agreed to grant certain registration rights to the Investor with respect to such shares
and certain Board designation rights, in each case, subject to the terms and conditions set forth
herein;

     NOW, THEREFORE, in consideration of the foregoing and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:

     Section 1. Definitions. As used herein, the following terms have the indicated
meanings, unless the context otherwise requires:

     “Agreement” has the meaning given to such term in the preamble hereto.

     “Asset Purchase Agreement” has the meaning given to such term in the recitals hereto.

     “Beneficially Own,” “Beneficially Owned,” “Beneficial Ownership” and “Beneficial Owner” with
respect to any securities means a Holder’s having such ownership, control or power to direct the
voting with respect to, or which otherwise enables a Holder to legally act with respect to, such
securities as contemplated hereby, including without limitation pursuant to any agreement,
arrangement or understanding, regardless of whether in writing. Securities “Beneficially Owned”
shall include securities Beneficially Owned by all other persons with whom a Holder would
constitute a “group” as within the meaning of Section 13(d) of the Exchange Act.

     “Blackout Period” means, with respect to a Registration Statement, a period in each case
commencing on the day immediately after the Company notifies the Holders that they are required,
pursuant to Section 4(c)(vi), to suspend offers and sales of Registrable Securities during which
the Company, in the good faith judgment of the Board, determines (because of the existence of, or
in anticipation of, any acquisition, financing activity, or other transaction involving the
Company, or the unavailability for reasons beyond the Company’s control of any required financial
statements, disclosure of information which is in its best interest not to publicly disclose, or
any other event or condition of similar significance to the Company) that the registration and
distribution of (and/or the registration of the offer and sale of) the Registrable Securities
covered or to be covered by such Registration Statement would be seriously detrimental to the
Company and its stockholders and ending on the earlier of (a) the date upon

 

 

which the material non-public information commencing the Blackout Period is disclosed to the
public or ceases to be material and (b) such time as the Company notifies the selling Holders that
the Company will no longer delay such filing of such Registration Statement, recommence taking
steps to make such Registration Statement effective, or allow sales pursuant to such Registration
Statement to resume; provided that no Blackout Period may last for more than 60 consecutive days;
provided, further, that during any period of 365 consecutive days, Blackout Periods may not, in the
aggregate, last for more than the greater of (a) zero days and (b) the result of 90 days minus the
number of days that Holders are required pursuant to Section 4(d) to discontinue and suspend
disposition of Registrable Securities because of the happening of any event described in Section
4(c)(vi).

     “Board” means the board of directors of the Company.

     “Business Day” means any day of the year, other than a Saturday, Sunday, or other day on which
the SEC is required or authorized to close.

     “Closing Date” has the meaning given to such term in the Asset Purchase Agreement.

     “Common Stock” has the meaning given to such term in the recitals hereto.

     “Company” has the meaning given to such term in the preamble hereto.

     “Designation Rights Termination Date” has the meaning given to such term in Section 2(b)
hereto.

     “Effectiveness Period” has the meaning given to such term in Section 4(c)(i).

     “Equity Securities Offering” means any underwritten registered offering of Relevant
Securities, and any offering or placement of any Relevant Securities pursuant to Rule 144A under
the Securities Act.

     “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the SEC promulgated thereunder.

     “Family Member” means (a) with respect to any individual, such individual’s spouse, any
descendants (whether natural or adopted), any trust all of the beneficial interests of which are
owned by any of such individuals or by any of such individuals together with any organization
described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended, the estate of any
such individual, and any corporation, association, partnership, limited liability company or other
entity all of the equity interests of which are owned by those above described individuals, trusts
or organizations and (b) with respect to any trust, the owners of the beneficial interests of such
trust.

     “Form S-1” means such form under the Securities Act as in effect on the date of this Agreement
or any successor registration form thereto under the Securities Act subsequently adopted by the
SEC.

2

 

     “Form S-3” means such form under the Securities Act as in effect on the date of this Agreement
or any successor registration form thereto under the Securities Act subsequently adopted by the
SEC.

     “Form S-4” means such form under the Securities Act as in effect on the date of this Agreement
or any successor registration form thereto under the Securities Act subsequently adopted by the
SEC.

     “Form S-8” means such form under the Securities Act as in effect on the date of this Agreement
or any successor registration form thereto under the Securities Act subsequently adopted by the
SEC.

     “Holder” means the Investor or any of such Investor’s successors and Permitted Assignees who
acquire rights in accordance with this Agreement with respect to the Registrable Securities
directly or indirectly from the Investor or another Holder (including from any Permitted Assignee)
and “Holders” means all of the foregoing individuals or entities.

     “Inspector” means any attorney, accountant or other agent retained by a Holder for the
purposes provided in Section 4(c)(x).

     “Investor” has the meaning given to such term in the preamble hereto.

     “Investor Director” means any member of the Board that was nominated for election to the Board
by the Holders pursuant to and in accordance with Section 2(a).

     “Market Standoff Period” means, with respect to each Equity Securities Offering, the period
beginning on the date of first sale of securities pursuant to such Equity Securities Offering and
ending on the date that shall be requested by the Company or the underwriters or initial purchasers
retained by the Company to facilitate such Equity Securities Offering; provided, however, that each
such period shall not be more than 90 days; provided further that (i) such period shall be no
longer than the shortest period imposed by the Company or the underwriters upon any other person or
entity and (ii) if any other person or entity receives a waiver with respect to any such matters,
the Holders shall be given a waiver with respect to their Shares as well.

     “NASD” means the National Association of Securities Dealers.

     “Permitted Assignee” means (a) with respect to a partnership or limited partnership, its
partners or former partners in accordance with their partnership interests, (b) with respect to a
corporation, its stockholders or former stockholders in accordance with their interest in the
corporation, (c) with respect to a limited liability company, its members or former members in
accordance with their interest in the limited liability company, (d) with respect to an individual,
any Family Member or (e) an entity that is controlled by, controls, or is under common control with
a transferor.

     “Piggyback Registration” has the meaning given to such term in Section 4(b)(i).

     “Piggyback Registration Statement” has the meaning given to such term in Section 4(b)(i).

3

 

     “register,” “registered,” and “registration” refer to a registration effected by preparing and
filing a registration statement in compliance with the Securities Act, and the declaration or
ordering of the effectiveness of such registration statement.

     “Registrable Securities” means the Shares, excluding any such Shares (a) that have been
publicly sold or may be sold immediately without registration or the requirement to make filings
with the SEC under the Securities Act either pursuant to Rule 144 of the Securities Act or
otherwise, (b) sold by a person in a transaction pursuant to a registration statement filed under
the Securities Act or (c) that are at the time subject to an effective registration statement under
the Securities Act (other than the Registration Statements contemplated hereby).

     “Registration Expenses” has the meaning given to such term in Section 4(e).

     “Registration Statement” means either of the Piggyback Registration Statements or the Shelf
Registration Statement; and “Registration Statements” means, collectively, the Piggyback
Registration Statements and the Shelf Registration Statement.

     “Relevant Security” means the Shares, any other equity security of the Company or any of its
subsidiaries and any security convertible into, or exercisable or exchangeable for, any Shares or
other such equity security.

     “SEC” means the Securities and Exchange Commission or any other federal agency at the time
administering the Securities Act.

     “SEC Effective Date” means, with respect to a Registration Statement, the date as of which
such Registration Statement is originally declared effective by the SEC.

     “Securities Act” means the Securities Act of 1933, as amended, or any similar federal statute
promulgated in replacement thereof, and the rules and regulations of the SEC thereunder, all as the
same shall be in effect from time to time.

     “Selling Expenses” has the meaning given to such term in Section 4(e).

     “Shares” means the shares of Common Stock issued to the Investor pursuant to the Asset
Purchase Agreement and (a) any and all shares of capital stock or other equity securities of the
Company which are added to or exchanged or substituted for such shares of Common Stock by reason of
the declaration of any stock dividend or stock split, the issuance of any distribution or the
reclassification, readjustment, recapitalization or other such modification of the capital
structure of the Company; and (b) any and all shares of capital stock or other equity securities of
any other corporation (now or hereafter organized under the laws of any state or other governmental
authority) with which the Company is merged, which results from any consolidation or reorganization
to which the Company is a party, or to which is sold all or substantially all of the shares or
assets of the Company, for which such shares of Common Stock are exchanged or substituted in
connection with such merger, consolidation, reorganization or sale, if immediately after such
merger, consolidation, reorganization or sale, the Company or the stockholders of the Company own
equity securities having in the aggregate more than 50% of the total voting power of such other
corporation.

     “Shelf Registration Statement” has the meaning given to such term in Section 4(a).

4

 

     “Transfer” has the meaning given to such term in Section 3(a).

     Section 2. Board Designation Rights.

     (a) Designation. Until the Designation Rights Termination Date, the Holders of a
majority of the Shares shall have the right to designate one nominee for election to the Board.

     (b) Termination of Designation Rights. The Holders of a majority of the Shares shall
not be entitled to designate any nominees for election to the Board pursuant to this Agreement from
and after the date (the “Designation Rights Termination Date”) that is the first date on which the
Shares Beneficially Owned by the Holders collectively represent less than thirty-one and
one-quarter percent (31.25%) of the Shares initially acquired by the Investor pursuant to the Asset
Purchase Agreement.

     (c) Company Support. At all times prior to the Designation Rights Termination Date,
the Company shall support the nominations of the persons designated by the Holders of a majority of
the Shares pursuant to Section 2(a), and the Company shall use its best efforts to cause the Board
(and the Company’s nominating committee, if any) to recommend the inclusion of such persons in the
slate of nominees recommended to stockholders for election as directors at each annual meeting of
stockholders of the Company.

     (d) Vacancies. If at any time prior to the Designation Rights Termination Date, a
vacancy is created on the Board by reason of the incapacity, death, removal or resignation of any
Investor Director, then the Company shall use its best efforts to cause the Board to appoint an
individual designated by the Holders of a majority of the Shares to fill such vacancy until the
next meeting of the Company’s stockholders at which directors are elected.

     Section 3. Market Standoff. Notwithstanding anything to the contrary set forth in
this Agreement, with respect to each Equity Securities Offering conducted after the Closing Date,
the following provisions of this Section 3 shall apply, if and only if (x) the underwriters or
initial purchasers retained by the Company to facilitate such offering request, in connection with
such offering, that the officers or directors or significant stockholders of the Company refrain
from selling any Relevant Security during any period, and (y) either (1) any nominee designated by
the Holders pursuant to Section 2(a) is a member of the Board, or (2) the Holders Beneficially Own
shares of Common Stock representing at least 10% of the fully diluted equity interests in the
Company (calculated giving effect to the exercise of all outstanding options, warrants and other
rights to purchase to acquire any Common Stock of the Company):

     (a) Without the prior written consent of the Company, during the Market Standoff Period
applicable to such Equity Securities Offering, each Holder will not (i), directly or indirectly,
offer, sell, agree to offer or sell, solicit offers to purchase, grant any call option or purchase
any put option with respect to, pledge, borrow or otherwise dispose of any Relevant Security, or
(ii) establish or increase any “put equivalent position” or liquidate or decrease any “call
equivalent position” (in each case within the meaning of Section 16 of the Exchange Act) with
respect to any Relevant Security, or otherwise enter into any swap, derivative or other transaction
or arrangement that transfers to another, in whole or in part, any economic consequence of
ownership of a Relevant Security (each of the transactions described in the immediately preceding
clauses (i) and (ii), being referred to as a “Transfer”), regardless of

5

 

whether such transaction is to be settled by delivery of Relevant Securities, other
securities, cash or other consideration; provided, however, that a Transfer to a Permitted Assignee
will not be subject to this Section 3 as long as (x) such Transfer is effected in accordance with
applicable securities laws; (y) such transferee agrees in writing to become subject to the terms of
this Agreement as a Holder; and (z) the Company is given written notice by such Holder of such
Transfer, stating the name and address of the transferee and identifying the Shares being
Transferred.

     (b) Furthermore, each Holder hereby authorizes the Company during the Market Standoff Period
to cause any transfer agent for the Relevant Securities to decline to transfer, and to note stop
transfer restrictions on the stock register and other records relating to, any Relevant Securities
for which such Holder is the record holder and, in the case of Relevant Securities for which such
Holder is the Beneficial Owner but not the record holder, agrees during the Market Standoff Period
to cause the record holder thereof to cause the relevant transfer agent to decline to transfer, and
to note stop transfer restrictions on the stock register and other records relating to, such
Relevant Securities.

     (c) Subject to the provisions of Section 4(b), without the prior written consent of the
Company, during the Market Standoff Period such Holder (x) will not participate in the filing with
the SEC of any registration statement, or circulate or participate in the circulation of any
preliminary or final prospectus or other disclosure document with respect to any proposed offering
or sale of a Relevant Security and (y) will not exercise any rights the undersigned may have to
require registration with the SEC of any proposed offering or sale of a Relevant Security
(including without limitation pursuant to this Agreement).

     Section 4. Registration Rights.

     (a) Shelf Registration Statement. The Company shall (i) file with the SEC a shelf
registration statement on Form S-1 (or, if the Company is eligible to use such form, Form S-3)
relating to the registration of the offer and resale by the Holders of all of the Registrable
Securities (the “Shelf Registration Statement”) and (ii) use its commercially reasonable efforts to
cause the Shelf Registration Statement to be declared effective by the SEC no later than the date
that is one (1) year after the Closing Date; provided, however, that the Company shall not be
obligated to effect any such registration pursuant to this Section 4(a), or keep such registration
or the Shelf Registration Statement effective pursuant to Section 4(c)(i), during any Blackout
Period.

     (b) Piggyback Registration Rights.

     (i) Piggyback Registration. If after the date that is one (1) year after the
Closing Date, the Company shall determine to register the offer and sale for cash of any of
its Common Stock for its own account, other than (i) a registration relating solely to
employee benefit plans or securities issued or issuable to employees, consultants (to the
extent the securities owned or to be owned by such consultants could be registered on Form
S-8) or any of their Family Members (including a registration on Form S-8), (ii) a
registration on Form S-4 in connection with a merger, acquisition, divestiture,
reorganization, exchange offer or similar event, or (iii) a registration in which the only
Common Stock being registered is Common Stock issuable upon conversion of debt

6

 

securities that are also being registered, then (subject to Section 4(b)(iii)) the
Company shall promptly give to the Holders written notice thereof, and in no event shall
such notice be given less than 20 calendar days prior to the filing of a registration
statement (each a “Piggyback Registration Statement” and collectively the “Piggyback
Registration Statements”) with respect to such registration (each a “Piggyback
Registration”), and shall, subject to Section 4(b)(ii) and Section 4(b)(iii), include in
such Piggyback Registration, all of the Registrable Securities specified in a written
request or requests, made within 10 calendar days after receipt of such written notice from
the Company, by any Holder or Holders. However, the Company may, without the consent of the
Holders, withdraw such Piggyback Registration Statement prior to its becoming effective if
the Company has elected to abandon the proposal to register the securities proposed to be
registered thereby.

     (ii) Underwriting. If a Piggyback Registration is for a registered public
offering involving an underwriting, the Company shall so advise the Holders in writing or as
a part of the written notice given pursuant to Section 4(b)(i). In such event the right of
any Holder to registration pursuant to Section 4(b)(i) shall be conditioned upon such
Holder’s participation in such underwriting and the inclusion of such Holder’s Registrable
Securities in the underwriting to the extent provided herein. All Holders proposing to
distribute their securities through such underwriting shall (together with the Company)
enter into an underwriting agreement in customary form with the underwriter or underwriters
selected for such underwriting by the Company. Notwithstanding any other provision of this
Section 4(b)(ii), if the underwriter or the Company determines that marketing factors
require a limitation of the number of shares to be underwritten, the underwriter may exclude
some or all Registrable Securities from such registration and underwriting. The Company
shall so advise all Holders (except those Holders who failed to timely elect to distribute
their Registrable Securities through such underwriting or have indicated to the Company
their decision not to do so), and the number of shares that may be included in the
registration and underwriting shall be allocated:

     (A) first to the Company; and

     (B) then, subject to written obligations and commitments existing as of October
25, 2006, to all selling stockholders, including the Holders, who have requested to
sell in the registration on a pro rata basis according to the number of shares
requested to be included.

No Registrable Securities excluded from the underwriting by reason of the underwriter’s
marketing limitation shall be included in such registration. If any Holder disapproves of
the terms of any such underwriting, such Holder may elect to withdraw therefrom by written
notice to the Company and the underwriter. The Registrable Securities and/or other
securities so withdrawn from such underwriting shall also be withdrawn from such
registration; provided, however, that, if by the withdrawal of such Registrable Securities a
greater number of Registrable Securities held by other Holders may be included in such
registration (up to the maximum of any limitation imposed by the underwriters), then the
Company shall offer to all Holders who have included Registrable Securities in the
registration the right to include additional Registrable Securities pursuant to the terms
and

7

 

limitations set forth herein in the same proportion used above in determining the
underwriter limitation.

     (iii) Notwithstanding anything to the contrary set forth in this Agreement, the Company
shall not be obligated to effect, or take any action to effect, any registration pursuant to
Section 4(b) after the Company has initiated two (2) such registrations (counting for this
purpose only registrations which have been declared or ordered effective and pursuant to
which securities have been sold).

     (c) Registration Procedures. In the case of each registration, qualification, or
compliance effected by the Company pursuant to Section 4(a) and Section 4(b), the Company will keep
each Holder including securities therein reasonably advised in writing (which may include e-mail)
as to the initiation of each registration, qualification, and compliance and as to the completion
thereof. In addition, the Company hereby agrees as follows with respect to each Registration
Statement:

     (i) The Company will use its commercially reasonable efforts to cause such Registration
Statement to become and remain effective at least for a period ending with the first to
occur of (A) the sale by the Holders of all Registrable Securities covered by such
Registration Statement, (B) the availability under Rule 144 for the Holders to immediately,
freely resell without restriction under United States federal securities laws all
Registrable Securities covered by such Registration Statement, or (C) the date that is two
years after the SEC Effective Date of such Registration Statement (provided, however, that
if the Company files a Registration Statement on Form S-1 and subsequently becomes eligible
to use Form S-3, it may file a post-effective amendment to such Form S-1 on Form S-3 prior
to the end of such period and use its commercially reasonable efforts to cause such
Registration Statement as amended to become effective until the end of such period) (in any
such case, the “Effectiveness Period”). At any time after the end of the Effectiveness
Period with respect to the Shelf Registration Statement, if (a) the Holders Beneficially Own
Registrable Securities representing more than 10% of the fully diluted equity interests in
the Company (calculated giving effect to the exercise of all outstanding options, warrants
and other rights to purchase to acquire any Common Stock of the Company) or (b) any nominee
designated by the Holders pursuant to Section 2(a) is a member of the Board, then (x) as
promptly as reasonably practicable after the written request of Holders of a majority of the
Registrable Securities, the Company shall file with the SEC another shelf registration
statement on Form S-1 (or, if the Company is eligible to use such form, Form S-3) relating
to the registration of the offer and resale by the Holders of all of the Registrable
Securities, (y) the provisions of this Agreement (including without limitation the
provisions of Section 4(a) and Section 4(c)) shall apply to such registration statement and
(z) such registration statement shall be deemed to be the Shelf Registration Statement (as
defined in Section 4(a)) for purposes of this Agreement.

     (ii) If any Registration Statement becomes subject to review by the SEC, the Company
will promptly respond to all comments and diligently pursue resolution of any comments to
the satisfaction of the SEC.

8

 

     (iii) The Company will prepare and file with the SEC such amendments and supplements to
each Registration Statement and any prospectus used in connection therewith as may be
reasonably necessary to keep such Registration Statement effective during the applicable
Effectiveness Period, and will comply with the provisions of the Securities Act with respect
to the disposition of all securities covered by such Registration Statement during such
period in accordance with the intended method(s) of disposition by the sellers thereof set
forth in such Registration Statement.

     (iv) The Company will furnish, without charge, to each Holder (A) a reasonable number
of copies of each Registration Statement (including any exhibits thereto other than exhibits
incorporated by reference), each amendment and supplement thereto as such Holder may
request, (B) such number of copies of the prospectus included in such Registration Statement
(including each preliminary prospectus and any other prospectus filed under Rule 424 under
the Securities Act) as each Holder may request, in conformity with the requirements of the
Securities Act, and (C) such other documents as each Holder may reasonably request in order
to facilitate the disposition of the Registrable Securities owned by such Holder, but only
during the applicable Effectiveness Period.

     (v) The Company will use its commercially reasonable efforts to register or qualify the
Registrable Securities under such other applicable securities or blue sky laws of such
jurisdictions as the Holders of a majority of the Registrable Securities reasonably requests
as may be necessary for the marketability of the Registrable Securities (such request to be
made by the time the relevant Registration Statement is deemed effective by the SEC) and do
any and all other acts and things which may be reasonably necessary or advisable to enable
the Holders to consummate the disposition in such jurisdictions of the Registrable
Securities owned by the Holders; provided, however, that the Company shall not be required
to (A) qualify generally to do business in any jurisdiction where it would not otherwise be
required to qualify but for this paragraph (v), (B) subject itself to taxation in any such
jurisdiction, or (C) consent to general service of process in any such jurisdiction.

     (vi) As promptly as practicable after becoming aware of such event, the Company will
notify each Holder of Registrable Securities being offered or sold pursuant to each
Registration Statement at any time when a prospectus relating thereto is required to be
delivered under the Securities Act of the happening of any event which comes to the
Company’s attention if as a result of such event the prospectus included in such
Registration Statement contains an untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the statements therein not
misleading, and the Company shall promptly prepare and furnish to such Holder a supplement
or amendment to such prospectus (or prepare and file appropriate reports under the Exchange
Act) so that, as thereafter delivered to the purchasers of such Registrable Securities, such
prospectus shall not contain an untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements therein not
misleading, unless suspension of the use of such prospectus otherwise is authorized herein
or in the event of a Blackout Period, in which case no supplement or amendment need be
furnished (or Exchange Act filing made) until the termination of such suspension or Blackout
Period.

9

 

     (vii) The Company will comply, and continue to comply during the period that each
Registration Statement is effective under the Securities Act, in all material respects with
the Securities Act and the Exchange Act and with all applicable rules and regulations of the
SEC with respect to the disposition of all securities covered by such Registration
Statement.

     (viii) As promptly as practicable after becoming aware of such event, the Company will
notify each Holder of Registrable Securities being offered or sold pursuant to each
Registration Statement of the issuance by the SEC of any stop order or other suspension of
effectiveness of such Registration Statement.

     (ix) The Company will permit the Holders of Registrable Securities being offered or
sold pursuant to each Registration Statement and their legal counsel, at such Holders’ sole
cost and expense to review and have a reasonable opportunity to comment on such Registration
Statement and all amendments and supplements thereto at least two Business Days prior to
their filing with the SEC.

     (x) The Company will make available for inspection by the Holders and any Inspector
retained by the Holders, at the Holders’ sole expense, all records as shall be reasonably
necessary to enable the Holders to exercise their due diligence responsibility, and cause
the Company’s officers, directors, and employees to supply all information which the Holders
or any Inspector may reasonably request for purposes of such due diligence; provided,
however, that the Holders shall hold in confidence and shall not make any disclosure of any
record or other information which the Company determines in good faith to be confidential,
and of which determination the Holders are so notified at the time the Holders receive such
information, unless (w) the Holders have, or obtained, knowledge of such information without
violation of or protection under any agreements with the Company or, to its knowledge any
third party, (x) the disclosure of such record is reasonably necessary to avoid or correct a
misstatement or omission in each Registration Statement and a reasonable time prior to such
disclosure the Holders shall have informed the Company of the need to so correct such
misstatement or omission and the Company shall have failed to correct such misstatement of
omission, (y) the release of such record is ordered pursuant to a subpoena or other order
from a court or governmental body of competent jurisdiction or (z) the information in such
record has been made generally available to the public other than by disclosure in violation
of this Agreement or any other agreement. The Company shall not be required to disclose any
confidential information in such records to any Inspector until and unless such Inspector
shall have entered into a confidentiality agreement with the Company with respect thereto,
containing terms substantially similar to those set forth in this Section 4(c)(x), which
agreement shall permit such Inspector to disclose records to the Holders. Each Holder
agrees that it shall, upon learning that disclosure of such records is sought in or by a
court or governmental body of competent jurisdiction or through other means, give prompt
notice to the Company and allow the Company, at the Company’s expense, to undertake
appropriate action to prevent disclosure of, or to obtain a protective order for, the
records deemed confidential. The Company shall hold in confidence and shall not make any
disclosure of information concerning the Holders provided to the Company pursuant to this
Agreement unless (A) disclosure of such information is reasonably necessary to comply with
federal or state securities laws, (B) disclosure of such

10

 

information to the SEC’s Staff of the Division of Corporation Finance is reasonably
necessary to respond to comments raised by such staff in its review of such Registration
Statement, (C) disclosure of such information is reasonably necessary to avoid or correct a
misstatement or omission in such Registration Statement, (D) release of such information is
ordered pursuant to a subpoena or other order from a court or governmental body of competent
jurisdiction, or (E) such information has been made generally available to the public other
than by disclosure in violation of this or any other agreement. The Company agrees that it
shall, upon learning that disclosure of such information concerning the Holders is sought in
or by a court or governmental body of competent jurisdiction or through other means, give
prompt notice to the Holders and allow the Holders, at the Holders’ expense, to undertake
appropriate action to prevent disclosure of, or to obtain a protective order for, such
information.

     (xi) The Company will use its commercially reasonable efforts to cause all the
Registrable Securities covered by each Registration Statement to be listed or quoted on the
principal securities market on which securities of the same class or series issued by the
Company are then listed or traded.

     (xii) The Company will provide a transfer agent and registrar, which may be a single
entity, for the Registrable Securities at all times.

     (xiii) The Company will cooperate with the Holders of Registrable Securities being
offered pursuant to each Registration Statement to facilitate the timely preparation and
delivery of certificates (not bearing any restrictive legends) representing Registrable
Securities to be offered pursuant to such Registration Statement and enable such
certificates to be in such denominations or amounts as the Investor may reasonably request.

     (xiv) The Company will take all other reasonable actions necessary to expedite and
facilitate disposition by the Holders of the Registrable Securities pursuant to each
Registration Statement, including without limitation making its chief executive officer,
president, chief financial officer and other appropriate officers and personnel available to
participate in marketing efforts with respect to any registered underwritten public
offering.

     (d) Suspension of Offers and Sales. Each Holder of Registrable Securities agrees
that, upon receipt of any notice from the Company of the happening of any event of the kind
described in Section 4(c)(vi) or of the commencement of a Blackout Period, such Holder shall
discontinue and suspend disposition of Registrable Securities pursuant to any Registration
Statement until the Holder’s receipt of the copies of the supplemented or amended prospectus
contemplated by Section 4(c)(vi) or notice of the end of the Blackout Period, and, if so directed
by the Company, such Holder shall deliver to the Company (at the Company’s expense) all copies
(including, without limitation, any and all drafts), other than permanent file copies, then in such
Holder’s possession, of the prospectus covering such Registrable Securities current at the time of
receipt of such notice.

     (e) Registration Expenses. All expenses incident to the Company’s performance of or
compliance with this Agreement, including without limitation all registration and filing fees,

11

 

messenger and delivery expenses, printing expenses, internal expenses (including without
limitation all salaries and expenses of its officers and employees performing legal or accounting
duties), all fees and expenses associated with filings required to be made with the NASD, as may be
required by the rules and regulations of the NASD, fees and expenses of compliance with securities
or blue sky laws (including reasonable fees and disbursements of counsel in connection with blue
sky qualifications of the Registrable Securities), rating agency fees, the fees and expenses
incurred in connection with the listing of the securities to be registered on all securities
exchanges on which similar securities issued by the Company are then quoted or listed, fees and
disbursements of counsel for the Company and its independent certified public accountants, and the
fees and expenses of any other persons retained by the Company, in connection with the registration
hereunder (collectively, the “Registration Expenses”) will be borne by the Company, but not
including any roadshow expenses, fees and expenses of counsel for the Holders and any underwriting,
broker or dealer discounts or commissions attributable to the sale of Registrable Securities (which
are hereinafter referred to as “Selling Expenses”). All Selling Expenses shall be borne solely by
the Holders.

     (f) Information by the Holder. The Holder or Holders of Registrable Securities
included in any Registration Statement shall furnish to the Company such information required under
Regulation S-K under the Securities Act regarding such Holder or Holders and the distribution
proposed by such Holder or Holders as the Company may request in writing. No Holder of Registrable
Securities will be entitled to have such Registrable Securities included in a Registration
Statement if such Holder does not furnish such information requested by the Company.

     (g) Indemnification.

     (i) In the event of the offer and sale of Registrable Securities under the Securities
Act, the Company shall, and hereby does, indemnify and hold harmless, to the fullest extent
permitted by law, each Holder, its directors, officers, partners, each other person who
participates as an underwriter in the offering or sale of such securities, and each other
person, if any, who controls or is under common control with such Holder or any such
underwriter within the meaning of Section 15 of the Securities Act, against any losses,
claims, damages or liabilities, joint or several, and expenses to which such Holder or any
such director, officer, partner or underwriter or controlling person may become subject
under the Securities Act or otherwise, insofar as such losses, claims, damages, liabilities
or expenses (or actions or proceedings, whether commenced or threatened, in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in (A) any Registration Statement, any preliminary prospectus, final
prospectus or summary prospectus contained therein, or any amendment or supplement thereto,
or (B) in any materials or information provided to investors by, or with the written
approval of, the Company in connection with the marketing of the offering of the Shares
(“Marketing Materials”), including any road show or investor presentations made to
investors by the Company (whether in person or electronically), or any omission or alleged
omission to state therein a material fact required to be stated therein or necessary to make
the statements therein in light of the circumstances in which they were made not misleading,
and the Company shall reimburse the Holder, and each such director, officer, partner,
underwriter and controlling person for any legal or any other expenses reasonably incurred
by them in connection

12

 

with investigating, defending or settling any such loss, claim, damage, liability,
action or proceeding; provided that the foregoing shall not apply, and the Company shall not
be liable, in any such case (A) to the extent that any such loss, claim, damage, liability
(or action or proceeding in respect thereof) or expense arises out of or is based upon an
untrue statement or alleged untrue statement in or omission or alleged omission from such
Registration Statement, any such preliminary prospectus, final prospectus, summary
prospectus, amendment or supplement in reliance upon and in conformity with written
information furnished to the Company through an instrument duly executed by or on behalf of
such Holder specifically stating that it is for use in the preparation thereof, or (B) to
the extent that such Holder failed to comply with the terms of the plan of distribution
mechanics described in the applicable prospectus. Such indemnity shall remain in full force
and effect regardless of any investigation made by or on behalf of the Holders, or any such
director, officer, partner, underwriter or controlling person and shall survive the transfer
of such shares by the Holders.

     (ii) As a condition to including any Registrable Securities to be offered by a Holder
in any Registration Statement, such Holder agrees to be bound by the terms of this Section
4(g) and to indemnify and hold harmless, to the fullest extent permitted by law, the
Company, its directors and officers, and each other person, if any, who controls the Company
within the meaning of Section 15 of the Securities Act, legal counsel and accountants for
the Company, any underwriter, any other Holder selling securities in such Registration
Statement and any controlling person within the meaning of the Securities Act of any such
underwriter or other Holder, against any losses, claims, damages or liabilities, joint or
several, to which the Company or any such director or officer or controlling person may
become subject under the Securities Act or otherwise, (A) insofar as such losses, claims,
damages or liabilities (or actions or proceedings, whether commenced or threatened, in
respect thereof) arise out of or are based upon an untrue statement or alleged untrue
statement in or omission or alleged omission from such Registration Statement, any
preliminary prospectus, final prospectus or summary prospectus contained therein, or any
amendment or supplement thereto, if such statement or alleged statement or omission or
alleged omission was made in reliance upon and in conformity with written information
furnished to the Company through an instrument duly executed by or on behalf of such Holder
specifically stating that it is for use in the preparation thereof, or (B) to the extent
that such Holder failed to comply with the terms of the plan of distribution mechanics
described in the applicable prospectus. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of the Company, or any such director,
officer, partner, underwriter or controlling person and shall survive
the transfer of such shares by the Holder, and such Holder shall reimburse the Company, and each such director,
officer, legal counsel and accountants, underwriter, other stockholder, and controlling
person for any legal or other expenses reasonably incurred by them in connection with
investigating, defending, or settling and such loss, claim, damage, liability, action, or
proceeding; provided, however, that such indemnity agreement found in this Section 4(g)(ii)
shall in no event exceed the gross proceeds from the offering received by the Investor.

     (iii) Promptly after receipt by an indemnified party of notice of the commencement of
any action or proceeding involving a claim referred to in Section 4(g)(i) or Section
4(g)(ii) (including any governmental action), such indemnified party

13

 

shall, if a claim in respect thereof is to be made against an indemnifying party, give
written notice to the indemnifying party of the commencement of such action; provided,
however, that the failure of any indemnified party to give notice as provided herein shall
not relieve the indemnifying party of its obligations under Section 4(g)(i) or Section
4(g)(ii), except to the extent that the indemnifying party is actually prejudiced by such
failure to give notice. In case any such action is brought against an indemnified party,
unless in the reasonable judgment of counsel to such indemnified party a conflict of
interest between such indemnified and indemnifying parties may exist or the indemnified
party may have defenses not available to the indemnifying party in respect of such claim,
the indemnifying party shall be entitled to participate in and to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party and, after notice
from the indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party shall not be liable to such indemnified party for
any legal or other expenses subsequently incurred by the latter in connection with the
defense thereof, unless in such indemnified party’s reasonable judgment a conflict of
interest between such indemnified and indemnifying parties arises in respect of such claim
after the assumption of the defenses thereof or the indemnifying party fails to defend such
claim in a diligent manner, other than reasonable costs of investigation. Neither an
indemnified nor an indemnifying party shall be liable for any settlement of any action or
proceeding effected without its consent. No indemnifying party shall, without the consent
of the indemnified party, consent to entry of any judgment or enter into any settlement,
which does not include as an unconditional term thereof the giving by the claimant or
plaintiff to such indemnified party of a release from all liability in respect of such claim
or litigation. Notwithstanding anything to the contrary set forth herein, and without
limiting any of the rights set forth above, in any event any party shall have the right to
retain, at its own expense, counsel with respect to the defense of a claim.

     (iv) In the event that an indemnifying party does or is not permitted to assume the
defense of an action pursuant to Section 4(g)(iii) or in the case of the expense
reimbursement obligation set forth in Section 4(g)(i) and Section 4(g)(ii), the
indemnification required by Section 4(g)(i) and Section 4(g)(ii) shall be made by periodic
payments of the amount thereof during the course of the investigation or defense, as and
when bills received or expenses, losses, damages, or liabilities are incurred.

     (v) If the indemnification provided for in this Section 4(g) is held by a court of
competent jurisdiction to be unavailable to an indemnified party with respect to any loss,
liability, claim, damage or expense referred to herein, the indemnifying party, in lieu of
indemnifying such indemnified party hereunder, shall (A) contribute to the amount paid or
payable by such indemnified party as a result of such loss, liability, claim, damage or
expense as is appropriate to reflect the proportionate relative fault of the indemnifying
party on the one hand and the indemnified party on the other (determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material fact or
omission relates to information supplied by the indemnifying party or the indemnified party
and the parties’ relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission), or (B) if the allocation provided by
clause (A) above is not permitted by applicable law or provides a lesser sum to the
indemnified party than the amount hereinafter calculated, not only the proportionate
relative fault of the indemnifying party and the indemnified party, but also

14

 

the relative benefits received by the indemnifying party on the one hand and the
indemnified party on the other, as well as any other relevant equitable considerations. No
indemnified party guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any indemnifying party
who was not guilty of such fraudulent misrepresentation.

     (vi) Indemnification similar to that specified in the preceding subsections of this
Section 4(g) (with appropriate modifications) shall be given by the Company and each Holder
of Registrable Securities with respect to any required registration or other qualification
of securities under any federal or state law or regulation or governmental authority other
than the Securities Act.

     Section 5. Miscellaneous.

     (a) Assignment of Rights; Successors and Permitted Assignees. No Holder may assign
its rights under this Agreement to any party without the prior written consent of the Company;
provided, however, that a Holder may assign its rights under this Agreement without such
restrictions to a Permitted Assignee as long as (i) such transfer or assignment is effected in
accordance with applicable securities laws; (ii) such transferee or assignee agrees in writing to
become subject to the terms of this Agreement as a Holder; and (iii) the Company is given written
notice by such Holder of such transfer or assignment, stating the name and address of the
transferee or assignee and identifying the Shares with respect to which such rights are being
transferred or assigned. Except as otherwise provided herein, the provisions of this Agreement
shall inure to the benefit of, and be binding upon, the successors, Permitted Assignees, heirs,
legatees, executors and administrators of the parties hereto.

     (b) Notices. All notices or other communications which are required or permitted
under this Agreement shall be in writing and sufficient if delivered by hand, by facsimile
transmission, by registered or certified mail, postage pre-paid, by electronic mail, or by courier
or overnight carrier, to the persons at the addresses set forth below (or at such other address as
may be provided hereunder), and shall be deemed to have been delivered as of the date so delivered:

	 	 	 	 	 
	 

	 	If to the Company:
	 	Allis Chalmers Energy Inc.
	 

	 	 	 	5075 Westheimer, Suite 890
	 

	 	 	 	Houston, Texas 77056
	 

	 	 	 	Attention: Theodore F. Pound, General Counsel
	 

	 	 	 	Facsimile: (713) 369-0555
	 
	 	 	 	 
	 

	 	with a copy (which

shall not constitute

notice) to:
	 	Andrews Kurth LLP

600 Travis, Suite 4200

Houston, Texas 77002

Attention: Robert V. Jewell

Facsimile: (713) 238-7135

15

 

	 	 	 	 	 
	 

	 	If to the Investor:
	 	Oil & Gas Rental Services, Inc.
	 

	 	 	 	948 DeGravelle Road
	 

	 	 	 	Amelia, Louisiana 70340
	 

	 	 	 	Attn: Burt A. Adams, President and Chief
	 

	 	 	 	Executive Officer
	 

	 	 	 	Facsimile: (985) 631-3427
	 
	 	 	 	 
	 

	 	 	 	and
	 
	 	 	 	 
	 

	 	 	 	Oil & Gas Rental Services, Inc.
	 

	 	 	 	Whitney Bank Building
	 

	 	 	 	228 St. Charles Avenue
	 

	 	 	 	Suite 814
	 

	 	 	 	New Orleans, Louisiana 70130
	 

	 	 	 	Attn: Brad A. Adams, Vice President and General
	 

	 	 	 	Counsel
	 

	 	 	 	Facsimile: (504) 522-0748
	 
	 	 	 	 
	 

	 	with a copy (which

shall not constitute

notice) to:
	 	Phelps Dunbar LLP

365 Canal Street, Suite 2000

New Orleans, Louisiana 70130

Attn: Mark A. Fullmer

Facsimile: (504) 568-9130

or at such other address as any party shall have furnished to the other party in writing.

     (c) Specific Performance. Each party to this Agreement agrees that any breach by it
of any provision of this Agreement would irreparably injure the other party and that money damages
would be an inadequate remedy therefor. Accordingly, each party agrees that the other party shall
be entitled to one or more injunctions enjoining any such breach and requiring specific performance
of this Agreement and consents to the entry thereof, in addition to any other remedy to which such
other party is entitled at law or in equity.

     (d) Counterparts. This Agreement may be executed in any number of counterparts, each
of which shall be enforceable against the parties actually executing such counterparts, and all of
which together shall constitute one instrument.

     (e) Amendments. The provisions of this Agreement may be amended at any time and from
time to time, and particular provisions of this Agreement may be waived, with and only with an
agreement or consent in writing signed by the Company and by the Holders of a majority of the
Registrable Securities outstanding as of the date of such amendment or waiver. The Investor
acknowledges that by the operation of this Section 5(e), the Holders of a majority of the
outstanding Registrable Securities may have the right and power to diminish or eliminate all rights
of the Holders under this Agreement.

     (f) Headings and Cross References. The headings of the several sections and
subsections of this Agreement are inserted for convenience only and shall not in any way affect

16

 

the meaning or construction of any provision of this Agreement. Unless the context requires
otherwise, all cross references in this Agreement refer to sections and subsections of this
Agreement.

     (g) Severability. In the case any provision of this Agreement shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the remaining provisions
shall not in any way be affected or impaired thereby.

     (h) Entire Agreement. This Agreement constitutes the full and entire understanding
and agreement between the parties with regard to the subject matter of this Agreement.

     (i) Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of Texas.

(SIGNATURE PAGES FOLLOW)

17

 

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

	 	 	 	 	 
	 	THE COMPANY:

ALLIS-CHALMERS ENERGY INC.

 	 
	 	By:  	/s/ David Wilde
 	 
	 	 	David Wilde 	 
	 	 	President and Chief Operating Officer 	 
	 

	 	 	 	 	 
	 	INVESTOR:

OIL & GAS RENTAL SERVICES, INC.

 	 
	 	By:  	/s/ Burt A. Adams
 	 
	 	 	Burt A. Adams 	 
	 	 	President and Chief Executive Officer

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